author: ELLIS, Chief Justice.

text:
    Loran GORRELL, Appellant, v. TIDE PRODUCTS, INC., Appellee.
    No. 8598.
    Court of Civil Appeals of Texas, Amarillo.
    Dec. 31, 1975.
    Rehearing Denied Jan. 26, 1976.

      Kendrick & Tarlton, Kenneth Nolan Tarl-ton, Amarillo, for appellant.
    Thomas & Burdett, Robert U. Mayfield, Hereford, for appellee.
   ELLIS, Chief Justice.

Loran Gorrell, defendant-appellant, has brought this appeal from a summary judgment entered by the trial court against him in favor of Tide Products, Inc., plaintiff-ap-pellee, in a suit upon a promissory note and upon his guaranty of an account of a third party. Reversed and remanded.

On December 16, 1974, the plaintiff filed its First Amended Petition alleging its entitlement to recovery from Loran Gorrell upon a promissory note executed and delivered on April 24, 1974, in the total sum of $4,632.25, including unpaid principal, accrued interest, together with attorney’s fees of 15% as stipulated in the note. Also, in the same pleading, plaintiff alleged that subsequent to the date of the note, on or about July 13, 1974, and on various dates thereafter, plaintiff sold and delivered to Gorrell Farms, Inc., in the regular course of business, goods and merchandise and performed various services for Gorrell Farms, Inc., on which account there was a balance due in the sum of $1,025.12. The portion of the suit for the amount of this account, together with reasonable attorney’s fees in the alleged sum of $341.71, was brought by plaintiff against Loran Gorrell as the guarantor of such account for Gorrell Farms, Inc.

The petition was sworn to by a representative of the credit department of Tide Products, Inc., as to the account pursuant to Rule 185, Texas Rules of Civil Procedure, the affidavit setting out:

“That the foregoing annexed account of TIDE PRODUCTS, INC., against LORAN GORRELL, as guarantor of the account of Gorrell Farms, Inc., for the sum of $1,025.12 is within the knowledge of affiant, just and true. That said account is due and that all just and lawful offsets, payments and credits have been allowed.”

The pleadings with respect to the note sued upon were not sworn. A copy of the note was attached to the petition, but neither the original note nor a certified copy thereof was attached or in any manner made a part of the record.

On December 16, 1974, the same date as that of the filing of Plaintiff’s First Amended Petition, the plaintiff filed its Motion for Summary Judgment seeking to recover upon its claim as pleaded in its First Amended Petition. The claim of the plaintiff, according to such petition, on its two causes of action, including (1) the note, interest and attorney’s fees, and (2) the sworn account against Gorrell Farms, Inc., for which defendant was the alleged guarantor, plus attorney’s fees on the account in the sum of $341.71, aggregated the sum of $5,999.18, together with costs and 6% interest from date of judgment.

On January 14, 1975, the Defendant’s First Amended Answer was filed. This answer was duly sworn and set out specifically the defenses of failure of consideration with respect to the note sued upon and breach of express and implied warranties relating to the produets and services for which the note was given.

Also, on the same date, January 14, 1975, Loran Gorrell filed his motion in Opposition to the Plaintiff’s Motion for Summary Judgment. The plaintiff’s Motion for Summary Judgment, as above stated, included all of the claims against defendant set out in the Plaintiff’s First Amended Petition which encompassed both the promissory note and the account of Gorrell Farms, Inc., guaranteed by the defendant. Attached to such motion in Opposition to Plaintiff’s Motion for Summary Judgment was defendant’s affidavit asserting failure of consideration and breach of express and implied warranties. The affidavit set out that an agent of Tide Products called upon appellant for the purpose of selling fertilizer that was expressly and impliedly warranted to increase the yield of the wheat grown on his farm; that the agent represented that the seller would test the soil and determine the chemicals necessary to bring about an increase in the yield of the wheat to be planted and that such seller formulated the chemicals to be applied for such purpose; that the chemicals were applied according to seller’s instructions except for a 25 acre tract upon which the chemicals were not applied; that this 25 acre tract was farmed and watered in the identical manner and subject to the same weather conditions as the land upon which the chemicals had been placed; and that at harvest time the tract upon which the chemicals were not applied yielded more wheat than that upon which the chemicals were applied.

Specifically, the affidavit in support of Defendant’s Opposition to Plaintiff’s Motion for Summary Judgment stated, among other things, that:

“The debt for which Tide Products sues represents the purchase price of such chemicals and the services performed by them in testing the soil and recommending the chemicals to be applied, etc. Such chemicals and the services of plaintiff proved to be of absolutely no value to me in that they in no way increased the yield of the wheat, and in fact, apparently caused a decrease in the yield.”

The hearing on the Plaintiff’s Motion for Summary Judgment was set for March 26, 1975, and on the date of the hearing, the plaintiff filed two affidavits with respect to the account portion of the suit, i. e., one affidavit concerning various demands made upon the defendant for payment of the $1,025.12 account, and the other affidavit regarding the work done and to be done by the attorney for the plaintiff regarding the collection of the account and the alleged reasonableness of the attorney’s fee claimed with respect to such account. However, after objection by defendant’s counsel to the introduction of such affidavits filed on the same date as that of the hearing, and the court’s sustaining of such objection, it was stipulated that those affidavits not be considered in the hearing. However, they were included in the transcript filed in this appeal, but in accordance with the stipulation, were not considered in connection with this appeal.

After hearing, the trial court entered summary judgment in favor of the plaintiff on the note, accrued interest and the stipulated 15% attorney’s fees thereon, and upon the $1,012.25 account, but excluded the attorney’s fees claimed upon the account portion of the suit. From this judgment the defendant has predicated his appeal upon five points of error.

The appellant contends in point of error number 3 that the trial court erred in granting summary judgment on the note on the grounds that the defendant’s pleadings and affidavit in opposition to the Plaintiff’s Motion for Summary Judgment raised a genuine issue as to a material fact by reason of the sworn defensive plea of failure of consideration and breach of warranty.

The defendant’s answer set out specifically a plea of failure of consideration for the note in accordance with the requirements of Rule 93, Texas Rules of Civil Procedure, as well as the defense of breach of implied and express warranties. Also, the summary judgment proof evidenced by the defendant’s affidavit in support of defendant’s plea in opposition to plaintiff’s motion for summary judgment upon its claim asserted in its First Amended Original Petition which included the note and the account allegedly guaranteed by the defendant, clearly set forth the defense of failure of consideration. Want or failure of consideration is clearly a permissible defense in a suit as between the payee and maker of a note unless the circumstances of the particular case present equities that preclude the maker from setting up the defense. 9 Tex.Jur.2d, Rev., Bills and Notes, § 257, and cases cited therein.

Appellant contends that the affirmative defense set out in his answer and his affidavit in opposition to the motion for summary judgment raised a genuine issue of material fact with respect to the defense of failure of consideration for the note. The appellee contends that at the time' of giving the note, April 24,1974, the defendant’s claimed defense of failure of consideration was with reference to a crop to be harvested in 1974 and referred to fertilizer applied to the land prior to or just after planting of the wheat. Further, appellee contends in its brief that it is a matter of judicial knowledge that wheat is planted in the fall of the year. The apparent implication is that the fertilizer in question was applied to the land during the previous fall (1973). Additionally, appellee asserts that the courts will take judicial knowledge that on the date the note was executed, April 24, growing wheat is nearly ready for harvest and that wheat at this time is so close to maturity that any differences or expected yield between the tract fertilized and the portion not fertilized would be obvious, and that by virtue of such knowledge, appellant waived the defense of failure of consideration. Appel-lee cites various cases regarding judicial knowledge by the courts with respect to times of planting and harvesting of crops. In the case of McGarraugh v. McGarraugh, 177 S.W.2d 296 (Tex.Civ.App., Amarillo 1943, writ dism’d), cited by appellee in support of such proposition, the court recognized that it is common knowledge that, in Texas, wheat is harvested, or at least is ripe and ready for harvest, in the latter part of July. In McCormick v. Ricks, 213 S.W.2d 337 (Tex.Civ.App., Amarillo 1948, writ ref’d n. r. e.), it was stated in the opinion that there Was testimony that wheat on the land in question had been harvested by the mid-die of July, and in Knudsen v. J. I. Case Co., 86 S.W.2d 794 (Tex.Civ.App., Amarillo 1935, no writ), the court stated that it is a matter of common knowledge that wheat planted in 1932 would ripen and be ready for harvest not later than 1933.

It is our opinion that the cases cited by appellee regarding judicial knowledge are inapplicable to the instant ease. We find no authority that establishes appellee’s contention that it is a matter of judicial knowledge that on April 24, 1974 (the date of execution of the note) the wheat was so close to maturity that any difference in expected yield between two tracts on the same farm would be obvious. We think that in any event such matter presents a fact question.

Under Rule 166-A, Texas Rules of Civil Procedure, summary judgment may be rendered if it is shown that there is no genuine issue as to any material fact and that the movant is entitled to summary judgment as a matter of law. Also, in a summary judgment case, the burden of proof is upon the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against him. Great American Reserve Insurance Company v. San Antonio Plumbing Supply Company, 391 S.W.2d 41 (Tex.1965); Tigner v. First Nat. Bank of Angleton, 153 Tex. 69, 264 S.W.2d 85 (1954); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952). No affidavit or other summary judgment proof was presented in support of the Motion for Summary Judgment with respect to appel-lee’s claim for recovery on the promissory note. The appellant’s asserted defenses of failure of consideration for the note and breach of expressed and implied warranties were affirmatively pleaded and sworn to in accordance with Rule 93, T.R.C.P. and it is our opinion that the appellee did not discharge its burden to establish that there is no genuine issue of material fact as to the appellant’s defenses.

Appellant’s point number 3 is sustained, and the portion of the summary judgment granted with respect to recovery on the promissory note is reversed and remanded for trial.

In its point of error number 5, the appellant contends that the trial court erred in granting summary judgment against him on the account because Rule 185, T.R.C.P. does not apply to the defendant who was only a guarantor and not a party to the account transaction, and that a genuine issue of material fact was raised by the pleadings and the affidavits on file.

Appellee sued appellant in his capacity as guarantor of the obligation of Gorrell Farms, Inc. One of the exhibits attached to Plaintiff’s First Amended Petition was a written guaranty of the account of Gorrell Farms, Inc., with Tide Products, Inc., signed by “L. E. Gorrell — Vice-Pred.” Also attached to Plaintiff’s First Amended Petition is an affidavit of one represented to have knowledge of the truth and justness of the account of Tide Products, Inc. with Gorrell Farms, Inc. The plaintiff swore to the First Amended Petition in the terms prescribed by Rule 185, T.R.C.P. That rule requires the party resisting the claim on a sworn account to file a written denial under oath that some or all of the items are not just and true. If the resisting party fails to file the sworn denial he is not permitted to deny all or any part of the claim. However, it has been established that a stranger to the account or one not a party to the account need not file the affidavit of denial required by Rule 185 in order to resist or set up a defense to the account. Copeland v. Hunt, 434 S.W.2d 156 (Tex.Civ.App., Corpus Christi 1968, writ ref’d n. r. e.); Nichols v. Acers Company, 415 S.W.2d 683 (Tex.Civ.App., Austin 1967, writ ref’d n. r. e.); Sampson v. APCO Oil Corporation, 476 S.W.2d 430 (Tex.Civ.App., Amarillo 1972, no writ). In each of these cases it was held that the defendant was a third party guarantor or stranger to the transactions underlying the sworn account and therefore was permitted to controvert and contest the account upon which the plaintiff had sued even though the defendant did not file a written denial under oath. Although a sworn account is prima facie evidence sufficient to support judgment as between parties unless denied under oath, this rule does not apply to parties who are strangers to the transactions. Sampson v. APCO Oil Corporation, supra.

On the basis of the pleadings and the summary judgment proof submitted in the instant case, it is our opinion that appellant, sued as a third party guarantor, was not required to deny under oath the justness and truth of the specified items in order to resist the account. Also, he was entitled to controvert and contest appellee’s claim by his affirmative defenses. See Copeland v. Hunt, supra.

Appellee asserts that in defendant’s affidavit in support of his motion in Opposition to Plaintiff’s Motion for Summary Judgment appellant admits “An agent for Tide Products called upon me for the purpose of selling fertilizer that was expressly and impliedly warranted to increase the yield on the crop grown on my farm. . . .” We do not think this quoted language establishes a debtor-creditor relationship of such nature as to prevent the defendant guarantor from asserting his defenses even though there is an absence of the Rule 185 denial on the defendant’s part. In the case of McCamant v. Batsell, 59 Tex. 363 (1883) in discussing the predecessor statute to the present Rule 185, the Supreme Court stated:

“It is not believed that a debt which is not the result of a transaction between the parties to it, and in reference to which they have equal means of knowledge, but which is the result of a transaction between one of them and some other person, can constitute such an account as the statute contemplates may be proved by the affidavit of a plaintiff, or as a defendant will be compelled to deny in whole or in part under oath, before he will be permitted to introduce evidence to disprove a prima facie case which the statute contemplates may be made by the affidavit.” Id. at 370-371.

Although as indicated in his affidavit in opposition to plaintiff’s motion for summary judgment, appellant was familiar with the representations made by the agent of Tide Products, Inc., and knew that the use of the chemicals did not result in the increased production as represented, this does not necessarily mean that he had sufficient personal knowledge of the specific items and services allegedly furnished to Gorrell Farms, Inc., by Tide Products, as set out in the sworn account, to enable him to deny the justness of the account as to various specific items set out in the account between Tide Products, Inc. and Gorrell Farms, Inc. Unless the appellant, as guarantor, had personal knowledge of the specific transactions with respect to the specific items set out in the account between Tide Products, Inc. and Gorrell Farms, Inc., as to the defendant-guarantor, such account would not be required to be denied under oath by him; it cannot be established by affidavit made in behalf of Tide Products, Inc.; and it is hearsay and inadmissible against the guarantor. Smith v. West Texas Hospital, Inc., 487 S.W.2d 143 (Tex.Civ.App., Amarillo 1972, no writ); Sampson v. APCO Oil Corporation, supra, and eases cited therein.

The record does not show the precise nature of the relationship between the ap-pellee and the appellant as guarantor of the account. Although the signed guaranty instrument had the words “Vice-Pred.” after his signature, there is no showing that the goods and services were ordered by or furnished to the appellant. It does not appear that appellant acted as agent for Gorrell Farms, Inc. Indeed, the fact that appellant was sued in the capacity of guarantor of the account of Gorrell Farms, Inc. is indicative that the appellee did not regard him as acting in a representative capacity for Gor-rell Farms, Inc., but rather in his individual capacity as a third party guarantor and not as a party to the account.

Appellee asserts that appellant, as an officer of Gorrell Farms, Inc., is chargeable with knowledge of all transactions entered into by Gorrell Farms, Inc. Although the knowledge imputed to appellant could form the basis for his ultimate liability on an account, properly proven, where Gorrell Farms, Inc. was the debtor, in the absence of a showing that the guarantor had personal knowledge with respect to each of the items of goods and services set out in the account, we do not believe such imputation of knowledge would enable him to properly deny under oath the truth and justness of the specific items alleged to have been furnished to Gorrell Farms, Inc., by Tide Products, Inc.; if he did not know such matters personally he could not properly deny them under oath since they would be hearsay as to him. Sampson v. APCO Oil Corporation, supra. Further, a failure to deny the account under oath does not bar appellant’s defenses upon other grounds. Copeland v. Hunt, supra.

Appellee contends that the appellant’s only effective pleading was his First Amended Original Answer which set up as defendant’s only defense, the alleged failure of consideration and breach of warranty as to the note, and that such answer is inapplicable to the account. Although such defenses were not formally included in Defendant’s Amended Original Answer with respect to the account, nevertheless the summary judgment proof received by the trial court in Opposition to Plaintiff’s Motion for Summary Judgment, including appellant’s affidavit, adequately raises the defenses of failure of consideration and breach of warranty with regard to the ap-pellee’s claim asserted in its First Amended Original Petition which encompassed both the note and the account. Where facts appear in affidavits upon motion for summary judgment which, if true, constitute a defense against the contentions of the moving party, summary judgment should be denied, even if there is an absence of formal defensive pleading. See Smith v. Crockett Production Credit Association, 372 S.W.2d 956 (Tex.Civ.App., Houston 1963, writ ref’d n. r. e.). In this connection, we note that it has been held that under such circumstances the trial court should deny the entry of summary judgment and permit amendment of the pleadings to conform to the summary judgment proof. Womack v. Allstate Insurance Company, 156 Tex. 467, 296 S.W.2d 233 (1956).

It is our opinion that the appellee’s summary judgment proof failed to establish that there is no genuine issue of material fact as to the appellant’s affirmative defenses of failure of consideration and breach of warranty with regard to the ap-pellee’s claim against the appellant as guarantor of the asserted debt of Gorrell Farms, Inc. Point of error number 5 is sustained.

Since we have sustained the points of error urged by appellant against the summary judgment rendered by the trial court regarding the causes of action asserted against him upon the note and the sworn account, respectively, we do not reach the remaining points raised by the appellant. Accordingly, the summary judgment is reversed and the causes asserted are remanded for trial.


source: Caselaw Access Project

author: KLINGEMAN, Justice.

license: Public Domain

text:
    William A. SWINNEY, and William A. Swinney, Inc., Appellants, v. Walter L. WINTERS, Jr., Appellee.
    No. 15374.
    Court of Civil Appeals of Texas, San Antonio.
    Dec. 31, 1975.
    Rehearing Denied Jan. 28, 1976.

      Dibrell, Dotson & Dibrell, Edward R. Woolery-Price, San Antonio, for appellants.
    Luther E. Rutherford, San Antonio, for appellee.
   KLINGEMAN, Justice.

Appellants, William A. Swinney and William A. Swinney, Inc., hereinafter called “Swinney,” appeal from an adverse judgment awarding appellee, Walter L. Winters, Jr., hereinafter called “Winters,” damages in the sum of $22,640.00 in a suit pertaining to the construction and sale of a house and lot by Swinney for Winters. Trial was to a jury who found, in answer to the only special issues submitted, (1) that Swinney had not completed the construction of the house in accordance with the plans and specifications on or about March 1,1973; (2) that on or about March 1,1973, subject only to such completion of construction, Winters was ready, willing, and able to close the deal as buyer of such residence and lot; (3) that the market value of the residence and lot on or about March 1, 1973 was $70,000.00.

Winters is an architect and Swinney builds and sells homes. Winters desired to build a home for himself and had prepared some plans but was looking for a desirable lot. Winters found a lot, which was owned by Swinney, which he deemed suitable. Winters tried to purchase such lot but was told by Swinney that he would not sell the lot unless Swinney built a house on it. After some negotiations, Winters and Swinney entered into a contract dated February 15, 1972, in which they agreed that Swinney would construct a residence on the lot according to certain agreed plans and specifications prepared by Winters, and would sell and convey such property to Winters for a consideration of $49,370.00 with the deal to be closed within 130 days. Winters put up $5,000.00 earnest money. It appears from the record that considerable delay thereafter ensued. Swinney contends that the delay was caused by Winters’ changes in house plans, weather problems, and some unusual features in the house; while Winters contends that, basically, the delay was the fault of Swinney. In any event, several extensions of time were agreed to and Swinney and Winters also agreed to an additional $3,000.00 consideration to cover Winters’ changes. Finally, according to Winters, Swinney told him that the house could be completed in a week or two and that he could go ahead and schedule a closing date, and February 22,1973 was agreed to. On February 20, Winters went by the house and was of the opinion that it could not be completed in two more days. He then called Swinney, who somewhat reluctantly agreed to change the closing date to March 1. On February 28, Winters visited the site, and according to Winters, a large number of things were yet to be done. He called Swinney again and told him that he would not close until they were completed. Swinney said that he was tired of messing with the house, and that if Winters didn’t want to close the sale, he would sell it to someone else. Swinney put up a for-sale sign on the lot, a realtor noticed it, found out the sale price, and immediately sold it to a customer. The sale price was $62,-500.00.

Swinney asserts 21 points of error which can be broken down into the following categories: (1) points of error with regard to the pleadings; (2) points of error complaining of the admission or exclusion of certain testimony; (3) a point of error complaining of certain remarks made by the trial court; (4) points of error complaining of the failure of the court to submit certain special issues; (5) points of error pertaining to the award of damages; (6) error of the trial court in denying Swinney judgment non obstante veredicto.

PLEADINGS

Swinney’s first point of error complains that the trial court erred in overruling his motion to strike pleadings because the first paragraph of Winters’ first amended petition is a paraphrasing and restatement in different language of the same paragraph previously ordered stricken by the court. In this connection, he asserts the amended pleading was filed within seven days of the date of trial without leave for filing first being obtained, in violation of the rules of civil procedure.

This point is without merit and is overruled. Rule 63, Tex.R.Civ.P., pertaining to amendments of pleadings, has been given a liberal interpretation by our courts and the rule itself provides that leave shall be granted by the judge unless there is a showing that such amendment would operate as a surprise to the opposite party. Swinney’s motion to strike the pleading does not contain an allegation of surprise. Swinney has not asserted here any surprise or prejudice; and therefore, any irregularity of failure to comply with the rules of civil procedure was cured by the trial court’s action in considering the amended pleading. Consolidated Furniture Company v. Kelly, 366 S.W.2d 922 (Tex.1963); W. C. Turnbow Petroleum Co. v. Fulton, 145 Tex. 56,194 S.W.2d 256 (1946); Lucas v. Hayter, 376 S.W.2d 790 (Tex.Civ.App.—San Antonio 1964, writ dism’d).

Moreover, the record here does not show whether leave was had or not and since the amended petition was considered by the court, leave is presumed. U. S. Letter Carriers Mutual Benefit Association v. Sypulski, 364 S.W.2d 840 (Tex.Civ.App.—Ft. Worth 1963, no writ). Swinney’s point of error number one is overruled.

By his 12th point of error, Swinney urges that the judgment entered exceeds the relief sought by Winters, and that the prayer is deficient in several respects.

The thrust of Swinney’s contention in this regard is that the prayer is not specific enough to determine the relief sought. An examination of the petition on which Winters went to trial discloses that he seeks damages on two alternate theories: (1) damages for false and fraudulent conduct of Swinney in an amount in excess of $100,-000.00; (2) in the alternative, damages for wrongful breach of contract, under which he asserts that because of such wrongful breach of contract, he is entitled to recover the difference between the reasonable market value of the property, which he alleges to be $85,000.00, and the contract price.

It is clear that the jury’s award was based on damages for breach of contract. The judgment awarded Winters damages in the amount of $22,640.00. The jury found the market value of the property to be $70,000.00. An earnest money payment of $5,000.00 was made by Winters. The parties agreed on an additional consideration of $3,000.00 for extras.

$70,000.00 — Jury finding of market value
- $49,370.00 — Contract price
$ 5,000.00 — Partial payment or earnest money
-$ 3.000.00 — Additional consideration for extras
$22,630.00 — $10.00 less than judgment awarded by court

Apparently a typographical error of $10.00 was made in typing the judgment, and the court’s award should have been $22,630.00 instead of $22,640.00.

As it can be ascertained from the entire pleadings, the relief and damages sought by plaintiff, the pleadings are sufficient to authorize the judgment entered.

ADMISSION AND EXCLUSION OF TESTIMONY

By two points of error Swinney complains that the trial court erred in: (a) permitting opinion testimony of plaintiff’s witness, Slater, as to the market value of the property because such opinion testimony constitutes secondary evidence, and the market value was conclusively established as matters of law by testimony which showed that the house and lot were actually sold to a third party for $62,500.00; (b) permitting testimony by Winters as to the market value of the house and lot because (1) his opinion was secondary evidence, (2) was self-serving, (3) was not based upon knowledge of sales in the area or other real estate values.

Swinney testified that the house and lot were sold to a third party for $62,500.00. Slater, a licensed real estate broker and realtor, testified that the fair market value of the property involved as of March 1,1973 was between $70,000.00 and $80,000.00; that he had inspected the property, and had also checked some comparables. The only objections to his testimony were (a) that he was not qualified as a licensed appraiser; (b) an objection to the inclusion of the date — March 1, 1973; (c) an objection that such testimony was a comment on the weight of the evidence; (d) an objection to his testimony as to comparable sales, because it is not shown that it was related to this specific house. All such objections were overruled. It is to be noted that there was no objection to the testimony on the ground that it was not the best evidence, or that it was secondary evidence, which is the only thing complained of in Swinney’s point of error. Swinney makes no complaint on the appeal as to the matters on which his objections were based.

With regard to Winters’ testimony, Winters testified that he is an architect and that it is a part of his training and duties to prepare construction costs. It is further evident from his testimony that he is familiar with the area and the particular house here involved. Winters further testified that he estimated the cost of the house and land right at $70,000.00 as of February 1972, and that he secured other bids on the construction and that they were in line with his estimate. Defendant’s objection to such testimony on the grounds of its relevancy was overruled. Winters also testified that the fair market value of the property as of February 15, 1972, was approximately $70,-000.00 and as of March 1973, approximately $85,000.00. There was no objection to this testimony.

As a general rule, the failure to make a timely and proper objection to proffered evidence will prevent a party from subsequently complaining on appeal of its admission by the trial court. State v. Landers, 377 S.W.2d 777 (Tex.Civ.App.—Tyler 1964, no writ); Wesco Production Company v. Birdwell & Son Drilling Company, 320 S.W.2d 411 (Tex.Civ.App.—Eastland 1959, no writ); 23 Tex.Jur.2d—Evidence, Section 208, p. 320. Even if the testimony elicited on examination is improper, no error was committed by the trial court where counsel did not properly object, did not obtain a ruling by the trial court at the time it was offered, and did not ask the court to instruct jury not to consider such testimony. McKenzie v. State, 383 S.W.2d 177 (Tex.Cr.App.1964); Royal v. Cameron, 382 S.W.2d 335 (Tex.Civ.App.—Tyler 1964, writ ref’d n. r. e,).

Swinney’s points of error as to the erroneous admission of testimony are overruled.

By his fourth, fifth, and sixth points of error, Swinney complains that the trial court erred in excluding certain testimony of defendant’s witnesses, Shafer and Heth-erington, because such testimony would (a) support and corroborate Swinney’s testimony that he warranted his houses and honored these warranties; (b) support and corroborate Swinney’s testimony that it is impossible to complete a home in every detail, and that every home requires some work after closing; (c) establish Swinney’s reputation as a builder.

Hetherington testified that Swin-ney had built a house for him. He was asked about the condition of the house at the time of closing. Objection was made and sustained that a house which Swinney may have built for Hetherington has no relevancy or bearing on this case. Hether-ington then testified that he considered Swinney a man of his word. An objection that the question calls for a conclusion based on facts not in evidence, that no proper predicate had been laid, and that it was based on hearsay, was sustained. He was then asked whether, in his dealings with Swinney, he had ever made any statements regarding what he could do with this house. Objection that this was hearsay was sustained. We think the objections were properly sustained. Some of the proffered testimony was hearsay and most of it pertained to other matters which had no bearing on this case. As a general rule in Texas, evidence of this character as to transactions between a party to the suit and a third party are inadmissable. Waul v. Hardie, 17 Tex. 553 (1856); Beckner v. Barrett, 81 S.W.2d 719 (Tex.Civ.App.—Dallas 1935, writ dism’d); Davidson v. Swanson, 24 S.W.2d 776 (Tex.Civ.App.—Beaumont 1930, no writ). The testimony excluded is irrelevant and immaterial to any issues in this case, and would shed no light on any material issue here involved.

The other excluded testimony complained of is that of witness, Shafer. Shafer is the staff appraiser for Richard Gill Company, which company deals in the financing of homes, and had previously worked for Alamo Savings Association. He testified that a finished house is one that is ready to move into, substantially complete as far as the things one looks for in a house. Plaintiff’s objection as to the opinion and interpretation was sustained. He then asked what Alamo Saving’s policy was and what criteria had to be met before they would agree to a loan. Plaintiff’s objections that Alamo’s loan policies were not involved and were not an issue in this case were sustained. We think that the objections were all properly sustained on the grounds hereinbefore set forth.

Moreover, nowhere in the record is there contained any bill of exceptions as to the excluded testimony of either Shafer or Hetherington. There is nothing in the record to show what such excluded testimony would have been. Error is not shown in the exclusion of evidence unless the appellant brings before the appellate court a record that shows clearly not only what the evidence would have been if admitted, but also its relevancy; and where an appellant excepts to a court’s ruling excluding testimony of a witness, but does not go further and develop by bill of exceptions what the witness’s answer and testimony would have been, no error on the part of the trial court is demonstrated. LeNoble v. Weber, Hall, and Caudle, Inc., 503 S.W.2d 321 (Tex.Civ.App.—Tyler 1973, no writ); Merrifield v. Seyferth, 408 S.W.2d 558 (Tex.Civ.App.—Dallas 1966, no writ); Gass v. Baggerly, 332 S.W.2d 426 (Tex.Civ.App.—Dallas 1960, no writ); Ex Parte Taylor, 322 S.W.2d 309 (Tex.Civ.App.—El Paso 1959, no writ); Texas Associates v. Joe Bland Construction Co., 222 S.W.2d 413 (Tex.Civ.App.—Austin 1949, writ ref’d n. r. e.); Rule 372, Tex.R. Civ.P.

No reversible error is shown with regard to the admission or exclusion of evidence.

COMMENTS OF THE COURT

By one point of error, Swinney complains that the trial court erred in making statements to plaintiff’s attorney in the presence of the jury, which statements were directed toward questions asked by plaintiff’s attorney, because the statements made by the court were comments by the court on the weight of the evidence.

During the cross-examination of Swin-ney, he was asked to look at plaintiff’s exhibit number 10 and some questions were asked about such exhibit. The court interrupted and stated that according to his record such exhibit was not in evidence. Defendant’s counsel then stated that whether material was in evidence or not is a responsibility of counsel and the court should not comment on its not being in evidence. Such point of error is without merit and is overruled. It was conceded by counsel for both parties that such exhibit was not in evidence. The court merely stated its true status. Such statement was not calculated to cause, nor could it cause, any harm or benefit to either party. Such statement is not a comment on the weight of the evidence.

FAILURE TO SUBMIT ISSUES

By two points of error, Swinney complains that the trial court erred in not submitting to the jury special issues on estop-pel, waiver, failure of consideration, substantial performance, and the contract price of the house and lot. Winters asserts that such points of error are without merit because such special issues were not properly submitted to the court, and no objection was made by Swinney to the charge as submitted.

The transcript contains some 23 proposed special issues, many of which have been stricken through and some of which have a notation thereon “not submitted.” Such special issues consist of nine pages, en masse, with a file mark on the last page. None of such special issues have any notation thereon showing that they were ever presented to the court, or any action by the court thereon. The transcript contains an agreement of counsel to file such group of special issues, but includes the following order of the trial court:

The Court qualifies the foregoing Agreement and the Order pursuant thereto in the following respects: The defendants’ requested special issues were informally considered and discussed by the Court and counsel before the charge was prepared. The Court made no ruling on them, by endorsement or otherwise, except to indicate they were not acceptable. They were neither formally urged nor filed and the Court considered them abandoned.
[s/s James A. McKay, Jr.]

The record contains no objections or exceptions to the charge as submitted.

Swinney’s points of error pertaining to the failure to submit special issues are not properly preserved for review under our rules of civil procedure. Any objection as to the failure to submit special issues is waived where the record contains no objections to the charges as submitted, and where the requested special issues contain no dates, endorsements, or official signature of the court reflecting the court’s action thereon. Steinberg v. Medical Equipment Rental Services, Inc., 505 S.W. 2d 692 (Tex.Civ.App.—Dallas 1974, no writ); Jones v. Smith, 466 S.W.2d 47 (Tex.Civ.App.—Ft. Worth 1971, writ ref’d n. r. e.); Epperson v. Berry, 466 S.W.2d 24 (Tex.Civ.App.—Houston [1st Dist.] 1971, no writ); Bituminuis Casualty Corporation v. Jordan, 351 S.W.2d 559 (Tex.Civ.App.—Waco 1961, no writ); Ramsey v. Polk County, 256 S.W.2d 425 (Tex.Civ.App.—Beaumont 1953, no writ); Gowan v. Reimers, 220 S.W.2d 331 (Tex.Civ.App.—Ft. Worth 1949, writ ref’d n. r. e.); Barnett v. Barnett, 206 S.W.2d 273 (Tex.Civ.App.—Austin 1947, no writ); Rules 272, 273, 274, 276, 277, Tex.R. Civ.P.

Moreover, the 23 special issues shown in the transcript are not separate, but en masse, and contain no notation, endorsement, or official signature of the court on any of them. The applicable rule of law is that requested issues and instructions are required to be submitted separately, and a party who does not follow this procedure, and makes a group request of a number of such issues cannot complain on appeal of their refusal by the trial court. Where one or more special issue requested en masse should not be given, the court is justified in refusing to give any of them. Edwards v. Gifford, 137 Tex. 559, 155 S.W.2d 786 (1941); Sterling v. Tarvin, 456 S.W.2d 529 (Tex.Civ.App.—Ft. Worth 1970, writ ref’d n. r. e.); Griffey v. Travelers Insurance Company, 452 S.W.2d 725 (Tex.Civ.App.—Amarillo 1970, writ ref’d n. r. e.); Sunset Motor Lines v. Blasingame, 245 S.W.2d 288 (Tex.Civ.App.—Dallas 1951, writ dism’d).

Swinney’s points of error complaining of the failure to submit special issues are without merit and they are overruled.

DAMAGES

By a number of points of error, defendant complains that the trial court erred in granting judgment against defendants in the sum of $22,640.00 because: (a) there is no indication by the court of the basis of that amount; (b) the prayer is insufficient to support such award; (c) the sum is grossly excessive; (d) such damages were not in the contemplation of the parties at the time they executed the contract; (e) plaintiff did not incur such minor expenses as it was his duty to do in order to prevent a breach; (f) the amount is remote, speculative and unjust; (g) there is no evidence to support the verdict and judgment; (h) the jury’s answer to Issue No. 3 is against the great weight and preponderance of the evidence.

Defendant made no objections or exceptions to the court’s charge as submitted, and in particular there is no objection whatsoever to the special issue on damages, or to the court’s definition of market value. Rule 274, Tex.R.Civ.P. provides in part that a party objecting to a charge must point out distinctly the matter to which he objects and the grounds of the objection and that any complaint as to any instruction, issue, definition, or explanatory instructions, on account of any defect, omission or fault in pleading, shall be deemed waived unless specifically included in the objections.

In Whitson Company v. Bluff Creek Oil Company, 156 Tex. 139, 293 S.W.2d 488 (1956), appellant complained of a damage award for $8,000.00 as the market value of a one-eighth overriding royalty. Defendant’s only objection as to the special issue submitting market value was that the issue did not inquire as to the proper measure of damages. No instruction was requested regarding the factors which the jury might consider in measuring market value. The Supreme Court said:

If the market value as submitted was not the correct measure of damages, objection should have been made to the issue by Whitson Company, pointing out distinctly the grounds of its objections. Rule 274, Texas Rules of Civil Procedure. Having failed to do so, it cannot thereafter be heard to say that the measure of damages as submitted was improper.

In Howell v. Bowden, 368 S.W.2d 842 (Tex.Civ.App.—Dallas 1963, writ ref’d n. r. e.), the court said:

For another reason we are of the opinion that the judgment for damages should not be reversed on the ground that the judgment is based on the wrong measure of damages. Appellant made no objection to the court’s charge to the jury on the ground he here urges, or to the court’s failure to submit any issues, or to the court’s definition of intrinsic value. Under Rules 274 and 372(d), appellant waived any objections to the court’s charge on the ground that it submitted the wrong measure of damages and will not now be heard to complain that the court’s charge permitted the jury to find damages based on wrong measure. Lloyds America v. Payne et a/., Tex.Civ.App., 85 S.W.2d 794; Iowa Mfg. Co. v. Baldwin et al., Tex.Civ.App., 82 S.W.2d 994, 999; Parks v. Hines, Tex.Civ.App., 68 S.W.2d 364, 368.

Appellant made no objection to the court’s charge on the grounds he now urges and most of his points of error pertaining to damages have been waived.

Appellant’s basic remaining complaint as to damages is that there is no evidence to support the jury’s answer to Special Issue No. 3, and that the jury’s answer is against the great weight and preponderance of the evidence. He argues that the testimony that the house sold for $62,500.00 establishes that amount as the market value as a matter of law. Appellant cites no cases holding that testimony as to the actual sales price of real property is conclusive of the market value and fixes its value as a matter of law. He does cite cases that it would be error to exclude testimony as to the actual sales price of the property, and that such testimony can be considered in determining the market value of the property. We have no argument with these cases and agree that such evidence is pertinent evidence to be considered by the jury, but we do not agree that it is conclusive. There are other types of evidence which are properly admissible and which can be properly considered in determining the market value. Opinion evidence by persons qualified to testify is frequently used in determining market value. The evidence as to the sales price of the property can and should be considered, together with the other evidence before the jury, in determining the market value, as was done in this case. The record does not establish as a matter of law that the market value of the house is $62,500.00.

Swinney also contends that the jury’s answer to Special Issue No. 3 is against the great weight and preponderance of the evidence. We have heretofore set forth some of the evidence regarding market value, but we will again summarize it. The evidence is undisputed that the property sold for $62,500.00. In addition, Slater, a licensed real estate broker and realtor, testified that he had inspected the property and had checked some comparables; and that the fair market value of the property in March of 1973 would be a low figure of $70,000.00 and a high figure of $80,000.00. Winters testified that as an architect, it was part of his duty to figure and make construction costs. He testified that his estimate of the cost of the property as of February 1972, was $70,000.00; and that he took bids on the construction of the house and that his estimate was in line with the bids received by him. He further testified that as of February 15,1972, the fair market value of the property would be approximately $70,-000.00, and as of March of 1973, approximately $85,000.00.

The only other testimony as to the market value was by Mr. Flores, the real estate broker who sold the property. He testified he had sold homes in Oak Hills during the years of 1972 and 1973, and that the houses he sold were in the $50,000.00 to $65,000.00 price range. He testified he sold the property here involved for $62,500.00 and that he thought the maximum the house would be worth would be $65,000.00 as a reasonable market value. He testified that the lots in Oak Hills are expensive. He testified that when he saw a “for sale” sign on the house, he called Swinney and asked permission to show the house, and that Swinney told him the price was $62,500.00. He further testified he sold the property on the same day that he saw the sign.

There was also testimony by Swinney that he was tired of messing with the house and needed the money; that he had over $50,000.00 invested in the property and he needed to get the funds to continue his construction business.

The rule is well established in this state that an appellate court will not disturb the finding of a jury on conflicting evidence where there is some evidence to support their verdict unless the verdict is so overwhelmingly against it as to shock the conscience or to show clearly that the conclusion reached was wrong, or was the result of passion, prejudice or improper motive. Highsmith v. Tyler State Bank & Trust Company, 194 S.W.2d 142 (Tex.Civ.App.—Texarkana 1946, writ ref’d); Foley Brothers Dry Goods Company v. Settegast, 133 S.W.2d 228, 234 (Tex.Civ.App.—Galveston 1939, writ ref’d).

Although there is conflicting evidence, we have concluded that the jury’s answer to Special Issue No. 3 is not against the great weight and preponderance, and is sufficiently supported by the evidence.

Swinney also complains that the court erred in not granting his motion for judgment non obstante veredicto and that the pleadings and evidence establish his affirmative defenses of estoppel, waiver, and failure of consideration as a matter of law. We disagree.

To sustain an action of the trial court in granting a motion non obstante veredicto it must be determined that there is no evidence on which the jury could have made the findings relied on. In acting upon a motion non obstante veredicto all testimony must be considered in a light most favorable to the party against whom such motion is sought. Conflicts in testimony will be disregarded, and every reasonable intendment deducible from the evidence must be indulged in such party’s favor. Douglass v. Panama, Inc., 504 S.W.2d 776 (Tex.1974); Leyva v. Pacheco, 163 Tex. 638, 358 S.W.2d 547 (1962); Burt v. Lochausen, 151 Tex. 289, 249 S.W.2d 194 (1952); Marsh v. Orville Carr Associates, Inc., 433 S.W.2d 928 (Tex.Civ.App.—San Antonio 1968, writ ref’d); Texas Employers Insurance Association v. Smith, 235 S.W.2d 234 (Tex.Civ.App.—Galveston 1950, writ ref’d).

The evidence does not establish Swinney’s affirmative defenses of estoppel, waiver, and failure of consideration as a matter of law, nor does the evidence establish that Swinney is entitled to a judgment as a matter of law.

The judgment awards Winters damages in the amount of $22,640.00. As hereinbefore indicated, the proper award should have been $22,630.00 instead of $22,-640.00.

The judgment is reformed so as to make the amount of the damages awarded $22,-630.00, and as reformed, the judgment is affirmed.

      . The prayer complained of is as follows: “WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that Defendant be cited to answer and appear herein and that upon final hearing hereof he recover each and all of his hereinbefore alleged damages together with interest thereon at the maximum rate provided by law, all costs of suit in this behalf expended, and all such other and further relief, both general and special, at law or in equity to which Plaintiff may show himself justly entitled.”

      . Any error in not admitting or excluding evidence becomes immaterial where evidence does not affect the verdict and judgment rendered; and to be reversible error, it must appear that erroneous admission or exclusion of evidence was reasonably calculated to cause and probably did cause the rendition of an improper verdict and judgment. Rule 434, Tex.R.Civ.P.; Gomez Leon v. State, 426 S.W.2d 562 (Tex. 1968); Purvis v. Johnson, 430 S.W.2d 226 (Tex.Civ.App.— San Antonio 1968, no writ); Ryder Tank Lines, Inc. v. Bentley, 397 S.W.2d 914 (Tex. Civ.App. — Ft. Worth 1965, writ refd n. r. e.).


author: RALEIGH BROWN, Justice.

text:
    Donna ARMSTRONG, Appellant, v. Robert D. ARMSTRONG, Jr., et al., Appellees.
    No. 4849.
    Court of Civil Appeals of Texas, Eastland.
    Jan. 8, 1976.
    Rehearing Denied Jan. 29, 1976.

      0. Glenn Weaver, Tabor, Fowler & Cline, Irving, for appellant.
    Jay M. Goltz, Dallas, for appellees.
   RALEIGH BROWN, Justice.

This is a suit for a portion of the insurance proceeds on the life of Robert D. Armstrong, Sr. His surviving sons, Robert D. Armstrong, Jr. and Stephen L. Armstrong, each sued Donna Armstrong, surviving widow and named beneficiary under the policies and New York Life Insurance Company for $10,000. New York Life interplead the disputed proceeds and was discharged from the suit. Judgment was entered authorizing recovery of $10,000 for each of the sons after jury findings that Robert D. Armstrong, Sr. intended upon his death such disbursement. Donna Armstrong appeals. We reverse and remand.

She argues the trial court erred in overruling her motion for judgment notwithstanding the verdict because the estates of Avis Armstrong and Robert Armstrong, Sr. were indispensable parties to the suit. We agree.

The ultimate relief sought by Robert D. Armstrong, Jr. and Stephen L. Armstrong was the imposition of an oral trust upon insurance proceeds. They plead that Donna Armstrong was made the beneficiary of the insurance policies after she agreed with Robert, Sr. the proceeds would be paid in accordance with his desires. The sons contend their father desired $10,000 to be paid each son, $5,000 to the Estate of Avis Armstrong, Robert, Sr.’s bills paid, and “Donna have a little something.” Before this court the sons agree trial was had upon trust issues only.

If in fact a trust was created, the pleadings, the evidence and admissions of Robert, Jr. and Stephen Armstrong establish the beneficiaries of such trust were themselves, the estates of Avis Armstrong and Robert, Sr., and Donna Armstrong.

In ruling on the necessity of an indispensable party to a suit, the court in Petroleum Anchor Equipment, Inc. v. Tyra, 406 S.W.2d 891 (Tex.1966), said:

“If Fite were truly an indispensable party to the suit, we would agree that the error in proceeding in his absence was fundamental error which could and should have been noticed by the court of civil appeals on its own motion. It was so held in Sharpe v. Landowners Oil Ass’n., 127 Tex. 147, 92 S.W.2d 435 (1936), and it must be so in the narrower concept of fundamental error announced in the opinions in Ramsey v. Dunlop, 146 Tex. 196, 205 S.W.2d 979 (1947). Jurisdiction over indispensable parties to a suit is as essential to the court’s right and power to proceed to judgment as is jurisdiction of the subject matter. See Scott v. Graham, 156 Tex. 97, 101, 292 S.W.2d 324, 327 (1956). Compare McCauley v. Consol. Underwriters, 157 Tex. 475, 304 S.W.2d 265 (1957).”

The court continued:

“Decision of any question of necessary parties to a suit should be made in light of the provisions of Rule 39, Texas Rules of Civil Procedure.”
“Rule 39, titled ‘Necessary Joinder of Parties,’ reads:
(a) Necessary joinder. Except as otherwise provided in these rules, persons having a joint interest shall be made parties and be joined as plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so, he may be made a defendant or, in proper cases, an involuntary plaintiff.
(b) Effect of failure to join. When persons who ought to be parties if complete relief is to be accorded between those already parties, have not been made parties and are subject to the jurisdiction of the court, the court shall order them made parties. The court in its discretion may proceed in the action without making such persons parties, if its jurisdiction over them can be acquired only by their consent or voluntary appearance; but the judgment rendered therein shall not affect the rights or liabilities of persons who are not parties.
(c) Names of omitted persons and reasons for nonjoinder to be pleaded. In any pleading in which relief is asked, the pleader shall set forth the names, if known to him, of persons who ought to be parties, if complete relief is to be accorded between those already parties, but who are not joined, and shall state why they are omitted.
It is at once apparent that the ‘necessary’ parties of which the rule speaks fall into two categories: (1) those who under paragraph (a) ‘shall be made parties,’ and (2) those who under paragraph (b) ‘ought to be parties if complete relief is to be accorded between those already parties.’ It is also at once apparent that ‘persons having a joint interest’ within the meaning of paragraph (a), properly interpreted, are indispensable parties, but that those who simply ought to be joined if complete relief is to be accorded between those already parties are not indispensable.”

The court in Scott v. Graham, 156 Tex. 97, 292 S.W.2d 324 (1956), stated:

“ . . . Whether a person is a necessary party is determined by his interest in the subject matter and outcome of the suit. As stated in Veal v. Thomason, 138 Tex. 341, 159 S.W.2d 472, all persons who have or claim a direct interest in the object and subject matter of the suit and whose interests will necessarily be affected by any judgment that may be rendered therein, are not only proper parties, but are necessary and indispensable parties.”

See also Royal Petroleum Corporation v. Dennis, 160 Tex. 392, 332 S.W.2d 313 (1960).

The general rule is that in suits affecting trusts or respecting the trust property, the beneficiary is a necessary party. Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377 (1945).

Robert Armstrong, Jr. and Stephen L. Armstrong seek a portion of an alleged trust res while recognizing the existence of other beneficiaries without making them parties to the litigation. All beneficiaries would have a “joint interest” and thus be indispensable parties. Their omission is reversible error.

This holding makes it unnecessary to consider the other points of error raised by Donna Armstrong.

The judgment is reversed and the cause remanded.


author: PHILLIPS, Chief Judge.

text:
    D. R. BERNARD et al., Appellants, v. L. S. S. CORPORATION, Appellee.
    No. 12337.
    Court of Civil Appeals of Texas, Austin.
    Jan. 14, 1976.
    Rehearing Denied Feb. 4, 1976.
    Michael P. Kessler, Houston, for appellants.
    Edmund L. Cogburn, John M. Helms, Dow, Cogburn & Friedman, Houston, for appellee.
   PHILLIPS, Chief Judge.

This is an appeal from a summary judgment entered in favor of appellee L.S.S. Corporation on a cross-claim for indemnity against appellants D. R. Bernard, J. B. Richardson, W. R. Knowles, and Darrell D. Wilson, based upon appellants’ written guaranty of a lease agreement by leasee, Mother Blues, Inc.

We affirm the judgment of the trial court.

On December 29, 1967, Mother Blues, Inc., leased premises from the L.S.S. Corporation for use as a nightclub. Subsequently, Mother Blues, Inc., failed to pay admission taxes to the State. On December 8, 1969, the State imposed a statutory lien on the leased premises under Tex.Laws 1957, Ch. 34, § 1, at 70. On August 16,1973, the State sued Mother Blues, Inc., for the admission tax delinquency, and L.S.S. Corporation for foreclosure of the statutory lien. L.S.S. Corporation cross-claimed against Mother Blues, Inc., for indemnity under sections 7 and 13 of the lease for any liability it might incur for the failure of Mother Blues, Inc., to pay admission taxes during the period from April 1, 1968 to September 30, 1970, and against the appellants under their guaranty for any liability L.S.S. Corporation might incur for the failure of Mother Blues, Inc., to pay admission taxes between January 1,1968 and September 30, 1969, the period the guaranty was in effect.

On January 30, 1975, the district court granted summary judgment to the State of Texas for $13,527.77 plus interest against Mother Blues, Inc., and for foreclosure of the State’s statutory lien on the leased premises owned by L.S.S. Corporation. The court then granted summary judgment to the L.S.S. Corporation on its cross-claim against Mother Blues, Inc., and the appellants in the sum of $18,527.77 for indemnity and attorney fees.

Appellants bring their appeal from the summary judgment against them on the cross-claim of L.S.S. Corporation.

Appellants are before us on. three points of error, contending, first, that ap-pellee’s cause of action for indemnity for the tax liability was barred by the four-year statute of limitations; second, that the appellants were not personally liable to ap-pellee under the guaranty because the guaranty period had expired before the State brought suit on the unpaid taxes and the statutory lien; and third, that summary judgment was improper because of insufficient proof offered by appellee and the existence of fact issues.

The indemnity clause in question is found in section 13 of the lease. It provides, in pertinent part:

“Tenant agrees to indemnify and save landlord harmless from all claims (including costs and expenses of defending against such claims) arising (or alleged to arise) from any act or omission of Tenant

We construe this clause as a promise to indemnify against liability. As such, a cause of action accrues to the indemnitee only when liability becomes fixed, as upon rendition of a judgment. Russell v. Lemons, 205 S.W.2d 629 (Tex.Civ.App.1947, writ ref’d n. r. e.); Texas Auto Services, Inc. v. Kemp, 478 S.W.2d 646 (Tex.Civ.App.1972, no writ). We hold that the cause of action of L.S.S. Corporation against Mother Blues, Inc., for indemnity for the unpaid admission taxes arose only upon foreclosure of the State’s statutory lien on appellee’s real property, not, as appellants contend, when Mother Blues, Inc., became delinquent in its tax payments. Consequently, appellee’s cross-claim for indemnity was not barred by the four-year statute of limitations.

Appellants contend in their second point of error that their guaranty had expired on September 30, 1969, and was no longer in effect when appellee obtained judgment for indemnity against Mother Blues, Inc., on January 80, 1975. Consequently, they maintain they cannot be held personally liable under the guaranty for the indemnity judgment against Mother Blues, Inc.

We agree that the guaranty expired by its own terms on September 30, 1969. However, it was while the guaranty was in force that Mother Blues, Inc., incurred liability for payment of the admission taxes. The guaranty agreement made appellants personally liable for performance by Mother Blues, Inc., of all the lease provisions, and it is undisputed that the failure to pay admission taxes when due was a breach of section 7 of the lease, by which Mother Blues, Inc., promised “(to) comply with all Federal, State, Municipal, and other laws, ordinances, rules, and regulations applicable to the leased premises, including business conducted thereon.” Appellants cannot escape personal liability on their guaranty for the non-performance of Mother Blues, Inc., of its lease obligations while the guaranty was in effect, simply because the assured party, here L.S.S. Corporation, had no cause of action for indemnity until it had incurred liability by virtue of the rendition of judgment for the State against Mother Blues, Inc., and foreclosure of the statutory lien on its real property.

We also overrule appellants’ third and last point of error which asserts that the trial court erred in granting summary judgment. The questions presented the court were solely questions of law relating to the interpretation of the guaranty contract. The facts giving rise to the lawsuit are admitted. Gibbs v. General Motors Corp., 450 S.W.2d 827 (Tex.1970). We also hold that if there was any ambiguity in the contract, a question upon which we express no opinion here, in the absence of pleadings to raise that issue, we consider it waived. Ross v. Burleson, 274 S.W.2d 105 (Tex.Civ.App.1954, no writ); Pickering v. First Pyramid Life Insurance Co. of America, 491 S.W.2d 184, 185 (Tex.Civ.App.1973, writ ref’d n. r. e.); Sale v. Contran Corp., 486 S.W.2d 161, 165 (Tex.Civ.App.1972, writ ref’d n. r. e.).

The judgment of the trial court is in all things affirmed.

Affirmed.

      . Until this provision was amended in 1971 the State could obtain a lien for unpaid admission taxes on “all property used by the owner or operator of any place of amusement.” (Emphasis added)


author: PER CURIAM.

text:
    John Carroll FORTUNE, Appellant, v. Capitola W. FORTUNE, Appellee.
    No.12408.
    Court of Civil Appeals of Texas, Austin.
    Jan. 14, 1976.

      William E. Adams, Senterfitt & Adams, San Saba, for appellant.
    B. Allen Cumbie, Hollon & Marion, Boerne, for appellee.
   PER CURIAM.

Appellant, John Carroll Fortune, on December 4, 1975, filed with the Clerk of this Court a motion to extend time for filing the statement of facts in a cause tried in the district court of San Saba County. Appel-lee, Capitola W. Fortune, responded in opposition to the motion. Appellee contends that appellant did not request the court reporter to prepare the transcript within a reasonable time after the motion for new trial was overruled by operation of law. We are of the opinion that appellee’s contention is well taken, and, accordingly, the motion to extend time for filing will be overruled.

The judgment was entered on August 11, 1975. The motion for new trial was filed on August 20,1975, and was overruled by operation of law on October 6, 1975. Fifty-nine days later, December 4, 1975, appellant requested the court reporter to prepare the statement of facts. The court reporter was unable to complete the statement of facts in time for filing with the Clerk of this Court on December 5,1975, the sixtieth day after the motion for new trial was overruled by operation of law.

Tex.R.Civ.P. 386 provides that by motion timely filed with the Clerk of the Court of Civil Appeals “good cause” may be shown why the statement of facts could not have been filed within the prescribed time.

Appellant filed his motion for extension of time within the time permitted by Rule 386. This Court is authorized to extend the time for filing the statement of facts upon a showing of “good cause” why the statement of facts could not have been filed within the sixty-day period. In cases dealing with the question, the courts have consistently held that the inability of the court reporter to prepare the statement of facts or the clerk to prepare the transcript because of the press of official business constitutes “good cause.” The Save Our City Organization of San Antonio, et al. v. Texas Highway Commission, 521 S.W.2d 895 (Tex.Civ.App. 1975, writ ref’d n. r. e.).

In considering a motion for extension of time for the filing of the statement of facts, however, the preliminary question to be decided is whether the request for the preparation of the statement of facts was made within a reasonable time after the entry of the judgment or after the motion for new trial was overruled. Patterson v. Hall, 430 S.W.2d 483 (Tex.1968).

Appellant requested the court reporter to prepare the statement of facts fifty-nine days after the motion for new trial was overruled by operation of law. Such request was not made within a reasonable time after the motion for new trial was overruled by operation of law, and, as such, appellant has failed to show good cause why the statement of facts was not filed within the time permitted by Rule 386. Wigley v. Taylor, 393 S.W.2d 170 (Tex.1965), Reinhardt v. Martinez, 439 S.W.2d 478 (Tex.Civ.App.1969, no writ), Gutierrez v. Casanova, 450 S.W.2d 771 (Tex.Civ.App.1970, no writ), Vaughan v. Commercial Insurance Co., 476 S.W.2d 428 (Tex.Civ.App.1972, no writ), The Save Our City Organization of San Antonio, et al. v. Texas Highway Commission, supra.

Appellant’s motion for extension of time is overruled.

      . Rule 386 was amended effective January 1, 1976. The amendment repeals that part of the rule which permitted extensions of time on motion filed within fifteen days after expiration of the sixty-day period when the motion showed good cause why the record could not be filed timely. Tex.R. Civ.P. 21c governs the consideration of motions for extensions of time filed after January 1, 1976.


text:
    Dwain A. SHIPMAN, Appellant, v. CITIZENS SAVINGS & LOAN ASSOCIATION, Appellee.
    No. 4855.
    Court of Civil Appeals of Texas, Eastland.
    Jan. 15, 1976.
    Rehearing Denied Feb. 5, 1976.
    0. Glenn Weaver, Tabor, Fowler & Cline, Irving, for appellant.
    George Watson, Grand Prairie, for appel-lee.
   RALEIGH BROWN, Justice.

This is a summary judgment case involving a secondary mortgage loan. Dwain A. Shipman sued Citizens Savings and Loan Association alleging violations of Article 5069, Sections 5.02(5), 5.08(3), 5.04(1), V.A. C.S. and seeking recovery of twice the amount of interest contracted for and reasonable attorney’s fees under Article 5069-8.01, Y.A.C.S. Shipman also alleged negligence and estoppel. Both plaintiff and defendant filed motions for summary judgment. Citizens’ motion was granted; Ship-man’s denied. Shipman appeals. We reverse and remand.

Shipman argues the trial court erred (1) in denying his motion for summary judgment, (2) in granting Citizens’ motion because it was not established as a matter of law Citizens did not violate the provisions of Article 5069-1.01 et seq. V.A.C.S., and (3) in granting Citizens’ motion because there existed issues of material facts regarding the allegations of negligence and estoppel.

Dwain A. Shipman, to finance improvements on his home, executed a Mechanic’s' and Materialman’s Lien Note to C. R. Ship-man. The obligation was assigned to Citizens and at the time of the assignment, Dwain Shipman requested that the loan be covered by Credit Life and Credit Disability Insurance. Approximately two years later, after becoming disabled, Shipman discovered that he was not covered by Credit Disability Insurance and instituted the instant suit.

He contends: the Mechanic’s Lien Note which he signed included a provision providing for attorney’s fees if placed in the hands of an attorney for collection, thus violating Section 5.02(5); Citizens failed to furnish a written statement showing the names and addresses of the lender and borrower, thus violating Section 5.04(1); and the loan being conditioned upon the obtaining of Credit Life Insurance, Citizens failed to supply the statement required by Section 5.03(3). Shipman seeks double the interest contracted for and attorney’s fees as provided by Section 8.01.

We cannot hold as a matter of law that Section 5.03(3) has or has not been violated. This section provides in part:

“When insurance is required in connection with a loan made under this Chapter, the lender shall furnish the borrower a statement which shall clearly and conspicuously state that insurance is requested or required in connection with the loan, and that the borrower shall have the option of furnishing the required insurance either through existing policies of insurance owned or controlled by him or of procuring and furnishing equivalent insurance coverages through any insurance company authorized to transact business in Texas . . . ”

The summary judgment proof includes a Loan Approval and Information Sheet of Citizens Savings and Loan Association which stated the loan was subject to compliance with special conditions as stated upon it and failure to comply would void the loan. Listed as a special condition was Credit Life Insurance. The Affidavit of Dwain A. Shipman stated in part:

“In the process of making application for the loan from Citizens Savings & Loan Association, I did not communicate to any officer or employee of Citizens Savings & Loan Association my desire to obtain or not obtain credit life insurance coverage in connection with such loan. No officer or employee of Citizens Savings & Loan Association ever mentioned such insurance coverage to me prior to my execution of the loan papers. I did not receive a statement from Citizens Savings & Loan stating that insurance was requested or required, or that I had an option to furnish such insurance from other sources.”

The Disclosure Statement signed by Ship-man for Citizens Savings & Loan Association contained the clause:

“Credit Life and Disability Insurance is not required to obtain this loan.”

Our Supreme Court in Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970), stated the rule to be followed in rendering or affirming a summary judgment as follows:

“In such cases, the question on appeal, as well as in the trial court, is not whether the summary judgment proof raises fact issues with reference to the essential elements of a plaintiffs claim or cause of action, but is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff’s cause of action.”

And in Great American Reserve Insurance Company v. San Antonio Plumbing Supply Company, 391 S.W.2d 41 (Tex.1965), announced:

“The burden of proof is on the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against him. Tigner v. First Nat'l. Bank, 153 Tex. 69, 264 S.W.2d 85, (1954); Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952). In other words, the evidence must be viewed in the light most favorable to the party opposing the motion. Valley Stockyards Co. v. Kinsel, 369 S.W.2d 19 (Tex.Sup.1963); Smith v. Bolin, 153 Tex. 486, 271 S.W.2d 93 (1954).”

We hold a material fact question exists as to whether there was a'requirement of Credit Life Insurance in connection with the loan. If insurance was required, compliance with Section 5.03(3) was a necessity otherwise no.

The contentions of Shipman as to the alleged violations by Citizens of Sections 5.02(5) and 5.04(1) must fail.

Section 5.02(5) in part provides:

“No further or other charge shall be directly, or indirectly, charged, contracted for, or received.”

There being no default on the Mechanic’s Lien Note and no suit thereon, no attorney’s fees have been charged or received by Citizens.

We hold the prohibition in the statute for other and further charges contracted for means the creation or bringing into existence of further or other charges. Schwab v. Schlumberger Well Surveying Corporation, 145 Tex. 379, 198 S.W.2d 79 (Tex.1946). The provision providing for attorney’s fees in the event of default was contained in the Mechanic’s Lien Note as contracted between Dwain A. Shipman and his father, C. R. Shipman. Citizens was not a party to that contract and should not be liable since it did not contract for any attorney’s fees.

The portion of Section 5.04(1) which Ship-man contends Citizens has violated states:

“When a secondary mortgage loan is made under the authority of this Chapter, the lender shall deliver to the borrower . a statement in writing in the English language showing the following information:
(a) The names and addresses of the borrower and of the lender.”

This section also includes the following language:

“If the note or loan contract shows the information required above, a copy of such note or loan contract may be delivered rather than a separate statement.”

The summary judgment proof establishes receipt by Shipman of the note and loan contract which contained the information required under Section 5.04(1).

It is unnecessary to consider the other points of error.

The judgment is reversed and the cause is remanded.


author: HALL, Justice.

text:
    J. D. WEAVER, Individually and as Independent Executor of the Estate of Zella N. Gray, Deceased, Appellant, v. FIRST NATIONAL BANK OF AMARILLO et al., Appellees.
    No. 5481.
    Court of Civil Appeals of Texas, Waco.
    Jan. 15, 1976.
    V. G. Kolius, Amarillo, for appellant.
    Gibson, Ochsner, Adkins, Harlan & Han-kins, Jewett E. Huff, Sanders, Saunders, Brian, Finney & Thomas, J. M. Pritchard, Amarillo, for appellees.
   HALL, Justice.

On December 23, 1971, Mrs. Zella Nation Gray purchased a time certificate of deposit in the amount of $5,000.00 from the appel-lee, The First National Bank of Amarillo, Texas; and on May 17, 1972, Mrs. Gray purchased another from the bank in the amount of $3,000.00. Although the certificates were purchased with Mrs. Gray’s separate funds, both are payable at maturity to “Zella N. Gray or Bessie Lee Gerken.” Mrs. Gerken, appellee here, was Mrs. Gray’s niece. Neither certificate contains a “right of survivorship” clause on behalf of Mrs. Gray and Mrs. Gerken.

Mrs. Gray died on May 21, 1973, at the age of 83 years. The appellant, J. B. Weaver, Mrs. Gray’s son, was duly appointed and qualified as independent executor of her estate. He called upon the bank for payment of the certificates; but the bank, knowing of a claim on the funds by Mrs. Gerken, refused to pay. The appellant initiated this suit against the bank. Mrs. Gerken intervened, claiming the certificates on the ground that when they were issued Mrs. Gray intended that they should provide for rights of survivorship between the named payees, and that the failure of the certificates to do so was caused by a mutual mistake of fact or law between the bank’s issuing representative and Mrs. Gray.

The case was tried to a jury. Answering four special issues, the jury found that Mrs. Gray and the bank’s representative mutually agreed at the time of issuance of each certificate that it should provide a right of survivorship as between Mrs. Gray and Mrs. Gerken; and that the failure of the certificates to so provide was caused by “a mutual mistake on the part of” Mrs. Gray and the bank’s representative. Judgment was rendered on the verdict reforming the certificates to provide for right of survivorship, and awarding them to Mrs. Gerken.

As grounds for reversal, the appellant contends (1) the trial court erred in permitting, over objection, parol evidence to alter and modify the unambiguous language of the certificates and engraft thereon a sur-vivorship clause; (2) there is no evidence, or, alternatively, the evidence is factually insufficient, to support the jury’s findings; and (3) any evidence of mutual mistake shows only a mistake of law by the bank’s representative and Mrs. Gray, and a mistake of law will not support the equitable remedy of reformation granted by the court. We overrule these contentions and affirm the judgment.

It is well established in Texas that where the parties to an instrument are in clear agreement as to the factual and legal result they wish to accomplish by it, but, by mutual mistake, the legal effect of the words they use does not produce that result, the case is a proper one for reformation of the instrument to make it conform to the antecedent intention of the parties; and parol proof is admissible to show the mistake and its mutuality. Kelley v. Ward, 94 Tex. 289, 60 S.W. 311, 313 (1901); Miles v. Martin, 159 Tex. 336, 321 S.W.2d 62, 67 (1959); Estes v. Republic National Bank of Dallas (Tex.Sup., 1970), 462 S.W.2d 273, 275.

On behalf of the bank, the transactions involving the issuance of the certificates of deposit, and their wording, were handled by Mrs. Earnestine Oakley. It was she who originally solicited and secured Mrs. Gray’s banking business soon after Mrs. Gray moved to Amarillo from Colorado. Mrs. Gray considered Mrs. Oakley a “dear friend,” referred to her as such to others, and relied upon her for business advice. Mrs. Oakley’s testimony alone, although it is corroborated by other proof, is legally sufficient to support the questioned findings. Without detailing it, it reasonably shows that Mrs. Gray’s purpose in purchasing the certificates in question was to “give something” to Mrs. Gerken; that she wanted the certificates issued and worded in a fashion that would assure immediate joint ownership and control thereof by her and Mrs. Gerken, and sole ownership by Mrs. Gerken in the event Mrs. Gray predeceased her; and that Mrs. Oakley believed the wording she used in the certificates accomplished these ends, and expressly told Mrs. Gray so in each instance. Her assurance satisfied Mrs. Gray. Of course, Mrs. Oakley was mistaken and, by her advice, led Mrs. Gray into the same mistake.

A review of the entire record convinces us that the jury’s findings are not against the great weight and preponderance of the evidence.

The appellant’s points and contentions are overruled. The judgment is affirmed.


author: CHADICK, Chief Justice.

text:
    In the Matter of T. T. W., Appellant.
    No. 8345.
    Court of Civil Appeals of Texas, Texarkana.
    Jan. 20, 1976.
    R. Lewis Nicholson, Dallas, for appellant.
    Henry Wade, Dist. Atty., Maridell Tem-pleton, Asst. Dist. Atty., Dallas, for appel-lee.
   CHADICK, Chief Justice.

This is an appeal from a juvenile court order waiving its jurisdiction and transferring T. T. W., a juvenile, to an appropriate district court or criminal district court for criminal proceedings. The order is reversed and the proceeding remanded.

The record shows that T. T. W., a juvenile and sole respondent, was not served with a summons to a hearing authorized by Tex. Family Code Ann. Sec. 54.02 and held by the juvenile court for the purpose of considering discretionary transfer of T. T. W. to a district court or criminal district court for criminal proceedings. Summons and service thereof were not shown to have been waived in any lawful manner. A defective summons to a hearing of this nature was held insufficient as notice in R. K. M. v. State of Texas, 520 S.W.2d 878 (Tex.Civ.App. San Antonio 1975, no writ). Reversal and remand was ordered. Also, a summons that did not conform to the mandatory provisions of Tex. Family Code Ann. Sec. 54.-02(b) has been held to deny a juvenile due process and require reversal and remand. In re K. W. S., 521 S.W.2d 890 (Tex.Civ.App. Beaumont 1975, no writ). Omission or failure to issue and serve a summons on the juvenile, in this instance, cannot be less harmful than service of a defective summons.

The governing statute, Tex. Family Code Ann. Sec. 53.06 (summons) and 53.07 (service) as well as See. 54.02(b) speaks in mandatory terms. Compliance is prerequisite to exercise of juvenile court jurisdiction to conduct hearings and make orders contemplated by Sec. 54.02. In the absence of a summons to the juvenile, the fact here, the juvenile court did not acquire jurisdiction to consider discretionary transfer. Appellant’s points of error 5 and 6 are sustained.

All twenty-one of appellant’s points have been examined and no error has been found requiring disposition contrary to that now directed. The order of the trial court is reversed and the proceeding is remanded for retrial.


author: REYNOLDS, Justice.

text:
    Robert M. VANN et al., Appellants, v. WESTERN DATA CENTERS, INC., Appellee.
    No. 8636.
    Court of Civil Appeals of Texas, Amarillo.
    Jan. 20, 1976.
    Kolander, Templeton & Hamilton (R. C. Hamilton), Amarillo, for appellants.
    Gibson, Ochsner, Adkins, Harlan & Han-kins (W. P. Sturdivant), Amarillo, for appel-lee.
   REYNOLDS, Justice.

Plaintiffs appeal from a take-nothing judgment rendered in their suit to recover the balance claimed due for the sale of their shares of stock to their former corporate employer. The evidence supports the trial court’s findings of accord and satisfaction in a bona fide dispute and a full release of plaintiffs’ claims. Affirmed.

Western Data Centers, Inc., initiated an employee stock purchase plan, administered by its board of directors, to encourage stock ownership by its employees in, and to furnish them an incentive to remain with, the corporation. The plan specified that until there is a public market for the stock, the shares could be resold only to Western and that the shares must be sold if the employee-owner left the corporation. The sole provision in the plan bearing on Western’s repurchase price of the shares reads:

Without restricting . . the Board of Directors in what other provisions may be required, they may require:

(1) That until the Board of Directors determines that a public market for the Common Stock has been established, the Corporation will repurchase from any employees any Common Stock purchased by him pursuant to this Plan up to a total limit for all of such purchases of $5,000 in any one year at a price per share equal to two times the current book value (as defined in 5(b) above) of such Common Stock at the time of repurchase or the amount per share for which such employee paid for such Common Stock, whichever is greater.

During meetings called to explain the plan to the employees, Western’s president, Carter Kelly, orally stated, and circulated his prepared written summary of the plan reciting, that Western would repurchase the stock at two times the current book value or cost, whichever was greater. Employees, among whom were the five plaintiffs — Robert M. Vann, James H. Freder-icks, Clement G. Pond, Jr., George T. Row-ley, Jr., and Ronnie D. Upton, who believed and relied on Kelly’s representations — purchased shares of Western’s stock. After-wards, some employees resold their shares to Western and received two times the book value for them.

A public market never was established for the stock, and the board of directors took no action to affirmatively require that the shares be repurchased at the price the plan provided they may set. When the repurchase representations made by Kelly came to the board’s attention, the board met and authorized Kelly to offer to repurchase the shares at cost plus fifteen (15%) percent, plus one (1%) percent per month for each month the shares were held. If accepted, the offer required the selling employee to sign the release imprinted on Western’s check issued in payment of the shares reading:

By accepting payment of this check, the undersigned does hereby release WESTERN DATA CENTERS, INC. (“WESTERN”), its officers and directors from any further claims and demands whatsoever, in law or in equity, which the undersigned, his heirs, executors, administrators, assigns or beneficiaries have or might have against WESTERN, its officers and directors under the terms of the Employee Stock Purchase Plan of WESTERN, any interpretation or summary of such Plan or by reason of the purchase or sale of any of the stock of WESTERN acquired under such Plan, it being intended to hereby sell to WESTERN all of the stock of WESTERN owned by the undersigned and to hereby release WESTERN, its officers and directors from any and all claims of any kind or character whatsoever which may have arisen by reason of the purchase or sale of such shares of stock by the undersigned.

Alternatively, the board authorized Kelly to offer to each employee rejecting the repurchase offer a $100 consideration to sign an agreement certifying that the employee understood nothing in the plan requires Western to repurchase the shares of stock at any time.

In a meeting with the employees, Kelly, with house counsel present, stated that he had misunderstood the plan and had made his representations of the repurchase price without the approval of the board of directors. The offers authorized by the board were explained. Questions asked by the employees were responded to by Kelly and Western’s counsel. Plaintiff Upton, testifying for all plaintiffs, stated that after the presentation he did not agree with the board’s view of the plan, he disputed the board’s contention, and he still was of the opinion that he was entitled to two times the current book value for his shares of stock. However, after consulting counsel of their choice and being advised that the required release was invalid, each plaintiff surrendered his stock, received Western’s check in the amount of the offer, endorsed the check which also constituted signing the release, and received payment on the check.

Subsequently, the five plaintiffs left the employment of Western and instituted this suit. The recovery each sought was the difference between the amount he received for his shares of stock and the amount of two times their book value on the date of sale, plus interest. After a non-jury trial, the trial court rendered judgment decreeing that plaintiffs take nothing.

The court made and filed findings of fact and conclusions of law. Summarized, the fundamental findings are that at the time each plaintiff accepted and endorsed his check containing the release, (1) there existed a bona fide dispute between each plaintiff and Western as to Western’s liability to repurchase the stock at a price of two times the current book value or cost, whichever was greater; (2) each plaintiff was unmistakably told and knew the amount Western tendered was conditioned on its acceptance as full satisfaction of the entire amount claimed; and (3) acceptance constituted a full release from any further claims in law and in equity. These findings bar plaintiffs’ claims and, being supported by the evidence of probative force favorable to the findings, must be upheld. See Brown v. Frontier Theatres, Inc., 369 S.W.2d 299 (Tex.1963).

Notwithstanding and without directly challenging the evidential support for these findings of fact, plaintiffs contend that, contrary to another of the court’s factual findings, until a public market was established in the stock, Western was required by the plan to repurchase their shares at two times the current book value and, therefore as a matter of law, there could be no consideration for the release. Plaintiffs advance the principle, held applicable to the records made in the cases cited by plaintiffs, that payment of the amount of a liquidated claim or an amount admittedly due is not consideration for a release of the residue demanded. But that is not the nature of the record made in the proceedings we review and, under this record, plaintiffs’ points of error must be overruled.

In the case at bar, the court found that at the time of the transaction a bona fide dispute existed as to the extent of Western’s liability under the plan. Developed before the court were plaintiffs’ pre-trans-action claim, and Western’s denial, that the terms of the plan and its operation, particularly with regard for the repurchase representations made by Western’s president, obligated Western to repurchase their shares of stock at two times current book value. In making its offer to repurchase, Western assumed the position that neither the plan nor the administering board of directors had set the price plaintiffs claimed, and that the president’s representations were neither authorized by nor binding on the board. Plaintiffs’ recognition that there was a dispute is confirmed by plaintiff Upton’s testimony.

That a good faith dispute as to liability on either a liquidated or an unliquidated demand furnishes sufficient consideration for an accord and satisfaction is no longer open to question. See Industrial Life Insurance Company v. Finley, 382 S.W.2d 100 (Tex.1964). Hence, whatever may have been Western’s liability under the plan, and it is unnecessary that we decide, the bona fide dispute made it immaterial whether plaintiffs were, as they contend, or were not, as Western asserts, entitled to receive two times the current book value for their shares of stock.

Thus, when Western explained its position and offered its check with the release affixed in full satisfaction for the surrendered shares, each plaintiff knew Western was disputing his claim and was making an unequivocal offer of a lesser amount in full and final settlement of the claim. Plaintiffs had three choices: accept Western’s repurchase offer; or reject it and accept Western’s alternative offer; or reject both offers and press their demands for the full amounts claimed to be due from Western. Plaintiffs chose the first course and, when they accepted the checks as tendered and executed the releases, they accepted the terms of the repurchase offer unaffected by their belief that the release was not valid to foreclose their claims for additional sums. The consequence, pursuant to the applicable principles enunciated in Industrial Life Insurance Company v. Finley, supra, is an accord and satisfaction fully releasing Western from plaintiffs’ claims, and the evidence justified the trial court in so finding.

The judgment is affirmed.


text:
    Charles E. LESTER, Jr., Movant, v. KENTUCKY BAR ASSOCIATION, Respondent.
    Court of Appeals of Kentucky.
    Oct. 17, 1975.
    Rehearing Denied March 5, 1976.
    James Steven Hogg, Jackson, for movant.
    Charles L. Calk, Lexington, Leslie G. Whitmer, Director, Kentucky Bar Association, Frankfort, for respondent.
   PER CURIAM.

This is a disciplinary action in which Charles E. Lester, Jr., has applied for reinstatement to practice law in Kentucky. He was disbarred on December 13, 1968, and a rehearing denied on March 31, 1969. Lester’s application for reinstatement was filed on January 10, 1974, and was timely heard by the trial committee. The committee, after holding evidentiary hearings, made a report to the Board of Governors in which they recommended that the application be sustained and that the applicant be reinstated to the practice of law. The Board of Governors considered the trial committee’s report but was not persuaded thereby. Instead, the Board of Governors recommended to this court that the application be denied.

Lester’s disbarment was predicated upon his conviction in the United States District Court for the Eastern District of Kentucky of the offense of conspiring to violate the civil rights of George Ratterman. Cf. Unit ed States v. Lester, 363 F.2d 68 (6th Cir., 1966). In his petition for reinstatement the applicant contends that he has been sufficiently rehabilitated to be readmitted to the practice of law.

On June 11, 1975, the court issued a rule for Lester to show cause why the recommendation of the board should not be followed. Pursuant to RCA 3.430 and 3.520, the applicant filed a timely response.

A person seeking reinstatement has the burden of overcoming a prior adjudication of disqualification. The judgment of disbarment continues to be evidence against the applicant and he may overcome it only by most persuasive proof. In re Weaks, Ky., 407 S.W.2d 408. In order to be reinstated, it is important that the applicant’s conduct and character since his disbarment have been exemplary; that he be worthy to have public confidence and trust placed in him; and that he has complied fully with the order of disbarment. In re Nisbet, Ky., 296 S.W.2d 465. Additional factors which should be considered include the nature of the conduct leading to disbarment, the applicant’s recognition of his wrongdoing, and his previous and subsequent conduct in regard to the practice of law. In re Stump, 272 Ky. 593, 114 S.W.2d 1094.

As a general proposition, opening the door to re-entrance into the profession is not a matter of grace or pardon for past offenses. In re Stump, supra. While sympathetic considerations are factors, the court must be cognizant of the responsible position a lawyer occupies in the community. Reinstatement in a particular case should in no way lower professional standards. It is the court’s duty to protect the interests of the public and the profession, as well as those of the applicant. In re Weaks, supra.

In the instant case, a very troubling question is whether Lester has fully complied with the order of disbarment. The record indicates several instances where Lester was engaged as a “law clerk” in his former office. His services included doing legal research, preparing memoranda, and giving advice and opinions on legal matters to associates. There is no indication that Lester met with clients.

RCA 3.020 defines the practice of law as follows:

“* * * any service rendered involving legal knowledge or legal advice, whether of representation, counsel or advocacy in or out of court, rendered in respect to the rights, duties, obligations, liabilities, or business relations of one requiring the services. * * * ”

In light of this definition, it is difficult to say whether Lester was serving as a “law clerk” for his former firm or practicing law vicariously. Some insight in resolving this question may be found in the compensation received by Lester for his services. The record is replete with testimony of Lester’s receiving substantial sums as compensation for his services on several occasions during the period of his disbarment. The payments are more nearly commensurate with those received for legal services than with the token sums generally earned by law clerks. It appears that Lester has violated the spirit if not the letter of the order of disbarment.

A trivial but aggravating point is the fact that the firm of “Lester and Riedinger”, of which applicant was the senior partner, continued to use the same name after Lester’s disbarment. The only possible legitimate reason for this was that Lester’s son did some work with the firm following his father’s disbarment; however, this justification is not plausible since the applicant’s son was never a partner in the firm. Certainly, retaining the name of a disbarred partner in the firm’s title has the appearance of impropriety. There is no indication that the applicant attempted at any time to rectify this matter.

The next obstacle to Lester’s reinstatement is found in the answers supplied in the application and in testimony given by him before the trial committee. With respect to the question in the application of whether the applicant had ever been “Charged with unprofessional or unethical conduct,” Lester replied, “See Lester v. Cmlth, etc. (1933), 250 Ky. 227, 62 S.W.2d 469; upon re-trial charges dismissed.” The record indicates, however, that upon remand a judgment of censure on one count and formal censure on another count was entered. Such a misrepresentation by the applicant cannot be excused. Also, when asked in the application to list “Dates and Places of Employment since * * * Disbarment,” Lester answered “None.” Applicant admittedly worked as a “law clerk” during this period. Even more troubling is Lester’s attempted explanation of income of $1,680 for “clerical work” reported in his 1971 Federal Income Tax Return. At first, Lester contended that the income was from clerical work performed “down at the boat harbor,” but after being confronted with ledger entries for the law firm of Lester and Riedinger showing two payments of $840 each (a total of $1,680) to himself, he acknowledged that the $1,680 “could havp been” from the law firm.

A final consideration is the fact that most of the affidavits and testimony concerning Lester’s reputation and rehabilitation are exceedingly superficial. The record lacks substantial specific testimony which demonstrates that the applicant has rehabilitated himself in the period since his disbarment. In fact, most of the witnesses testifying concerning Lester’s rehabilitation and ability have been only in occasional casual contact with the applicant since his disbarment. At any rate, the opinions are the same as the affiants and witnesses would have expressed prior to the disbarment.

The burden is on Lester to establish that he has rehabilitated himself in spite of his past failings, so as to be worthy of trust and confidence and capable of being an asset to the legal profession. This burden is heavy indeed when the former conduct demonstrates a basic lack of professional morality. In re Applewhite, Ky., 401 S.W.2d 757. The record falls short of persuading the court that the applicant has, since his disbarment, earned the right to re-enter the legal profession.

The recommendations of the Board of Governors are accepted and the application for reinstatement is denied.

REED, C. J., and STEPHENSON, JONES, PALMORE, CLAYTON and STERNBERG, JJ., sitting.

All concur.