text:
    Raymond H. PETEREIT, Individually & dba Cinderella Co., Appellant, v. MID-WEST MARKO, INC., Appellee.
    No. 17093.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    March 23, 1978.

      Frank G. Waltermire, Houston, for appellant.
    Lapin, Totz & Mayer, James N. Hull, Houston, for appellee.
   PEDEN, Justice.

This appeal is from a judgment based on the bulk sales provisions, Chapter 6, of the Texas Business and Commerce Code. Mid-West Marko sued Raymond H. Petereit and Michael White for a debt incurred by White before he sold the assets and inventory of the Cinderella Company. Mid-West Marko took an interlocutory default judgment against White, and its suit against the appellants was submitted on agreed facts. The trial court’s conclusions of law state that Petereit is liable for the debt under § 6.106 of the Code. Mr. Petereit’s appeal seeks an interpretation of § 6.106 and of the liability it imposes on the transferee in a bulk sales transaction.

The parties agreed that Mid-West Marko sold goods valued at $296.66 to White while he was doing business as the Cinderella Co. Later, on December 13, 1974, he sold all of the company’s assets to Petereit, who paid $7,000 for them. A proper list of creditors and a schedule of property sold were prepared. The schedule was filed in the Harris County Clerk’s Office and the list of creditors was preserved by Petereit for six months after the transfer, in compliance with § 6.104 of the Code. The parties agreed that it is not now known whether Mid-West Marko’s claim was included on the list of creditors. Mid-West Marko was notified of the transfer at least ten days before December 13, as required by Sections 6.105 and 6.107 of the Code, but filed no claim on Petereit within thirty days after notice of the transfer, and it was never paid. It filed suit before the running of the six-month statute of limitation provided in § 6.111 of the Code.

The appellant argues that Section 6.106 of the Texas Business and Commerce Code does not impose personal liability on the transferee in a bulk sales transaction who has complied with the other sections of Chapter 6 of the Code. We do not agree with that position, but we hold that Mid-West Marko has not shown itself entitled to relief under Section 6.106.

Section 6.106 of the Code provides that in addition to the requirements of Sections 6.104 and 6.105,

(1) Upon every bulk transfer subject to this chapter for which new consideration becomes payable except those made by sale at auction it is the duty of the transferee to assure that such consideration is applied so far as necessary to pay those debts of the transferor which are either shown on the list furnished by the transferor (Section 6.104) or filed in writing in the place stated in the notice (Section 6.107) within thirty days after the mailing of such notice. This duty of the transferee runs to all the holders of such debts, and may be enforced by any of them for the benefit of all. (emphasis added).
(2) If any of said debts are in dispute the necessary sum may be withheld from distribution until the dispute is settled or adjudicated.
(3) If the consideration payable is not enough to pay all of the said debts in full distribution shall be made pro rata.

Section 6.106 “requires the bulk transferee to assure that the new consideration payable under the bulk transfer is paid pro rata to those creditors of the transferor shown in the transferor’s list or to those creditors who file their claim within thirty days.” Ruud, The Texas Legislative History of the Uniform Commercial Code, 44 Texas Law Review 597 (1966). Mid-West Marko, the plaintiff-appellee in our case, did not establish that its name was “shown on the list furnished by the transferor” or that its claim was “filed in writing . . . within thirty days after the mailing of such notice”, so it did not show that Section 6.106 is applicable.

The appellant says the trial court erred in interpreting Section 6.106 to hold personally liable a transferee who without culpability paid consideration to his trans-feror in reliance on the silence and inaction of the transferor’s creditor. We sustain this point.

The trial court’s judgment is reversed and judgment is rendered that the plaintiff take nothing.


source: Caselaw Access Project

author: REYNOLDS, Justice.

license: Public Domain

text:
    B & D HAYES, a partnership, Appellant, v. ANDERSON, CLAYTON & COMPANY, INC., dba Acco Seed, Appellee.
    No. 8884.
    Court of Civil Appeals of Texas, Amarillo.
    March 27, 1978.
    Rehearing Denied April 24, 1978.
    Morehead, Sharp, Tisdel & White, Ed Self, Plainview, for appellant.
    La Font, Tunnell, Formby, La Font & Hamilton, Thomas E. Hamilton and Larry McEachern, Plainview, for appellee.
   REYNOLDS, Justice.

B & D Hayes, a partnership, seeks the reversal of a take-nothing judgment, entered on the jury’s verdict, in its suit to recover the contract premium price of seed grown by B & D Hayes for Acco Seed. No reversible error is presented by B & D Hayes’ points of error. Affirmed.

B & D Hayes is a partnership for the purpose of conducting the farming operations of Bill and Don Hayes. Acco Seed is a division of Anderson, Clayton & Company, Inc. In April of 1974, two contracts were executed on behalf of the partnership and Acco Seed. The partnership would plant Acco’s parent seed stocks and produce seed grain. If the seed grain produced met the contract standards, including a germination of at least 85%, Acco would pay the premium price specified; otherwise,

* * * * * *
21. Any of the seed production of which the Company is not obligated to make payment or which the Company has rejected because of its ineligibility under any of the provisions of this contract will become the property of the Grower to be used by him only as feed or to be sold as commercial feed milo and in no event to be sold or used as planting seed. Grower agrees and admits the Company would be irreparably damaged if any ineligible seed were sold or used as planting seed. Grower, at his option, may pick up rejected seed or accept payment from Company at fifteen cents over the current market price of Grower’s local market for commercial grade milo at the time of rejection of seed delivered. If the grower elects to pick up said rejected seed the Company is obligated to contaminate said seed with a quantity of sorghum seed of a different variety and/or color in any amount that will not affect the market price of the feed milo.

Acco furnished the parent seed stocks to Bill Hayes, who planted it and harvested the seed. This seed was delivered to Acco, with delivery beginning 14 November 1974 and ending 18 November 1974. When the seed was dried, germination tests were begun.

About two weeks after delivery, Bill Hayes inquired about getting a payment on the seed. He was informed that all Acco could pay at this time was the current commercial market price. Hayes received a check for that price on 12 December 1974.

The germination tests on the seed were completed in January of 1975. B & D Hayes was notified on 29 January 1975 that the grain did not meet the 85% germination rate required by the contracts.

Bill and Don Hayes met with Acco’s production and processing manager and two other employees on 30 January 1975. Bill Hayes described the conversation in these words:

A Well, we just — we told them that we felt like the grain had already been accepted when they made the payment for the grain, and we asked them not to do anything with the grain until we talked with them further about it. They asked us if we would like to have the grain back, and we told them that we would. They said, well, they would have to comingle the grain, I believe was the word they used, contaminate it with other grain to where it couldn’t be used for seed purposes. And we told them, well, we didn’t want it in that condition. They said, well, if they sold it, did we want to come over there and watch them haul it out. I told them we sure did; we wanted to be sure it was our grain that was being hauled out.
* * * * * *
A They told us they would let us know when it was being hauled out.

On or about 10 February 1975, Acco was notified it would be sued if payment for the seed was not made in fifteen days. Without notifying the partnership, Acco, on advice of counsel, sold the seed for feed on 30 May 1975.

Thereafter, the partnership began this action. Alleging a payment of an aggregate sum in excess of the amount of the 12 December 1974 payment, the partnership sought to recover the balance of the premium price stated in the contracts. There is neither an alternative allegation that Acco has not paid, nor a plea for recovery of, any balance due on the contract price for rejected seed.

By its verdict, the jury found that Acco: (1) signified it would accept the seed in spite of its non-conformity as to germination; (2) failed to reject the seed within a reasonable time after delivery; did an act inconsistent with the partnership’s ownership of the seed by (3) refusing to return it to the partnership and by (4) selling such seed; and (5) notified the partnership of its revocation of acceptance of the grain within a reasonable time.

The court rendered a take-nothing judgment. B & D Hayes has appealed.

Considered in connection with the time sequence, the first two jury findings would constitute, under V.T.C.A., Bus. & C. § 2.606, Acco’s acceptance of the seed; but, by its last finding, the jury further determined that Acco had timely revoked its acceptance. The partnership attacks this last finding with legal and factual insufficiency points of error.

Because all witnesses agreed that Acco “rejected” the seed on 29 January 1975, the partnership argues that no witness testified, and there is no other evidence to show, that Acco “revoked” its acceptance. The semantic distinction is not persuasive in view of the record.

Contrary to Acco’s position that it never accepted the seed, the jury was convinced that the first two of Acco’s acts inquired about amounted to an acceptance of the seed. After these acts, Acco “rejected” the seed upon completion of the germination tests. This evidence is undisputed, it convinced the jury that it was a timely revocation of the acceptance it had found, and it is both legally and factually sufficient to support the finding.

Still the partnership contends there can be no revocation of acceptance because there is an insufficient evidential basis to show that the seed’s non-conformity substantially impaired its value to Acco. Cited is the comment 2, § 2.608, statement that revocation of acceptance is possible only where non-conformity substantially impairs the value of the goods to the buyer. The contention is unavailing because the record is replete with testimony concerning the large expenditures necessary to research, develop, produce and protect the superior seed variety contracted for and its value to Acco, all of which would be lost if the seed does not meet the quality standards.

As noted, the jury found that Acco’s two acts of refusing to return the seed and selling it were acts inconsistent with the partnership’s ownership of the seed. The partnership submits that since these acts indisputably occurred after Acco revoked its acceptance, the acts amounted to a new acceptance as a matter of law, and Acco is contractually obligated to pay the premium price.

The jury found that Acco had timely revoked its prior acceptance which, by authority of § 2.608 of the Code, amounts to a rejection. A rejection is governed by paragraph 21 of the contracts. Accord, § 1.102(c) of the Code.

Thus, when Acco rejected the seed, the partnership was given the option by paragraph 21 of the contracts to either pick up the seed contaminated or accept from Acco payment at the price for rejected seed. The partnership unqualifiedly refused to pick up the seed contaminated, thereby obligating Acco to buy the seed at the rejected seed price. There being no evidence that Acco refused to buy the seed or pay the rejected seed price, the ownership of the seed contractually passed to Acco, whose action thereafter could not be an act inconsistent with the partnership’s ownership.

The partnership’s points of error are overruled. Acco’s cross-points, which are advanced only in the event of a reversal and remand, are not reached.

The judgment is affirmed.


author: DODSON, Justice.

text:
    In the Matter of H_ S_, JR.
    No. 8874.
    Court of Civil Appeals of Texas, Amarillo.
    March 27, 1978.
    Rehearing Denied April 24, 1978.

      Samuel C. Kiser, Amarillo, for appellant.
    George N. Harwood, Asst. Potter County Atty., Amarillo, for appellee.
   DODSON, Justice.

In this case the county attorney of Potter County, Texas, filed a petition against H- S-, Jr., a minor, the appellant here, in the Court of Domestic Relations in and for Potter County, Texas, alleging that the appellant had engaged in delinquent conduct and seeking an adjudication of delinquency and such disposition of the care, control and custody of the appellant, as the court may find just and proper. The appellant waived a jury trial. The juvenile court held an adjudication hearing and a disposition hearing on the matter. The court found that H_S_, Jr., had engaged in delinquent conduct and entered an order committing him to the care, custody and control of the Texas Youth Council in accordance with applicable provisions of the Texas Family Code. H_S-, Jr., appeals to this court. We reverse and remand.

The appellant attacks the jurisdiction of the juvenile court, claiming the State’s petition is fatally defective as a matter of substance for failure to state the “place” where the alleged delinquent conduct occurred. The State says the omission is not one of substance, that appellant received “due process and fair treatment,” and that the evidence shows the appellant’s alleged delinquent conduct occurred in Potter County, Texas.

Section 53.04(d)(1) of the Texas Family Code provides: “The petition must state: (1) with reasonable particularity the time, place, and manner of the acts alleged and the penal law or standard of conduct allegedly violated by the acts.” (Emphasis added) It is undisputed that the State’s petition failed to set forth with reasonable particularity the state and county or any place where the alleged acts of delinquent conduct occurred. Moreover, the State produced no evidence to show where the conduct occurred until after the appellant moved for dismissal on the ground that the State failed to plead and prove the place where the alleged delinquent conduct occurred.

In support of its position, the State contends that the petition and hearings afforded the appellant satisfy the essentials of “due process and fair treatment” in juvenile delinquency proceedings under In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1967), and In re S. J. C., 533 S.W.2d 746 (Tex.1976). These cases deal in part with minimal due process requirements under the Constitution of the United States. They do not prohibit the State from prescribing statutory requirements calculated to afford the accused in a juvenile proceeding more than minimal constitutional protection.

In D. W. M., 21 Tex.Sup.Ct.J. 242, 243 (March 4, 1978), a juvenile transfer proceeding, the Supreme Court of Texas determined, among other things, that the word “must” as used in § 53.04 and other sections set forth therein denotes mandatory statutory requirements. When, as here, the State prescribes requirements which do not contravene the U.S. Constitution, then the State must adhere to its requirements. Thus, we conclude that the State’s petition, which fails to allege “with reasonable particularity . . . the place” where the alleged act of delinquent conduct occurred, does not meet the mandatory requirements of the statute, and therefore is fatally defective.

Appellant’s point of error is sustained. The order of adjudication and commitment pertaining to H_ S_, Jr., is reversed and the cause is remanded to the juvenile court.


text:
    A. L. HUDDLESTON, Appellant, v. Mildred FERGESON, Appellee.
    No. 8885.
    Court of Civil Appeals of Texas, Amarillo.
    March 27, 1978.

      John H. Mikkelsen, Vernon, for appellant.
    Richard D. Bird, Childress, for appellee.
   REYNOLDS, Justice.

At the instance of purchaser, the trial court, concluding that seller had breached an unconsummated contract for the sale of realty, decreed that purchaser recover the escrow deposit. The conclusion is grounded on findings that seller was unable to convey the title contracted for and to deliver possession of the realty. The evidence fails to establish a breach in either particular alleged and found. Reversed and rendered.

By a written contract executed 9 December 1975, A. L. Huddleston agreed to sell, and Mildred Fergeson agreed to purchase, the “North one-half (NVá), Section No. 95, Block A, T. & N. 0. Ry. Co. Survey, Foard County, Texas, containing 320 acres, more or less.” Mrs. Fergeson escrowed $4,000 of the $40,000 purchase price with Huddle-ston’s agent, conditioned that it would be paid to Huddleston as liquidated damages if she defaulted or that it would be returned to her, absent her enforcing specific performance, if Huddleston failed to fully and timely perform his obligations under the contract.

The contract obligated Huddleston to furnish within thirty days a complete abstract of title certified to a current date, obligated Mrs. Fergeson to point out in writing, within ten days after the receipt of the abstract, any objections to the title, and specifically provided that “no objection thereto shall be considered unless so pointed out.” Huddle-ston was allowed ten days after receipt of the written objections to cure and remove any valid objections, it being recited that Mrs. Fergeson “agrees and accepts the fact that although SELLER [Huddleston] will reserve no minerals or Royalty, that said minerals and royalty may have heretofore been conveyed to third parties.”

The transaction was to be consummated at a designated place on or before 23 January 1976, or as otherwise agreed by the parties. At the closing, Huddleston was required to deliver to Mrs. Fergeson: (1) a duly executed and acknowledged general warranty deed “conveying good and marketable title in fee simple to all of the Property with no mineral or royalty reservation;” and (2) possession of the property. The contract specified that it constituted the sole and only agreement of the parties.

On 23 January 1976, Mrs. Fergeson had her attorney write a letter to Huddleston’s counsel. The letter admitted in evidence states that Mr. Fergeson is ready, willing and able to comply with the contract, but he insists upon assurance that he will be put in possession upon closing; that, until some assurance can be given and received on ingress and egress, “we must withhold closing this transaction;” and that Mr. Ferge-son advises that Huddleston has indicated an agreement to postpone the closing until the matter might be resolved.

The record is silent as to any attempt to close the transaction after the date of 23 January 1976. The transaction was not consummated.

On 11 March 1976, Mildred Fergeson initiated this action, seeking to recover her $4,000 escrow deposit. She pleaded that while she had performed all of her contractual obligations and was prepared to consummate the contract on 23 January 1976, Huddleston had breached the contract. As particulars of the breach, she alleged that Huddleston gave her no assurance that he would or could deliver possession upon closing of the transaction; and that, although she has withheld employing counsel to examine the abstract of title, she has reason to believe that Huddleston cannot convey the title specified in the contract.

Huddleston responded with a general denial. He did not affirmatively plead any right to the escrow deposit.

At a 30 June 1977 bench trial, Mrs. Fergeson introduced the contract and the 23 January 1976 letter. The court then admitted, over the proper objection, her testimony that Huddleston promised her immediate possession upon signing the contract; that she was unable to go upon the property because one adjoining landowner had locked the gate across the access road which was upon his land and she was not able to cross the lands of other neighbors; and that Huddleston promised to return her escrow deposit “if he couldn’t get us in there.” She acknowledged that her attempt to go on the land was before 23 January 1976, and she conceded that, so far as the contract provides, she was not entitled to possession until the time of closing.

During her testimony, Mrs. Fergeson admitted that the abstract of title was timely delivered to her, and that, before 23 January 1976, she never had the abstract examined and that written objections to the title based upon an abstract examination were never furnished to Huddleston. So far as she knew, a title opinion was never rendered.

Called as an adverse witness, Huddleston testified that he was in possession of the property when the contract was signed. He denied any oral agreement for immediate possession or return of the escrow deposit. Elicited, over objection, was his testimony that the minerals and royalties were outstanding.

The trial court rendered judgment decreeing that Mrs. Fergeson recover the $4,000 escrow deposit from Huddleston. At Huddleston’s request, findings of fact and conclusions of law were made and filed. Upon factual findings that Huddleston was unable to: (1) “deliver to purchaser [Mildred Fergeson] possession of the property;” (2) “furnish a General Warranty Deed conveying good and marketable title in fee simple to all of the property with no mineral or royalty reservations;” and (3) “perform the contract in accordance with the terms of same,” the court, “having found that defendant [Huddleston] was unable to perform the terms of the contract,” concluded that Mrs. Fergeson was entitled to the escrow deposit.

Appealing, Huddleston advances six points of error, directing “no evidence” points to the findings upon which the judgment rests. He prays for reversal of the trial court’s judgment and rendition of judgment that Mrs. Fergeson take nothing.

Preliminary to entertaining the points of error, it should be noted that the rights and obligations of the parties are fixed by their 9 December 1975 written contract. Mrs. Fergeson declared on the contract as written without alleging any ambiguity, accident, mistake or fraud. Huddleston entered a general denial. Hence, to recover, Mrs. Fergeson had the burden to prove that Huddleston had breached the contract as she alleged. Hud-dleston did not have to show that he was not in default.

By his first point, Huddleston charges the trial court with error in denying him the escrow deposit on the ground that Mrs. Fergeson failed to examine the abstract of title in accordance with the contract. The point must be overruled for two reasons.

First, Huddleston filed a general denial only; he did not plead for the relief which he says the court denied him. It is axiomatic that a judgment shall conform to the pleadings, Rule 301, Texas Rules of Civil Procedure, and a party cannot recover through a right not asserted. Starr v. Ferguson, 140 Tex. 80, 166 S.W.2d 130, 132 (1942).

Second, the contract does not provide that Huddleston shall be entitled to the escrow deposit if Mrs. Fergeson fails to timely examine the abstract of title; instead, the failure imposes on Mrs. Fergeson the penalty that no title objections shall be considered. It is, however, this feature of the contract which, together with the undisputed evidence, denies to Mrs. Fergeson the right to contend that an objectionable title is a breach of the contract.

The contractual provision for a good and marketable title inured to the benefit of Mrs. Fergeson. She was obligated to point out, and Huddleston was obligated to cure and remove, any objections to the title within the time limits imposed, and any objections not pointed out were specifically waived. Mrs. Fergeson had the right to waive defects and accept such title as Hud-dleston had. Lieber v. Nicholson, 206 S.W. 512, 514 (Tex.Comm’n App. 1918, judgm’t approved).

Although Mrs. Fergeson pleaded that she had performed all of her obligations under the contract, she judicially admitted in the same pleading that the abstract of title had not been examined. Her testimony constitutes a judicial admission of the same fact. The letter she authorized on the date set for closing expressed no objection to the title. She made no objection to the title until she pleaded in this action on 11 March 1976, fifty-two days after the last date provided by the contract for her objections and forty-seven days after the date set for closing the transaction.

Mrs. Fergeson defaulted in her obligation, thereby depriving Huddleston of an opportunity to cure any valid objections she may have had to the title. The legal effect of her default is that she cannot complain of the absence of a marketable title. Gips v. Red Robin Corporation, 366 S.W.2d 853, 858 (Tex.Civ.App.—Houston 1963, writ ref’d n. r. e.). Being in default, Mrs. Fergeson waived any title objection and now is in no position to seek recovery of the escrow deposit on the ground that she objects to Huddleston’s title. Lieber v. Nicholson, supra, at 514. Thus, there is no basis in law for the trial court’s finding that Huddleston was unable to perform the contract in this respect.

The other term of the contract which the court found Huddleston was unable to perform was the delivery of possession of the property to Mrs. Fergeson. The finding is inexplicit as to time; i. e., whether at the time the contract was executed as Mrs. Fergeson was permitted to testify over objection, or at the time of closing as specified in the contract. In either event, the finding must fail under this record.

The court erred in not excluding Mrs. Fergeson’s testimony that, contemporaneous with the execution of the contract, Huddleston promised her immediate possession or, in lieu thereof, return of the escrow deposit. This testimony would vary the terms of the contract upon which Mrs. Fergeson based her action. The purpose of reducing the agreement to writing was to definitely settle the terms and, as the contract makes explicit, to exclude all oral understandings to the contrary. Hobbs Trailers v. J. T. Arnett Grain Company, Inc., 560 S.W.2d 85, 87 (Tex.1977). The testimony was violative of the parol evidence rule, a rule of substantive law, which renders inadmissible any testimony to vary the legal effect of a writing in the absence of any ambiguity, accident, mistake or fraud shown in connection with the contract. The inadmissible testimony, whether objected to or not, is without probative force and will not support any finding. Texarkana & Ft S. Ry. Co. v. Brass, 260 S.W. 828, 830 (Tex.Comm’n App.1924, judgm’t adopted).

The remaining query, then, is whether Mrs. Fergeson produced any evidence of her allegation that Huddleston would not or could not deliver possession at closing. The exact language of the contract is:

At closing, SELLER [Huddleston] shall:
* * * * * *
(2) Deliver to PURCHASER [Mildred Fergeson] possession of the property.

It is apparent that Mrs. Fergeson equates possession with her inability to gain access to the property prior to the date for closing; yet, the contractual language does not justify that equation. A right of ingress and egress is a right to go upon and across the land of another, Parker v. Bains, 194 S.W.2d 569, 574 (Tex.Civ.App.—Galveston 1946, writ ref’d n. r. e.), but the contract does not speak to that right. Rather, the contract provides that at closing Huddle-ston is to deliver both the prescribed deed and possession. The phrase “[d]eliver . possession” is unaccompanied by any qualifying word to suggest that a formal act or ceremony was contemplated or to indicate the kind of possession. There is nothing to show that the parties used the phrase in a sense different from its ordinary meaning.

Long established in Texas are the principles regarding possession in connection with conveyancing. In this state, the distinction between seisin in deed and in law is not known; the legal title vests the owner with seisin and possession which he retains unless divested by actual possession taken and held by another. Thus, a conveyance by deed gives constructive possession to the grantee, who is deemed to be in actual possession even though neither the grantee nor anyone under him is actually residing on or occupying the land. Whitehead v. Foley, 28 Tex. 268, 289 (1866). Upon delivery of the conveyance, nothing remains to be done in order to give the grantee, as between him and the grantor, complete dominion over the property. Rogers v. Rogers, 15 S.W.2d 1037, 1039 (Tex.Comm’n App.1929, holdings approved). Consequently, unless the circumstances indicate otherwise, actual occupation is not necessary to constitute possession. Johnson v. Perkins, 140 S.W.2d 282, 284 (Tex.Civ.App.—Beaumont 1940, writ dism’d judgm’t cor.).

The only evidence of possession of the property is that Huddleston was in possession of it. It follows that Huddleston’s delivery of his deed would deliver possession of the property within the meaning of the language of the contract. There is no evidence that Huddleston was unable, or refused, to deliver his deed on the date set to consummate the contract. Hence, there is no evidence to support Mrs. Fergeson’s allegation and the court’s finding that Hud-dleston was unable to perform the contract in this regard.

Accordingly, Huddleston’s points two through six, inclusive, are sustained. This action dictates that the trial court’s judgment must be reversed and, pursuant to Rule 434, Texas Rules of Civil Procedure, the judgment the trial court should have rendered must be rendered.

The judgment of the trial court is reversed. Judgment is here rendered that Mildred Fergeson take nothing by this action against A. L. Huddleston.


author: AKIN, Justice.

text:
    Gus LAZIDIS, Harold R. Shuler and Louise G. Reese, III, Appellants, v. Mollie Hannah GOIDL, Appellee.
    No. 19445.
    Court of Civil Appeals of Texas, Dallas.
    March 28, 1978.

      Thomas K. Boone, Dalton, Moore, Forde, Joiner & Stollenwerck, Dallas, for appellants.
    Roger D. Bush, Steinberg, Luerssen & Vogelson, Dallas, for appellee.
   AKIN, Justice.

This is an appeal from a summary judgment rendered in favor of appellee on a promissory note and against the maker and certain guarantors, three of which appeal. As grounds, appellants assert that: (1) the summary judgment evidence did not establish that appellee had possession of the note; (2) that the affidavits attached to appellee’s motion did not show how the affiants had personal knowledge of the averments; and (3) the appellee sought an alternative and inconsistent remedy to this action by seeking in another suit to foreclose a vendor’s lien on the property securing the note. We hold, however, that the affidavits properly support the judgment and that the alternative remedy sought by appellee is not inconsistent with this action. Accordingly, we affirm.

Appellants first contend the trial court erred in rendering summary judgment in favor of appellee because the summary judgment evidence does not establish that appellee had possession of the note, citing Texas National Corp. v. United Systems International, 493 S.W.2d 738 (Tex.1973). In that case, the supreme court stated: “If a sworn or certified copy, rather than the original of the note, is used, the motion or affidavit should clearly evidence that the plaintiff is the present owner and holder and in possession of the note.” [Emphasis added]. Since the original note was not before the trial court, our question turns on whether the affidavits comport with this language in the supreme court’s opinion.

Appellee’s motion is supported by affidavits of appellee, her attorney, and her son. The attorney’s affidavit avers that the attached exhibit is a true and correct copy of the note, the original of which was executed by appellants and delivered to appel-lee and that appellee “has been the owner and holder of such note at all times since the delivery of same to her.” A second affidavit by the attorney states that he is the attorney of record for appellee. Mrs. Goidl’s affidavit states that she has “been the owner and constructive holder of the note at all times since its delivery for her behalf.” The affidavit of Irving Goidl identifies the affiant as the appellee’s son and states that he has managed appellee’s affairs for the past five years. In such capacity, he states that the note was delivered to him for appellee by her attorney and that he kept the note for appellee “until recently when such note was turned over to Mrs. Goidl’s attorney, Lawrence E. Steinberg.” Attached to all three affidavits is a copy of a note, which all affiants aver to be a true and correct copy of the original note. No where in any affidavit is it specifically stated that Mrs. Goidl is in possession of the original note; however, it is clear that Mrs. Goidl’s son had actual possession of the note until it was turned over to her attorney apparently for collection and that both were her authorized agents.

Although the supreme court used the terms “present owner and holder and in possession” of the note, the term “in possession” is redundant of the word “holder.” The language “in possession” is significant only in the sense that a person in possession of a note is prima facie presumed to be the “owner and holder.” The word “holder” is a word of art with a specific legal meaning. Tex.Bus. & Com.Code Ann. § 1.201(20) (Vernon’s 1968), defines holder as “a person who is in possession of a document of title or an instrument or an investment security drawn, issued or endorsed to him or to his order or to bearer or in blank.” Under this definition, the use of the word “holder” includes possession of the note by definition. Likewise, a person may be the owner and holder of a note when the note is held by an authorized agent of the owner, as here. E. g., Felton v. Davenport, 148 S.W.2d 988 (Tex.Civ.App.—El Paso 1941, writ dism’d, jdgmt. correct), Dickson v. Dickson, 324 S.W.2d 422 (Tex.Civ.App.—Houston 1959, no writ). Consequently, in our view, the term “constructive holder” as averred in Mrs. Goidl’s affidavit, was used only in the sense that she did not have physical possession, although she was a holder under the Uniform Commercial Code. Nevertheless, in our view, the appel-lee’s affidavits collectively show that Mrs. Goidl is the owner and holder of the note and that physical possession of the note is in her agent, Steinberg. Thus, the contention that the note may be in the hands of an innocent third party, as appellants urge, is specious.

Appellants next contend that the trial court erred in granting appellee’s motion for summary judgment because the affidavits in support of the motion do not properly show how each affiant had the requisite personal knowledge of the matters therein. Appellants rely on Greater Houston Bank v. Miller & Freeman Ford, Inc., 540 S.W.2d 390, 392 (Tex.Civ.App.—Corpus Christi) rev’d on other gds., 544 S.W.2d 925, 926 (Tex.1976) for the proposition that con-clusory statements by an affiant that he has personal knowledge of all matters stated in his affidavit are not sufficient; the affiant must show how he learned of the facts contained in the affidavit. We agree with this statement generally; however, here the affidavits collectively show how each affiant learned of or knew the facts contained in each affidavit. Irving Goidl states in his affidavit that a true and correct copy of the real estate note is attached and that the note was delivered to him for appellee by her attorney in connection with the sale of certain property. He further states he had been keeping the note for appellee until he turned it over to her attorney. Thus, he has shown how he knew the facts contained in his affidavit. The affidavit of appellee recites that she conveyed certain real estate to L.R.R.S. Corp. and in partial consideration a note was executed by L.R.R.S. Corp., et al. She further states she is the owner and constructive holder of the note. Finally, Steinberg’s affidavit recites that a true and correct copy of a real estate note executed by L.R.R.S. Corp., et al, and delivered to appellee is attached and that appellee has been the owner and holder of the real estate note at all times since its delivery to her. Thus, the recitation of fact by each affiant clearly shows how each learned or knew of the matters contained in each affidavit. Consequently, these aver-ments are not conclusions within the ambit of the authorities cited by appellants.

In connection with the contention that the affidavits are insufficient in that they are not shown to be based on personal knowledge, appellants argue that the affidavits relied on by appellee are from interested witnesses and consequently will not support a summary judgment unless they are clear, direct and positive and there are no circumstances tending to discredit the testimony. They argue that statements made by appellee’s attorney in his affidavit that appellee is the owner and holder conflict with statements made by Irving Goidl in his affidavit that appellee’s attorney is in possession, in that it is impossible to tell whether appellee’s attorney has possession of the note. The fact that appellee’s attorney states appellee is the owner and holder does not negate the fact he has possession. Indeed, as we have noted, supra, possession may be in the hands of an authorized agent of the owner and still the owner may aver that he is the owner and holder of the note. We conclude that the affidavits here are clear, direct and positive and nothing in the record tends to impeach them. Under these circumstances, the mere fact that they may be from interested witnesses will not defeat summary judgment. International Shelters, Inc. v. Corpus Christi State Nat’l Bank, 475 S.W.2d 334, 337-338 (Tex.Civ.App.—Corpus Christi 1971, no writ); see Lotspeich v. Chance Vought Aircraft, 369 S.W.2d 705, 711-712 (Tex.Civ.App.—Dallas 1963, writ ref’d n. r. e.).

Finally, appellants argue the trial court erred in granting appellee’s motion for summary judgment on the promissory note because a previously instituted suit between the same parties was pending in another court in which appellee was suing to recover title to the realty securing the note. Thus, appellants conclude, appellee was pursuing an alternative and inconsistent remedy to an action on the note. We do not agree. Appellee attaches by affidavit her pleading in that suit which shows, contrary to appellant’s contention, that ap-pellee was seeking foreclosure of a vendor’s lien rather than rescission. A holder of a secured note may sue, as here, on the note without resorting to the security. Carter v. Gray, 125 Tex. 219, 81 S.W.2d 647, 648 (1935); Weatherby v. Townes, 42 Tex. 83 (1875); Harper v. First State Bank of Grand Prairie, 3 S.W.2d 552, 553 (Tex.Civ.App.—Waco 1928, writ ref’d). On the other hand, a holder of a secured note may proceed against the security and, then, if a deficiency exists, seek payment from the maker and guarantors. The mere fact that appellee may have the right to rescind under a vendor’s lien is not tantamount to an election to exercise that right. Carter v. Gray, id at 648. See Maupin v. Chaney, 139 Tex. 426, 163 S.W.2d 380, 384 (1942) (per Alexander, C. J.). Since, in appellee’s other suit, she seeks foreclosure of her security interest, not rescission, no election was made nor required.

Affirmed.


author: SPURLOCK, Justice.

text:
    The SCHWARTZ CO., INC., Appellant, v. PAULSEL LUMBER CO., Appellee.
    No. 17959.
    Court of Civil Appeals of Texas, Fort Worth.
    March 30, 1978.
    Rehearing Denied April 27, 1978.

      Greenberg & Bach and Robert M. Green-berg, Dallas, for appellant.
    Christopher, Bailey & Taylor and M. Ward Bailey, Fort Worth, for appellee.
   OPINION

SPURLOCK, Justice.

This is a venue case. By its original petition in the nature of a sworn account, Paulsel Lumber Company sued The Schwartz Company. The defendant filed an instrument denominated “Defendant’s Original Answer”. A close examination of this pleading indicates that the document also includes a plea of privilege. Plaintiff did not file a controverting affidavit within the ten days required by Rule 86 (1967). Pursuant to Rule 5(b) (Supp.-1978), the plaintiff filed a motion for leave to file his controverting affidavit late. After a hearing on this motion, the trial court found that “good cause” existed for permitting the late filing of the controverting plea and granted leave to the plaintiff to file said plea. Then a hearing was held on the plea of privilege and it was overruled. Defendant has perfected an appeal.

We affirm.

The following is a fair summary of the relevant events leading up to the trial court’s order permitting the late filing of plaintiff’s controverting plea.

On March 11,1977, Paulsel Lumber Company, through its attorney, filed suit against The Schwartz Co., Inc., on a sworn account. On March 24, 1977, plaintiffs attorney received a letter from the attorney for defendant. Accompanying this letter was a pleading styled “Defendant’s Original Answer”. The transmittal letter also referred to the pleading as an answer. Plaintiff’s attorney read the transmittal letter and the style of the defendant’s pleading and concluded that the document only contained an “answer”, as that term is normally used by attorneys. His reasons for not examining the pleading more thoroughly at the time of receipt were (1) that he was working on an exhaustive brief that had to be filed with the Interstate Commerce Commission, and (2) he was working on various requests for admissions, interrogatories, and other pleadings and documents filed in connection with other litigation that he was handling for various clients.

On April 4, 1977, plaintiff’s attorney discovered that the defendant’s pleading denominated “Defendant’s Original Answer” also included a plea of privilege. Further, he testified that it was necessary to pull the delivery receipts supporting the invoices in order to file an adequate controverting plea. He then notified the Paulsel Lumber Company and asked the person in charge of the records to pull the delivery receipts, but due to the volume of records, it took several days for the company to assemble these supporting delivery receipts.

Realizing that the ten days in which to file a controverting plea had passed, plaintiff’s attorney filed a motion to permit the late filing of the controverting plea. After receiving evidence at the hearing on the motion to permit the late filing, the trial court ruled that “good cause” had been shown and granted leave to plaintiff to file the controverting plea. When announcing his decision, the trial court noted that he had reviewed the records of the clerk of his court and that even the clerk’s office had not noticed that a plea of privilege had been filed in the case.

By its first point of error, the defendant contends that “(t)he trial court erred in holding that good cause had been shown to permit the late filing of the controverting plea of plaintiff for the reason that as a matter of law good cause had not been shown.”

Rule 86 (1967) provides in part that if an “adverse party desires to controvert the plea of privilege, he shall within ten days after he or his attorney of record received the copy of the plea of privilege file a controverting plea under oath, setting out specifically the grounds relied upon to confer venue of such cause on the court where the cause is pending.”

Rule 5 (Supp.-1978) provides:

“When by these rules ... an act is required or allowed to be done at or within a specified time, the court for cause shown may, at any time in its discretion (a) with or without motion or notice, order the period enlarged if application therefor is made before the expiration of the period originally prescribed or as extended by a previous order; or (b) upon motion permit the act to be done after the expiration of the specified period where good cause is shown for the failure to act; . . . (Emphasis added.)

In support of this point of error, defendant contends that the case of Smith v. Isaac, 326 S.W.2d 922 (Tex.Civ.App.—Waco 1959, no writ) is squarely in point. We disagree, because the facts of the Smith case can be easily distinguished from the facts of the case before us. In Smith, the attorney did not read the document until it was too late to file the controverting plea; whereas, in the case before us, the plaintiff’s attorney did read the letter of transmittal and the designation of the type of pleading on the document. Further, in Smith, the plaintiff did not file a motion seeking leave of the trial court to permit the late filing. Because of this, we conclude that the trial court in Smith had no alternative but to strike the late-filed controverting plea and transfer the cause.

The defendant contends that his pleading styled “Defendant’s Original Answer” is in strict conformity with Rule 851 (1967), which provides that the original answer may include a plea of privilege, among others. We agree, but we are also guided by Rule 11 (1967), which provides:

“The proper objective of rules of civil procedure is to obtain a just, fair, equitable and impartial adjudication of the rights of litigants under established principles of substantive law, to the end that this objective may be attained with as great expedition and dispatch and at the least expense both to the litigants and to the state as may be practicable, these rules shall be given a liberal construction.”

As lawyers and officers of the courts, we must never allow ourselves to lose sight of this fundamental objective of the Texas Rules of Civil Procedure.

Based upon the facts in this case, we conclude that the trial court did not abuse its discretion in holding that “good cause” had been shown to permit the late filing of the controverting plea. We particularly disagree with defendant’s contention in his first point of error that “as a matter of law good cause had not been shown.” Defendant’s first point of error is overruled.

By its second through fourth points of error, defendant basically contends that the trial court erred in overruling its plea of privilege.

In its controverting plea, plaintiff relied upon Tex.Rev.Civ.Stat.Ann. art. 1995, Subd. 5, (Supp.-1978), which is the venue exception applicable where there is a contract in writing to perform an obligation in a particular county, or a definite place therein. See 1 McDonald, Texas Civil Practice § 4.11.1 at 444, et seq. (1965) for a discussion of the necessary venue facts under Tex.Rev.Civ.Stat.Ann. art. 1995, Subd. 5, (Supp.-1978). One of those venue facts is that the claim is based upon a written contract. In establishing this venue fact, the petition is the best evidence of the nature of the suit. Since the trial court can take judicial notice of its contents, it does not need to be formally introduced into evidence. 1 McDonald, Texas Civil Practice § 4.55 at 611-612 (1965).

We have read the entire statement of facts in this case and hold that the signed invoices payable at Fort Worth, Texas, were properly admitted into evidence under Tex.Rev.Civ.Stat.Ann. art. 3737e (Supp.-1978), since a proper predicate was laid for the introduction of those invoices as business records.

We hold that the trial court properly overruled defendant’s plea of privilege. The judgment of the trial court is affirmed.

      . All references to rules are to Tex.R.Civ.P.


author: COLEMAN, Chief Justice.

text:
    Eli E. KAPHAN, Appellant, v. FIDELITY AND DEPOSIT COMPANY OF MARYLAND, Appellee.
    No. 17094.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    March 30, 1978.
    Rehearing Denied April 27, 1978.

      Houchins & Tasker, Kenyon Houchins, Houston, for appellant.

      Law Offices of Adolph Uzick, Robert L. Lipstet, Houston, for appellee.
   COLEMAN, Chief Justice.

The Fidelity and Deposit Company of Maryland, the surety on Eli E. Kaphan’s bond as guardian of the estate of Edna Kaphan, brought suit against Eli E. Kaphan to recover money which it paid to the successor guardian of Edna Kaphan by reason of a shortage in the guardianship account. The judgment for the plaintiff was entered on a jury verdict. The judgment will be affirmed.

On the 8th day of September, 1971, Eli E. Kaphan was appointed guardian of the person and estate of Edna Ada Kaphan, alleged to be a person of unsound mind. He made a written application to the Fidelity and Deposit Company of Maryland requesting that company to execute as surety his guardian’s bond. This application was in the form of a contract executed by Eli E. Kaphan. In the contract, Kaphan agreed: “to indemnify the company against all loss, liability, cost, damages, attorney’s fees and expenses whatever, which the company may sustain or incur by reason or in consequence of having executed said bond; third, that the company shall have the right and is hereby authorized but not required, to adjust, settle, or compromise any claim, demand, suit, or judgment upon said bond, unless I shall request the company to litigate such claim or demand or defend such suit or to appeal from such judgment, — .”

On the 27th day of June, 1974, the court on its own motion removed Eli E. Kaphan as guardian for failure to file an annual account as required by Section 400 of the Probate Code of Texas. On the 24th day of July, Jack E. Withem was appointed guardian of the estate and person of Edna Ada Kaphan. He had represented Eli E. Ka-phan while Kaphan was acting as guardian. Thereafter, Kaphan was ordered to file a final accounting. The order required him to appear on October 17, 1974, at 9:30 A.M. and show cause why he should not be required to file a final account.

An instrument purporting to be a final account was prepared by Withem and was executed by Kaphan and filed with the probate court. On October 31,1974, a hearing was held on Kaphan’s final account. The account showed the sum of $9,993.54 as “unaccounted for”. On October 31, 1974, the court considered the account and allowed certain unauthorized expenditures, together with statutory compensation to the guardian, and found a net amount unaccounted for in the sum of $8,633.33. The court considered the account filed to be an annual account and refused to approve it. In the same order, he found the net amount of the deficiency and entered a judgment against Eli E. Kaphan and Fidelity and Deposit Insurance Company of Maryland in favor of the successor guardian in the sum of $8,633.33.

Mr. Williams, the claims attorney for the plaintiff, testified that after the judgment was entered he talked to Mr. Kaphan about paying the judgment. Mr. Williams determined that Mr. Kaphan lacked the funds to pay off the judgment and after receiving a demand from the successor guardian, paid the judgment in full. Mr. Kaphan did not testify, and there is no evidence that he requested the company to litigate the claim or to appeal the judgment.

Mrs. Kaphan subsequently died, and Mr. Kaphan was her sole heir. On the trial of this case, the jury found that Kaphan was indebted to Fidelity and Deposit Company of Maryland in the sum of $8,633.33, and that $1500.00 would be a reasonable attorney’s fee. Judgment was entered in favor of the plaintiff on the findings of the jury.

Appellant contends that the judgment of the probate court against him and the plaintiff was void.

The plaintiff alleged his contractual right to adjust, settle or compromise a claim made against it on the bond. There is evidence of a claim under the bond, payment of the claim and the failure of Ka-phan to repay the sum paid by it in settlement of the claim. Kaphan did not allege or prove the failure of the company on request to litigate the claim. He asserted fraud in the preparation of the final account on his behalf, but did not allege that the company had any connection with or knowledge of the fraud. It was not alleged or proven that Kaphan did not, in fact, sign the account. Notice of the hearing on the show cause order was published by posting and a personal citation was ordered served on Kaphan and the surety on his bond.

The plaintiff’s action, based on the promise contained in the application for bond, was established by undisputed facts. Ka-phan failed to plead or prove a defense to this cause of action. He did not request issues of fact to be submitted to the jury which would establish a defense. The judgment entered can be sustained on this ground alone.

The defenses asserted by Kaphan are based on their contention that the probate court’s judgment establishing the amount of the indebtedness to the estate was void. This is a collateral attack on that judgment in that it is an attempt to avoid its binding force in a proceeding not instituted for such purpose. Akers v. Simpson, 445 S.W.2d 957 (Tex.1969). The judgment of a court of general jurisdiction is not subject to collateral attack except on the ground that it had no jurisdiction of the person of a party or his property, no jurisdiction of the subject matter, no jurisdiction to enter the particular judgment, or no capacity to act as a court. Austin Independent School District v. Sierra Club, 495 S.W.2d 878 (Tex.1973).

The probate court order of October 31,1974, requiring the repayment of the sum of $8,633.33 to the estate of Edna Ada Kaphan recites that “such citation as is required by law has been accomplished”. A judgment which contains on its face all of the plain jurisdictional recitals must be accorded absolute verity against a collateral attack. Akers v. Simpson, 445 S.W.2d 957 (Tex.1969); Donaldson v. First State Bank of Abernathy, 352 S.W.2d 302 (Tex.Civ.App.—Amarillo 1961, writ ref’d n. r. e.). The probate court had jurisdiction to enter an order requiring the guardian of an estate pending in the court to restore to the estate money improperly diverted from the estate. Currie v. Drake, 550 S.W.2d 736 (Tex.Civ.App.—Dallas 1977, writ ref’d n. r. e.)

In Glenn v. Dallas County Bois D’Arc Island Levee District, 268 S.W. 452 (Tex.1925), the court held that a collateral attack against a judgment by a party to it cannot be sustained upon the ground that a third person or one of the parties has been guilty of false swearing or fraudulent representation in inducing it. The court said:

“Upon the question of the effect of fraud in avoiding a transaction, much confusion has * * * arisen from want of proper limitation upon the maxim that fraud vitiates everything, even the solemn judgments of a court of record. The fraud of a party does not render the transaction absolutely void within itself, but simply affords the ground to have it declared void by a proper proceeding for this purpose. * * * ”

The court quoted from Williams v. Haynes, 77 Tex. 283, 13 S.W. 1029, as follows:

“Evidence of fraud aliunde the record cannot be heard to dispute the judgment, even where the fraud is in obtaining jurisdiction.”

The appellant argues that the order of the probate court was void since it is a personal judgment in favor of Jack With-em, not a party to-the proceedings. The Texas Probate Code, Section 222(c) provides that the order of removal shall require, as to all the estate remaining in the hands of the removed person, delivery thereof to the person or persons entitled thereto, or to one who has been appointed and has qualified as successor representative. Jack Withem was the successor representative and the probate court properly required Kaphan to pay the amount of the judgment to Jack Withem in his representative capacity.

The annual accounting filed on behalf of Kaphan together with the show cause order issued by the probate court constituted pleadings sufficient to invoke the jurisdiction of the court upon the subject matter determined by the judgment. The judgment rendered by the probate court based upon the deficiency found in the annual accounting was not void. Edwards Feed Mill v. Johnson, 158 Tex. 313, 311 S.W.2d 232 (1958).

Appellant’s assignments based on the premise that the judgment of the probate court requiring Kaphan to make restitution to the estate of Edna Kaphan is void and cannot be sustained.

The appellant complains of the court’s submission of Special Issues 1 and 2. No objections to the charge of the court are found in the transcript. This point is waived. Houston Belt and Terminal Railway Company v. Wherry, 548 S.W.2d 743 (Tex.Civ.App.—Houston [1st Dist.] 1977, writ ref’d n. r. e.).

The judgment is affirmed.


author: JAMES, Justice.

text:
    James W. RAMSEY, Appellant, v. SENTRY INSURANCE, a Mutual Company, Appellee.
    No. 5863.
    Court of Civil Appeals of Texas, Waco.
    March 30, 1978.
    Grant Liser, Brown, Herman, Scott, Dean & Miles, Fort Worth, for appellant.
    Paul L. Peebles and Anne Gardner, Brown, Crowley, Simon & Peebles, Fort Worth, for appellee.
   OPINION

JAMES, Justice.

This is a workmen’s compensation case. Appellant James W. Ramsey alleged that he received an injury to his low back on or about May 30, 1975, while in the employment of Cletex Trucking, Inc., as a truck driver; that this injury caused him to suffer a herniated (ruptured) disc in his back and as a result he was totally and permanently disabled. The Appellee Sentry Insurance Company answered with a general denial and other pleadings not necessary to detail herein.

Trial was had to a jury which found:

(1) Plaintiff-Appellant Ramsey received an injury on or about May 30, 1975.
(2) That he was injured in the course of his employment.
(3) The jury failed to find that such injury was a producing cause of any total incapacity.
(4) The jury likewise failed to find that such injury was a producing cause of any partial incapacity.
(5) That Cletex Trucking, Inc. had notice of such injury within 30 days after its occurrence.

Based upon the jury verdict the trial court entered judgment that Plaintiff-Appellant Ramsey take nothing, from which he appeals.

Appellant’s points of error assert that the jury’s failure to find that Appellant’s injury was a producing cause of any total incapacity or any partial incapacity is so against the great weight and preponderance of the evidence as to be clearly wrong and unjust. We sustain these points of error and reverse the trial court’s judgment and remand the cause for retrial on the merits.

James W. Ramsey was thirty-three years of age at the time of trial. He had worked for Cletex Trucking on two separate occasions prior to his employment in question. He began work for Cletex Trucking the last time on October 18, 1974, as a truck driver.

He testified that he made hauls to five states driving a Mack truck with “on-the-road, off-the-road suspension,” which jarred him and bounced him around. He said he first noticed a problem in December 1974 or January 1975 when he was on a trip to New Mexico. It started in his leg and hip but he continued to work. In May 1975, he began hurting so badly that he went to see a doctor. He first saw Dr. Steve Johnson in Cleburne, who in turn referred him to Dr. Thomas Rapp, an orthopedic surgeon, in Fort Worth. Dr. Rapp placed Appellant Ramsey in a hospital for traction where he remained for 10 days. Dr. Rapp then referred Appellant to Dr. Clayton Smith, a neurosurgeon, in Fort Worth. Dr. Smith first saw Ramsey on July 16, 1975, and after making the necessary examinations, performed surgery on the lumbar area of Appellant’s spine on July 23, 1975. Dr. Smith found that Ramsey had suffered a ruptured disc; and after Ramsey’s convalescence therefrom, Dr. Smith restricted Appellant from any activity requiring heavy lifting or climbing, bending, stooping or driving a truck. Dr. Smith further testified that within reasonable medical probability, Ramsey would be under these restrictions permanently.

In the case at bar, the jury found that Appellant Ramsey suffered an injury on or about May 30,1975, in the course and scope of his employment. These findings are not challenged. From this starting point, it is undisputed that the Appellant suffered a ruptured disc in his low back which required surgery. It is also undisputed that he was hospitalized after this surgery and required a period of recovery, and as a result of this injury the Appellant cannot perform heavy work. There was only one injury before the jury, and the evidence conclusively shows that this injury caused some incapacity.

In passing upon Appellant’s points of error challenging the factual sufficiency of the jury’s failure to find total incapacity, and partial incapacity, we have carefully reviewed the entire record and weighed the evidence in support of and contrary to the jury’s findings (or rather failure to find) in question, as we are obliged to do. In re King’s Estate (1951) 150 Tex. 662, 244 S.W.2d 660.

We do not deem it necessary or advisable to detail all the evidence. Here, we are concerned with only one type of complaint or injury suffered by the Appellant, to wit, a low back injury. Jury findings establish that Appellant suffered the injury on or about May 30, 1975, in the course and scope of his employment. The evidence conclusively shows that this injury necessitated two periods of hospitalization and surgery for the removal of a ruptured disc, with a period of convalescence with some permanent residual disability. Under this state of the record we have no alternative but to hold that the jury’s failure to find that the injury in question was a producing cause of any disability is so against the great weight and preponderance of the evidence as to be manifestly wrong and unjust. See Thomas v. International Insurance Co. (Waco, Tex.Civ.App.1975) 527 S.W.2d 813, NRE; Seeton v. Aetna Casualty and Surety Co. (Eastland, Tex.Civ.App.1976) 535 S.W.2d 783, no writ.

The judgment is reversed and the cause is remanded for retrial.

REVERSED AND REMANDED.


author: BISSETT, Justice.

text:
    Gene MANGHAM et al., Appellants, v. V. K. HALL and Betty Hall, Appellees.
    No. 1258.
    Court of Civil Appeals of Texas, Corpus Christi.
    March 31, 1978.
    Rehearing Denied April 20, 1978.

      A. A. Munoz, II, Atlas, Hall, Schwarz, Mills, Gurwitz & Bland, McAllen, for appellants.
    H. H. Rankin, Jr., William Gamble, Rankin & Kern, McAllen, for appellees.
   OPINION

BISSETT, Justice.

This suit was brought by V. K. Hall and Betty Hall against Gene Mangham, d/b/a Mangham Air Conditioning, and Valcon, Inc., to recover damages for destruction of plaintiffs’ fence, for “loss of business” resulting from alleged acts of trespass, and for exemplary damages. The case was tried to a jury and based on a verdict, the trial court rendered a joint and several judgment against the defendants, which awarded the plaintiffs actual damages in the amount of $10,000.00 for “loss of business”; $165.08 for the destruction of a fence; and $10,000.00 for exemplary damages. Defendants have appealed.

In view of our decision to reverse the judgment of the trial court and remand the cause, we summarize only the portions of plaintiffs’ pleadings which are pertinent to our disposition of this appeal.

Plaintiffs alleged that they were the owners of a laundromat business; that “beginning about 1967”, Mangham, who owned real property adjoining a parking lot owned by the plaintiffs and used by their customers, began the construction of a building, which was built for him by Valcon, Inc.; that during the course of the construction the defendants drove their heavily loaded trucks over and across the parking lot of the Halls and committed certain other enumerated acts of trespass; that following the completion of the building, the defendant Mangham continued to trespass upon the parking lot, and “this continued until in the year 1969”, when Valcon built a new building “on the front part” of the first building for Mangham; that the defendants, during the course of construction of the new building in 1969, actually ordered plaintiffs’ customers to move their cars from plaintiffs’ parking lot; that the customers quit using plaintiffs’ laundromat because of defendants’ trespasses; and that “same continued as a continuing trespass from May 1969 to October 1969”. Plaintiffs further alleged that the trespasses committed by the defendants which took place “almost throughout the year 1969”, also:

“[cjaused great and serious damage to Plaintiffs as their business had continued to increase even while the trespass of the Defendant Mangham continued prior to the construction of the new building but during the year 1969, while Valcon, Inc., was building the building for Defendant Mangham, the business of the laundry of Plaintiffs on the adjoining property continued to fall off instead of increase as it had done before and was doing when these Defendants began the building and the decrease in the volume of business was pronounced and severe, caused by the high-handed method used by the Defendants Mangham and Valcon, Inc., in forcing their trespass upon the property of Plaintiffs and against Plaintiffs’ customers until the actual damages to Plaintiffs during the period of time by the trespass of both Mangham and Valcon, Inc., was at least $10,000.00 and the damage done by them in tearing down Plaintiffs’ chain link fence and destroying the material which amounts to $200.00.

Mangham and Valcon, Inc., in their first point of error, complain that the trial court erred in submitting Special Issue 7 over their objection that the issue as submitted with the term “loss of business” does not take into consideration “the fact that any expenses incurred in generating any loss of gross income would have to come out of that figure and as a matter of law the Plaintiffs are entitled to recover their net profits.” The point must be sustained.

Special Issue 7 and the jury’s answer thereto, reads:

“SPECIAL ISSUE NO. SEVEN
Did V. K. and Betty Hall sustain a loss of business as a result of the actions of Gene Mangham and Valcon, Incorporated which you have found in answer to the preceeding (sic) issues?
Answer: ‘Yes’ or ‘No’.
We, the jury, answer: Yes.”

Defendants also filed a motion for judgment non obstante veredicto, wherein they asked that the jury’s answer to Special Issue 7 be disregarded. The motion was overruled.

Since our disposition of the first point of error is decisive of this appeal, it is not necessary that we set out in detail all of the evidence adduced at the trial. Suffice it to say that the above quoted allegations contained in plaintiffs’ trial petition concerning defendants’ alleged acts of trespass are fully supported by the evidence. The proof further shows that plaintiffs did lose customers in 1969 during the period that the second building was under construction because of such trespasses by both defendants. No issues were requested and none were submitted relating to the trespasses allegedly committed solely by Mangham as “a continuing trespass” from “sometime in 1967” until the time the second building was finished in October, 1969.

Plaintiffs owned and operated five laundromats in McAllen, Texas, at and prior to the time that this suit was filed. The laundromat and its adjoining parking lot here involved was purchased by plaintiffs in 1964. It was called the “Whitecap”. The business was an established business by 1967. It was closed in July, 1975.

Mrs. Hall kept the records for the Whitecap. The records consisted of gross receipts only. The gross receipts for the years 1964-1973 were introduced in evidence. Under the pleadings, only those for the years 1966-1969 could possibly have any bearing on this appeal. The gross receipts for those years were:

1966 $27,991
1967 $25,793
1968 $25,245
1969 $20,068

Concerning the expectations which the plaintiffs had with respect to the business expected, Mrs. Hall testified:

“A Well, we always felt that it should increase, oh, at least, from a Thousand to Fifteen Hundred a year. And, a laundry of that size when we bought it, we had hopes that it would continue to increase at least to Thirty Thousand Dollars a year, but it never did reach that.”

The only testimony with respect to profits is from Mrs. Hall, when, in response to the questions asked her, said:

“Q So, this loss that we see from Twenty-Seven Thousand to Twenty-Five Thousand in 1967, approximately Two Thousand Dollar drop, that isn’t all profit; is it, Mrs. Hall?
A No.
Q Do you have any idea how much of that would have been profit?
A How much would have been profit? Q Yes?
A I would say at least thirty percent.”

When asked if she had “any idea of what the expenses for the Whitecap would run”, Mrs. Hall responded:

“A Well, we were buying the property and I think if you will look to the front of the notebook, I had — Well, what originally started out as the monthly payments and we would have the property and the taxes. No, I am sorry. They were included in the payment of the building. And, then, you would have your utilities. You would have parts and repairs and expenses and things of that sort.”

She further stated that she did not have records which showed the expenses for the Whitecap, because she did not keep those records separately and apart from the records for the other laundromats operated by plaintiffs.

Mr. Hall testified, in summary, that the Whitecap was “getting off the ground” pri- or to the time of “the problem” in 1969. He was told to assume that the gross receipts in 1969 were $5,000.00 less than the gross receipts in 1968. With that assumption, he was asked:

“Can you tell us whether or not that would cause a corresponding decrease in your expenses, and fixed expenses, your operating expenses?”

He answered:

“It would be very small, because mostly your expenses are fixed. So much each month.”

Mr. Hall further testified:

“Q Isn’t it a fact that about the only expenses that would go up when business goes up is your utility bills?
A Yes. And, that would go up some with it, but probably only maybe ten per cent, more or less, or something like that, or five per cent.”

Damages must be measured by a legal standard, one which serves to guide the fact finder in determining what sum will compensate the injured party. The measure of damages in a given case is a question of law and should be given in the charge of the court to the jury. International-Great Northern R. Co. v. Casey, 46 S.W.2d 669 (Tex.Comm’n App.1932, holding adopted); McMahan v. Musgrave, 229 S.W.2d 894 (Tex.Civ.App.—Eastland 1950, writ dism’d). While the form for submission of a particular special issue is left to the sound discretion of the court according to the requirements of each case, the submission must be sufficient to enable the jury to make an award of damages on proper grounds and correct principles of law. Jackson v. Fontaine’s Clinics, Inc., 499 S.W.2d 87 (Tex.Sup.1973); 17 Tex.Jur.2d, Damages, § 315 (1960).

Where a business which was already established and was making a profit at the time a person trespassed on property which was used by the business, and the trespass resulted in a diminution in the amount of gross receipts which could have been expected in the light of past developments, existing conditions, and reasonable forecasts, the owner of the business is entitled to recover damages for the actual loss (profits) sustained by him because of the trespass. Southwest Battery Corporation v. Owen, 131 Tex. 423, 115 S.W.2d 1097 (1938); Texas & P. Ry. Co. v. Mercer, 127 Tex. 220, 90 S.W.2d 557 (Tex.Comm’n App.—1936, opinion adopted); Cain v. Fontana, 423 S.W.2d 134 (Tex.Civ.App.—San Antonio 1967, writ ref’d n. r. e.); 17 Tex.Jur.2d, Damages, § 145 (1960). Such a loss of profits because of the diminution of “gross receipts” is measured by the loss of “net profits” and not the loss of “gross receipts”, except where the actual expenses which would have been incurred had the “gross receipts” been received are fixed with reasonable certainty. Hall v. Brown, 398 S.W.2d 404, 408 (Tex.Civ.App.—Waco 1966, no writ); American Const. Co. v. Caswell, 141 S.W. 1013, 1018 (Tex.Civ.App.—Austin 1911, no writ); 25 C.J.S. Damages § 90 (1966).

The term “net profits” is, “to a large degree, selfexplanatory and implies, generally speaking, what remains in the conduct of a business after deducting from its total receipts all of the expenses incurred in carrying on the business”. G & W Marine, Inc. v. Morris, 471 S.W.2d 644 (Tex.Civ.App.—Beaumont 1971, no writ). Or, as said in Stapper v. Van Valkenburgh & Vogel, 128 S.W.2d 466, 467 (Tex.Civ.App.—Amarillo, 1939, writ dism’d, judm. corr.):

“[t]he words ‘net profits’ means the money received from the sale of goods after deducting their costs and expenses.”

The Court, in Giles v. Rayburn, 173 S.W.2d 371, 373 (Tex.Civ.App.—San Antonio 1943, no writ), said:

“[I]t is academic that, in general, net profits of an operation are ascertainable by deducting the actual expenses from the gross earnings of the business. The difference between those items constitutes the net profits . . . ”

In “the calculation of net profits, allowance should be made for expenditures that the plaintiff would have been compelled to make”. 17 Tex.Jur.2d, Damages, § 144 (1960).

The law, in cases where plaintiffs seek a recovery for loss of profits sustained by reason of a defendant’s trespass which causes a reduction in gross receipts which otherwise would have been received by the plaintiffs in the operation of their business, demands that the plaintiffs prove by evidence of probative value all “factual data which supported their claim to lost profits”. International Harvester Company v. Kesey, 507 S.W.2d 195 (Tex.Sup.1974). The plaintiffs did not meet their burden in this case.

In Jackson v. Fontaine’s Clinics, Inc., supra, the plaintiff pleaded that the acts of the defendants “would prevent plaintiff from deriving the normal pecuniary reward from its business activities that it otherwise would have been entitled to attain. While it was not clear, apparently the plaintiff sought a recovery for loss of net profits. In the issue pertaining to damages, if any, sustained by the plaintiff by reason of the defendant’s acts, the jury was instructed that the members thereof could take into consideration:

“(a) the reasonable cash value, if any, of the loss of monetary reward from Fon-taine’s Clinics, Inc.’s business activities.”

The defendant contended, in part, that the instruction permitting the jury to find losses was not supported by the evidence. The contention was sustained. The Court, at page 90, said:

“[HJowever, the jury was given no guideline for determining a loss of net profits. Manifestly, the phrase ‘monetary reward’ does not describe net profits, and no other instruction was given connecting that phrase with net profits or with any other recognized measure of damages.
We hold that this submission was factually defective, because it simply failed to guide the jury on any proper legal measure of damages.”

The logic and reasoning in that case should be applied in this case.

It is our opinion that the language of Special Issue 7 would mislead a reasonably intelligent jury into finding that plaintiffs were entitled to gross revenues, that is, with no deduction of operating expenses. Our view is that while “net profit” is a word of common usage and whose meaning is readily understood, it is not synonymous with the term “loss of business”. Plaintiffs cite Southwest Battery Corporation v. Owen, 131 Tex. 423, 115 S.W.2d 1097 (1938), as authority that such terms are used synonymously by the courts. We do not agree. In Owen, the court was concerned with the speculative nature of “profits” in a fledging business including what factors make such profits certain and not with whether the jury was given a proper measure of damages with which to determine the amount of lost profits. We do not question the principle that uncertainty as to the amount of damages will not defeat recovery.

Plaintiffs further contend that Cain v. Fontana, supra, is also authority that the terms “loss of business” and “profits loss” are “not only synonymous, but more importantly, judicially accepted as the proper language upon which to submit issues regarding the loss of income sustained by a business as a result of an intentionally inflicted trespass”. We are not in agreement with that contention. In the cited case, the trial court did submit an issue on whether the plaintiff suffered a “loss of business” as a result of the defendant’s trespass. However, the defendant, on appeal, attacked the findings by the jury that the plaintiff sustained a “loss of business” and that the plaintiff was damaged in the amount of $250.00 for such “loss of business” solely on the grounds of “no evidence” and “factually insufficient evidence”. That is not the case here, for, in this case the defendants challenge the submission of Special Issue 7 on the grounds that the trial court, in submitting an inquiry into “loss of business” submitted an improper measure of damages, and the proper measure was “lost profits”. Moreover, in the Cain case, there was evidence that in the months of January and February the plaintiffs’ business had a net profit of $533.31 and $565.17, respectively, a loss of $188.95 in April, and a loss of $441.57 in May (the month of the trespass). The Court of Civil Appeals held that preexisting profits may be considered in arriving at a just estimate of the amount of profits lost. It was not error to submit the issue of “lost business” in the Cain case, since the defendant did not object to its submission on the ground that it submitted a wrong measure of damages. Clearly, there was evidence to support the finding that $250.00, which was substantiated by evidence that such was, actually, a loss of “net profits”. That is not true of the instant case.

It is clearly established by the evidence that the gross receipts from the Whitecap for the years 1967 and 1968 were substantially the same, and, as testified by Mr. Hall, the business was “getting off the ground”. It can only be concluded from the evidence that the drop in the amount of gross receipts (approximately $5,000.00) in 1969 was caused by defendants’ acts in 1969 during the time that the second building was under construction. It is further conclusively established by the evidence that the expenses of operating the Whitecap were largely fixed, but there is no evidence as to the amount in dollars and cents of any such expenses incurred in operating that particular laundromat for 1969 or for any other year. While Mr. Hall testified that “about the only expenses that would go up when business goes up is your utility bills”, and that the increase in the utilities would “probably only maybe ten per cent, more or less, or something like that, or five per cent”, that testimony does not establish a basis for a determination of what the expenses would have been had the Whitecap grossed $5,000.00 more in 1969 over the actual amount which it did gross. The “net profits” of the Whitecap were not established for the year 1969, or for any other year.

It is common knowledge that the cost of utilities may vary from year to year because of changes in price in the unit of measure. The complaint in this case is anchored on the loss of gross receipts in the year 1969, not 1967. No question was asked of Mrs. Hall as to what percentage of the $5,177.00 diminution in gross receipts in 1969, when compared with those of 1968, would have been profit.

Plaintiffs are not entitled to recover the amount of gross receipts which they lost and would have received but for the trespasses of the defendants. Such a recovery would be a windfall to them, the effect of which would be to place them in a better financial condition than they would have occupied had the trespasses not occurred. We believe that there was some evidence to show a considerable loss of net profits, but the case was submitted on the wrong measure of damages. Defendants’ objections to the submission of Special Issue 7 should have been sustained. The proper measure of damages in this case is loss of net profits, which would be the difference between the total amount of gross receipts and the total amount of operating expenses which would have been incurred by the plaintiffs had the “lost gross receipts” been received by them. Defendants’ first point is sustained.

Since this case will be reversed and remanded, it is not necessary that we consider or discuss any of defendants’ remaining points.

The sustaining of defendants’ first point requires a reversal of the trial court’s judgment, but does not require that we render a take nothing judgment, as defendants request in their brief. We believe that the ends of justice would be better served by reversing and remanding for a new trial rather than reversing and rendering judgment that plaintiffs take nothing in their suit against defendants. Rule 434, T.R.C.P.; Atchison, T & S. F. Ry. Co. v. Scott, 551 S.W.2d 740 (Tex.Civ.App.—Beaumont 1977), aff’d, 21 Tex.Sup.Ct.J. 126 (Jan. 7, 1978); National Life and Accident Insurance Company v. Blagg, 438 S.W.2d 905 (Tex.Sup.1969); Texas & Pacific Railway Company v. Van Zandt, 159 Tex. 178, 317 S.W.2d 528 (1958); General Supply and Equipment Co., Inc. v. Phillips, 490 S.W.2d 913 (Tex.Civ.App.—Tyler 1972, writ ref’d n. r. e.); U. M. & M. Credit Corporation v. Doss, 452 S.W.2d 45, 48-9 (Tex.Civ.App.—Dallas 1970, writ ref’d n. r. e.).

The judgment of the trial court is REVERSED and the cause is REMANDED for a new trial.


author: GUITTARD, Chief Justice.

text:
    J. Z. WOOLRIDGE et al., Appellants, v. Robert FOLSOM, Individually and as Mayor of the City of Dallas, Appellee.
    No. 19491.
    Court of Civil Appeals of Texas, Dallas.
    March 31, 1978.
    Edward B. Cloutman, III, Mullinax, Wells, Mauzy & Baab, Inc., Dallas, for appellants.
    Lee E. Holt, City Atty., Joseph W. Geary, Jr., Daniel C. Garner, Geary, Stahl, Koons, Rohde & Spencer, Dallas, for appellee.
   GUITTARD, Chief Justice.

The principal question in this case is whether the district court has jurisdiction of a suit by residents of the city of Dallas against the mayor to nullify certain contracts of the city on the ground of a conflict of interest on the part of the mayor. The trial court dismissed for want of jurisdiction, and we affirm.

Plaintiffs base their suit on the following provisions of article 988 of the Texas Revised Civil Statutes (Vernon 1963):

No member of the city council, or any other officer of the corporation, shall be directly or indirectly interested in any work, business or contract, the expense, price or consideration of which is paid from the city treasury, or by an assessment levied by an ordinance or resolution of the city council.

The trial court held that this statute applies only to municipalities incorporated under the general laws of the state, not to those with home-rule charters adopted under article XI, section 5, of the Texas Constitution, and that the matter of conflicts of interest on the part of municipal officers is completely covered by the charter of the city of Dallas and ordinances enacted pursuant to the charter, particularly the city’s code of ethics for municipal officers. On this appeal, plaintiffs’ only point of error is that the trial court erred in holding that article 988 has no application to officials of the city of Dallas.

We agree with the decision of the trial court. Comparison of article 988 with applicable provisions of the charter and the code of ethics for municipal officers reveals that the statute contains nothing that is not also covered by the charter and the code, whereas the charter and the code contain specific provisions, both procedural and substantive, not found in article 988. The pertinent provision of the charter is chapter XXII, section 11, as follows:

No officer or employee shall have any financial interest, direct or indirect, in any contract with the city, or by financially interested, directly or indirectly in the sale to the city of any land, materials, supplies or services, except on behalf of the city as an officer or employee. Any violation of this section, with knowledge, express or implied, of the person or corporation contracting with the city shall render the contract involved voidable by the city manager or the city council. The alleged violations of this section shall be matters to be determined either by the trial board in the case of employees who have the right to appeal to the trial board, and by the- city council in the case of other employees.

Also, chapter II, section 1, of the charter empowers the city council:

To provide a code of ethics by ordinance which shall be binding on all officers, employees, and elective and appointive officials as provided herein, setting out the acts, conduct and financial interest which shall be considered to be in conflict with the position they hold and providing the procedure for enforcing the same. This may be either in addition to, or incorporated into personnel rules and regulations as pertain to various employees.

Acting under these powers, the council has adopted by ordinance a code of ethics for municipal officers and employees, of which section 11-124 is pertinent:

The failure of any officer or employee to comply with or the violation of one or more of the standards of conduct set forth in this article, which apply to him, shall constitute grounds for expulsion, reprimand, removal from office or discharge, whichever is applicable. In the case of an employee of the city, disciplinary action and appeals therefrom shall be in conformance with procedures established by the city charter and personnel rules and regulations. Where no specific appeal procedure is otherwise prescribed, the appeal shall be to the trial board. In the case of a city councilman, the matter shall be decided by a majority of the remainder of the councilmen. In the case of members of boards or commissions, the matters shall be decided by the city council. The decision of these bodies shall be final in the absence of bias, prejudice or fraud.

Plaintiffs argue that although the statute contains no provision for the procedure by which the prohibition against conflicts of interest may be enforced, it implies the jurisdiction of a district court, at the instance of any resident of the city, to use its equitable powers to nullify any contract in violation of the prohibition against conflicts of interest, whereas the charter and code provisions, which specify certain procedures and prescribe certain penalties, limit enforcement measures to the specific remedies provided.

We cannot agree that article 988 authorizes a district court to employ its equitable powers to nullify municipal contracts, regardless of what the city charter and ordinances may provide. On historical grounds, we agree with defendant’s contention that article 988, like other articles in chapter 2 of title 28 of the Texas Revised Civil Statutes, apply only to general-law municipalities. O’Quinn, “History, Status and Function of Cities, Towns and Villages,” 2A Tex.Rev.Civ.Stat.Ann. XXIX (Vernon 1963).

Plaintiffs concede that certain of the articles in chapter 2, like the provision for election of aldermen by wards (articles 977, 979), do not apply to home-rule cities. They argue, however, that article 988 is a regulatory statute stating a principle of public policy generally applicable to all municipalities, and consequently, must be applied to home-rule cities as well. We do not agree because if article 988 is merely a statement of a general principle, or a codification of the common law, it adds nothing to the more specific provisions of the charter and the code. Plaintiffs assert, however, that article 988 has implications that are not subject to definition and limitation by a home-rule charter. They contend, for instance, that it renders any contract contrary to its terms void and unenforceable, either by the city or by the other contracting party. The charter provides, on the other hand, in chapter 22, section 11, that any such contract shall be “voidable by the city manager or the city council,” and section 2-124 of the code provides that failure of any officer to comply with the prescribed standard of conduct “shall constitute ground for expulsion, reprimand, removal from office or discharge,” and further provides that in the case of a member of the city council, “the matter shall be decided by a majority of the remainder of the councilmen.”

No provision can be found in article 988 that a conflict of interest must be dealt with by nullification at the instance of a citizen, as plaintiffs contend, rather than by avoidance of the contract at the election of the city manager or the council or by disciplinary action against the officer, or both, as the charter and code provide. We see no reason, therefore, why the people of the city, under the power granted to them by the home-rule amendment, cannot adopt their own method of dealing with the problem. We hold that the charter and code provisions are controlling and exclude any implication of a different remedy based on general principles to be found in article 988 or elsewhere.

Plaintiffs argue that the public interest would be better served by nullification of the contract by a court of equity. Even so, the public interest is a matter of legislative policy on which the people of the city have spoken directly by adoption of the charter and indirectly by the council’s enactment of the code. Proper regard for the principle of separation of powers requires that courts be slow to interpose their own solutions for problems which have already been dealt with by proper exercise of legislative power. We need not decide whether equitable relief would be available if plaintiffs take their complaint to the city council and the council takes no action.

These considerations, in our view, justify the trial court’s dismissal of the action for lack of jurisdiction. Whether the proper ground for the dismissal was failure of the petition to state a claim upon which equitable relief could properly be granted, or lack of standing of plaintiffs to attack the contracts in question, rather than for want of potential jurisdiction of the subject matter in the strict sense, is a question we need not decide, since it does not affect disposition of the appeal.

Affirmed.

      . The statutes governing general-law cities are contained in title 28 of Tex.Rev.Civ.Stat.Ann. arts. 961 to 1269m (Vernon 1963), although some of the articles in title 28, by their terms, apply to all municipalities, and Chapter 13, arts. 1165-1182, apply specifically to home-rule cities. O’Quinn, “History, Status and Function of Cities, Towns and Villages,” 2A Tex.Rev.Civ. Stat.Ann. XXVIII to XXXVIII (Vernon 1963).

      . No contention is raised here that plaintiffs lack standing to bring this suit because of failure to establish that they have a special private interest in the subject matter of the contracts in question different from that of the public generally. See Scott v. Board of Adjustment, 405 S.W.2d 55 (Tex.1966); Hoffman v. Davis, 128 Tex. 503, 505, 100 S.W.2d 94, 95 (1937); First Nat’l Bank of Bellaire v. Prudential Ins. Co. of America, 551 S.W.2d 112, 114 (Tex.Civ.App.—Houston [14th Dist.] 1977, writ refd n. r. e.).


author: YOUNG, Justice.

text:
    Carl S. BURROWS, Appellant, v. Burl BOWDEN, Receiver for the First State Bank, Aransas Pass, Texas, Appellee.
    No. 1239.
    Court of Civil Appeals of Texas, Corpus Christi.
    March 31, 1978.
    John H. Akin, Pearce, Smith & Akin, Austin, for appellant.
    Frank W. Nesbitt, Robert W. Johnson, Jr., Wood, Burney, Nesbitt & Ryan, Corpus Christi, for appellee.
   OPINION

YOUNG, Justice.

This is an appeal by writ of error from a default judgment, defendant having failed to answer or appear, entered on a promissory note against appellant, defendant below, Carl S. Burrows in favor of Burl Bowden, receiver for the First State. Bank, Aransas Pass, Texas. Appellant brings two points of error: 1) that the trial court erred in entering judgment on the pleadings, without hearing evidence, because appellee’s claim was not “liquidated”; and 2) that appellant was unable to obtain a statement of facts and, thus, was entitled to a retrial of the cause.

After filing the original transcript to perfect his appeal, appellant filed a supplemental transcript which included the following: a stipulation signed by the attorneys for both parties that at the time the default judgment was taken, September 28, 1976, no evidence was offered in support thereof; an affidavit of the trial judge, the Honorable John H. Miller, which stated in pertinent part:

“I do recall such case. At the time the matter was presented to me, I examined the official court file and docket sheet. I examined the Plaintiff’s pleadings, and citations on file therein. I examined the contents of the proposed judgment, and after examining same granted a Default Judgment to the Plaintiff in accordance with the proposed judgment.
At the time of the hearing of this case, my official court reporter was present in the courtroom. No official record was demanded or requested by any party, nor was a report of the proceedings necessary.”

And the court reporter’s affidavit stating, in essence, that he did not, nor did anyone else take down any transcription in the hearing of the instant case.

Appellee contends the court may not consider the affidavits or stipulation filed in this case and he relies upon Rosenfeld v. Steelman, 405 S.W.2d 801 (Tex. Sup.1966) and other cases which hold generally that a court of civil appeals may not review irregularities in the trial court upon submission of affidavits.

These cases are irrelevant to the papers filed in the instant supplemental transcript. The stipulation and affidavits do not relate to irregularities which a trial court should first consider before being presented to the court of civil appeals. Rather, the stipulation of counsel represents, in substance, an agreed statement of the case under Rule 378, T.R.C.P. The affidavits of the trial judge and court reporter are an expeditious and acceptable means of showing the court of civil appeals the absence of a statement of facts in the trial court’s default judgment proceeding. See Rule 1, T.R.C.P. Such affidavits provide support for that which the attorneys have the power to stipulate to on appeal under Rule 378, supra. The Court in Sherman v. Philips Industries, Inc., 560 S.W.2d 154 (Tex.Civ.App.—Houston [1st Dist.] 1977, no writ) recognized the use of this affidavit procedure.

Even if the supplemental transcript had not contained these documents, the facts contained therein would still be before this Court as uncontroverted facts in the appellant’s original brief. Rule 419, T.R. C.P.

As to appellant’s first point of error, that appellee’s claim was unliquidated, the law is clear. Damages may not be assessed in a default judgment proceeding without presenting evidence unless the claim is liquidated; that is, when the amount due can with sufficient certainty be calculated by the Court solely from the instrument and the factual, as opposed to conclusory, allegations of the petition. Rules 241 and 243, T.R.C.P. Hughes v. Jones, 543 S.W.2d 885 (Tex.Civ.App.—El Paso 1976, no writ); Hall v. C-F Employees Credit Union, 536 S.W.2d 266 (Tex.Civ.App.—Texarkana 1976, no writ); Freeman v. Leasing Associates, Inc., 503 S.W.2d 406 (Tex.Civ.App.—Houston [14th Dist.] no writ); C & H Transportation Company, Inc. v. Wright, 396 S.W.2d 443 (Tex.Civ.App.—Tyler 1965, writ ref’d n. r. e.).

Appellee’s petition alleges that on November 4, 1969, appellant borrowed $150,-000.00 from appellee and executed a promissory note to repay this amount in $5,000.00 monthly installments. Moreover, appellee’s petition provides in pertinent part:

“V.
That Defendant defaulted in the payment of said note marked EXHIBIT “A” by failing to make payments when due and owing on said note.
VI.
That Defendant is entitled to a lawful offset on said note marked EXHIBIT “A” in the amount of Forty-Four Thousand Five Hundred Seventy-five and 92/100 Dollars ($44,575.92) which said Defendant paid on the amount financed and for earned interest prior to default.
VII.
That Plaintiff is entitled to interest as provided in said note marked EXHIBIT “A” at ten per cent (10%) per annum on the balance due from date of default until judgment, and Plaintiff is entitled to interest at ten per cent (10%) per an-num from the date of judgment until finally paid. Interest due and owing to Plaintiff on the note marked EXHIBIT “A” through February 19, 1974, is $38,-034.90. Interest accrues at the rate of $28.88 per day on said note.
VIII.
That as a result of said default and pursuant to said promissory note marked EXHIBIT “A”, Plaintiff has been required to obtain the services of an attorney and Plaintiff has agreed to pay said attorney a reasonable fee for the collection of this indebtedness, said reasonable amount being ten per cent (10%) of the principal and interest owing by Defendant to Plaintiff at the time of judgment, as provided in said note marked EXHIBIT “A”.
WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that it have judgment and recover from Defendant the sum of ONE HUNDRED FIVE THOUSAND FOUR HUNDRED TWENTY-FOUR AND 08/100 DOLLARS ($105,424.08), together with interest thereon in the amount of Thirty-Eight Thousand Thirty-Four and 90/100 Dollars ($38,034.90) plus interest at the rate of ten per cent (10%) from and after February 19, 1974, until judgment and ten per cent (10%) of this total amount as attorneys’ fees; -and interest on the total amount of principal, interest and attorneys’ fees at the rate of six per cent (6%) per annum from date of judgment until finally paid, and for all costs of court and for such other and further relief, both general and special, at law and in equity, to which plaintiff may be justly entitled.”

We find that the instant petition states an unliquidated claim. Although .ap-pellee presents some novel methods for calculating the date of default, his petition does not state the date of default or indicate with sufficient certainty when the default occurred. Hall v. C-F Employees Credit Union, supra. Also, the petition merely presents a conclusory allegation as to the “lawful offset” to which appellant is entitled. Nowhere does the petition give the dates and amounts of payments; thus, the principal balance due is not sufficiently certain without further factual allegations or evidence as to the amounts of each payment. Hughes v. Jones, supra; C & H Transportation Company, Inc. v. Wright, supra. Because the principal balance due is uncertain, all other amounts, including interest and attorney’s fees which are calculated on the basis of the unpaid balance and accrued interest could not be accurately calculated. Appellant’s first point is sustained. Accordingly, we need not consider appellant’s second point of error.

The judgment of the trial court is reversed and the cause is remanded for trial.