text:
    MINNEHOMA FINANCIAL COMPANY, Appellant, v. James V. DITTO, Appellee.
    No. 17949.
    Court of Civil Appeals of Texas, Fort Worth.
    May 4, 1978.
    Rehearing Denied June 1, 1978.

      Simon & Simon, and Sheldon Anisman, Fort Worth, for appellant.
    Anderson, Martin, Rodriguez & Anderson, and Carol Campbell, Wichita Falls, for appellee.
   OPINION

HUGHES, Justice.

As owner and holder of a retail installment contract and security agreement dated November 1, 1973, Minnehoma Financial Company obtained a judgment against James V. Ditto for $8,912.74, admittedly due thereon, plus contractual attorneys’ fees of $1,336.91 and costs. The contract was secured by a lien on a mobile home purchased by Ditto. The trial court denied sequestration of the mobile home and refused to recognize and order foreclosure of Minnehoma’s lien upon it. Minnehoma has limited the scope of its appeal under Tex.R. Civ.P. 353 to the issue of the trial court’s failure to order foreclosure of the lien. The question presented is whether Minnehoma’s lien to secure the purchase money of the mobile home is for an improvement to a homestead so as to require the signature of both spouses under Tex.Const. art. XVI, § 50 (Supp.1978) and Tex.Rev.Civ.Stat.Ann. art. 5460 (Supp.1978).

We reverse and render judgment for Minnehoma.

Minnehoma owned a 1972 Gold Crest mobile home which it consigned to Interstate Housing Corporation. On June 18, 1973, Ditto and Interstate entered into a conditional sales agreement on the mobile home. Under the contract the title was not to pass until all of the purchase price was paid. Interstate retained the right to repossess and sell the mobile home, if necessary, and to apply the proceeds to the amount due. Ditto paid Interstate $6,180.00 on the mobile home. The total purchase price was $11,180.00, the balance being due within ninety days.

There was testimony that Interstate did not disclose this transaction to Minnehoma at that time and that had disclosure been made, Minnehoma would have demanded payment in full of the invoice amount. When Ditto was unable to pay the balance due, Interstate and Ditto arranged financing with Minnehoma. On November 1, 1973, Interstate and Ditto executed a retail installment contract and security agreement. The contract was assigned to Minne-homa.

Under the November contract the cash sale price was $13,062.40 with a deferred payment price of $22,970.40. Payments were to be made over a 144-month period. Title was not to pass until all payments had been made. In the event of default, provision was also made for repossession and sale.

Ditto defaulted. It is admitted that Min-nehoma is the owner and holder of the November 1, 1973 retail installment contract and security agreement. It is also admitted that the amount due thereunder is $8,912.74 plus attorneys’ fees. The testimony reflects that this amount represents the outstanding balance of $16,178.72, less a rebate of $7,265.98, or the amount necessary to pay the contract off as of October 31, 1974.

Ditto’s wife, Joynell Ditto, did not sign either the conditional sales contract of June 18th or the retail installment contract of November 1st. Neither contract purported to create a lien on the land itself.

It is undisputed that the mobile home was delivered and attached by Interstate to Ditto’s property in late June 1973 after the first contract was signed. The wheels were removed, and it was placed on concrete blocks and anchored with eight-foot buried anchors. The mobile home has plumbing and electricity. There was testimony that it may be removed without substantial damage to the realty or to the mobile home itself.

A certificate of title on the mobile home was issued on January 14, 1974, and given to Ditto with Minnehoma’s lien noted thereon.

The jury made the following findings: The mobile home was attached to the reality in a manner to indicate the intention that it be a permanent part of Ditto’s real estate, and on or before November 1, 1973, the realty to which it was attached constituted Ditto’s homestead. All parties intended that the November 1, 1973 agreement take the place of the agreement of June 18, 1973. The money or consideration advanced by Minnehoma was for the purchase money of the mobile home. Minneho-ma was not the seller and had acquired the November contract in good faith and for value. The cash sale price in the June contract was $11,180.00 and in the November contract, $13,062.40. The difference was the result of a bona fide error between Ditto and Interstate.

Minnehoma’s points of error are that the trial court erred in: (1) Refusing to order foreclosure of its alleged first lien; (2) Submitting certain special issues over the objection that the issue of whether or not the mobile home was attached to what later could be classified as Ditto’s homestead was immaterial; (3) Failing to uphold and foreclose Minnehoma’s purchase money lien on the mobile home which, as a matter of law, is superior to any homestead exemption claimed by Ditto; and (4) Failing to uphold and foreclose Minnehoma’s lien because Ditto did not show title sufficient to support a homestead exemption in the mobile home and because Minnehoma proved an express lien under both contracts and the Certificate of Title Act, Tex.Rev.Civ.Stat.Ann. art. 6687-1 et seq. (1977) as well as an implied and equitable lien.

Ditto’s counsel argues that the major issue is whether the mobile home was an improvement to a homestead so as to require the wife’s signature in order to create a lien on the mobile home. Ditto’s counsel concedes in her brief that Minnehoma has an express lien under both the June and November contracts and the Certificate of Title Act, but argues that the express lien claim is “inferior to the homestead exemption and invalid unless the constitutional requirements for establishing improvement liens are met . .

Ditto’s position is that Interstate did not perfect a valid lien on the mobile home because it did not obtain Mrs. Ditto’s signature on the June contract even though it should have been on notice that it was to be attached to homestead. Ditto also argues that Minnehoma’s lien under the November contract was likewise invalid because Mrs. Ditto’s signature was not obtained even though the mobile home was thus clearly an improvement to homestead at that time. Finally, Ditto urges that Minnehoma’s lien claim under the Certificate of Title Act is also inferior to the homestead claim in the absence of the wife’s signature.

Minnehoma argues that it has a purchase money lien protected by Tex.Const. art. XVI, § 50 (Supp.1978) and that Ditto could have no homestead interest in the mobile home before he had completed the transaction to acquire it. Minnehoma emphasizes that it was only the acquisition of the mobile home and its attachment to the realty which permitted Ditto to make a homestead claim at all.

Tex.Const. art. XVI, § 50 (Supp.1978) provides:

“The homestead of a family shall be, and is hereby protected from forced sale, for the payment of all debts except for the purchase money thereof, or a part of such purchase money, the taxes due thereon, or for work and material used in constructing improvements thereon, and in this last case only when the work and material are contracted for in writing, with the consent of both spouses, in the case of a family homestead, given in the same manner as is required in making a sale and conveyance of the homestead .... No mortgage, trust deed, or other lien on the homestead shall ever be valid, except for the purchase money therefor, or improvements made thereon, as hereinbefore provided

We agree with Ditto that a mobile home may be deemed an improvement to the realty when attached to the realty in a manner indicating an intention that it be a permanent part of the real estate. See Lassiter v. Bliss, 559 S.W.2d 353 (Tex.1977) (dissenting opinion). The nature of a mobile home does not preclude its being given homestead protection. If a mobile home is attached in such a manner to a homestead, it is entitled to homestead protection. Capitol Aggregates, Inc. v. Walker, 448 S.W.2d 830 (Tex.Civ.App.-Austin 1969, writ ref’d n. r. e.); Gann v. Montogomery, 210 S.W.2d 255 (Tex.Civ.App.-Fort Worth 1948, writ ref’d n. r. e.) (concurring opinion); Clark v. Vitz, 190 S.W.2d 736 (Tex.Civ.App.-Dallas 1945, writ ref’d.)

But in this case there is the further question of whether the lien is on the homestead.

As against non-purchase money lienhold-ers, Ditto would have a homestead interest in the mobile home. Also, assuming the land itself were homestead prior to June 18, 1973, Minnehoma could not have placed a valid lien on the land in order to secure the purchase money of the mobile home unless the signatures of both spouses were obtained.

But in this instance Minnehoma’s lien under both contracts is only on the mobile home. Ditto argues that this is a lien on the homestead, and his only basis for contesting the validity of the liens under the two contracts is the absence of the wife’s signature. Ditto argues that the November contract may not be viewed as a readjustment of the June lien claim because there was no valid lien claim under the June contract in the absence of the wife’s signature. Under Ditto’s theory the November lien claim is, therefore, invalid because the wife’s signature was not obtained on the November contract.

We agree with Minnehoma that the June contract did not require the wife’s signature. We also agree that the November contract must be viewed as a readjustment of the original obligation and therefore was not subject to the requirement of both signatures, either. The homestead laws are not to be construed so as to destroy pre-existing rights. Gage v. Neblett, 57 Tex. 374 (1882). As against the purchase money lienholder, the mobile home did not become part of the homestead, until the purchase price was paid. The lien on the mobile home is thus not a lien on the homestead, and both signatures were not required. As against a purchase money lien-holder the requirement that the signatures of both spouses be obtained extends only to the creation of a lien on what was already homestead at the time of the transaction. Hartell v. Tulsa Rig, Reel & Manufacturing Co., 64 S.W.2d 804 (Tex.Civ.App.-Amarillo 1933, no writ).

The requirement that the signatures of both spouses be obtained is intended to protect a spouse from possible loss of existing homestead rights without his consent. Andres v. Security Nat. Bank of Wichita Falls, 121 Tex. 409, 50 S.W.2d 253 (1932). Mrs. Ditto’s rights in the land were in no way affected by the creation of a lien on the mobile home.

The following cases on which Ditto relies are inapplicable because they involve liens on the existing homestead for improvements thereto: Kepley v. Zachry, 131 Tex. 554, 116 S.W.2d 699, supplemented at 131 Tex. 561, 121 S.W.2d 595 (Tex.Comm’n App. 1938, opinion adopted); Andrews v. Security Nat. Bank of Wichita Falls, supra; and Lyon v. Ozee, 66 Tex. 95, 17 S.W. 405 (1886).

Ditto also relies on Sweet v. Lyon, 39 Tex.Civ.App. 450, 88 S.W. 384 (1905, writ denied). Ditto argues that the lien in the instant case “is not in the legal sense a purchase money lien on the homestead” because " 'purchase money’ refers only to the realty and any improvements existing thereon at the time of first purchasing the homestead.” As we see it, that argument is irrelevant because the lien for the improvement is not on the existing homestead, but rather is on the mobile home which was later attached to the homestead. We do not think it significant that Interstate may have had notice that the mobile home was to be attached to Ditto’s land. There is a crucial distinction between an improvement lien on the homestead requiring two signatures and a purchase money lien which does not: In the case of a purchase money lien, the lien for purchase money is on the property purchased, and both signatures are not required. An improvement lien requiring both signatures is one which is for an improvement but is on the existing homestead.

Accordingly, we sustain Minnehoma’s points of error except as to the alternative implied or equitable lien theory which is unnecessary for us to reach.

Minnehoma sought, both at trial and on appeal, to obtain possession and title to the mobile home, but the judgment it obtained against Ditto under the November contract, is only for $8,912.74 plus attorneys’ fees. Minnehoma cannot have an enforceable lien claim for more than that amount.

There is an additional question concerning the extent of Minnehoma’s enforceable lien claim in view of the fact that the second contract had a higher cash sale price as well as a deferred payment price. As already noted, the jury found that the difference in the cash sale price under the two contracts was the result of a bona fide error between Ditto and Interstate.

In light of the jury’s finding, we hold that Minnehoma has an enforceable lien claim against the mobile home for $8,912.74 plus attorneys’ fees of $1,336.91 and costs, this being the amount due under the November contract, as awarded by the trial court.

“The head of the family, being charged with the responsibility of discharging the encumbrance and thus preserving the homestead, must necessarily have the right to renew, rearrange, and readjust the encumbering obligation; otherwise he might lose the homestead through foreclosure proceedings, and the very purpose of the constitutional inhibition against encumbering the homestead be defeated. In accomplishing this purpose he may change the form of the obligation so long as he acts in good faith and does not intentionally increase the burden on the homestead for purposes other than are necessary for the readjustment of the outstanding obligation.” Machicek v. Barcak, 141 Tex. 165, 170 S.W.2d 715, 717 (1943).

This appeal having been limited to the trial court’s failure to recognize and order foreclosure of Minnehoma’s lien, we reverse the trial court as to that portion only and here render judgment for Minnehoma recognizing and ordering foreclosure of its lien against the mobile home for $8,912.74 plus attorneys’ fees of $1,336.91 and costs. Upon foreclosure, the proceeds from the sale are to be credited against the judgment of $8,912.74 plus attorneys’ fees of $1,336.91 and costs, which Minnehoma obtained against Ditto below.


source: Caselaw Access Project

author: MASSEY, Chief Justice.

license: Public Domain

text:
    The REPUBLIC NATIONAL BANK OF DALLAS, Appellant, v. NORTHWEST NATIONAL BANK OF FORT WORTH, Appellee.
    No. 17995.
    Court of Civil Appeals of Texas, Fort Worth.
    May 4, 1978.
    Rehearing Denied June 1, 1978.

      Green, Gilmore, Rothpletz & Hyden, Frank B. Rynd, Dallas, for appellant.
    Farris & Thompson, Thomas L. Farris, Fort Worth, for appellee.
   OPINION

MASSEY, Chief Justice.

By this opinion we affirm the judgment of the trial court denying Republic National Bank of Dallas, as Trustee, any right of enforcement of an instrument called an Irrevocable Letter of Credit issued by Northwest National Bank of Fort Worth. The trial court denied enforcement upon a conclusion of law that “The letter of credit in question is a contract of guaranty to answer for the default of B & H Amusement Rides, Inc. and not a true letter of credit.”

The instrument read as follows:
THE NORTHWEST NATIONAL BANK 7820 White Settlement Road Fort Worth, Texas
.Speegle Berry President
IRREVOCABLE LETTER OF CREDIT Non-Transferable February 28, 1969 American Cities Trust Company 1815 South Montclair, Oak Cliff Dallas, Texas,
and/or its successor as Trustee of the Perpetual Care Fund of Crown Hill Memorial Park, a Perpetual Care Cemetery.
Gentlemen:
We hereby open our irrevocable credit in your favor, available in the following manner and on the following terms:
1. Transferability. The credit is nontransferable.
2. Drafts. Your single draft drawn on Northwest National Bank of Fort Worth, at ten (10) days’ sight, in the amount of the unpaid principal, interest and attorneys’ fees then due and payable after default, pursuant to the terms of a certain Promissory Note executed January 12,1968, by B & H Amusement Rides, Inc., payable to the order of American Cities Trust Company, which draft must state upon its face: “Drawn under Letter of Credit of the Northwest National Bank of Fort Worth, Texas, dated February 21, 1969.”
3. Total. The draft must not exceed Fifty Thousand and no/100 Dollars ($50,-000.00).
4. Purpose. To be applied to the balance remaining on a certain loan evidenced by a certain Promissory Note executed January 12,1968, by B & H Amusement Rides, Inc., payable to the order of American Cities Trust Company, secured by a security interest in and upon the inventory of B & H Amusement Rides, Inc.
5. DOCUMENTS. The required documents are:
(a) Original Promissory Note, executed January 12, 1968, by B & H Amusement Rides, Inc., payable to the order of American Cities Trust Company.
(b) Copy of letter advising B & H Amusement Rides, Inc. of default in the payment of the said note executed January 12, 1968, said advice letter being addressed to B & H Amusement Rides, Inc., showing receipt, and being dated not less than twenty (20) days in advance of the date of Sight Draft.
(c) Copy of letter advising E. L. Baker, Jr., Jerome I. Weiner, and Henry W. Simon, Jr. of default in the payment of the said Note executed January 12, 1968, said advice letter being addressed in care of Simon & Simon, attorneys, 816 First National Building, Fort Worth, Texas, and being dated not less than twenty (20) days in advance of the date of Sight Draft.
(d) Copy of letter which advised owners of B & H Amusement Rides, Inc. property of default in payment and resulting acceleration of the said Promissory Note dated January 12, 1968, said letter being dated not less than twenty (20) days prior to the date of Sight Draft.
6. OBLIGATION OF ISSUER. The Northwest National Bank of Fort Worth, Texas, agrees with American Cities Trust Company, and/or its successor as Trustee of the Perpetual Care Fund of Crown Hill Memorial Park, a Perpetual Care Cemetery, to duly honor a proper draft drawn and negotiated in compliance with the terms of this Letter of Credit upon presentation to the office of the bank.
7. RULES APPLICABLE. The Credit, except as otherwise provided, is to be governed by the Uniform Commercial Code in force in the State of Texas on the date of its issuance.
Yours very truly,
NORTHWEST NATIONAL BANK
By: /s/ Speegle Berry (Authorized Signature)
President

The face of the instrument discloses that the liability of the Northwest Bank was to come into existence only in the event of the default of B & H Amusement Rides upon its note of January 12, 1968 and as applied to the balance upon notice of such default with resulting acceleration of the note, etc., coupled with proofs relative thereto attached to the draft for the amount owing on the note in question (up to $50,000.00) presented to such bank in the prescribed form. In other words the instrument constituted a guaranty by the bank to the beneficiary that if and in the event the note obligor defaulted upon the obligation the bank would, in the place and stead of the obligor, make the beneficiary whole. (Default did occur, following which there was full compliance by Republic Bank, successor Trustee; with refusal of Northwest Bank for stated reason that because the instrument was a guaranty — and not a letter of credit — it was not liable thereon.)

In 3 R.C.L. 425, § 53, “Loan of Credit or Underwriting Securities” (1914), it was well stated that “A banking corporation cannot lend its credit to another by becoming a surety, indorser, or guarantor for him. It cannot for the accommodation of another indorse his note or guarantee the performance of obligations in which it has no interest. Such an act is an adventure beyond the confines of the banking business, and, when its true character is known no rights grow out of it, though it has taken on in part the garb of a lawful transaction; and this applies to national banks. . . .” The text continues in excellent explanation of the reasons why it is that when a bank is found to have so acted its action is ultra vires and void.

On the other hand the issuance of a true letter of credit by a banking corporation constitutes legitimate banking practice. Though every letter of credit is, in a sense, a form of guaranty, the letter of credit differs from a classical surety undertaking in that it is a primary obligation between the issuer and the beneficiary and the issuer of the credit is not concerned with the arrangements between the beneficiary and the issuer’s account party. The ordinary commercial letter of credit contains authority to the beneficiary to draw a draft, and a promise to honor the draft, given either generally to bona fide holders or to some particular person, and if it shows it was for the purpose of being produced to obtain credit, and the purchaser is within the terms of the letter, it amounts to an offer that, if he purchases the draft, it will be honored, and the offer becomes a contract when the draft is negotiated. 6 Michie, Banks and Banking, p. 409, “Exchange, Money, Securities, Etc.,” Ch. 12, § 30, “(Letter as Contract) — Nature of Contract” (1975).

By the Texas Business & Commerce Code, Ch. 5, “Letters of Credit,” § 5.103, “Definitions,” a letter of credit means an engagement by a bank or other person, etc. that the issuer will honor drafts or other demands for payment upon the conditions specified in the credit.

In the Code of Federal Regulations, Title 12, “Banks and Banking,” Ch. 1, “Comptroller of the Currency,” under Sub-part E — Miscellaneous, and on Guaranties and Suretyship, § 7.7016, “Letters of credit distinguished from guaranty” (1977), is stated: “A national bank may issue its own letters of credit to or on behalf of its customers in the normal course of its business: Provided, That the bank’s obligation may legally be described as a letter of credit and not as a mere guaranty. In order to constitute a true letter-of-credit transaction, the following elements must all be present: (a) The bank must receive a fee or other valid business consideration for the issuance of its undertaking; (b) the bank’s undertaking must contain a specified expiration date or be for a definite term; (c) the bank’s undertaking must not be unlimited but be up to a stated amount; (d) the bank’s obligation to pay must arise only upon the presentation of specific documents and the bank must not be called upon to determine disputed questions of fact or law; (e) the bank’s customer must have an unqualified obligation to reimburse the bank on the same condition as the bank has paid.” Of this there has been clarification: See Federal Register, Vol. 42, No. 92, 24206, 24207 (May 5,1977 interpreting ruling by Bloom, acting Comptroller of the Currency). The determination of legality of a letter of credit is by statutory law and not by departmental regulation. But statutory consideration would be construed and viewed as contradiction of the common law only where so stated or necessarily implied.

“A guaranty is a promise to answer for the payment of some debt, or the performance of some obligation, in case of the default of another person, who is in the first instance liable for such payment or performance. A letter of credit confers authority upon the person to whom it is addressed to advance money or furnish goods on the credit of the writer (citing cases). It is well settled that the guaranty of a national bank is ultra vires.” Border Nat. Bank v. American Nat. Bank, 282 F. 73 (CCA, Fifth Circuit, 1922).

Whether a (purported) letter of credit is a contract of suretyship or guaranty or some more separate and independent undertaking must be determined by a consideration of the phraseology of the writing, the object sought to be accomplished thereby, and the precise obligation and conditions imposed on and assumed by the parties thereto. 6 Michie, Banks and Banking, p. 414, “Exchange, Money, Securities, Etc.,” Ch. 12, § 31, “Construction” (1975).

While we are of the opinion that the face of the instrument itself establishes it to be a guaranty, as a guaranty is distinguished from a true letter of credit, the trial court filed findings of fact, supported by the record of the evidence, which would in any event justify the court’s legal conclusion that the instrument constituted a guaranty.

Because the judgment was for Northwest Bank and not the Republic Bank as successor Trustee for American Cities Trust Company to whom the instrument was addressed, we are in no way troubled with a question of whether there should be enforcement under a theory that American Cities Trust Company, Trustee, though in delicto was not in pari delicto with Northwest Bank so that it would nevertheless be entitled to recover. Had the judgment been for Republic Bank and had there been any evidence in support it might have been that though there was illegality of the transaction as ultra vires for the bank there would be an entitlement by the beneficiary to enforce the contract despite the fact it was one of guaranty. However, there was no evidence presented on trial that at time the transaction was accomplished there was anything known by Northwest Bank and not known by American Cities Trust Company, Trustee, nor by the true bank customer who secured the contract for the Trustee. There was an absence of evidence that the customer had no intention of violating the law. Under the circumstances there was no occasion to depart from the general rule. Graham v. Dean, 144 Tex. 61, 188 S.W.2d 372 (1945).

The points of error by Republic Bank, Trustee, are solely directed to the evidence on trial. Its complaints are that there was no evidence the instrument was a guaranty, that there was insufficient evidence to support the finding by the trial court that it was, and that the finding was contrary to the great weight and preponderance of the evidence. The points are overruled.

Judgment is affirmed.


author: YOUNG, Justice.

text:
    Elizabeth B. KIMMEY et al., Appellants, v. EL CAMPO INDEPENDENT SCHOOL DISTRICT et al., Appellees.
    No. 1295.
    Court of Civil Appeals of Texas, Corpus Christi.
    May 4, 1978.
    Rehearing Denied June 8, 1978.
    Charles H. DuBois, Wood, Burney, Nes-bitt & Ryan, Corpus Christi, for appellants.
    Robert J. Magner, Gates Steen & Associates, Austin, Homer R. Taylor, Wharton, for appellees.
   OPINION

YOUNG, Justice.

This is an appeal from a suit in which appellee, El Campo Independent School District sued Elizabeth B. Kimmey, Individually and as the Independent Executrix of the Estate of J. A. Kimmey, Gibralter Life Insurance Company, and the Haliburton Company for unpaid ad valorem taxes. The State of Texas, Wharton County and the City of El Campo intervened. Gibralter Life Insurance, the Haliburton Company and Kimmey, in both capacities, filed answers, but failed to appear for trial. The trial court entered a judgment in favor of the appellees, the School District, Wharton County, and the State of Texas against all three defendants. Elizabeth Kimmey, in both capacities, is the only defendant who appeals. The record indicates that the School District, Wharton County and the State of Texas were notified of this appeal, but that only the School District filed an appellee’s brief.

Appellant asserts two points of error alleging that there was no evidence introduced at trial to establish a cause of action against the appellant and that the cause should be reversed because appellant is unable to obtain a statement of facts in the proceedings below.

As to the first point of error the law is clear: where a defendant files an answer, the plaintiff is required to prove his case even though the defendants failed to appear at trial. Frymire Engineering Company v. Grantham, 524 S.W.2d 680 (Tex.Sup.1975). Accordingly, appellees were required to introduce evidence at trial.

The record in this case is conflicting as to what, if any, evidence was introduced in support of the judgment. An affidavit of Jack Morris, court reporter for the court hearing this matter stated:

“ . . . [I] was present as the Court Reporter for the trial of Cause No. 2921, styled El Campo Independent School Dis trict vs. Elizabeth B. Kimmey, Et Al, tried in the 23rd Judicial District Court of Wharton County, Texas, before the Honorable G. P. Hardy, Jr. On September 13, 1977, I was requested in writing by the Appellants Elizabeth B. Kimmey, ., to prepare a Statement of Facts in this case.
Because there was no testimony or other evidence offered at the trial of this case, there was nothing for me to report, and I am unable to prepare a Statement of Facts in this case.”

On the other hand, the recitals in the trial court’s judgment rendered by Judge Hardy state:

“ . . . evidence was submitted as to the value of the hereinafter described land; and the Court having heard the pleadings, the evidence and the argument of counsel, . . . ”

Moreover, pages 44 through 56 of the transcript contain tax statements which were purportedly introduced during the hearing.

We think the recitals in the judgment and the tax statements in the transcript show that some evidence was introduced to establish a cause of action. See Hamilton v. Empire Gas & Fuel Co., 134 Tex. 377, 110 S.W.2d 561, 566 (Tex.Comm’n App.1937, opinion adopted); Christian v. Howeth, 522 S.W.2d 700, 702 (Tex.Civ.App.-Fort Worth 1975, writ ref’d n. r. e.). Appellant’s first point is overruled.

Regarding appellant’s second point that she is unable to secure a statement of facts of the proceedings below, we agree that this point requires a reversal of the cause.

It is undisputed, as evidenced by the affidavit of the court reporter, supra, that he was requested to prepare a statement of facts but was unable to do so.

In a recent case before our Court, Garcia v. Kelly, 565 S.W.2d 112 (Tex.Civ.App.— Corpus Christi 1978, no writ), we stated: “If an appellant exercises due diligence and through no fault of his own is unable to obtain a proper record of the evidence, a new trial should be granted in order to preserve his right to review. Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312, 314 (Tex.Civ.App.-Dallas 1975, writ ref’d); Smith v. Smith, 544 S.W.2d 121, 123 (Tex.Sup.1976); Robinson v. Robinson, 487 S.W.2d 713, 715 (Tex.Sup.1972).

If the appellant was not present and was not represented by counsel when the testimony was taken, and he later discovers that no record was made, the lack of a record cannot reasonably be waived. Morgan Express, supra, at 314. Moreover, ‘An appellant is not required to undertake to agree with an adversary upon the facts adduced at the trial or to rely upon the unaided memory of the trial judge who decided the merits of the case in order to obtain a Statement of Facts’. Rogers v. Rogers, 561 S.W.2d 172, 173 (Tex.Sup.1978).”

Accordingly, we find that appellant Kim-mey has exercised due diligence and through no fault of her own is unable to obtain a statement of facts. We hold that the recitations in the judgment and the tax statements in the transcript compel us to reverse the judgment of the trial court and to remand the cause.

Appellee School District contends in its brief, on the other hand, that its claim is liquidated in nature, that it is therefore subject to be determined by the Court without any additional evidence, and that consequently failure to produce a statement of facts does not entitle a defendant to a reversal and remand. Appellee cites Williamson v. City of Eastland, 65 S.W.2d 774 (Tex.Civ.App.-Eastland 1933, no writ). Williamson is distinguishable, though, in that the defendant in that case did not file an answer. In the instant case, however, the appellant and others did file answers and these answers compelled the appellee to produce evidence at trial, unlike a default judgment and liquidated damages situation. Frymire Engineering Company v. Grantham, supra.

Because the respective rights of the appealing and nonappealing parties are so interwoven, we reverse the whole judgment instead of only a part thereof. See Curtis v. Carey, 393 S.W.2d 185 (Tex.Civ.App.— Corpus Christi 1965, no writ).

The judgment of the trial court is reversed as to all defendants and the cause is remanded for trial.


author: SHANNON, Justice.

text:
    Charles P. PARKS, Appellant, v. The BOARD OF ADJUSTMENT OF the CITY OF KILLEEN, Appellee.
    No. 12713.
    Court of Civil Appeals of Texas, Austin.
    May 10, 1978.
    Rehearing Denied June 7, 1978.
    Dennis C. Hollé, Dulany & Hollé, Belton, for appellant.
    J. Rush Milam, III, City Atty., Killeen, for appellee.
   SHANNON, Justice.

This appeal involves construction and application of the zoning ordinance of Killeen. The issue is whether operation of a music school by a property owner in his residence violates the ordinance. The judgment of the district court of Bell County affirmed the order of the Board of Adjustment of Killeen. That order was to the effect that operation of the school was not in violation of the ordinance. We will affirm the judgment.

Charles E. Baxter and wife, Margaret, own a residence in Killeen. Their property is located in a district zoned single-family residential. The Baxters live in the house and they also conduct a music school there. They teach as many as one hundred-ten student hours each week. Several students are taught different music instruments simultaneously. The Baxters earn in excess of $20,000 annually from operation of the music school.

Appellant Charles P. Parks owns property near the Baxter residence. Parks initiated proceedings culminating in this appeal in an effort to close down the music school. Parks’ position was, and is on appeal, that the operation of the music school was in violation of Subsection 6 of the zoning ordinance. The relevant provisions of Subsection 6 are here set out:

“Section 6. District ‘R-l.’ Single-family residential district.
SUBSECTION 6-1. USE REGULATIONS
(M) Accessory buildings and uses, customarily incident to the uses in this subsection 6-1 and located on the same lot therewith, not involving the conduct of a retail business.
(1) The term accessory use shall include customary home occupations such as the office of a milliner, dressmaker, musician or artist, provided that such uses are located in the dwelling used by such a person as his or her private residence, and provided that no assistant not a member of the family residing on the premises is employed, and no window display or sign is used to advertise the same.”

Subsection 6-l(M)(l) permits accessory uses customarily incident to single-family dwellings. An examination of Subsection 6-l(M)(l) demonstrates that an accessory use includes customary home occupations. A music school is a “customary home occupation” by the terms of the section. The proof shows that the Baxters use the dwelling as their private residence and that only the Baxters conduct music classes.

By several points of error, appellant insists that the size of the music school and its income are additional limitations which must be considered in the determination whether the music school operation is a “customary home occupation.” If the size and income of the school were to be considered, appellant claims that the school could not be viewed as a “customary home occupation.”

Appellant’s primary authority for argument that a residential music school may lose its “home occupation” status if it becomes too extensive is Florence v. Turbeville, 239 S.C. 126, 121 S.E.2d 437 (1961). In Florence two hundred-twenty students were instructed six days each week by the owners of the residence. The facts were in that case that the dominant use or purpose of the property was no longer residential but instead commercial. To the contrary, in the case at bar, the evidence supports the district court’s presumed conclusion that the property was still used as a residence and the giving of music lessons was but incidental to that use.

Subsection 6-l(M)(l) does not characterize “customary home occupation” in terms of profitability or volume of business. Had the city council desired to so limit the term, “customary home occupation,” it could have done so. It is not for the Board of Adjustment or the courts to engraft further limitations upon the ordinance. Accordingly, the Baxter’s music school remains a “customary home occupation” even though prosperous and well attended. Appellant’s points of error are overruled.

The judgment is affirmed.


author: MURRAY, Justice.

text:
    LO-VACA GATHERING COMPANY, Appellant, v. Edward O. GARDNER et ux. and Blanche O’Meara Hamilton Eubank, Appellees.
    Nos. 15993, 16020.
    Court of Civil Appeals of Texas, San Antonio.
    May 10, 1978.
    Rehearing Denied June 7, 1978.

      J. Clifford Gunter, III, Jim L. Flegle, Robert B. Watts, Houston, for appellant.
    Petry & Petry, Carrizo Springs, for appel-lees.
   MURRAY, Justice.

Lo-Vaca Gathering Company instituted two condemnation proceedings on October 26, 1977, under authority of Tex.Rev.Civ. Stat.Ann. art. 1436 (1962), and Tex.Bus. Corp.Act Ann. art. 2.01 B(3)(b) (1956). These statutes vest in Lo-Vaca the power of eminent domain for the purpose of constructing pipelines for the transportation of oil, gas and other minerals in the State of Texas. The two condemnation suits were filed with the judge of the 49th Judicial District of Dimmit County, Texas, under authority of Tex.Rev.Civ.Stat.Ann. art. 3266a, § 2 (Supp.1978), which provides:

In all counties in which there is no county court, at law with jurisdiction of eminent domain cases, the party desiring to initiate condemnation proceedings shall file its petition with the district judge; and objections to the award of the special commissioners shall be filed in the district court.

Three special commissioners were duly appointed in each case and a hearing date was set for November 15, 1977. One day before the special commissioners’ hearing, the landowners filed pleas to the jurisdiction and an application for temporary restraining order in the district court. A hearing was scheduled for November 22, 1977. At the conclusion of this hearing, the district court entered an order dismissing the special commissioners theretofore appointed and dismissed Lo-Vaca’s cause of action and ordered that it be removed from the docket of the court. Lo-Vaca has timely perfected an appeal from such order to this Court. We reverse and remand.

Lo-Vaca contends in its first point of error that the district court lacked jurisdiction to grant a temporary injunction or dismiss the consolidated cases before the special commissioners had conducted a hearing or entered an order. We agree.

The landowners do not attack the legality of the petition filed nor the jurisdiction of the judgment of the 49th District Court to appoint special commissioners, or for the condemnation proceedings to be carried out as provided by statute. Their only contention in their plea to the jurisdiction and application for temporary restraining order is that no necessity exists for the taking of their property.

It is well established that up to and including the award of special commissioners, the condemnation proceeding is an administrative and not a judicial proceeding. Pearson v. State, 159 Tex. 66, 315 S.W.2d 935 (1958); Lower Nueces River Water Supply District v. Cartwright, 160 Tex. 239, 328 S.W.2d 752 (1959); McInnis v. Brown County Water Improvement District No. 1, 41 S.W.2d 741 (Tex.Civ.App.—Austin 1931, writ ref’d).

The landowners contend that Lo-Vaca owns other lands in the vicinity sufficient for their needs and, since this is so, the district judge had no power to appoint special commissioners and the entire condemnation proceedings were void. This contention may and should be considered by the district court in an appeal from the award of the special commissioners. We think this issue has been conclusively decided by the Texas Supreme Court in Tonahill v. Gulf States Utilities Company, 446 S.W.2d 301 (Tex.1969). In Tonahill, the condemnor instituted a condemnation proceeding in the county court and special commissioners were appointed and qualified and the parties were notified of the time and place of the special commissioners’ hearing. The condemnee then sued in the district court for a temporary injunction restraining the condemnor and the special commissioners from hearing or determining any issue in the condemnation proceedings because the description of the property was legally insufficient. The district court granted a temporary injunction and the court of civil appeals dissolved the injunction and ordered the case dismissed. In a per curiam opinion, the Supreme Court affirmed the dissolution of the injunction, stating:

The right of appeal affords petitioner an adequate remedy for anything that may occur in the condemnation proceedings up to and including the award of the special commissioners. There was no occasion then for the district court to enjoin the proceedings, and the temporary injunction was properly dissolved by the Court of Civil Appeals.

That there is no necessity for the taking is an issue that may and should be considered and decided by the district court in the event of an appeal from the award of the special commissioners. The special commissioners are not authorized to pass on such questions and the only question before the special commissioners concerns damages. Tex.Rev.Civ.Stat.Ann. art. 3265 (1968).

Our holding on the above point makes it unnecessary to discuss other questions raised in the brief filed by Lo-Vaca, and our action in this case is without prejudice to the landowners’ right to seek relief in the district court in the event of an attempt to enter upon or damage their lands under the colorable authority of a void condemnation proceeding.

The orders of the trial court in Lo-Vaca Gathering Company v. Blanche Eubank, Cause No. 5220, and Lo-Vaca Gathering Company v. Edward O. Gardner, Cause No. 5221, in the District Court of Dimmit County, Texas, 49th Judicial District, are reversed and vacated and these causes remanded for further proceedings prescribed by the appropriate condemnation statute.


author: HALL, Justice.

text:
    AMBER CONSTRUCTORS, INC. and Travelers Indemnity Company, Appellants, v. LINDY DENNIS AIR CONDITIONING, INC., Appellee.
    No. 5787.
    Court of Civil Appeals of Texas, Waco.
    May 11, 1978.
    Rehearing Denied June 1, 1978.

      Richard W. Alexander and Bob Kuhn, Kuhn, Collins & Rash, Austin, for appellants.
    Ted Hollen, Austin, for appellee.
   HALL, Justice.

In 1975, appellant Amber Constructors, Inc. (Amber), was the general contractor for the renovation of the Academic and Administration Building of Navarro College located in the City of Corsicana. In August of that year appellee Lindy Dennis Air Conditioning, Inc. (Lindy), entered into a written contract with Amber under which Lindy was to do certain insulation and acoustical ceiling work on the college building for Amber for the total price of $13,700.00. Lindy commenced work under the contract. In May, 1976, because of disputes Amber was having with other workers on the job and because the work was not proceeding on schedule, Amber asked Lindy to leave the job with the understanding that Lindy would be paid for the work it had done under the contract. At that time, Lindy had received $1,300.00 for insulation work previously completed under the contract. The parties were unable to agree on the balance due. Lindy then brought this suit against Amber and against appellant Travelers Indemnity Company (Travelers). In the first count of its petition, Lindy sought recovery against Amber in the amount of $11,376.71 for breach of the contract. Alternatively, Lindy alleged that Travelers had issued and was surety on a Payment Bond executed by Amber pursuant to the provisions of Article 5160, Vernon’s Tex. Civ.St., for the protection of claimants supplying labor and material on the Navarro College job; that Lindy had complied with the notice provisions of the statute; and that, under the terms of the statute, Lindy was entitled to recover $12,400.00 as the reasonable value of completed work on the contract for which it had not been paid, plus reasonable attorneys’ fees in the amount of $5,000.00, jointly and severally against Amber and Travelers, for which prayer was made. Amber and Travelers answered with a general denial, allegations to the effect that it was Lindy who breached the contract thereby causing Amber to expend $7,607.00 to complete Lindy’s work, and a prayer for an offset of that amount against any award allowed Lindy.

Trial was to a jury. Answering special issues numbered as follows, the jury made these findings:

1. When Lindy was asked by Amber to leave the job Lindy had incurred expenses for labor and materials under the contract totaling $7,400.00.
2. If Lindy had been permitted to complete the contract it would have made a profit of $3,580.00.
3. The reasonable value of materials furnished and work completed by Lindy when it was asked to leave the job was $10,582.00.
4. The work and materials referred to in special issue number 3 were furnished by Lindy pursuant to the terms of the contract.
5. Lindy was attempting in good faith to perform its obligations under the contract when it was asked to leave the job.
6. A reasonable attorney’s fee for legal services necessarily rendered in representing Lindy in the trial court is $3,000.00.
7. $1,500.00 is a reasonable attorney’s fee for Lindy’s representation in the Court of Civil Appeals in the event the case is appealed.
8. The material Lindy ordered sent to the jobsite was the material installed by Lindy’s workers.

Amber and Travelers moved for judgment non obstante veredicto that Lindy take nothing asserting (1) that the jury’s answer to special issues 1, 3, 4 and 8 should be disregarded because they were without any support in the evidence, and (2) that because of certain particularized deficiencies in the pleadings and the proof, Lindy failed to bring itself within the beneficial provisions of Article 5160, Vernon’s Tex. Civ.St. Lindy filed its motion for judgment in which it asked the court to either (1) disregard the jury’s answers to special issues 1 and 2 and render judgment for it on the remaining verdict for $10,582.00 damages, plus $3,000.00 attorney’s fees, plus an additional $1,500.00 attorney’s fees in the event of an appeal; or (2) to disregard the answers to special issues 3, 6 and 7, and render judgment for it on the remaining verdict for $10,980.00 damages. The court granted the first count in Lindy’s motion for judgment, disregarded the answers to the first two special issues, and rendered judgment in favor of Lindy against Amber and Travelers, jointly and severally, for the sum of $13,582.00, plus an additional $1,500.00 in the event of an appeal. Amber and Travelers appeal. We affirm.

It is asserted by appellants that the evidence is both legally and factually insufficient to support the jury’s answer to special issue 3; and that the evidence is also legally insufficient to support the answer to special issue 4.

Lindy’s ceiling mechanic who did the work in question testified that when Lindy was removed from the job the total work required under the contract was forty to forty-five percent finished. The manager of Lindy’s acoustical installation department was also called as a witness. He is Lindy’s job estimator. He testified that he is also field supervisor on all of Lindy’s jobs, and that he is responsible for the acoustical and insulation work. He personally keeps a file on each job. He was shown to be thoroughly familiar with the costs and values of materials and labor for acoustical and ceiling work and the particular job in question, and it was he who had purchased the materials for the job and ordered them sent to the jobsite. He was familiar with the plans and specifications under the contract with Amber. He testified that assuming the work under the contract was forty percent completed its value would be $12,155.00. He testified, too, that because of Lindy’s good credit rating, its ability to order in large quantities, and the use of direct shipping to its jobsites, it gains an advantage not accorded other ceiling contractors of about twenty percent on the cost of its materials. The value figure he gave did not include this discount. There is no evidence that materials other than those ordered by him were used on the job, and the only inference to be gleaned from the record is that only those materials were actually used by Lindy on the job.

The evidence we have recited is legally sufficient to support the jury’s answers to issues 3 and 4. Under the whole record, which we need not detail, we hold also that the evidence is factually sufficient to support the answer to issue 3.

In its pertinent parts at the time Amber and Lindy executed the contract in question, Article 5160 provided that a general contractor who entered into a formal contract in excess of $2,000.00 with the State or any governmental or quasi-governmental authorities of the State including “any county of this State” for the construction, alteration or repair of any public building or the prosecution or completion of any public work was required to execute a Payment Bond with a corporate surety in the amount of the contract “solely for the protection of all claimants supplying labor and material.” Provision was also made for an award of attorneys’ fees in the event it was necessary for a claimant to sue to enforce his claim. Travelers asserts that the record does not support the judgment against it and the resulting attorney’s fees under Article 5160 because there is no evidence that Amber’s contract was with the State, and because there is no evidence that Travelers had executed a Payment Bond under the job in question. These contentions are overruled.

James Butler is an estimator and field supervisor for Amber. It was he who executed the contract with Lindy on behalf of Amber. He testified directly that Amber was general contractor on the renovation job, that the architect in charge of the project was employed and paid by Navarro County, and that it was necessary for Amber to secure the architect’s approval of work done before Amber was paid for the work. The architect’s representative on the job was called as a witness by Amber. He testified on direct examination by Amber as follows: “Q. And on the job, such as the one that Amber Constructors had with Navarro County, who do you hold responsible for having this work done right? A. The superintendent of the job, and the general contractor. Q. In this case, that was Amber Constructors? A. Yes.” By the parties’ stipulation and by letters in evidence the record shows that Lindy filed its claim “pursuant to [Article 5160]” with both Amber and Travelers. Travelers responded by letter as follows: “We acknowledge, without prejudice to any and all rights and defenses under our bond, receipt of [your claim]. We are reviewing the circumstances surrounding your claim with our principal and anticipate that a satisfactory solution will be reached in the near future. Please feel free to contact The Travelers if you have any additional information or feel that no progress is being made toward settlement of this matter.”

The evidence we have recited is legally sufficient to establish that Amber’s contract for the renovation project at Navarro College was with Navarro County, and Travelers had executed a Payment Bond on the project in accordance with the provisions of Article 5160.

Appellants have other points and contentions. None present reversible error under the record. All are overruled.

The judgment of the trial court, including the award to Lindy of $1,500.00 as attorney’s fees for this appeal, is affirmed.


author: McKAY, Justice.

text:
    Patrick McGONAGILL, Appellant, v. HIDE-A-WAY LAKE CLUB, INC., Appellee.
    No. 1104.
    Court of Civil Appeals of Texas, Tyler.
    May 11, 1978.
    Rehearing Denied June 8, 1978.

      Rick Rogers, Texarkana, for appellant.
    Samuel M. George, Larry S. Parker, Tyler, for appellee.
   McKAY, Justice.

This is an appeal from an interlocutory order denying appellant a temporary injunction. Appellant, Patrick McGonagill, brought suit to enjoin appellee from disconnecting the water supply to appellant’s sprinkler system. The trial court granted a temporary restraining order in appellant’s favor, but at the subsequent hearing refused to grant a temporary injunction. It is from this order that appellant perfected his appeal. Appellant alleged that, in relying upon appellee’s agent, he purchased pipe to effectuate connection of his sprinkler system with appellee’s golf course fairway watering system; that he later installed a water sprinkler system at a cost of $1,500.00; and that he then landscaped his yard at a cost of $8,000.00. It was further alleged that appellee’s agent acted with actual or apparent authority and appellee ratified his acts. Appellant prayed for a temporary restraining order, temporary injunction, and permanent injunction to prevent appellee from turning off the water and for $1,000.00 in damages resulting from the loss of his landscaping.

Appellee answered that appellant had never acquired an easement on its property and by general denial. At the hearing on the temporary injunction, the trial court entered the order denying a temporary injunction which is the subject of this appeal.

On or about July 1, 1972, appellant purchased Lot 401 of Unit 13 of the Hide-AWay Lake, Inc. Subdivision, and simultaneously made application for membership in Hide-A-Way Lake Club. The application for membership and water service agreement, signed by appellant, provided for one . three-quarter (¾) inch water service connection to appellant’s lot and further stated:

“This agreement contains the entire agreement of the parties to membership in Hide-A-Way Lake Club and water service and charges. It may not be changed orally, but only by an agreement in writing signed by an authorized representative of the corporation.”

Another document, entitled “Restrictions, Covenants and Conditions Applicable to Hide-A-Way Lake,” on file in the Smith County Deed Records, provides that “the pumping of water from any lakes or ponds is prohibited except by special permit, in writing, granted by Hide-A-Way Lake, Inc.”

Appellee, in its corporate form, is the successor of Hide-A-Way Lake Club, an organization comprised of members who were required to be owners of lots in the development. Appellant testified that the water pressure to his house was poor; that he attempted for over a year to get his lawn in shape by using a sprinkler and water hose; and that he could not operate his sprinkler system due to the low water pressure. At this time, Thomas Goode was employed by appellee as golf course superintendent. Appellant testified that he and Goode discussed the water problem. Goode told appellant that his crew would install a water line from the middle of the fifth fairway to appellant’s property if appellant would purchase the necessary pipe. Appellant purchased the pipe and some time later Goode’s crew installed it.

Concerning his authorization to take such action, Goode testified, “There wasn’t any authorization made pro or con. I had authorization to do anything I wanted to as far as I knew.” To his knowledge, no other property owner obtained water in this manner.

Harold Fowler was general manager of Hide-A-Way Lake Club, Inc. from October, 1973, to June, 1977. Some time in the fall of 1975, upon being informed by a member of the Board of Directors of Hide-A-Way Lake Club, Inc. that appellant’s water sprinkler system was connected with the golf course water system, Fowler ordered the water cut off. When the water was cut off, appellant asked to appear before the next meeting of the Hide-A-Way Lake Club, Inc. Board of Directors. On November 3, 1975, he appeared before the Board, explained the situation and that he was willing to pay up to $700.00 or $800.00 a year for the water. Rather than taking any action at that time, the Board took the matter under advisement.

The minutes of the next Board meeting, on December 30,1975, reflected that Wayne Griffin of the Board of Directors instructed Fowler to remove the water lines leading to appellant’s sprinkler system at his earliest convenience. Although this action was never taken, the water remained cut off. At some point, appellant contacted his present attorney of record. A letter dated January 8, 1976, from appellant’s counsel was later hand delivered to Griffin. In substance, the letter proposed several ways in which to settle the dispute. However, it further stated that, “If none of the proposals are satisfactory, [appellant] would like to file a lawsuit so that this whole mess can be resolved once and for all.” Some time later, appellant turned the water on. Fowler testified that he was not aware the water had been turned on. The water remained on until June, 1977, when Earl Horton, the new general manager, ordered Joe Mac-Mahon, golf course superintendent, to disconnect the water. Appellant then filed his petition seeking injunctive relief which the trial court refused to grant.

At the hearing appellant testified that he landscaped the yard for $8,000.00. He also testified that one man had estimated it would cost $1,000.00 to connect his sprinkler system to the three-quarter inch line which provided water to the house. McGonagill further testified that as of the time of the hearing that other homeowners in the neighborhood had sprinkler systems connected to the water line servicing their homes and that the water pressure had been corrected and seemed sufficient.

In his sole point of error, appellant argues that the trial court’s refusal to grant a temporary injunction was a clear abuse of discretion because only questions of law were presented, which, based on the undisputed facts, established his rights to an injunction. We disagree.

It is settled law that the grant or refusal of an injunction is ordinarily within the sound discretion of the trial judge, and on appeal, the review of the trial court’s action is limited to the narrow question of whether the action constituted a clear abuse of discretion. Janus Films, Inc. v. City of Fort Worth, 163 Tex. 616, 358 S.W.2d 589 (1962); Repka v. American National Ins. Co., 143 Tex. 542, 186 S.W.2d 977 (1945). Absent disputed facts, the action of the trial court is not reviewed as a matter of discretion, but whether the trial court correctly applied the law to the undisputed facts. General Telephone Co. v. City of Wellington, 294 S.W.2d 385, 393 (Tex.1956); Southland Life Ins. Co. v. Egan, 126 Tex. 160, 86 S.W.2d 722 (1935).

The sole question on an application for a temporary injunction is petitioner’s right to the preservation of the status quo, and to establish such right it is required only to show a probable right and a probable injury. Watts v. Alto Ind. School District, 537 S.W.2d 776 (Tex.Civ.App-Tyler 1976, no writ); Chesterfield Finance Co. v. State, 331 S.W.2d 368 (Tex.Civ.App.-Waco 1960, writ ref’d). The issuance of a temporary injunctive writ is not sanctioned if the applicant fails to show either a probable right of recovery, Camp v. Shannon, 162 Tex. 515, 348 S.W.2d 517 (1961), or a probable injury. Armendariz v. Mora, 526 S.W.2d 542 (Tex.1975). An injunction will never be granted unless it appears that injury will otherwise result to the applicant. Chisholm v. Adams, 71 Tex. 678, 10 S.W. 336 (1888); Justice Mortgage Investors v. C. B. Thompson Construction Co., 533 S.W.2d 939, 946 (Tex.Civ.App.-Amarillo 1976, writ ref’d n. r. e.). It has also been said that in order to obtain injunctive relief one must prove a probable right to a permanent injunction and a probable injury. Oilfield Haulers Association v. Railroad Commission, 381 S.W.2d 183 (Tex.1964). One seeking injunctive relief need only offer evidence tending to prove a probable right to recovery and a probable injury if the injunction is not granted. Transport Company of Texas v. Robertson Transports, Inc., 152 Tex. 551, 556, 261 S.W.2d 549, 552 (1953).

Irrespective of the nature of the right threatened, the granting of an injunction may also depend on the absence of an adequate remedy at law. Storey v. Central Hide & Rendering Co., 148 Tex. 509, 226 S.W.2d 615 (1950); Covarrubia v. Butler, 502 S.W.2d 229, 230 (Tex.Civ.App.-San Antonio 1973, writ ref’d). However, the existence of a remedy at law is not ground for denial of injunctive relief unless the legal remedy is as practical and efficient to the ends of justice as the equitable remedy. Sumner v. Crawford, 91 Tex. 129, 41 S.W. 994, 995 (Tex.1897); Irving Bank & Trust Co. v. Second Land Corp., 544 S.W.2d 684, 688 (Tex.Civ.App.-Dallas 1976, no writ); Long v. Castaneda, 475 S.W.2d 578, 582 (Tex.Civ.App.-Corpus Christi 1971, writ ref’d n. r. e.).

A court is authorized and empowered to grant injunctive relief when it is made clear to appear that without it irreparable injury will result. Dunn v. City of Austin, 77 Tex. 139, 11 S.W. 1125, 1127 (1889). An irreparable injury is an injury of such a nature that the injured party cannot be adequately compensated therefor in damages, or that the damages which result therefrom cannot be measured by any certain pecuniary standard. Southwestern Chemical Co. v. Southeastern Pipeline Co., 369 S.W.2d 489, 492 (Tex.Civ.App.-Houston 1963, no writ); Wilson v. Whitaker, 353 S.W.2d 945 (Tex.Civ.App.-Houston 1962, no writ). If there is a question as to plaintiff’s right to prevail, and it does not appear that a temporary injunction is required to prevent injury to plaintiff, it is within the discretion of the trial judge to deny interlocutory relief. Zmotony v. Phillips, 529 S.W.2d 760 (Tex.1975).

We agree with the trial court that appellant failed to show a probable right of recovery or a probable injury and hence had no right to the preservation of the status quo by injunction. The documents in evidence explicitly deny appellant’s right to the water. His own testimony reflects the adequacy of a remedy at law. Appellant testified that there was sufficient water pressure from his service connection to water his lawn. After a review of the evidence, we believe some issues of fact exist. Therefore, we may reverse the action of the trial court only upon a clear abuse of discretion. We find that the trial court did not abuse its discretion in denying appellant injunctive relief. Considering only the undisputed facts, we believe the trial court correctly applied the law to the facts. Accordingly, appellant’s point of error is overruled.

Judgment of the trial court is affirmed.


author: EVANS, Justice.

text:
    FIRST NATIONAL BANK OF BELLAIRE, Appellant, v. Hal M. HUBBS, Appellee.
    No. 17117.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    May 18, 1978.

      Vickery & Brown, Charles R. Vickery, Jr., David W. Showalter, Houston, for appellant.
    Werner & Rusk, Ray Hensarling, Houston, for appellee.
   EVANS, Justice.

The plaintiff, Hal M. Hubbs, brought this action against the defendant, First National Bank of Bellaire, alleging that the sum of $3587.51 had been removed from his checking account without his authority and that the bank had wrongfully dishonored for “insufficient funds” his check to the Internal Revenue Service in the amount of $4800.00. The bank filed its answer and also filed a counterclaim for the balance allegedly due under three installment notes given by the plaintiff to finance the purchase of certain automobiles. The plaintiff thereafter filed a first amended original petition, alleging actual and punitive damages for the wrongful dishonor of his check, and pleading, in the alternative, that the bank had converted his money in the amount of $3587.51.

The cause was evidently tried and submitted to the jury on the theory of conversion. In response to the first two special issues the jury found that the bank had wrongfully exercised dominion, ownership or control over the plaintiff’s property which resulted in damage to the plaintiff. In response to the third special issue the jury found that the sum of $10,000.00 would reasonably compensate the plaintiff for his damages. No other issues were requested by either side.

The trial court entered judgment on the jury’s verdict that the plaintiff recover from the bank the sum of $3587.00 with interest at the legal rate from September 4, 1971 and its judgment further provided: “This recovery shall be offset by the claim of First National Bank of Bellaire against Hal M. Hubbs in the amount of $982.77, plus 15% attorney fees, plus 10% interest from September 4, 1971.”

It is the bank’s position that it was justified in removing the sum of $3587.51 from the plaintiff’s account in order to safeguard the money after it had received notice of a claim being asserted by a third party. It also contends that it had the right to set off against the plaintiff’s action for recovery of the money removed, an equal amount of indebtedness owed by the plaintiff to the bank on the three car installment notes.

In 1971 the plaintiff owned a general insurance agency, Houston National Agency, and his checking account was carried in the First National Bank of Bellaire as “Houston National Agency and Hal M. Hubbs.” The plaintiff’s agency was the sole representative of Northeast Insurance Company in the State of Texas, and it collected the insurance company’s premiums and handled their claims. Bradford Associates was an insurance premium finance company located in the State of Maine, and the plaintiff testified that he had been authorized by Northeast to sign its name to checks from Bradford Associates and that during the time he had his account with Bellaire bank, he had signed checks in that manner for deposit to his account. There is dispute in the testimony as to whether the bank’s officers were aware of the plaintiff’s authority to endorse checks in this manner.

On September 3, 1971, an officer of the Bellaire bank received a telephone communication from an officer of Casco Bank & Trust Company in Maine, advising that Cas-co was handling the Bradford Associates account and that Bradford was claiming that checks made payable to Northeast Insurance Company, drawn on the Casco bank, and endorsed “Northeast Insurance Company by Houston National Agency,” had been endorsed without authority. This communication was followed by a letter from the Casco bank to the Bellaire bank dated September 7, 1971, which advised that Bradford was asking relief from Casco and that Casco, in turn, was notifying the Bellaire bank that it would look to it under the warranty provisions of the Uniform Commercial Code. Upon receiving this communication, the Bellaire bank caused the sum of $3587.51 to be removed from the Houston National Agency’s checking account and placed the money in the form of a cashier’s check made payable to Houston National Agency with the notation “Funds held pending outcome of dispute.” It is not clear why the exact amount of $3587.51 was withheld.

On September 23, 1971, the plaintiff made a written demand on the Bellaire bank for the return of the withheld funds, and the bank filed an interpleader action on September 27, 1971, which was subsequently dismissed. The Bellaire bank was never required to return any funds to the Casco bank.

Money may be the subject of an action for conversion if the fund can be described or identified as a specific chattel. However there is no conversion where the indebtedness may be discharged by the payment of money generally. Hull v. Freedman, 383 S.W.2d 236 (Tex.Civ.App.-Ft. Worth 1964, writ ref’d n. r. e.); Graham v. Turner, 472 S.W.2d 831, 839 (Tex.Civ.App.-Waco 1971, no writ).

A fund which is placed on deposit with a bank ordinarily becomes a general deposit, creating a debtor/creditor relationship between the bank and the depositor. Citizens National Bank v. Hill, 505 S.W.2d 246, 248 (Tex.1974). The title to the deposited funds passes to the bank, but the bank has the duty to disburse the funds on deposit in accordance with the directions of the depositor. Mesquite State Bank v. Professional Investment Corp., 488 S.W.2d 73, 75 (Tex.1972).

In the case at bar the pleadings and proof show that the relationship of debtor and creditor existed between the plaintiff and the Bellaire bank and that the cause was erroneously tried on the theory of conversion. The plaintiff’s pleadings and the undisputed evidence will support an action in debt for the return of the funds on deposit, but the bank had the right to offset against such recovery the amount of an equivalent indebtedness owed by the depositor to the bank. Sears v. Continental Bank & Trust Co., 562 S.W.2d 843 (Tex.1977). The plaintiff concedes that he received an appropriate credit for the amount of the funds on deposit against the amount owing upon the installment notes, and the undisputed evidence shows that the sum of $982.77 represented the unpaid balance due on the notes at the time of the judgment. Therefore, the question remaining for this court’s determination is whether the plaintiff’s recovery may be sustained on the theory of wrongful dishonor.

The vice president of the Bellaire bank who handled the transaction in question testified that after receiving notice of the possible claim from the Casco bank, the money was withdrawn from the plaintiff’s account so that the plaintiff could not spend the money until the claim was settled. He testified that after this money was taken out of the plaintiff’s account, the bank refused to honor any checks that came in on the account, including the check made payable to the Internal Revenue Service. He stated that the check to the Internal Revenue Service had been rejected because the account had been closed and because there wasn’t enough money in the account to cover the check after the sum of $3587.51 had been withdrawn.

The plaintiff testified that in August 1971 he had issued a check for $4800.00 to the Internal Revenue Service and that at that time there was sufficient money in the account to cover the check. The record, however, does not show how much money remained in the account at the time the Internal Revenue Service check was presented for payment, and the evidence does not, therefore, conclusively establish that the bank’s action in withdrawing the funds from the account caused the check to be dishonored.

In order to support an action for wrongful dishonor there must be both pleading and proof that there was money on deposit in plaintiff’s account sufficient to pay the check at the time of presentment. Gustason v. Northeast National Bank, 486 S.W.2d 596 (Tex.Civ.App.—Ft. Worth 1972, no writ). The plaintiff’s failure to meet his burden in this respect requires a reversal of the trial court’s judgment.

In view of the fact that the cause was tried on an erroneous theory of law, and since the record does not affirmatively demonstrate the inability of the plaintiff to recover under a correct theory, the cause will be remanded for new trial. Patterson v. Wizowaty, 505 S.W.2d 425 [Tex.Civ.App.-Houston (14th Dist.), 1974, no writ]; West Texas Equipment Company v. Walker, 417 S.W.2d 864 (Tex.Civ.App.—Amarillo 1967, writ ref’d n. r. e.).

In further proceedings in the cause it should be noted that a bank’s liability for damages proximately caused by the wrongful dishonor of an item is governed by Tex.Bus. & Com.Code, § 4.402. Under this provision of the Code, the bank’s liability is limited “to actual damages proved” when the dishonor occurs through the bank’s mistake, and if “so proximately caused and proved” the recovery may include consequential damages, as for loss of credit and mental anguish. North Shore Bank v. Palmer, 525 S.W.2d 718 [Tex.Civ.App.-Houston (14th Dist.), 1975, writ ref’d n. r. e.].

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


author: NYE, Chief Justice.

text:
    Debra June BROWN, Appellant, v. Jacky Joe BROWN, Appellee.
    No. 1368.
    Court of Civil Appeals of Texas, Corpus Christi.
    May 18, 1978.
    Rehearing Denied June 8, 1978.

      Ernest O. DeBakey, Houston, for appellant.
    Donald R. Uher, Bay City, for appellee.
   OPINION

NYE, Chief Justice.

This is a venue suit. Involved is a suit for divorce and the parent-child relationship. The father, Jacky Joe Brown, filed the suit in Matagorda County, Texas. The mother, Debra June Brown, appeals to this Court from a denial of her plea of privilege to be sued in Harris County where she and her daughter reside.

The father instituted suit in Matagorda County in August of 1977 in which he sought a divorce from his wife and a determination of conservatorship for their daughter, Dana Junette Brown. His petition stated that their daughter is not under the continuing jurisdiction of any other court. The mother did not file a formal answer but appeared and filed a plea of privilege in February of 1978 alleging that she and her daughter are residents of Harris County and that venue lies exclusively in Harris County under the Texas Family Code, Section 11.04(a) and (c)(3). This subdivision provides that a suit affecting the parent-child relationship shall be brought in the county where the child resides, and in the event the parents do not reside in the same county, the child’s residence shall be in the county where the parent having care and control of the child resides.

In the mother’s pleadings she states that she resides in Harris County, Texas with the child and that she had filed suit in Harris County. There is nothing in the record before us, however, to indicate the basis or nature of the Harris County suit or, more importantly, when it was filed. The general common law rule in Texas is that the trial court in which a suit for divorce is first filed acquires dominant jurisdiction to thé exclusion of other coordinate courts. Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063 (1926). If the parties are parents of a child, or children, the law requires the petitioner to include in such divorce action a suit affecting the parent-child relationship unless the child is under the continuing jurisdiction of another court under Section 11.05 to the Code. See Tex. Family Code Ann. § 3.55(b) (1975). A subsequent suit involving the same parties and the same controversy (i.e., divorce and parent-child relationship) would have to be dismissed. Curtis v. Gibbs, 511 S.W.2d 263 (Tex.Sup.1974). See also Tex. Family Code Ann. § 11.071(d) (Supp.1978). If the mother’s Harris County suit was a divorce action and if it was filed after the father’s Mata-gorda divorce suit was filed, it would have to be dismissed.

The venue and transfer provisions contained in the Family Code are intended to supplant the general plea of privilege rules contained in our Rules of Civil Procedure. Therefore, the mother’s plea of privilege is a misnomer and should properly be denominated as a motion to transfer the cause insofar as it affects the parent-child relationship. See Rogers v. Rogers, 536 S.W.2d 442 (Tex.Civ.App.-Houston [14th Dist.] 1976, no writ).

Even if we consider the mother’s pleadings as a motion to transfer and even if the same had merit, such an appeal is not properly before us. An order either granting or denying the motion to transfer is non-appealable. Texas Family Code Ann., § 11.06(f); Rogers v. Rogers, 536 S.W.2d 442, 443 (Tex.Civ.App.-Houston [14th Dist.] 1976, no writ); Guillory v. Davis, 530 S.W.2d 870, 871 (Tex.Civ.App.-Beaumont 1975, writ dism’d); Benckenstein v. Benckenstein, 515 S.W.2d 336 (Tex.Civ.App.-Houston [14th Dist.] 1974, writ dism’d). The remedy for an erroneous ruling on a motion to transfer is by petition for writ of mandamus. See Cassidy v. Fuller, 21 Tex.Sup.Ct.J. 325, 568 S.W.2d 845 (1978).

The Supreme Court in Cassidy identified the venue requirement in Section 11.04(a) of the Family Code as evidencing legislative intent to fix venue where the current circumstances affecting the child may usually be best shown. The Legislature manifested an exception to this general rule, however, where a suit involving a divorce is combined with a suit affecting the parent-child relationship. The residence of the child is irrelevant when the parent-child suit is initially filed as part of the divorce action under Section 3.55(b). This is also true where a parent files a motion in a court previously vested with continuing jurisdiction to transfer that parent-child suit to the divorce court where it will be consolidated with the divorce action under Section 3.55(c). The mandatory transfer provision of Section 3.55(c) shows that venue is proper for both the divorce and the parent-child relationship suits in the court which has jurisdiction of the divorce.

The transfer provisions of Sections 11.06(a) and 11.06(b) do not apply when venue is proper in the court in which the divorce and the parent-child relationship suit is pending. A discretionary transfer for the convenience of the parties and witnesses and in the interest of justice under Section 11.06 subdivision (c) was discussed by the Supreme Court in Cassidy. Such a transfer was not requested by appellant in the trial court.

Forum shopping is discouraged by our appellate courts and is forestalled by statutes providing certainty of venue and mandatory transfer as indicated by the Supreme Court in Cassidy. Certainty of venue is prescribed for divorce cases in Sections 3.21 and 3.55 of the Family Code.

The appeal is accordingly dismissed.


author: DUNAGAN, Chief Justice.

text:
    GULF ATLANTIC LIFE INS. CO., Appellant-Appellee, v. Jack PRICE et al., Appellees-Appellants.
    No. 1075.
    Court of Civil Appeals of Texas, Tyler.
    May 18, 1978.
    Rehearing Denied June 8, 1978.

      Bruce W. Bowman, Jr., Turner, Rodgers, Sailers, Jordan & Calloway, Dallas, H. P. Smead, Jr., Longview, for appellant.
    Lynn S. Patton, Fisher, Patton & McLe-more, Longview, Jack N. Price, Price & William, Austin, for appellees.
   DUNAGAN, Chief Justice.

On June 28, 1971, the appellant, Gulf Atlantic Life Insurance Company (hereafter referred to as Gulf Atlantic), agreed to make a loan to Jack Price and Janet Price and one Richard D. Kennedy, in the amount of $260,000. According to this agreement, it was contemplated that the loan would be for a term of two years (later changed to one year) with interest payable .monthly at the rate of 10% per annum and a payment of $600 to be made each month to be applied against principal. The original agreement further provided for charges of $13,-000 as a commitment fee and an additional $13,000 for an inspection fee.

The agreement further provided an option to Gulf Atlantic to buy 25% of the properties subject to the mortgage securing repayment of the loan for the sum of $1,000. The option provision provided that the same was exercisable during a one month period between August 15, 1974, and September 15, 1974.

The loan in question was a standby commitment whereby Gulf Atlantic agreed to make the loan if such loan was not obtained someplace else after two years. The agreement bound Gulf Atlantic to be ready to make the loan during a one month period.

After a one month extension of the commitment (for which the sum of $500 was paid), the loan funds were advanced on September 13,1973. The form of the transaction reflects the loan to be to P & K Properties, Inc., a corporation, with personal guaranties from Jack N. Price, Janet Price and Richard D. Kennedy. P & K Properties, Inc., had its right to do business forfeited on the date of the loan. At the time the loan was closed, the $6,500 inspection fee was paid. The $260,000 loan went into default and Gulf Atlantic made demand for payment. The appellees instituted suit claiming the loan was usurious, and the appellant counterclaimed for debt and foreclosure.

The $13,000 commitment fee was found by the jury to be a reasonable fee, in light of the risk to be borne for having a loan available in the future. As such, this commitment fee was found by the jury to be a bona fide commitment fee and was not interest.

The inspection fee had been reduced by agreement of the parties from $13,000 to $6,500. The $6,500 inspection fee was found by the jury to constitute a charge for the lending of money, thereby constituting interest.

The trial court rendered judgment as follows:

“It is therefore ORDERED, ADJUDGED and DECREED that the Defendant Gulf Atlantic Life Insurance Company, having contracted for, charged or received interest greater than the amount authorized by law must forfeit to Jack N. Price and Janet Price twice the amount of the interest contracted for, charged, or received, . . and accordingly, the Defendant Gulf Atlantic Life Insurance Company must forfeit twice the amount of ten (10%) per cent of $260,000, together with twice the amount of $6,500, and also twice the amount of $30,000, and that the sum of these amounts, after doubling, must be deducted from the amount of $253,500 (after deduction of the ‘front end’ payment which was denominated as an inspection fee). All payments made on the loan in question excluding the $13,000 commitment fee which the jury determined not to be interest, and the $6,500 inspection fee which has already been taken into account, must also be credited against the principal sum of $253,500. Accordingly, Defendant and Counterclaimant Gulf Atlantic Life Insurance Company is hereby awarded judgment against the Plaintiffs Jack N. Price and Janet Price, now Janet Splawn, as guarantors, in the amount of $114,284.67, provided that all payments against the loan in question or this judgment, from whatever source, shall be applied to the liability of the guarantors-Plaintiffs until that liability is discharged.”

The appellant’s fifth point of error states that “The trial court erred in granting judgment for Jack and Janet Price based on the value of the option because the jury finding that the value of the option was Thirty-one Thousand and No/100 ($31,-000.00) Dollars conflicts with the jury finding that the value of the option was speculative and uncertain.”

The special issues we are concerned with were submitted in the court’s charge as follows:

“SPECIAL ISSUE NO. 6:
Do you find from a preponderance of the evidence, the option to acquire 25% of the Lake Shore Motel property as of September 12, 1973, had a value?
Answer ‘Yes’ or ‘No.’
Answer Yes”
“SPECIAL ISSUE NO. 7:
If you have answered the above Issue ‘yes,’ answer the following issue, otherwise, do not answer.
What do you find from the preponderance of the evidence to be the value, if any, of said option.
Answer in Dollars and Cents.
Answer: $31,000.00”
“SPECIAL ISSUE NO. 20:
Do you find from a preponderance of the evidence, if any, that the value of the option was uncertain or speculative as of September 12, 1973?
Answer ‘Yes’ or ‘No.’
Answer: Yes”

We are faced with a situation in which the jury set the value of the option at

$31,000 in Special Issue No. 7, and then said in Special Issue No. 20 that the value of the option was uncertain or speculative as of the same date. In order for jury findings to conflict, they must oppose each other and be such that they cannot both be true. Billingsley v. Southern Pacific Company, 400 S.W.2d 789, 795 (Tex.Civ.App.—Tyler 1966, writ ref’d n. r. e.); Fort Worth & Denver Railway Co. v. Britton, 310 S.W.2d 654, 657 (Tex.Civ.App.—Fort Worth 1958, writ ref’d n. r. e.); Maddox v. Ellison, 240 S.W.2d 398, 400 (Tex.Civ.App.—Amarillo 1951, n. w. h.). In the instant case, both of the jury findings cannot be true.

The ultimate question is not whether the findings are inconsistent or in conflict, or even in irreconcilable conflict; rather, the ultimate question is whether the conflict in the findings is fatal to the entry of judgment. Bay Petroleum Corporation v. Crumpler, 372 S.W.2d 318, 319 (Tex.1963).

“To require a judgment entered on a verdict containing conflicting answers to be set aside, the conflict between the answers must be such that one answer would establish a cause of action or defense, while the other would destroy it.” Little Rock Furniture Mfg. Co. v. Dunn, 148 Tex. 197, 222 S.W.2d 985, 991 (1949); Nichols v. Red Arrow Freight Lines, 300 S.W.2d 740, 745 (Tex.Civ.App.—Texarkana 1957, writ ref’d n. r. e.).

“It is essential that the party seeking to set aside a verdict on the ground of conflict must be able to point out that one of the conflicting answers of the jury, in connection with the rest of the verdict except the issue with which it conflicts, necessarily requires the entry of a judgment different from that which the court has entered.” Little Rock Furniture Mfg. Co. v. Dunn, supra; Mossler v. Foreman, 493 S.W.2d 627, 630 (Tex.Civ.App.—Houston [14th Dist.] 1973, n. r. e.). In our case, the answer to Special Issue No. 7 considered with the rest of the verdict and omitting Special Issue No. 20, would support a judgment for usury; while, ignoring the answer to Special Issue No. 7, the answer to Special Issue No. 20 considered with the rest of the verdict, would defeat any cause of action for usury. Therefore, the conflict is one that requires reversal of the case for a new trial. Accordingly, the appellant’s fifth point of error is sustained.

The remainder of appellant’s points of error are rendered immaterial in view of our above holding except for point of error number six. In this point of error the appellant states that it is entitled to a judgment as a matter of law because the guaranty agreement signed by Jack and Janet Price did not call for the payment of usurious interest. The point of error has no merit. The appellant mistakenly relies upon Micrea v. Eureka Life Insurance Company, 534 S.W.2d 348 (Tex.Civ.App.-Fort Worth 1976, writ ref’d n. r. e.). The case stands for the proposition that a guarantor of a corporate obligation has no cause of action or defense for usury unless the statutory corporate rate of interest set out in Article 1302-2.09, Tex.Rev.Civ.Stat.Ann., has been exceeded. See also Skeen v. Glenn Justice Mortgage Company, 526 S.W.2d 252, 256 (Tex.Civ.App.-Dallas 1975, n. w. h.) and Loomis Land & Cattle Company v. Diversified Mortgage Investors, 533 S.W.2d 420, 425 (Tex.Civ.App.-Tyler 1976, n. r. e.) for cases in accord with this proposition. In the instant case the interest rate may well exceed the maximum allowable corporate interest rate set by Article 1302-2.09, depending upon the outcome of fact findings concerning whether or not the various provisions of this loan constitute interest.

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