author: WARD, Justice.

text:
    Pearline Cathy ARMENDARIZ, Micha Miracle and B & B Vending & Music Company, d/b/a B & B Vending Company, Appellants, v. Joe B. MORA, d/b/a Central Vending Company, Appellee.
    No. 6550.
    Court of Civil Appeals of Texas, El Paso.
    June 8, 1977.
    Rehearing Denied July 6, 1977.

      Brewster, Steinberger & Mayhall, Jack L. Brewster, El Paso, for appellants.
    Charles E. Anderson, El Paso, for appel-lee.
   OPINION

WARD, Justice.

This is a tort action for damages arising from the alleged intentional interference with the Plaintiff’s contractual rights where the Plaintiff had the exclusive right to operate his coin-operated machines at that establishment known as “The Brass Asp.” The Defendants were the lessee-bar owner who executed the contract with the Plaintiff, the successor-lessee of the premises, and the Plaintiffs competitor who placed his own machines in the premises under contract with the successor-lessee. Trial was to a jury on special issues which determined there had been a wilful and intentional interference with the performance of the contract participated in by all of the Defendants. Based on the verdict, judgment was entered which awarded the Plaintiff both actual and exemplary damages. The three Defendants have appealed and as modified we affirm.

S & H Realty Company was the owner of the real estate in question, and on February 28, 1972, entered into a written lease of the business premises with the Defendant, Cathy Armendariz, for a period of two years, the lease containing an option to renew for an additional period of three years. Cathy permitted the installation of certain coin-operated machines in the bar by a third party, and on June 6, 1972, these machines together with the concession under which they were operated were purchased from the then owner by the Plaintiff, Joe Mora, who was doing business under the name of Central Vending Company. According to Mora, Cathy participated to the extent that she witnessed this transaction and saw Mora purchase the machines for $1,000.00. She also at that time executed the written exclusive concession lease which became the subject of this suit and which provided that for a period of five years, Mora was granted the exclusive right to place coin-operated amusement and vending machines in the premises, with the receipts from the operation of the machines being equally divided between the parties. These two parties thereafter operated under this agreement until the events which brought about its breach in March, 1974.

On October 31, 1973, Cathy Armendariz entered into a written contract of sale with the Defendant, Micha Miracle, to sell to her the assets and business of The Brass Asp at an agreed price of $22,000.00 plus inventory, the sale being conditioned that the purchaser, Micha Miracle, secure a liquor license by March, 1974, that Cathy Armen-dariz execute the option to renew the lease of the premises for the three-year period beginning March, 1974, and that that renewal lease be then assigned to the purchaser. At that time, the Defendant, B & B Vending Company, which was in the coin-operated machine business, had agreed with Micha Miracle that if she purchased the business, it would lend her $10,000.00 and in turn would place its machines in the premises. By March, 1974, Micha Miracle had secured her liquor license, and the option to renew the lease had been exercised by Cathy Armendariz. According to the Plaintiff’s version, at that time the Defendants realized that they would not be able to remove the Plaintiff’s machines without a fight. In any event, they decided not to proceed under the assignment of the original lease but would obtain a new lease between the owner and Miracle. They were successful and on March 13th, the owner of the building, S & H Realty Company, released the Defendant, Cathy Ar-mendariz, from the renewal lease and in turn executed an entirely new lease of the premises to Micha Miracle for a term of three years, the terms of this new lease being guaranteed by the Defendant, B & B Vending Company. On March 7th, the two Defendants, Micha Miracle and B & B Vending Company, entered into a location agreement which provided that B & B Vending Company would have the exclusive right to install and operate its coin machines on the premises for a term of six years. It was only then that the Defendants first informed Mora of the events and called upon the Plaintiff to remove his machines from the premises. Joe Mora instituted suit against the three Defendants seeking temporary and permanent injunc-tive relief to protect his interests under his exclusive concession lease which still had three years to run. The trial Court granted the temporary injunction, this Court of Civil Appeals affirmed, and the Supreme Court reversed and dissolved the temporary injunction. Armendariz v. Mora, 526 S.W.2d 542 (Tex.1975).

The Plaintiff then amended his pleadings, dropped his request for injunctive relief, and sued for damages arising from the tor-tious interference with his contractual rights. As stated, the case proceeded to trial before a jury, which by its answers to special issues made the following findings: (1) that one or more of the Defendants knew, or in the exercise of ordinary care should have known, of the existence of the exclusive concession lease between Mora and Mrs. Armendariz before Micha Miracle bought The Brass Asp; (2) that one or more of the Defendants interfered with the operation of Mora’s machines at the location; (3) that the interference was wilful and intentional; (4) that the interference was a proximate cause of a monetary loss to the Plaintiff; (5) that each of the three Defendants interfered with the operation of Mora’s machines at the location; (6) that the reasonable compensation to Mr. Mora for his financial loss by reason of the interference was the sum of $3,250.00 for loss of income to the date of trial, $4,750.00 for future loss of income, and $25.00 loss of equipment from the machines in question; (7) that the three Defendants acted with malice in their interference; (8) that exemplary damages should be assessed; and (9) that $7,000.00 was assessed as exemplary damages. Based upon the verdict of the jury, judgment was entered that the Plaintiff have recovery for $8,025.00 actual damages and $7,000.00 exemplary damages.

By an overly broad and multifarious first point, the Defendants-Appellants complain that no cause of action exists against them in that the Plaintiff had no valid contract which could be interfered with or rights that could be invaded, and that the Plaintiff failed to both prove and secure jury findings that any interference upon the part of the Defendants was “without just cause or excuse.” Defendants first insist that the Plaintiff’s exclusive concession lease was invalid as entered into in direct violation of the terms of the real estate lease between S & H Realty Company and Cathy Armendariz, which prohibited subleasing without the landlord’s written consent, and the subleasing was also contrary to the prohibition contained in Article 5237, Tex.Rev.Civ.Stat.Ann.

The general rule is that for there to be a right of action against one for contractual interference, there must be in existence a valid contract subject to that interference. Glenn v. Gidel, 496 S.W.2d 692 (Tex.Civ.App. — Amarillo 1973, no writ). To maintain the action for interference with the contract, it must be established that (1) there was a contract subject to interference, (2) the act of interference was wilful and intentional, (3) such intentional act was a proximate cause of Plaintiff’s damage, and (4) actual damage or loss occurred. Here the attack is that the first element was missing as there was no valid contract. The rule announced in Clements v. Withers, 437 S.W.2d 818 (Tex.1969), controls. There, the Court held that the unen-forceability of the contract in question, because of its failure to meet the requirements of the Statute of Frauds, was no defense to an action for tortious interference with its performance. The fact that the landlord in the present case might complain and invalidate the agreement gave no right to third parties to interfere with the performance of the contract.

Regardless, it is our opinion that this contract is not within the prohibition of the lease or of the statute. No exclusive possession of any of the premises was granted to the Plaintiff thereby. It did not create a leasehold estate and was not a sublease. To that extent, we approve the holding in Hancock v. Bradshaw, 350 S.W.2d 955 (Tex.Civ.App.—Amarillo 1961, no writ). We do not follow that authority where it held that the three-year exclusive concession lease was a mere privilege revocable upon transfer to a new sublessee. While there has been no uniformity in upholding these exclusive concession agreements regarding coin-operated machines or in determining whether they are mere licenses or contracts, we think the better view recognizes them as valid contracts between the parties where they are for a term and are supported by a valuable consideration. Vass v. Fisher, 405 S.W.2d 866 (Tex.Civ.App.—Houston 1966, no writ). See Annot. 53 A.L.R.3d 471 (1973). These contracts have become a fixture of everyday life and have been the subject of attempted regulation in this State. Art. 13.17, Taxation — General, Tex.Rev.Civ.Stat.Ann.; Taylor v. State, 513 S.W.2d 549 (Tex.Cr.App.1974). We hold there was a valid contract which could be the subject of the tort action.

The complaint made by the Defendants that the Plaintiff failed to prove and secure jury findings that any interference upon the part of the Defendants was “without just cause or excuse” is without merit. Tippett v. Hart, 497 S.W.2d 606 (Tex.Civ.App.—Amarillo), writ ref’d n. r. e., 501 S.W.2d 874 (Tex.1973). See Comment 28 Baylor L.Rev. 687 at 689 and 696 (1976). The four elements discussed above establish a prima facie case of interference with contract, and it is then incumbent upon the Defendant to defeat the action by showing that his act was either justified or privileged. The Defendants have misplaced the burden of proof.

Also under the first point, the Defendants make a “no evidence" argument that there was no showing that the claimed interference with the contract was wilful and intentional on the part of the three Defendants. Interference with a contract is an intentional tort and it is essential to the establishment of the cause of action that this element of wilful and intentional interference be established. Herider Farms-El Paso, Inc. v. Criswell, 519 S.W.2d 473 at 476 (Tex.Civ.App.—El Paso 1975, writ ref’d n. r. e.); Tippett v. Hart, supra at 611. The evidence that the three Defendants wilfully and intentionally interfered with the contract rights of the Plaintiff will under this point be viewed in the light most favorable in support of the jury findings, and only the evidence and inferences arising which support those findings will be considered, and the evidence and inferences contrary to the findings will be rejected. The Defendant, Cathy Armendariz, knew of the contract as she executed it in June, 1972, and in October, 1973, when she entered into the contract of sale she knew she would then breach her contract with the Plaintiff, Mora. The Defendant, B & B Vending Company, at all times was represented by Gilbert Seelmeyer. He had been in the coin-operated machines business for many years, was a competitor of the Plaintiff, knew the Plaintiff and knew that he operated under written contracts. Seel-meyer had also been a member of the Texas Vending Machine Commission, knew that the law required a written agreement between the machine and bar owners, and, according to Mora, was fully aware of Mora’s contract and of its terms before the final sale took place. Seelmeyer was the one that found Miracle and introduced her to Cathy Armendariz, and had agreed to lend her $10,000.00 if she would agree that his machines be put into the bar. Cathy explained to Miracle how the machines operated and how the profits on the concession were handled. Also, according to Cathy, Seelmeyer explained the operation to her. According to Mora’s version, all three Defendants were on notice of his contract rights before the sale was finally consummated, and Seelmeyer then informed him that regardless of his contract, the parties would all proceed under the new arrangement and that Mora’s machines were to be removed from the bar. We find the evidence legally sufficient to support a jury finding that there was a wilful and intentional interference with the Plaintiff’s exclusive concession lease by each of the Defendants. The first point is overruled.

By their second point, the Defendants complain of the form of the submission of Special Issue No. 1 in that it instructed the jury that the concession lease was a valid contract. The issue was to the following effect:

“From a preponderance of the evidence, do you find that one or more of the Defendants knew, or in the exercise of ordinary care should have known, of the existence of the ‘exclusive concession lease’ between Mr. Mora and Mrs. Ar-mendariz * * * before Mrs. Miracle bought the Brass Asp?”

There is no merit to the complaint. The Court merely inquired as to the existence of the knowledge of the Defendants or their knowledge of facts sufficient to put them upon inquiry of the existence of the concession lease. Further, as previously discussed, the contract was valid as far as the Defendants were concerned.

The Defendants further complain of the issue as they argue that the inquiry should have been whether the Defendants had “actual knowledge” of the contract and not whether the Defendants “knew or should have known of the contract.” The rule is that the interfering party must have had actual knowledge of the existence of the contract and of the plaintiff’s interest or, at least, knowledge of such facts and circumstances that would lead a reasonable man to believe in their existence. Kelly v. Galveston County, 520 S.W.2d 507 at 513 (Tex.Civ.App.—Houston [14th Dist.] 1975, no writ); Tippett v. Hart, supra at 611; Comment 28 Baylor L.Rev. at 692. The point is overruled.

By their next three points, the Defendants object to the forms of submission of Special Issues Nos. 2, 3, and 5 in the Court’s Charge. The points are overruled as being without merit for reasons previously discussed.

The form of Special Issue No. 6 is the subject of the Defendants’ next points. That issue inquired as to:

“What sum of money, if any, do you find from a preponderance of the evidence would reasonably compensate Mr. Mora for his financial loss, if any, occasioned, if it was by reason of the interference, if any, of one or more of the Defendants?”

The jury was then instructed that they could consider the following elements of damages:

“(a) Loss of income from the time that Mr. Mora’s machines were disconnected until the present date.
* * * * # *
“(b) Loss of income which, in reasonable probability, Mr. Mora will lose in the future and after this date up to the 6th of June, 1977.”

In connection with those two elements of damage, the jury was instructed that if Mora could have located the machines at another location, that the jury would not allow him any loss for such period of time that the machines could reasonably have been located elsewhere, either in the past or in the future. The measure of damages for tortious interference with contract is the same as for breach of contract, the Court attempting to put the Plaintiff in the same economic position he would have been in had the contract not been breached. Prowse v. Whitehurst, 313 S.W.2d 126 at 130 (Tex.Civ.App.—San Antonio 1957, writ ref’d n. r. e.). Both the breaching party and the interfering party are jointly and severally liable for the actual damages incurred by the Plaintiff.

As we understand the Defendants, their main complaint was that an instruction should have been given to the jury in connection with the issue defining loss of income as a net profit which the Plaintiff might have realized. However, the Defendants failed to request in writing and tender to the trial Court a definition of the term “net profit,” and a failure to submit a definition under the circumstances was not error. Tex.R.Civ.P. 279; State v. Harrington, 407 S.W.2d 467 (Tex.1966).

The other main objection by the Defendants was that the trial Court in the damage issues was instructing the jury that the contested concession lease was valid and effective until June 6, 1977. As previously discussed, the exclusive concession lease with Cathy Armendariz was effective until that time and the parties had no grounds to complain of any alleged invalidity. These points are overruled.

No error is reflected by the Defendants’ point objecting to the form of the submission of 6(c) of the Court’s Charge regarding storage charges as the jury found no damage under that paragraph. Tex.R.Civ.P. 434.

By paragraph 6(d) of the Court’s Charge, the inquiry was made as to what would compensate the Plaintiff for his financial loss by reason of loss of equipment from the machines in question. From our examination of the record, we have found no evidence which was introduced as to the value of any lost equipment on these machines that was caused by the Defendants. The amount of damages assessed was $25.00, and this will be eliminated.

The Defendants next present a multifarious point as to the submission of Special Issues Nos. 7, 8, and 9 which related to the finding of malice and the assessing of exemplary damages therefor, the Defendants first arguing that there was no evidence supporting their submission or the award of exemplary damages in this case. In any proper case in an action of interference with contract, exemplary damages are recoverable against the interfering party. As stated in Clements v. Withers, supra, actual malice is a necessary element to sustain an award of exemplary damages, and the Court defined actual malice as “ill-will, spite, evil motive, or purposing the injury of another.” It was in this manner that the Court defined malice in the present case. Kidd v. Hoggett, 331 S.W.2d 515 (Tex.Civ.App. — San Antonio 1959, writ ref’d n. r. e.).

As suggested in Clements v. Withers, supra, the problem presented is the distinction between the intent on the part of the Defendants to contract favorably and profitably among themselves knowing that they were going to cause a breach of the Plaintiff’s contract which would be a wrong and a basis for actual damages. Or, on the other hand, were the motives and purposes on the part of the Defendants those of acting with “ill-will, spite, evil motive, or purposing the injury of another.” Gilbert Seelmeyer testified that in the past he had had trouble with the Plaintiff who had undercut him on two occasions and forced him to remove his machines from locations where he had first possession. From this, the jury could infer that Seelmeyer was actuated by spite and revenge. In view of this and the careful planning and the step-by-step manner in which the Defendants proceeded for a period of from six to eight months before they informed the Plaintiff a few days before the final closing that his machines would have to go, we find the evidence legally sufficient to justify the submission of the malice issue and of the exemplary damages in this case. The Defendants’ point is overruled.

The Defendants finally complain of misconduct of the jury, their main assertion being that during the deliberation, the jury decided and argued that the exclusive concession lease was a binding contract. This argument, as previously discussed, was not an incorrect statement insofar as it applied to the relation between the Plaintiff and Cathy Armendariz. Even if it were, no misconduct is reflected. Even an incorrect statement would be an effort on the part of the jury to follow its own reasoning rather than applying the Court’s Charge. A misinterpretation or misunderstanding of a court’s charge is not misconduct. Stephens County Museum, Inc. v. Swenson, 517 S.W.2d 257 (Tex.1974). The argument made by one juror that the Appellant Miracle, being one of the Defendants, had to be held liable as a victim of circumstances or as a matter of blind justice at best would be faulty or illogical reasoning, which is not misconduct. Griffith v. Hudspeth, 378 S.W.2d 153 (Tex.Civ.App.—San Antonio 1964, no writ). Argument made by a juror that Miracle was not as innocent as she pretended was not error.

As to the balance of the misconduct which was alleged to have occurred, there is a denial by one or more of the jurors that any of the complained of statements were ever made. The burden to prove the occurrence of the overt act of misconduct was not sustained and the decision of the trial Court on the question is binding on this appeal. Brawley v. Bowen, 387 S.W.2d 383 (Tex.1965). The point is overruled.

The judgment of the trial Court is modified only to the extent that the sum of $25.00 is deducted from the amount of actual damages awarded by the trial Court. In all other respects, the judgment of the trial Court is affirmed.


source: Caselaw Access Project

author: OSBORN, Justice.

license: Public Domain

text:
    Michael Lynn TAFT, Appellant, v. Rebecca Elizabeth (Taft) JOHNSON, Appellee.
    No. 6623.
    Court of Civil Appeals of Texas, El Paso.
    June 8, 1977.
    Rehearing Denied July 6, 1977.
    Daniel R. Rutherford, San Antonio, for appellant.
    Mitchell, Stewart & Hemmi, James D. Stewart, Kirk Patterson, San Antonio, for appellee.
   OPINION

OSBORN, Justice.

This case involves a change in a parent-child relationship by the trial judge after trial to a jury which was unable to reach a verdict. Concluding that there has been a denial of the right to a jury trial, we reverse and remand.

The parties were married in December, 1971, and divorced in January, 1975. That decree named the Appellant, Michael Lynn Taft, managing conservator, and Appellee, Rebecca Elizabeth (Taft) Johnson, possesso-ry conservator of Mickey Denver Taft, the only child of the marriage. The petition for divorce filed by Michael alleged:

“Petitioner states that Respondent REBECCA ELIZABETH TAFT is in poor health and it would be for the best interest of the minor child, MICKEY DENVER TAFT, to have Petitioner appointed as Managing Conservator of this child and Respondent appointed as Possessory Conservator of this child at this time; Petitioner states that should the health of the Respondent improve at some future time, that it would be proper at such time to have Respondent REBECCA ELIZABETH TAFT appointed as Managing Conservator of this child, MICKEY DENVER TAFT.”

A year after the divorce, Rebecca filed a “Motion for Temporary Relief” seeking to be named temporary managing conservator. The Court denied the request but did order an investigation by the Texas Department of Public Welfare as to the homes of each parent and granted Rebecca specific visitation rights, including physical custody of the child one week each month. Later, Rebecca filed an amended motion to modify the parent-child relationship. She alleged “substantial and material changes of circumstances” and that the change in managing conservator would be in the best interest of the child. In addition, she alleged that there was an agreement between the parties that she would be named managing conservator when she regained her health, which she alleged had been accomplished. She incorporated in this pleading the language from the petition for the divorce set forth above. The Appellant having demanded a jury and paid the fee, the case was tried before a jury which was unable to reach a verdict. The Court, within a month after the mistrial, entered an order increasing Rebecca’s visitation rights to include one weekend per month and four weeks in July of each year, in addition to the one week per month previously granted. Within a month after the entry of this order, the Court entered another order in which it found:

“ * * * that the parties have entered an agreement concerning conserva-torship in compliance with Section 14.06 of the Texas Family Code; that under the terms of this agreement, Movant, Rebecca Elizabeth (Taft) Johnson, is to be appointed Managing Conservator of the child, Michael Denver Taft, at the time that Movant’s health improved; that as a matter of law Movant’s health has so improved; that this agreement is in the child’s best interest and the parties should be ordered to perform the terms of this agreement.”

The Court then removed Michael as managing conservator and named Rebecca as managing conservator, and named Michael as possessory conservator with specific visitation rights, including one week each month until Mickey reaches school age and four weeks each July. He also ordered Michael to pay child support. It is from this order changing the managing conservator that Appellant appeals.

The first contention is that the trial Court has denied Appellant his right to a jury trial. We agree. Section 11.13, Tex. Family Code Ann., provides for a jury trial in all suits affecting the parent-child relationship, except for adoptions. Our Legislature in 1961 provided that “[i]n any hearing held in this State concerning the custody of a child, whether pursuant to a divorce cause or not, any party to the hearing may, upon assumption of jury costs, demand a jury to determine custody of the child, and the judgment of the court must conform to that determination.” General and Special Laws of Texas, Regular Session, 57th Legislature, 1961, pp. 663-664. This Statute became a part of Article 4639a. Such provision was generally carried forward into Section 11.13(b) of the Texas Family Code. See 5 Tex.Tech.L.Rev. 409 (1974). The new code had a proviso that “the court may not enter a decree that contravenes the verdict of the jury on the issues of managing con-servatorship, possession of, or access to a child.” The Court in In Re Y., 516 S.W.2d 199 (Tex.Civ.App.—Corpus Christi 1974, writ ref’d n. r. e.), noted many earlier cases holding that the 1961 amendment made jury findings binding on the trial Court, and then expressly held that under the new Code provision, the jury’s verdict is still binding on the Court and said:

“ * * * There is no indication in the Family Code that the legislature intended to retreat from those interpretations of the 1961 Amendment to Article 4639a. # * *

In that case, Chief Justice Nye pointed out that, even where a change of conditions has been shown, whether a change of custody is warranted is a question for the jury, and the trial Court cannot substitute its judgment for that of the jury.

In 1974, the Legislature rewrote Subsection (b) so as to provide that the jury still has the responsibility to determine which party shall be managing conservator and which party shall be possessory conservator, and the trial Court is bound by the jury’s determination of that issue. But the trial Court has been given authority to provide specific terms and conditions of access to the child, provide support requirements, and provide for the respective rights, privileges, duties, and powers of the conservators. See 8 Tex.Tech.L.Rev. 43-44 (1976). If the trial Court may change managing conservators after a hung jury, then the right to a jury trial is meaningless. The Appellant asserts that his right to a jury trial is protected by both the United States and Texas Constitutions. Article I, Sec. 15, of the Texas Constitution appears to protect the right to trial by jury, as that right existed at the time of the adoption of the Constitution in 1876. Article V, Sec. 10, which is a part of the Judiciary Article, purports to accord the right of trial by jury in the trial of every cause in the District Courts, without regard to whether the right existed at the time of the adoption of the Constitution or came into the law after the adoption of the Constitution. Harris, “Jury Trial In Civil Cases — A Problem in Constitutional Interpretation,” 7 Sw.L.J. 1 at 3 (1953). Clearly, the Judiciary Article was intended to broaden the right to a jury as afforded by Article I. State v. Credit Bureau of Laredo, Inc., 530 S.W.2d 288 (Tex.1975).

Without the necessity of deciding his constitutional rights, Appellant certainly had a statutory right to a jury trial on the issue of whether there should be a change in the general care and custody of Mickey Denver Taft. Having been denied that right, we sustain his points of error which complain of denial of a jury trial.

The Appellee urges that this case is controlled by Section 14.06 of the Texas Family Code. It is contended that the parties had entered into an agreement that Rebecca would obtain custody of the minor child when she regained her health; further, that Appellant recognized such agreement as recited by the quoted provision from his divorce petition; and that the proof having established as a matter of law that she had regained her health, the trial Court properly carried out the agreement between the parties when it changed managing conservators. We do not believe a pleading signed by counsel for one party is a written agreement entered into by the parties, as required by Section 14.06. If the pleading constituted such agreement, it appears to only be a recognition of Rebecca’s right, after regaining her health, to become managing conservator. There is no recital in the pleading that she must be appointed managing conservator at such time. There is absolutely no language in the decree of divorce that the Court had considered any written agreement as to conservatorship of the child, or that such conservatorship should be changed upon restoration of Rebecca’s health. Certainly, the Court did not order any such change to be carried out by the parties at such time as Rebecca regained her good health. Under the facts of this case, we conclude that Section 14.06 has no application.

We find no conflict between Sec. 11.13, which provides for a jury trial in suits affecting the parent-child relationship, and Sec. 14.06, which gives the Court the right to approve and order enforcement of written agreements as to conservatorship and support of a child. Sec. 14.06 applies where the parties are in agreement, while Sec. 11.18 applies where the parties cannot agree and desire to have a jury decide their dispute. But if the parties are in agreement about conservatorship and support, that agreement must be in writing in language which is clear and unambiguous so that the trial Court may approve the agreement and order that it be performed by the parties, and they may do so without further dispute as to their respective duties and obligations. That was not done in this case.

The Court’s order entered on August 31, 1976, changing the managing conservator and possessory conservator for Mickey Denver Taft and requiring Michael to pay child support, is reversed and the cause is remanded, and the parties are returned to the status and position which they held under the Court’s order entered on July 6, 1976, with the specific rights, privileges, duties, and powers of conservators as provided for in that order.


author: McKAY, Justice.

text:
    Mary Jane GLASSCOCK, Appellant, v. CITIZENS NATIONAL BANK et al., Appellees.
    No. 1018.
    Court of Civil Appeals of Texas, Tyler.
    June 9, 1977.
    Rehearing Denied July 7, 1977.

      C. H. Gilmer, Rocksprings, for appellant.
    Patrick J. Pape, San Antonio, for appel-lees.
   McKAY, Justice.

This case arises out of a suit by appellees, Citizens National Bank of San Antonio and Jess McNeel, against Thomas F. Glasscock (Glasscock) seeking to set aside a deed from Thomas F. Glasscock to his wife, Mary Jane Glasscock, appellant, covering his interest in the community in lands in Edwards County, Texas, alleging such conveyance to have been for the purpose of hindering, delaying and defrauding appellees. Appellant’s answer alleged, among other things, such suit constituted a collateral attack on a prior judgment of the 63rd District Court of Edwards County, Texas, divorcing appellant from Glasscock and approving the property settlement made between them. The trial court granted judgment on the jury verdict for appellees, declaring the said conveyance void.

Appellant brings two points of error, the second being subdivided into two parts. Point one complains that the trial court erred in overruling appellant’s “plea to the court for an instructed verdict showing this suit to be a collateral attack upon the prior valid, final judgment of such Court." Point two complains that the trial court erred in overruling appellant's motion for new trial “(a) for plaintiffs’ failure to make lessees in possession of the property in question parties to such suit, they being necessary and indispensable parties; (b) because of irreconcilable conflict in the jury answers to Special Issues Nos. 4 and 5.” With these in mind we will examine the facts.

On December 15, 1973, Glasscock executed a warranty deed conveying his interest in and to approximately 3,270 acres of land which was community property to appellant. The consideration recited in this conveyance was “in settlement and reimbursement of advances to me by Mary Jane Glasscock, my wife, from her separate property and estate.” No mention was made in the deed of.an anticipated divorce between Glasscock and appellant. On May 8, 1974, appellant filed her petition for divorce with the 63rd District Court of Edwards County, the same court as in this cause, alleging, among other things, that she continued to live with Glasscock as his wife until on or about February 25, 1974, on which date they separated. On June 21, 1974, Glass-cock executed a waiver of citation and the same was filed in the cause on July 18, 1974. On July 18,1974, appellant, in person and by and through her attorney appeared before the court and was granted a decree of divorce which was signed and entered on October 1, 1974. This decree recited “that the property settlement heretofore effected between the parties be, and the same is hereby approved . . however, no written property settlement agreement was attached to the decree or introduced into evidence in the present case. In fact, the record reveals that both appellant and Glass-cock testified that other than the deed in question no formal property agreement or settlement was reached between the parties. Appellees were not parties to this divorce suit.

On August 27, 1974, appellees recovered judgments totalling $32,951.12 plus interest, attorney’s fees and court costs against Glass-cock. Appellees recorded abstracts of these judgments in Edwards County and had writs of execution issued on the judgments and delivered to the sheriff who returned the same nulla bona on November 4, 1974, the date of the filing of the present suit.

Appellant contends by her first point that the decree of divorce approving the property settlement between Glasscock and appellant is a final, valid judgment, conclusive on appellees, and that the present suit amounts to no more than a collateral attack on such judgment. We disagree. The doctrines of res judicata and collateral estoppel only apply to parties to the prior suit and their privies. Benson v. Wanda Petroleum Go., 468 S.W.2d 361, 363 (Tex.1971); Swilley v. McCain, 374 S.W.2d 871, 874 (Tex.1964). Privity connotes those who are in law so connected with a party to the judgment as to have such an identity of interest that the party to the judgment represented the same legal right. Benson v. Wanda Petroleum Co., supra. Appellees, who at the time of the divorce decree were unsecured, nonjudgment creditors of Glass-cock, were not parties to the divorce suit and were not so connected with Glasscock as to have such an identity of interest that Glasscock represented the same legal right; in fact, being in a debtor-creditor relationship Glasscock represented a right adverse to appellees. Moreover, it appears that ap-pellees could not be bound by the divorce decree since the court in a divorce action has no power to disturb the rights which creditors lawfully have against the parties or to award the property to the creditor’s prejudice. Broadway Drug Store of Galveston v. Trowbridge, 435 S.W.2d 268, 270 (Tex.Civ.App.-Houston [14th Dist.] 1968, no writ); Swinford v. Allied Finance Company of Casa View, 424 S.W.2d 298, 301 (Tex.Civ. App.-Dallas 1968, writ dism’d); 3 Speer’s Marital Rights in Texas, Sec. 840, pp. 200—201; Texas Family Law, Simpkins (Speer’s 5th Ed.) Sec. 5:71, p. 368. Finally, we do not believe appellees would be bound by a property settlement not specified or identified in the divorce decree. We hold that the present suit is not a collateral attack on the prior divorce decree. Point one is overruled.

Appellant’s point two(a) complains that the trial court erred in overruling appellant’s motion for new trial because of the absence of lessees in possession of the property in question as parties to the suit, claiming that such lessees are “necessary and indispensable parties”. Rule 39, T.R. C.P., amended 1971, provides:

“(a) Persons to be Joined if Feasible. A person who is subject to service of process shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties, or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party. If he should join as a plaintiff but refuses to do so, he may be made a defendant, or, in a proper case, an involuntary plaintiff. . . .”

This new rule intended to do away with the distinctions of proper, necessary and indispensable parties under the prior rule. See Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d 200, 202-205 (Tex.1974), for discussion. Under the prior rule, a lessee of a grantee of a deed had been held not to be an indispensable party in an action for specific performance between the grantor and grantee because the lessee had no joint interest in the title to the land in question and no judgment was sought against it by the parties to the suit. City of Arlington v. Bardin, 478 S.W.2d 182, 191 (Tex.Civ.App.-Ft. Worth 1972, writ ref’d n. r. e.). In commenting on the present Rule 39, the Supreme Court in Cooper has said “it would be rare indeed if there were a person whose presence was so indispensable in the sense that his absence deprives the court of jurisdiction to adjudicate between the parties already joined.” 513 S.W.2d at 204. It is suggested in 1 McDonald’s Texas Civil Practice, 1965 Ed. Cumulative Supplement, Sec. 3.23, p. 24, that if a party were held not indispensable under the prior rule, he should not be held indispensable under the amended rule.

The record reveals that the only evidence that there was a lease in existence on the lands involved here came from testimony by appellant during the trial. Appellant testified the property was leased, but she did not identify the lessees nor state the terms. The written lease was not introduced into evidence but was attached to appellant’s motions after trial. The suit was to set aside a conveyance from Thomas F. Glass-cock to Mary Jane Glasscock and in our view they were the only “necessary and indispensable” parties under Rule 39 and the authorities. Any lessee for farming or ranching purposes would not have a joint interest in the suit to cancel a deed, and complete relief could be had among the two parties. We hold any lessee was not an indispensable party nor a necessary party. Point two(a) is overruled.

Point two(b) complains of an irreconcilable conflict between the jury’s answers to special issue no. 4 and special issue no. 5. The former found that Glasscock executed the deed in question “with intent to hinder or delay [appellees] in the collection of their debt” while the latter failed to find that Glasscock executed the deed in question “with intent to defraud [appellees] in the collection of their debt.” Appellant claims there is a material conflict in the findings that precludes the entry of a valid judgment. We disagree.

Section 24.02(a) of the Texas Business and Commerce Code, which special issues nos. 4 and 5 were predicated upon, provides as follows:

“A transfer of real or personal property, a suit, a decree, judgment, or execution, or a bond or other writing is void with respect to a creditor, purchaser, or other interested person if the transfer, suit, decree, judgment, execution, or bond or other writing was intended to
“(1) delay or hinder any creditor, purchaser, or other interested person from obtaining that to which he is, or may become, entitled; or
“(2) defraud any creditor, purchaser, or other interested person of that to which he is, or may become entitled.”

The statute clearly provides two distinct grounds of recovery, i. e., a jury finding that the conveyance in question was made either with intent to hinder or delay the creditor, or with intent to defraud the creditor in order to void the conveyance. In the instant case the jury finding that the deed in question was executed with intent to hinder or delay the creditors would be sufficient to support the judgment for appellees. Point two(b) is overruled.

The judgment of the trial court is affirmed.

      . “SPECIAL ISSUE NO. 4
      “Do you find from a preponderance of the evidence that the conveyance of December 15, 1973, was executed by Thomas F. Glasscock with intent to hinder or delay the following in the collection of their debt, if any?
      “ANSWER ‘YES’ OR ‘NO’ TO EACH.
      ANSWER
      “a. Citizen’s National Bank of San Antonio ‘Yes’
      “b. Jess McNeel ‘Yes’
      “SPECIAL ISSUE NO. 5
      “Do you find from a preponderance of the evidence that the conveyance of December 15, 1973, was executed by Thomas F. Glasscock with intent to defraud the following in the collection of their debt, if any?
      “ANSWER ‘YES’ OR ’NO’ AS TO EACH.
      ANSWER
      “a. Citizen’s National Bank of San Antonio ‘No’
      “b. Jess McNeel ‘No’ ”


author: COLEMAN, Chief Justice.

text:
    Bill BRYAN d/b/a Mustang Trailer Sales, Appellant, v. GENERAL ELECTRIC CREDIT CORPORATION, Appellee.
    No. 16890.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    June 16, 1977.

      John S. Brukner, Houston, for appellant.
    Henry H. McCreight, Jr., Houston, for appellee.
   COLEMAN, Chief Justice.

This is an appeal from a default judgment rendered under the authority of Rule 170, T.R.C.P, when the defendant, Bill Bryan, failed to comply with an order entered in response to the “Motion to Produce Documents and Other Items for Inspection and Copying”. The appellant’s principal contention is that the trial court erred and abused its discretion in ordering the production of documents under Rule 167, T.R.C.P., because the appellee’s motion failed to plead good cause as required by said rule.

Bryan is in the business of selling mobile homes to the public. In 1971 he entered into a contractual relationship with General Electric Credit Corporation relating to retail sales and inventory financing. In 1975 plaintiff filed this suit alleging various breaches of the contractual relationship; seeking damages and a declaratory judgment. A timely answer was filed on behalf of the defendant.

General Electric Credit Corporation filed a Motion to Produce Documents and Other Items for Inspection and Copying. After a hearing at which Bryan appeared by attorney, the trial court entered an order requiring the production of certain documents and other items for inspection and copying. Bryan failed to comply with the order or offer any reason for his noncompliance. General Electric Credit Corporation then filed a motion to compel production of the documents and other items. The hearing was set for July 13, 1976 and notice of the motion and hearing was served upon Bryan. Bryan failed to appear at the hearing. The trial judge sustained the motion and entered a notation on his docket sheet that “Pleadings of Def. struck & other relief.”

After the trial judge returned from his vacation he entered an order on August 31, 1976 striking the defendant’s answer and granting a default judgment in favor of the plaintiff. On the same day the default judgment was signed and entered. These were separate instruments. On August 9, 1976 twenty-seven days after the hearing on the motion to compel and twenty-two days before the judgment was signed, Bryan filed an instrument entitled “Motion for Rehearing or in the Alternative to Set Aside Order.” At that time he was not represented by counsel and he prepared the motion personally. This motion was heard by the court on September 2, 1976 and the court announced its decision overruling the motion on the same date. An order to that effect was signed and entered on September 13, 1976. Prior to the entry of this order Bryan filed a Motion for New Trial on September 9, 1976 and, thereafter, filed a First Amended Motion for New Trial on September 22, 1976. At the September 2 hearing the trial court announced to the parties that he considered the “Motion for Rehearing or in the Alternative to Set Aside Order” as being a motion in the nature of a motion for a new trial. No action was taken on the motion subsequently filed by Bryan.

General Electric Credit Corporation has filed a motion with this court seeking the dismissal of the action by reason of a claimed lack of jurisdiction. The point presented by this motion rests on the appel-lee’s contention that the motion for rehearing which was overruled after the September 2, 1976 hearing was in fact a prematurely filed motion for new trial which was overruled by an order signed and entered on September 13, 1976. The appellee then asserts that the “Defendant’s First Amended Motion for New Trial” filed on September 22, 1976 was in fact a second amended motion which cannot be considered by reason of Rule 329b(2), T.R.C.P., which provides no more than one amended motion for new trial may be filed. Appellee contends that the Motion For New Trial filed September 9, 1976 was the First Amended Motion For New Trial and was overruled by operation of law on October 25, 1976. Ap-pellee points out that the appellant filed his cost bond with the court precisely 30 days from the date that the September 9th amended motion was overruled by operation of law and admitted that this cost bond was timely filed. Appellee points out, however, that appellant failed to timely make a request for, and timely file, a transcript of the proceedings within sixty days from the date that the amended motion was overruled by operation of law in violation of jurisdictional mandates of Rule 386, T.R. C.P. Appellee then asserts that since the appellant did not file a motion to extend time for filing the transcript under Rule 21c, T.R.C.P., the jurisdiction of this court has not been invoked since appellant did not timely perfect his appeal.

When appellant filed his Motion for Rehearing on August 9, 1976 no order or judgment had been signed and entered by the trial court. The only record of the action taken by the court after the hearing held on July 13, was the docket entry “Pleading of Def. struck & other relief.” In his Motion for Rehearing appellant alleged that he did not attend the hearing because plaintiff’s representative had assured him the case was settled and that he would not have to worry about the hearing. He requested that the court set the motion for a hearing and that a “new hearing be ordered and/or, if an order has already been entered, that this order be set aside and a new hearing be ordered.”

The order signed and entered on the 31st day of August, 1976 by the trial court recited that on the 13th day of July, 1976 the cause came on to be heard on the plaintiff’s motion for order striking out defendant’s answer and entering judgment by default in favor of plaintiff for the relief demanded in plaintiff’s original petition by reason of defendant’s failure and refusal to comply with the order of the court of May 17, 1976 requiring the production of certain documents. The order recited that the court heard argument and was “fully advised that defendant had totally failed and refused to comply with the order of the court of May 17,1976.” The order then states that:

“. . it is ORDERED that the answer of the Defendant be and the same is hereby struck and that Judgment as by default be rendered in Plaintiff’s favor against the Defendant for the relief demanded in Plaintiff’s Original Petition.”

The order further adjudged that all costs of court and other reasonable expenses, including a reasonable attorney’s fee of $250.00 incurred as a result of the filing of the motion be assessed against the defendant.

On the same day an instrument entitled “Judgment” was signed and entered by the trial court. This instrument recites that on August 31, 1976,

“among other relief granted, this Court struck Defendant’s pleadings from the Docket of the cause and granted Plaintiff a Judgment against the Defendant as requested in Plaintiff’s Motion.”

The judgment then recites:

“After presentation and consideration of the pleadings, the evidence and argument of counsel, the Court finds that all lawful offsets and credits have been allowed the Defendant, and is of the opinion that the law and the facts are with the Plaintiff and against the Defendant.”

The court’s judgment was then rendered against the defendant and for the plaintiff in the amount of $22,479.81 with interest, attorney’s fees, and also granted certain declaratory relief.

The provisions of the judgment rendered by the court were not known to the appellant at the time he filed his Motion for Rehearing. The appellant did not know the exact provisions of the order entered on the same date, which reflected the relief granted by the trial court after the July hearing. The nature of the relief granted after that hearing was reflected by the court’s docket entry which was known to appellant. It might be reasonably concluded, therefore, that the Motion for Rehearing was directed to the action taken by the trial court after the July hearing as reflected in the “Order”, rather than the Judgment, subsequently signed and entered.

Rule 306c, T.R.C.P., provides that no motion for new trial shall be held ineffective because prematurely filed; but every such motion shall be deemed to have been filed on the date of but subsequent to the rendition of “the judgment the motion assails”. In Home Fund, Inc. v. Denton Federal Savings & Loan Ass’n, 485 S.W.2d 845 (Tex.Civ.App. — Port Worth 1972, no writ history), the court refused to apply the provisions of Rule 306c, supra, where the motion for new trial and amended motion for new trial attacked a judgment which was subsequently superseded by a judgment nunc pro tunc. The court reasoned that the motions attacked the judgment which was superseded rather than the superseding judgment. A similar holding is found in Dubert v. Adkins, 475 S.W.2d 383 (Tex.Civ.App. — Corpus Christi 1971, no writ history). There the court held that an amended motion for a new trial filed on November 30, which complained of the judgment rendered on November 2 rather than a corrected and amended judgment rendered on December 4 could not be considered under Rule 306c, supra, a prematurely filed motion for new trial in an appeal from the December 4th judgment.

In Mercer v. Band, 454 S.W.2d 833 (Tex.Civ.App. — Houston [14th] 1970, no writ history), the court held that an instrument entitled “Amended Motion For New Trial” was in fact a motion to vacate a prior judgment for the plaintiffs and to enter a judgment for the defendant and had no efficacy as a motion for new trial. The court stated that in order to determine the effect of the instrument it was necessary to determine its nature by looking to its substance rather than its form. It stated that a motion’s substance is not to be determined by its caption or by its introduction but is to be gleaned from the body of the instrument and its prayer for relief. The court stated that for a new trial motion to have efficacy as such, it must, by the very nature of such an instrument, seek to have an existing judgment set aside and to have a relitigation of the issues. This case was followed in Stevens v. Douglass, 501 S.W.2d 383 (Tex.Civ.App. — Texarkana 1973). A writ of error was granted in the Stevens case and the holding of the court that it had jurisdiction of the cause was necessarily approved by the action of the supreme court in remanding the case to the court of civil appeals for consideration of the points of error not disposed of in its judgment. Stevens v. Douglass, 505 S.W.2d 532 (Tex.1974).

This court has consistently applied the rule that the nature of the instrument be determined by its substance and purpose rather than by its form or title. Iowa Mutual Insurance Company v. Burmester, 313 S.W.2d 897 (Tex.Civ.App. — Houston 1958, no writ history); Chekanski v. Texas & New Orleans Railroad Company, 306 S.W.2d 935 (Tex.Civ.App. — Houston 1957, writ ref’d n. r. e.).

Appellant’s Motion for Rehearing was directed at the action taken by the court after the July hearing reflected by the docket entry. The subsequent order entered by the court was interlocutory in that it merely ordered the pleadings struck and authorized the entry of default judgment. The final judgment was entered on the same date in a separate instrument. The defendant’s Motion for Rehearing was not directed to the final judgment and will not be construed to be a prematurely filed motion for a new trial. It is the duty of this court to see that a case is disposed of upon its merits “where this can be done without doing violence to the rules or injustice to the rights of the parties.” Smirl v. Globe Laboratories, 144 Tex. 41, 188 S.W.2d 676 (1945).

It follows that the September 9th motion was the first motion for new trial and the September 22 amended motion was properly filed. Appellant filed his transcript with this court within sixty days from the date the amended motion for new trial was overruled by operation of law. He has perfected his appeal. This court has acquired jurisdiction of this case.

In his second point of error the appellant contends that the trial court was in error and abused its discretion in ordering the production of documents and rendering a default judgment thereafter because the appellee failed to plead and prove good cause as required by Rule 167, T.R.C.P. The pertinent rule of law to be applied here is set out in the case Texhoma Stores, Inc. v. American Central Ins. Co., 424 S.W.2d 466 (Tex.Civ.App.—Dallas 1968, writ ref’d n. r. e.), in these words:

“. . . Both federal and state decisions construing Rule 167, T.R.C.P., and Rule 34, Federal Rules of Civil Procedure, state that while the spirit of these rules require liberal construction it was never intended to revolutionize practice by allowing ‘fishing excursions’ . . . The cases are also uniform in holding that the burden is upon the moving party to both allege and prove a good cause for the production of the instruments requested.

The opinion in the case above cited supports a construction of Rule 167, supra, that would require allegation and proof of facts, and not mere conclusions, showing a need for the production of the document listed and the reasons why the requested information is material to the issues involved. The opinion states:

“. . . the court’s judgment must be supported by demonstration by the moving party of its need and materiality. Moreover, if the moving party can get the information without resorting to the discovery process, good cause does not exist. The good cause requirement is not a mere formality, but is a plainly expressed limitation on the use of that rule.

Both the pleadings and the proof must show facts demonstrating that the documents or things sought to be inspected will in some way aid the movant in the preparation or defense of his case. A mere conclusion in the motion that the documents contain or constitute material or relevant evidence is not enough. Sufficient facts must be set out to enable the court to see the materiality of what is sought. Narro Warehouse, Inc. v. Kelly, 530 S.W.2d 146 (Tex.Civ.App.—Corpus Christi 1975, writ ref’d n. r. e.); Irwin v. Basham, 507 S.W.2d 621 (Tex.Civ.App.—Dallas 1974, writ ref’d n. r. e.); Johnson v. Logwood, 430 S.W.2d 679 (Tex.Civ.App.—Texarkana 1968, writ ref’d n. r. e.).

In Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434 (1959), the Supreme Court stated:

“. . . this discussion assumes that the bill will be a written pleading and the relevancy and materiality will be set out in such written pleading. In fact, rule 167, after providing for the filing of the motion showing good cause and notice to the opposite party or parties, and setting out the things which the court may order produced and inspection permitted requires that such things must ‘constitute or contain evidence material to any matter involved in the action’.”

Appellee’s motion failed to set out facts showing good cause for the motion or showing the materiality and relevance of the material requested to the issues in the case. In his motion to produce appellee states that he had agreed with appellant’s attorney of record for a voluntary production of certain documents concerning all transactions between the appellant and the appellee. He states that the attorney of record for the appellant had withdrawn as attorney, and he concludes that, since appellant has not given notice to appellee that he has engaged other counsel to represent him, appellee is unable to seek the cooperation necessary for a voluntary production and inspection of the items previously agreed to be produced voluntarily. Appellee did not allege that the appellant had refused to comply with the agreement made by his former attorney nor does he state facts showing that the material is unavailable from other sources.

The appellee failed to allege facts showing materiality and relevance of the documents requested. As an example, in paragraph 1 of the 13 different paragraphs relating to documents requested appellee sought, and the court granted, production of “all copies of the articles of incorporation, bylaws, corporate minutes, share certificate books, certificates of good standing from the Secretary of State, State of Texas, if any, withdrawal certificates from the Secretary of State, and any other documents, records or correspondence indicating the existence, nonexistence and status of an alleged corporation known as Mustang Trailer Company, Inc.” It is obvious that much of this material could be obtained from the Secretary of State. The plaintiff sued Bill Bryan d/b/a Mustang Trailer Company, and alleged that defendant was an individual doing business in Alvin, Texas. Answer was filed on behalf of Bill Bryan, d/b/a Mustang Trailer Company, and consisted only of a general denial. The materiality of the matter requested to the issues involved within the suit is not shown.

In paragraph number 11 appellee requested “any documents reflecting, containing or in any way referring to each contract, agreement or relationship, past or present between defendant Bryan and any financial institution, including but not limited to banks, savings and loan organizations, finance companies and credit unions of all types with respect to which Bill Bryan was able to finance the purchase and sale of inventory to sell to the retail customer market.” No facts are alleged raising an issue in the case involving Bryan’s relationship with other financial institutions.

Request number 7 seeks the production of “all documents relating to the employment or termination of employment of Donald R. Shigekawa and refers to “deposition testimony — lines 2 thru 6.” No depositions are before this court and it cannot determine the significance of the reference. Appellee does state in his motion that the testimony in the depositions on file with the court proves the existence of the documents referred to in the motion and that custody and control of the documents is exercised by Bill Bryan. However, no facts are alleged in the motion showing the materiality of proof of the employment status of Donald R. Shigekawa to the issues in the case.

There is no transcript of the testimony heard on the motion. We assume that evidence was produced showing both necessity for the requested information as well as its materiality to the issues involved. We hold, however, that the failure to allege facts in the motion showing good cause, as well as the failure to allege facts showing that the information to be gained from the documents requested is material and relevant to the issues involved in the case as revealed by the pleadings in the case, requires a holding that the trial court erred in granting the motion. Since the trial court erred in granting the motion its further action in striking the pleadings of the defendant and granting a default judgment was error and constituted an abuse of discretion. Texhoma Stores, Inc. v. American Central Ins. Co., supra.

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


author: McDONALD, Chief Justice.

text:
    Madelyn D. COKER, Appellant, v. The TRAVELERS INSURANCE COMPANY, Appellee.
    No. 5717.
    Court of Civil Appeals of Texas, Waco.
    June 16, 1977.
    Rehearing Denied July 21, 1977.
    Paul J. Chitwood and John R. Vorhies, Chitwood, Riley & Snyder, Inc., Dallas, for appellant.
    Stephen S. Livingston, Thompson, Knight, Simmons & Bullion, Dallas, for ap-pellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by plaintiff from judgment awarding her $3,932.78 attorneys’ fees (plaintiff asserting such award inadequate). Plaintiff Coker sued defendant Insurance Company on a group health insurance policy. Trial before the court resulted in judgment plaintiff take nothing. The Dallas Court of Civil Appeals reversed the judgment; rendered judgment for plaintiff for $3,967.31, and remanded the case to the trial court for determination of attorneys’ fees under Article 3.62 of the Texas Insurance Code. Upon trial plaintiff sought an award of $23,850. attorneys’ fees. The trial court rendered judgment for $3,932.78.

The trial court filed Findings and Conclusions summarized as follows:

FINDINGS OF FACT
1) There were no pretrial motions which required a hearing.
2) No depositions were taken.
3) The case was submitted to the court on stipulated facts, with the attorneys making arguments and submitting trial briefs.
4) Plaintiff appealed the judgment and submitted a brief to the Court of Civil Appeals.
5) Plaintiff recovered $3,967.31 on the judgment rendered by the Court of Civil Appeals.
6) There were no other benefits to the insured incident to the prosecution of this suit already accrued or to accrue on account of the insurance policy.
7) As a result of the judgment plaintiff settled an additional claim in amount of $3,932.78 without necessity of litigation, but there is no evidence such recovery pertained to the insurance policy before the court.
8) A reasonable attorneys’ fee for this case is $3,932.78, regardless of whether or not the settlement is considered as accruing on account of the policy before the court.
9) The case was a routine policy construction that turned on whether the policy was ambiguous.
10)Attorney for plaintiff unnecessarily complicated the case by raising a multiplicity of dubious legal theories.
11) Said attorney made this into a career case.
12) Said attorney acted in bad faith in seeking the large sum of $23,850. as attorneys’ fees.
CONCLUSIONS OF LAW
1)Plaintiff is entitled to a reasonable fee for the prosecution and collection of her loss herein.
Plaintiff appeals on 10 points contending:
1) The trial court erred in making findings 6 thru 12.
2) The trial court erred refusing to make additional findings and conclusions.
3) The trial court abused its discretion in holding that $3,932.78 is a reasonable fee for plaintiff’s attorneys.

Article 3.62 Texas Insurance Code provides where a loss occurs on a life, health or accident insurance policy and the company does not pay within 30 days, that the company is liable for “reasonable attorneys’ fees * * * [and] the court in fixing such fees shall take into consideration all benefits to the insured incident to the prosecution of the suit, accrued and to accrue on account of such policy”.

One witness testified reasonable attorneys’ fees in this case would be between $3,000. and $4,000; another witness testified $20,000; plaintiff’s counsel testified they had spent some 457 hours on the case, which at $50. and $75. per hour entitled them to $23,850.

The case was difficult and plaintiff’s attorneys did a most commendable job; recovered $3,957.31 judgment, plus settling a related matter for $3,932.78.

The trial court found in finding 8 that a reasonable attorneys’ fee for the case was $3,932.78 regardless of whether or not the additional settlement is considered.

The issue of attorneys’ fees is a fact issue just like any other issue. International Security Life Insurance Co. v. Spray, Tex., 468 S.W.2d 347; Braswell v. Braswell, Tex.Civ.App. (Waco) 476 S.W.2d 444, Er. Dismd.

The evidence is ample to sustain finding 8; findings 6, 7 and 9 thru 12 are immaterial to the judgment; the trial court did not abuse its discretion in holding $3,932.78 a reasonable fee for plaintiff’s attorneys; and the trial court did not err in refusing to make additional findings.

AFFIRMED.


author: DUNAGAN, Chief Justice.

text:
    William H. FENLON, Trustee, Appellant, v. Morris JAFFEE, Individually and d/b/a Central Park Mall, Appellee.
    No. 1015.
    Court of Civil Appeals of Texas, Tyler.
    June 23, 1977.
    Rehearing Denied July 21, 1977.

      Evelyn H. Biery, Bruce Waitz, Law Office of Bruce Waitz, San Antonio, for appellant.
    Pat Priest, San Antonio, for appellee.
   DUNAGAN, Chief Justice.

This is a conversion suit. Suit was brought by William H. Fenlon, Trustee in Bankruptcy, in the matter of Michel’s Par-fumes, Inc., Bankrupt, hereinafter called appellant, against Morris Jaffee, individually and doing business as Central Park Mall, hereinafter called appellee. Appellant in his original petition alleged that appellee, as landlord of appellant’s predecessor in interest (Michel’s Parfumes, Inc., Bankrupt), wrongfully took and converted appellant’s “kiosk,” a type of structure used as a retail outlet and located in appellee’s shopping mall according to a written lease between appellee as landlord and Michel’s Parfumes, Inc. as lessee. Appellant sought damages in the amount of $16,000.00, or, in the alternative, sought legal title and possession of the kiosk.

The case was tried before the court without a jury, and judgment was rendered that appellant take nothing by his suit against appellee. The court in its judgment stated certain recitations; otherwise, there were no requests for findings of fact and conclusions of law, and none were filed.

Appellant thereafter timely perfected this appeal, alleging six points of error in his brief. In points of error numbers one and four appellant alleges the court erred in holding that title to the kiosk passed to the appellee because the kiosk was personalty and appellee’s acts in taking possession of the kiosk constituted an act of conversion. In points of error numbers two and three appellant alleges the court erred in holding that appellee obtained title to the kiosk by foreclosing a lien and through abandonment by appellant. In his final points of error numbers five and six appellant complains of the court’s alleged finding of the value of the kiosk and also complains of the introduction of certain testimony. Appellee presents seven counterpoints contesting each of appellant’s points of errors and also argues that no findings of fact or conclusions of law were made.

We affirm.

Pursuant to a written lease executed on October 15, 1970, Michel’s Parfumes, Inc. leased from appellee an area known as area 131 in appellee’s Central Park Mall located in San Antonio, Texas. Area 131 was retail space being some 20 X 26 feet in size. The lease granted a five year term with two additional five year optional terms. The agreed rental for the initial lease term was $500.00 per month. No rentals were ever paid.

The lease authorized the construction of improvements on area 131. Michel’s Par-fumes, Inc., lessee, hired O. C. Sinclair, a general contractor, to construct a structure on area 131. The structure, called a “kiosk” in construction parlance, was designed as an outlet for retail sales. Sinclair agreed to build the kiosk on a cost plus twenty percent basis, which ultimately amounted to $19,747.74. Sinclair, with the help of hired subcontractors, finished construction of the kiosk. The kiosk was constructed out of “wood and stucco.” The kiosk was affixed to the mall floor by driving concrete nails through lumber comprising the bottom boards of the walls of the kiosk. The kiosk contained, besides its open space for retail operations, two lavatories and several small dressing rooms. The kiosk was fully supplied with plumbing and electrical facilities, with the plumbing and electrical conduits coming up through the floor. The kiosk had a roof which was not attached to the ceiling of the mall. The record indicates that the kiosk was a sturdy and solidly built building and, had it stood on open ground, was capable of withstanding extreme natural forces; that no other kiosk in the mall was of such sturdy construction; and that its strong construction gave it no additional value for the function which it served since it was completely enclosed in the mall.

Sinclair, the contractor, testified that after the kiosk was completed there remained unpaid on the construction price an approximate amount of $1,250.00. A lawsuit resulted between Sinclair and appellee, although the record is not clear in what capacity Sinclair sued appellee. In his original answer, appellee alleged, but at trial failed to offer any proof, that Sinclair’s suit was based on mechanic’s liens outstanding against the kiosk. At any rate, the suit between Sinclair and appellee resulted in Sinclair recovering $2,500.00 from appellee. Sinclair’s testimony indicates that he disbursed the recovery to others but couldn’t remember how or to whom the recovery was disbursed. Appellant knew of the lawsuit, as evidence by the bankruptcy schedule of Michel’s Parfumes, which stated that the kiosk was “in legal dispute between O. C. Sinclair and Central Park Mall as to ownership.”

The record does not indicate when Michel’s Parfumes commenced business nor when the kiosk was completed. However, on February 1,1971 creditors filed an involuntary bankruptcy petition against Michel’s Parfumes. Michel’s Parfumes was finally adjudicated a bankrupt, and appellant was appointed receiver for the assets of the bankrupt. On October 19, 1971, appellant was discharged as receiver and appointed trustee. Approximately five months later, on March 24,1972, appellant mailed a letter to the appellee demanding the amount of the bankrupt’s investment in the kiosk and thereafter filed suit alleging that appellee had converted the kiosk.

The appellee’s conduct relative to this suit began on February 12, 1971, when ap-pellee mailed a letter to Michel’s Parfumes stating that appellee intended to terminate the lease due to nonpayment of rent, pursuant to provisions in the lease. The total amount of back rent and expenses due was $2,060.76. Michel’s Parfumes had never paid any rentals. The letter gave Michel’s Parfumes five days to cure default. The letter was returned to appellee marked “unclaimed” on March 10,1971. Meanwhile, on February 18, 1971, either appellee or O. C. Sinclair entered the kiosk, changed the locks, and took possession of the kiosk. Thereafter the lawsuit between Sinclair and appellee commenced resulting in a recovery in favor of Sinclair against appellee for approximately $2,500.00 for work done in the construction of the kiosk. It appears from the record that after appellee paid this amount to Sinclair he took possession of the kiosk, although it also appears that appellee to no avail attempted to find a tenant for area 131 pending the Sinclair lawsuit. Up until the time of this suit, the kiosk was intermittently vacant or leased to other tenants. Appellee’s manager testified that they tried to sell the kiosk but that they found no one who was willing to buy it. Appellee’s manager testified that the kiosk had a value of $5,000.00, and that this was the figure they had unsuccessfully tried to sell it for.

The lease between appellee and Michel’s Parfumes provided that appellee was entitled to terminate the lease upon the happening of any one or more specified events. Two of these events were the adjudication of the tenant as a bankrupt and the failure of tenant to cure default in payment of rent. Paragraph 1 of said lease provided:

“Improvements and fixtures placed on the leased premises by the tenant are to be provided and installed at the tenant’s expense; and, the tenant shall have the right to erect on the leased premises a kiosk, at his own expense, in accordance with the plans and specifications attached hereto as Exhibit ‘C’ and made a part hereof. The tenant shall have the right to remove said improvements, fixtures, furnishing, kiosk, and other property erected or installed by him at the end of the lease term or any renewal term or extension, provided that all amounts payable to landlord under the terms of this lease and the then-current lease term have been paid.”

As mentioned earlier, appellant, in the capacity as trustee of the bankrupt’s estate, made a letter demand on March 22, 1972 to appellant seeking the amount of $16,818.60 representing the investment of Michel’s Parfumes, the bankrupt, in the kiosk, which kiosk appellant considered an asset of the corporation. The record indicates that ap-pellee offered the kiosk to appellant but that appellant refused it. Of course, by that time, appellee had already effectively terminated the lease and seized possession of the leased premises. However, at trial appellee still offered to return the kiosk to appellant. Appellant took the position at trial that he was entitled to recover the value of the kiosk and accordingly refused tender of the kiosk.

We shall first consider the legal effect of the lack of findings of fact and conclusions of law in the record. The court rendered its judgment holding that appellant was entitled to take nothing against appellee. The judgment contained the following recitation:

“In the absence of application for trial by jury, the court after presentation of the testimony, evidence, and arguments of counsel, found that the kiosk was not a trade fixture; the fair market value of the kiosk in February of 1971 was $5,000.00; that the presumption of non-forfeiture had been overcome by evidence and the burden of proof reverted then to the Plaintiff; that to sue for money damages instead of the improvements themselves over one year after forfeiture and re-entry on the leasehold would have been inequitable if done by the Lessee and was, therefore, inequitable by the Trustee; that the kiosk became a part of the real estate and title thereto was forfeited on February 18,1971 upon re-entry by the landlord; and that the Trustee rejected the leasehold interest and abandoned whatever rights the tenants had therein. Based on such finding the Court is of the opinion that judgment should be rendered in favor of Defendant.”

Appellant’s first five points of error complain of the alleged “holdings” of the trial court as above recited. Appellee contends in his first counterpoint that no findings of fact and conclusions of law were requested or filed and that therefore the judgment “should be affirmed if it can be upheld on any legal theory that finds support in the evidence”; that the only “holdings” of the court were that appellant take nothing by his suit and that costs be taxed to appellant.

There is presently existing in the law a question as to whether recitations in a judgment have the same force and effect as formal findings of fact and conclusions of law. Rule 306, Tex.R.Civ.P., provides that “The entry of the judgment shall contain the full names of the parties, as stated in the pleadings, for and against whom the judgment is rendered.” Before amendment in 1971, Rule 306 provided, following the last word of the present rule, that the judgment also should “carefully recite the findings of the jury, or the several findings, if more than one, upon which judgment is based.” This deletion was considered in Roberson Farm Equip. Co. v. Hill, 514 S.W.2d 796, 801 (Tex.Civ.App. — Texarkana 1973, writ ref’d n. r. e.), wherein the Court of Civil Appeals held that “Recitals now, except those showing the full name of the parties, etc. and those stating for and against whom judgment is rendered, are not sanctioned by the rule nor given place or function in a judgment.”

In Constance v. Constance, 544 S.W.2d 659 (Tex.Sup.1976) reversing the Austin Court of Civil Appeals’ opinion at 537 S.W.2d 488, the Supreme Court held: “Judgments . . . are to be construed as a whole toward the end of harmonizing and giving effect to all the court has written. . . . Conclusive effect is not to be given the use or not at a particular point in the judgment of the commonly employed decretal words, and what the court has adjudicated is to be determined from a fair reading of all the provisions of the judgment.” Constance, supra, dealt with the omission in a divorce decree of an express adjudication of the military retirement benefits of the husband. The wife appealed, and the Court of Civil Appeals held that since the retirement benefits were not adjudicated, that husband and wife held the benefits as tenants in common. The husband appealed to the Supreme Court which affirmed the trial court, holding that “It is clear on the face of the decree in question that the award of $200 per month for child support rested upon the decision of the trial court to award the retirement benefits to the husband.” Thus, the issue in Constance involved a determination of what the decree awarded, and not the independent significance of any factual recitations in the divorce decree. The Supreme Court held that in determining what was adjudicated, all the provisions of the judgment “are to be construed as a whole.” Thus, we deem still valid the statement of the Court of Civil Appeals at 537 S.W.2d 488, 490, which was that “insofar as the judgment undertakes to recite findings of fact, such findings are not conclusive,” citing 4 McDonald, “Judgments”, sec. 17.09.3 (1971) and 33 Tex. Jur.2d “Judgments” sec. 35 (1962).

The Supreme Court’s decision in Constance, supra, did not affect the holding of Roberson, supra, discussed previously. Roberson went on to hold at 514 S.W.2d 801 that:

“. . . Cases may be found in which recitals appear to have been treated as findings of fact or conclusions of law, as contemplated by Tex.R.Civ.P. 296 et seq., but presently there is no warrant in the procedural rules for such treatment. Finding and conclusions serving as a basis for judgment are governed and have application in accordance with Rule 296 and associate rules.”

The Houston Court of of Civil Appeals (14th Dist.) held to the contrary in Davis v. Davis, 507 S.W.2d 841, 843 (Tex.Civ.App.— Houston [14th Dist.] 1974, rev’d on other grounds, 521 S.W.2d 603), but in doing so relied upon a Dallas Court opinion from 1949 without considering the 1971 amendment to Rule 306.

Findings of fact and conclusions of law at the request of either party are to be stated by the judge separately after rendition of judgment. Tex.R.Civ.P. 296. To allow legally controlling facts to be recited in a judgment with effective and permanent import would also allow Rules 296-299, Tex.R. Civ.P., to be suspended at the whim of the court or counsel for either party. Assuming that the rules did allow findings of fact to be effectively recited in the judgment, how would dissatisfied counsel receive on request additional or amended filings pursuant to his procedural right as provided by Rule 298, Tex.R.Civ.P.?

Rule 299 provides in part that “Where findings of fact are filed by the trial court they shall form the basis of the judgment upon all grounds of recovery and of defense embraced therein. The judgment may not be supported upon appeal by a presumption of finding upon any ground of recovery or defense, no element of which has been found by the trial court; . . . This rule places the burden on the party or parties requesting findings or additional findings to request those findings which support or weaken the judgment. If a party omits to request one independent and legally controlling fact element, yet requests others, the judgment cannot be upheld presumptively on the finding omitted. Thus, to allow findings of fact to be recited in the judgment potentially disrupts the rule that in situations where no findings of fact are requested or filed by the trial court the judgment should be affirmed if it can be upheld on any legal theory that finds support in the evidence. Bishop v. Bishop, 359 S.W.2d 869 (Tex.Sup.1962).

As stated in Roberson, supra, there is no support in the rules to warrant findings of fact and conclusions of law to be included in the recitals of the judgment. Aside from this, there is a plethora of potential conflict between Rules 296-299 and a practice of reciting fact findings in the judgment. Thus we feel obliged to follow the rule laid down in Roberson, supra.

As stated earlier where no findings of fact or conclusions of law have been filed or requested, the judgment of the trial court must be affirmed if there is any evidence of probative force to support it upon any theory authorized by law. Bishop v. Bishop, supra; Rosenthal v. Leaseway of Texas, Inc., 544 S.W.2d 180, 183 (Tex.Civ. App.—Tyler 1976, no writ); John Deere Co. v. Neal, 544 S.W.2d 514, 517 (Tex.Civ.App.—Texarkana 1976, no writ). The Court of Civil Appeals must presume that the trial court found all necessary facts in favor of the judgment, and the reviewing court is bound by such implied findings if there is any evidence of probative value to support them. Pruske v. National Bank of Commerce of San Antonio, 533 S.W.2d 931 (Tex.Civ.App.—San Antonio 1976, no writ); Tex as State Bd. of Medical Examiners v. Haynes, 388 S.W.2d 258 (Tex.Civ.App—Tyler 1965, no writ). In so reviewing the evidence, all evidence that is contrary to the presumed findings must be disregarded. Bowen v. El Paso White Truck Co., 434 S.W.2d 931 (Tex.Civ.App.—El Paso 1968, no writ); Trice Contract Carpets & Furniture, Inc. v. Martin, 334 S.W.2d 554 (Tex.Civ.App.—Amarillo 1960, no writ).

The sole criteria upon which the court entered a take-nothing judgment against appellant in this suit for conversion could only be that the kiosk became a part of the realty. If the kiosk was a part of the realty, there can be no action for conversion. Carpenters Local Union v. Texas State Federation of Labor Bldg. Ass’n, 288 S.W.2d 874 (Tex.Civ.App.—Austin 1956, writ ref’d n. r. e.); 14 Tex.Jur.2d “Conversion” sec. 7 (1960). Accordingly, this court presumes that the trial court found facts which support a holding that the kiosk was a part of the realty at the time of trial.

We have carefully viewed the record and are of the opinion that there is some evidence in support of the implied fact that the kiosk had become a part of the realty. The record indicates that the kiosk was constructed out of “wood and stucco”; that its dimensions were 20 X 26 feet; that it was nailed to the floor of the mall with concrete nails, the nails being driven through 2X4 lumber that made up the bottom of the walls of the kiosk and into the concrete floor; that the kiosk was connected to the plumbing network of the mall; that the plumbing came up through the floor and was connected to two lavatories in the kiosk; that there were two dressing rooms in the kiosk; that the kiosk was connected to the electrical network of the mall; that the electrical conduits came up out of the floor of the mall; that the kiosk was a very sturdy building; that it was of sound enough construction to withstand a hurricane or a collapse of the roof of the mall; and that the kiosk would last for fifty years if cared for.

A fixture is broadly defined as something that is personal in nature but so annexed to realty as to become part of the realty. See 25 Tex.Jur.2d “Fixtures” sec. 1 (1961) and cases cited therein. This, of course, does not mean that it must be impossible to remove the fixture, and whether removal is permissible is a question that has been considered by numerous cases.

In the case of O’Neil v. Quilter, 111 Tex. 345, 234 S.W. 528 (1921), the Supreme Court of Texas followed a rule laid down in Hutchins v. Masterson, 46 Tex. 551, 26 Am. Rep. 286 (1877). The rule is used to determine whether a chattel has become an immovable fixture and consists of the following three-part test quoted from Ruby v. Cambridge Mutual Fire Insurance Company, 358 S.W.2d 943 (Tex.Civ.App.—Dallas 1962, no writ) at page 945: “(1) Has there been a real or constructive annexation of the property in question to the realty? (2) Was there a fitness or adaption of the article to the uses or purposes of the realty with which it is connected? (3) Was it the intention of the party making the annexation that the chattel should become a permanent accession to the freehold?” The third criteria, dealing with intention, is the preeminent factor whereas the first and second criteria are “chiefly of value as evidence of this intention.” Capitol Aggregates, Inc. v. Walker, 448 S.W.2d 830, 834 (Tex.Civ.App.—Austin 1969, writ ref’d n. r. e.); Millers Mutual Fire Ins. Co. v. Jackson, 359 S.W.2d 510 (Tex.Civ.App.—Amarillo 1962, no writ).

The question of intention, as well as the general question of whether the property has the status of a fixture, is a question of fact to be determined by the trier of fact. Goodyear Service Stores v. Clegg, 361 S.W.2d 445 (Tex.Civ.App. — San Antonio 1962, no writ); Millers Mutual Fire Ins. Co. v. Jackson, supra; Dallas Joint Stock Land Bank of Dallas v. Lancaster, 100 S.W.2d 1029, 1032 (Tex.Civ.App. — Waco 1936, writ dism’d).

Apparently the trial court found that the appellee as landlord and Michel’s Parfumes as tenant intended that the kiosk was to become a part of the realty subject, however, to removal only upon compliance with certain conditions precedent. The lease provided that “The tenant shall have the right to remove said improvements, fixtures, furnishing, kiosk and other property erected or installed by him at the end of the lease term . . . provided that all amounts payable to landlord under the terms of this lease . . . have been paid.”

Of course, the general rule is that a lessee retains title to a structure built upon leased premises and has a right of removal. In this respect, the law of fixtures should not apply as long as conditions precedent to the right of removal have been complied with. Wright v. MacDonell, 88 Tex. 140, 30 S.W. 907, 909 (1895). A written lease agreement governs the intention of the landlord and tenant in respect to their property rights in fixtures. Haverfield Co. v. Siegel, 366 S.W.2d 790 (Tex.Civ. App. — San Antonio 1963, writ ref’d). Furthermore, the general rule that a tenant may remove improvements is subject not only to the law of fixtures concerning damage to the realty caused by removal, but is also subject to contracts to the contrary. Eckstine v. Webb Walker Jewelry Co., 178 S.W.2d 532 (Tex.Civ.App — Fort Worth 1944, writ ref’d). Here we think the trial court had cause to believe that the intention of the parties as to the right of removal was subject to a condition precedent, that of payment of all rentals due. The trial court was further authorized to believe that the primary benefit to appellee as landlord under the lease agreement was the receipt of rental payments, based upon the testimony of appellee’s manager that the kiosk had little value to the mall independent of the ability to rent lease area 131.

Where there is a right of removal, if it is not exercised within a reasonable time, the right is forfeited. What length of period constitutes a reasonable time is a question of fact or a mixed question of law and fact, to be determined according to the circumstances existing in the particular case. A & M Petroleum Co. v. Friar, 152 S.W.2d 470, 471 (Tex.Civ.App. — El Paso 1941, no writ); Clark v. Clark, 107 S.W.2d 421, 425 (Tex.Civ.App. — Texarkana 1937, no writ).

This court is cognizant of the rule that the law abhors forfeitures. Eckstine v. Webb Walker Jewelry Co., supra. However, there is some evidence in the record that the right of removal was forfeited. It is indeed persuasive that the tenor of appellant’s entire case was that appellant did not want the kiosk, but wanted money instead. The court was authorized to believe, based on the evidence in the record, that Michel’s Parfumes’ right to remove the kiosk was forfeited. Furthermore, the record does not indicate that a demand for removal of the kiosk was ever made.

The record reveals that on February 12, 1971, pursuant to written lease provisions, appellee mailed by certified mail, return receipt requested, a demand for rent in arrears and gave notice that if the back rent was not paid the lease would be terminated. On February 18,1971, Michel’s Par-fumes lost possession of the lease premises when the locks were changed. It is unclear in the record who changed the locks and seized possession, but we deem this not material to the disposition of this case, the point being that Michel’s Parfumes was divested of possession on February 18, 1971. At the time the lease was terminated and the lease premises were seized, the kiosk was vacant.

An involuntary petition in bankruptcy was filed against Michel’s Parfumes on February 1, 1971. Approximately seven months later Michel’s Parfumes was adjudicated a bankrupt. On September 20, 1971, appellant was appointed receiver, and on October 19,1971, was appointed trustee. It was not until March 22, 1972, some five months later that appellant made demand on appellee for $16,318.60 representing the total investment of Michel’s Parfumes in the construction of the kiosk. The record is vague as to the use to which the kiosk was put during this period. It is undisputed that appellee did not remove or sell the kiosk.

Approximately thirteen months passed between the time that Michel’s Parfumes’ lease was terminated and the locks were changed on the kiosk and the time of appellant’s demand for $16,318.60. Although appellant brought suit for said amount or in the alternative for possession of the kiosk, at trial appellant alleged that it was entitled to opt for the value of the kiosk and refuse return of the kiosk, and indicated to the trial court that it did not want the kiosk. The record indicates that appellee offered to return the kiosk. Appellee’s counsel asked appellee’s property manager if there was any objection to the kiosk being removed by appellant, to which the property manager replied, “No. Be glad for them to have it.”

The question presents itself: What was appellee to do with the kiosk during the thirteen months between the time Michel’s Parfumes lost possession and the time that appellant made demand for its alleged value? There is nothing in the record to indicate that appellee could do anything other than allow the kiosk to remain on the lease premises, whether it had become a part of the real estate or not. As it turned out, appellee’s only alternative for the thirteen month period was to not terminate the lease, thereby building up against the bankrupt estate an amount of back rent of some $6,500.00. Appellant has overlooked this question throughout the entire case, and instead has sought the cost of construction of the kiosk without demanding return of the kiosk.

We feel that equity itself would not allow a recovery in favor of appellant based upon the facts stated.

For the above stated reasons we feel that the judgment of the trial court that appellant take nothing against appellee should be affirmed. In so holding, we overrule appellant’s points of error numbers one, three and four and find it unnecessary to consider points of error numbers two, five and six.

Judgment affirmed.


author: SHANNON, Justice.

text:
    T. W. DAVIDSON et ux., et al., Appellants, v. Lester SUBER, d/b/a Suber Realty Company, Appellee.
    No. 12575.
    Court of Civil Appeals of Texas, Austin.
    June 29, 1977.
    Rehearing Denied July 20, 1977.

      Roy Q. Minton, John L. Poster, Minton, Burton & Fitzgerald, Inc., Austin, for appellants.
    John H. Akin, Pearce, Smith & Akin, Austin, for appellee.
   SHANNON, Justice.

This appeal concerns the right vel non of Lester Súber, a real estate broker, to recover a commission.

Appellee, Súber, sued appellants, T. W. Davidson and wife, Jo Davidson, in the district court of Travis County for $2,750 as a commission and for attorney’s fees. After trial to the court, judgment was entered for Súber for the commission and for attorney’s fees.

Súber pleaded that by his efforts he obtained a specifically enforceable contract for the benefit of appellants. By the terms of the contract Gretchen Mickler was to purchase the assets of appellants’ business, known as “Donna Bella Salon,” a beauty shop located in Austin. The contract provided that appellants were to pay Súber $2,750 as an agent’s commission. Súber averred that he had obtained the contract of sale pursuant to a listing agreement entered into by appellants.

On the date of the closing, Mickler refused, for her own reasons, to perform under the contract, and appellants chose not to require performance. The failure to close the sale was not due to the fault of appellants.

With respect to the matter of an agent’s commission, the contract provided as follows: “Seller [appellants] agrees to pay the undersigned agent [Súber] a commission . . . in cash for negotiating this sale.”

Suber’s position is that because the contract of sale was valid and specifically enforceable, his right to the agent’s commission accrued when he obtained the contract for appellants, and that it is immaterial, with respect to his right to the commission, that the sale was not consummated.

We have concluded that Suber’s position is correct. The broker has effected a sale and is entitled to a commission if the vendor may enforce specific performance of the contract. Miss & Raley v. Wren, 102 Tex. 567, 113 S.W. 739 (1908); Stevens v. Karr, 119 Tex. 479, 33 S.W.2d 725 (1930), Kost v. Lancaster, 414 S.W.2d 514 (Tex.Civ.App.1967, writ ref’d n. r. e.).

Appellants assert by point of error that the district court erred in entering judgment for Súber since the court found “ . . . as fact the plaintiff [Súber] abandoned his rights under the real estate listing and escrow sales contracts.” Appellants’ point of error refers to finding of fact “F” which reads as follows:

“F. On the day after the proposed closing of the sale, the Plaintiff called the Defendant, T. W. Davidson, on the telephone and said, ‘It don’t [sic] look like I can sell your shop,’ and T just don’t feel like I can work on it anymore for you.’ At the time he made such statements, he intended to terminate the listing contract and the escrow sales contract. The defendants Davidson thereafter considered the escrow sales contract to be of no further effect.”

The court did not conclude that Súber abandoned his rights under the contract, but instead the court concluded in conclusion of law “E” that when Súber made the statements contained in finding “F,” “ . . .he did not waive or abandon his claim to a commission under the listing agreement or the sales contract.” (Emphasis added). The point of error is overruled.

Appellants’ point of error three complains of the entry of the judgment awarding attorney’s fees to Súber. The district court found as a fact that appellants were not at fault for the failure of the sales contract to close. In that connection, the court found “ . . . I would not award attorney’s fees except for the fact that I feel compelled to do so by law.” The court concluded in this respect, “Under Article 2226, Y.A. C.S., it is not within the discretion of the Court to deny to the plaintiff the recovery of his reasonable attorney’s fees. Plaintiff [Súber] is accordingly granted judgment for his reasonable attorney’s fees in accordance with the finding hereinabove made.”

Point of error three reads as follows: “The district court erred in awarding Ap-pellee attorney’s fees based upon its erroneous conclusion of law that it had no discretion to deny such relief and in light of its finding of fact that it would deny such relief if it had the discretion to do so.”

Appellants argue that by the terms of Tex.Rev.Civ.Stat.Ann. art. 2226, the district court had the authority to determine whether or not to award attorney’s fees. As a corollary to that proposition appellants insist that only because of a misapprehension of its authority did the court enter judgment for attorney’s fees.

Article 2226 provides that the party “. . . may, if represented by an attorney, also recover ... a reasonable amount as attorney’s fees.” (Emphasis added). Because art. 2226 is in derogation of the common law and is penal in nature, that article is strictly construed. New Amsterdam Casualty Co. v. Texas Industries, Inc., 414 S.W.2d 914 (Tex.1967). In consideration of the rule of strict construction and in consideration of the less than imperative nature of the word “may,” appellants urge that the district court was empowered to enter judgment for attorney’s fees, but was not required to do so.

The parties have not shown us, nor have we found, a case in point. The courts seem to assume, however, that the broker is entitled to judgment for attorney’s fees, upon proper proof, even though no sale resulted pursuant to the listing agreement. See Reinke v. West, 303 S.W.2d 419 (Tex.Civ.App.1957, no writ); Shirley v. Albright, 404 S.W.2d 152 (Tex.Civ.App.1966, writ ref’d n. r. e.); Cooper v. Wildman, 528 S.W.2d 80 (Tex.Civ.App.1975, no writ). Our view is that art. 2226 autho rizes the party to seek reasonable attorney’s fees in the proper case, and if the party makes his proof, then the court shall enter judgment for attorney’s fees.

The judgment is affirmed.

      . Appellants do not claim that Suber’s cause of action was one in contract and that Tex.Rev. Civ.Stat.Ann. art. 2226 was inapplicable. That issue is not before this Court, and accordingly, is not passed on.