author: OSBORN, Justice. PRESLAR, Chief Justice,

text:
    Ted BUTLER et al., Appellants, v. EXXON CORPORATION, Appellee.
    No. 6644.
    Court of Civil Appeals of Texas, El Paso.
    Nov. 16, 1977.
    Rehearing Denied Dec. 14, 1977.

      Cox, Smith, Smith, Hale & Guenther, Inc., Eugene B. Labay, Richard T. Brady, San Antonio, for appellants.
    Baker & Botts, Frank G. Harmon, Michael Paul Graham, Diana M. Hudson, Walter B. Morgan, Houston, Walter B. Morgan, Exxon Co., Houston, for appellee.
    Anderson, Brown, Orn & Jones, Earl A. Brown, Jr., Houston, for amicus curiae Earl A. Brown, Jr.
    Strasburger & Price, Leo J. Hoffman, Dallas, for amicus curiae Strasburger & Price.
    Stubbeman, McRae, Sealy, Laughlin & Browder, W. B. Browder, Jr., David K. Brooks, Midland, for amicus curiae Amoco Production Co., et al.

      Vinson, Elkins, Searls, Connally & Smith, James W. McCartney, Houston, for amicus curiae Mobil Oil Corp.
   OPINION

OSBORN, Justice.

This case involves the question of whether or not additional royalties are due to the lessors under gas royalty provisions of four oil and gas leases which were executed in 1966. The trial Court denied any additional recovery. We affirm in part and in part reverse and remand.

The basic dispute results from the fact that the price of natural gas in the intrastate market in Texas rapidly escalated from the time the gas discovered under these leases was sold for less than 20<p per mcf in 1970 to over $2.00 per mcf by early 1975. Relying primarily upon Texas Oil & Gas Corporation v. Vela, 429 S.W.2d 866 (Tex.1968), Appellants contend that they should have been paid a gas royalty based on market value when the gas was delivered to the purchaser. See: Kelly, “What Price, Gas?”, 7 St. Mary’s L.J. 333 (1975).

The four leases cover lands which form a part of the Atkinson Gas Field in Karnes and Live Oak Counties. In 1970, after the first wells were drilled, the lessee executed contracts to sell the gas for the next twenty years. On the gas produced from Units Nos. 2 and 4, the initial price was 18$ per mcf. On Unit No. 5, the price was 18V2$. In addition, another 1½$ per mcf was paid for processing rights for the extraction of liquid hydrocarbons. Each of the gas contracts had a provision for a price escalation of 1$ per mcf every five years. From the beginning of production in 1970 until it assigned the leases to a third party on October 1, 1975, Exxon made royalty payments to the lessors based upon the amount realized from such sales.

The two principal leases, being Exxon Leases Nos. 510294 and 510296 which cover nearly 80% of the Butler acreage involved in this suit, contained the following royalty clause:

“The royalties to be paid by Lessee are: (a) on oil, one-eighth of that produced and saved from said land, the same to be delivered at the wells or to the credit of Lessor into the pipe line to which the wells may be connected; Lessee may from time to time purchase any royalty oil in its possession, paying the market price therefor prevailing for the field where produced on the date of purchase; (b) on gas, including casinghead gas or other gaseous substance, produced from said land and sold or used off the premises or for the extraction of gasoline or other product therefrom, the market value at the well of one-eighth of the gas so sold or used, provided that on gas sold at the wells the royalty shall be one-eighth of the amount realized from such sale; * * * and (c) on all other minerals mined and marketed, Vs either in kind or value at the well or mine * *

Lease No. 510292 contains a very similar clause except for a provision for payment to two different royalty owners, the lessors and the State. See: Gregg, “Analysis of the Usual Oil and Gas Lease Provisions”, 5 S.Tex.L.J. 1 at 13 (1960).

Lease No. 510266, which covers 26.11 acres and 3.2% of the Butler acreage involved in this suit, contains a clause which requires the lessee to pay to the Veterans’ Land Board and to deliver to the credit of the lessor “one-sixteenth of the market value at the well of all gas produced and saved from the leased premises.”

After gas was discovered in the Atkinson Field, parts of these leases were unitized pursuant to Railroad Commission Regulations to form parts of three one-well units. Following production, the Butlers executed a series of division orders which provided:

“Settlements for gas sold at wells or at a central point in or near the field where produced shall be based on the net proceeds at the wells. * * * ”

After Hattie L. Butler, Appellant’s mother, died in September, 1973, a new division order, dated November 1, 1973, was executed which provided for settlements on oil and gas to be in accordance with the royalty provisions of the leases. The original division orders were revoked on April 1, 1975, and a new division order was signed to require payments for oil and gas in accordance with the royalty provisions in the leases.

Much of the testimony in the case consists of opinion evidence of expert witnesses. Each side used a consulting petroleum engineer to develop their theory of the case. Mr. Max Powell, testifying as an expert witness for the Appellants, commenced with a tabulation of gas sales in a seven-county area of South Texas, and ultimately reached a conclusion as to the market value of gas in the Atkinson Field for each quarter from October, 1972, until October, 1975. These prices ranged from 32.9<t per mcf at the beginning to $2.06 per mcf at the end. Basically, he averaged the top three sales in Live Oak and Karnes Counties each quarter to determine market value during such period. He said all sales which he finally used were comparable in quantity, quality, and availability of gas. He concluded that the Butlers had been underpaid in the amount of $187,881.55, plus interest of $27,407.29. He readily admitted that this determination was based on new gas coming into the market under current market conditions. Mr. Powell testified, and the trial Court found, that the gas was delivered to the purchaser at the tailgate of a centralized separation, dehydration, and compressing facility of Exxon which was located approximately 100 feet west of the west fence line on the Butler property and thus was off the leased premises. Mr. Powell concluded that there could be a sale at the well even though delivery was made to the purchaser several hundred feet from the well head. But he said a sale off the premises, as in this case, was not in his opinion a sale at the well. In this regard, he said:

“ * * * that the circumstance in which Exxon obligated itself to pay royalty to the Butler families called for market value at the well for gas sold or used off of the premises, and that is what happens here. You are not selling the gas on these premises. The delivery point is off of the premises and that is what invokes, in my view, the market value clause.
‡ * * ‡ * *
“ * * * It cannot be construed as a sale at the well for the three units for which the Butler family owns royalty because the delivery point and the point of sale is not located on any of those three units.
:jc ‡ * sjc ⅜ ⅝
“I’m saying to you that if the sale had taken place on the premises covered in the lease, then it would have been a proceeds royalty provision and not a market value provision.”

Mr. H. J. Gruy testified as an expert witness for the Appellee and said that in his opinion Exxon was required to execute long term contracts to sell the gas in 1970, and that in his opinion they got fair market value and the best price available at the time of sale. He said sales after 1970 were not comparable and could not be considered in determining market value. Mr. Gruy considered the sale by Exxon to be at the well. He testified:

Q Normally what would you consider to be a well head sale?
“A Well, a well head sale is generally considered to be a sale in or near the wells as distinguished from tailgate of a plant sale.
“Q Okay. If you had a sale, say, that occurred at the tailgate of a, say, a compression station located off of the lease premises over on another lease, would you consider that as a well head sale?
“A I would.”

The trial Court filed extensive Findings of Fact and Conclusions of Law. In addition to the undisputed facts set forth above concerning the leases and gas contracts, the Court found that in 1970 a prudent operator would make every reasonable effort to market the gas from Units Nos. 2, 4, and 5 as quickly as possible so as to prevent drainage from other wells in the field. The Court also found that in 1970 gas could only be sold on long term contracts with minimal price escalation provisions, and that the contracts for this gas were bona fide arms length transactions with a price as good or better than any prices being paid for gas in Karnes and Live Oak Counties at that time. The Court also found that Exxon had attempted diligently but unsuccessfully to renegotiate the contracts.

With regard to payments called for by the lease provisions and those actually made, the Court found:

“9. This Court finds that the gathering, compression and dehydration expenses incurred by Exxon and charged against the contract prices in the royalty computations were ordinary and reasonable.
“10. At all times material to this case, and specifically commencing with the last quarter of 1972, down through and including the third quarter of 1975, the defendant Exxon Corporation paid royalties to plaintiffs on the gas produced from the land covered by the above mentioned leases on the market value at the well of Vsth of the gas sold.
“11. The market value at the well of the gas which was sold was the total proceeds received by the defendant Exxon Corporation from Lo-Vaca Gathering Company and Coastal States, less the cost of gathering, compressing and dehydration which were required to make the gas marketable. The Court specifically finds that the market value at the well of the gas produced from Unit 2 was 19½ cents per met [sic] at all times material to this case, and specifically commencing with the last quarter of 1972 through the third quarter of 1975, less the expenses of gathering, compression and dehydration shown in Column 5 of Plaintiffs’ Exhibit 17 for each month during that period of time when there was gas production, and the Court finds that the market value at the well of the gas produced from Unit 4 was 19½ cents per mef through May 1975, and 20½ cents per mef thereafter, less the expenses of gathering, compression and dehydration shown in Column 5 of Plaintiffs’ Exhibit 17 for each month during that period of time when there was gas production, and the Court finds that the market value at the well of the gas production from Gas Unit 5 was 20 cents per mef during that period of time, less the cost of gathering, compression and dehydration which was shown in Column 5 of Plaintiffs’^Exhibit 17 as to that gas unit.
“12. While the Court finds that the defendant has paid the plaintiffs royalties on the gas produced and sold from their leases on the basis of the market value at the well, without regard to whether the gas is sold at the wells, the Court further finds that the sale of gas from these leases was a sale ‘at the wells’ within the meaning of those terms in the leases. It is so understood in the industry. Specifically, this Court finds that the term ‘at the wells’ means gas delivery which occurs in the vicinity of the field of production where the wells are located, rather than at some remote location such as the other end of a gas transmission line.. For a sale to be termed ‘at the wells’, delivery need not occur at the ‘Christmas tree’ on top of the well casing, nor is there any requirement that delivery occur on the particular lease or unit from which the gas is produced. Any such distinction would be artificial and have no relation to the prudent and economican [sic] operation of a gas field. Therefore, the Court finds that the plaintiffs have also been paid royalties on gas produced and sold at the wells on Vbth of the amount realized from such sale, the amount realized from such sale constituting the total proceeds received for the gas stream, less the cost of compression, gathering and dehydration, as set forth above.
“13. The parties to the leases, all in accord with industry custom, practice, and usage at all pertinent times, intended to use the word ‘sold’ in the gas royalty clause or relate to the point in time of executing the contract of sale, intended that ‘market value at the well’ be fixed and determined as of the time of the execution of the contract of sale, and intended that the prices fixed by the contract less the marketing costs, if any, would establish the market value at the well. This intention is also evidenced by the provisions of Division Orders agreed to by the parties.”

In the Conclusions of Law, the trial Court said: “The language of the gas royalty clause in leases involved in this case is substantially different from the Vela lease.” The Court “concludes that the sales proceeds of the gas was intended to be the limit of the royalty obligation on gas produced from these leases.” In an alternative conclusion, the Court held that market value must be based on sales of gas comparable in time and prior to the drastic increase in price in 1972. The Court did reach other conclusions of law including ones concerning the division orders which were found to constitute a practical and reasonable construction placed upon the royalty provisions of the leases by the parties themselves and to be a binding contract until they were revoked.

The gas royalty clause in oil and gas leases is discussed at length in Chapter 40 of Kuntz, The Law of Oil and Gas, Vol. 3 (1967), with sections on Evolution of the Gas Royalty Clause; Provision for Fixed Gas Royalty; Provisions for Delivery of Royalty Gas in Kind; and Provisions for Payment of Value or Proceeds from Sale of Royalty Gas. In the early days of operations, there was practically no market for natural gas, but it was recognized that “if such gas were to be used off of the premises or sold, then such gas had a demonstrated value and the lessee should be required to make a fixed periodic payment to the lessor while the gas was so used or sold.” Kuntz, supra, Sec. 40.1. Where gas was used on the premises, it was thought to be to the benefit of both the lessor and the lessee and no royalty was due. The early leases generally provided for a fixed annual gas royalty of a few hundred dollars. Kuntz, supra, Sec. 40.2. Although some leases eventually provided for the delivery of royalty gas in kind, the more common provision provided for the payment of the gas royalty in money. Kuntz, supra, Sec. 40.4. Some of the first provisions for payment in money provided that the lessee agrees to pay an amount to be determined by the proceeds of the sale of gas. Kuntz, supra, Sec. 40.4. A second type of gas royalty clause provided that the lessee agrees to pay an amount to be determined by the market value or market price of the gas produced. Kuntz, supra, Sec. 40.4. “It [was] not uncommon for a gas royalty clause to combine the two types just mentioned and to use the market value to determine the royalty if there are no sales at the well and to use the sale price if there are sales.” Kuntz, supra, Sec. 40.4.

In the Vela case, supra, the lease contained two separate provisions for royalty on gas. The first was with regard to wells where gas only was found, and in such instance the royalty was Vsth of the market price at the well for gas used off the premises or sold. The second provision was on gas produced from any oil well. On such gas, the lessee was required to pay ⅛⅛ of the market value of such gas if used for the manufacture of gasoline, but if the gas was sold by the lessee, then the royalty was Vsth of the net proceeds derived from the sale of such gas at the well. In that case, all of the gas was being produced from gas wells and, therefore, the Court was not concerned with the interpretation or meaning of the “net proceeds” clause which was applicable only on the sale of casinghead gas.

In three of the Butler leases, the parties provided for a gas royalty of Vsth of the market value at the well of gas used off the premises or sold, as in the Vela gas well clauses, but then added another clause to provide that on gas sold at the wells, the royalty would be Vsth of the amount realized from such sale, similar to the provision in the Vela lease on the sale of casinghead gas. The question immediately arises as to whether or not the “provided” clause providing for a royalty based upon the “amount realized from such sale” conflicts with the earlier clause for royalty based upon “market value.” We are compelled to construe the clauses, if possible, so as to give meaning and effect to both clauses and to nullify neither of them. Benge v. Scharbauer, 152 Tex. 447, 259 S.W.2d 166 (1953); Southland Royalty Company v. Pan American Petroleum Corporation, 378 S.W.2d 50 (Tex.1964). Therefore, we construe the gas royalty clause to provide that there shall be a royalty of Vsth of the market value at the well “on gas used off the premises” and “on gas sold other than at the wells,” and that “on gas sold at the wells” the royalty shall be ⅛⅛ of the amount realized from such sale. Such construction is clearly consistent with the opinion in the Vela case, since the Court in that case pointed out that the parties “might have agreed that the royalty on gas produced from a gas well would be a fractional part of the amount realized by the lessee from its sale.” In this case, the parties did so agree in three of the four leases with which we are concerned.

We next turn to the issue of whether or not the gas sold under Leases Nos. 510294, 510296, and 510292 was “sold at the wells” as found by the trial Court. The testimony of Mr. Gruy, as noted earlier, certainly supports that finding. Mr. Powell said he would not put a footage limitation on how far a sale could be made from the Christmas tree at the wellhead to the point of delivery and still be a sale at the well. His position was that a sale “off the premises” could not be at the well. But it must be noted that the parties did not use mutually exclusive terms such as “on the premises” and “off the premises,” or “at the well” and “away from the well” in the two clauses with different provisions for royalty payments. The clause based on “amount realized” from a sale “at the well” has no limiting language requiring the sale to be “on the premises.” In Skaggs v. Heard, 172 F.Supp. 813 (U.S.D.C.Tex.1959), Judge Allred held under a gas royalty clause that a sale at a separator 320 feet from the wellhead was a sale “at the well” as opposed to being a sale not at the well and off the leased premises. Obviously, the issue was not as clearly drawn in that case because of the different language in the royalty clause. Nevertheless, it points up the fact that a sale may occur “at the well” even though delivery is made several hundred feet from the Christmas tree. Certainly, both Mr. Powell and Mr. Gruy recognized this in their testimony. Thus, we expressly approve the trial Court’s finding of fact No. 12 that the gas sold under the Butler leases was sold at the wells. We also agree with the conclusion of law No. 6 that the royalties paid the Appellants were based on the amount realized from the sale of gas as provided for in Leases Nos. 510294, 510296, and 510292, and that no additional royalties are due on those leases. All of the Appellant’s points of error contending to the contrary are overruled.

As to Lease No. 510266, the royalty is ½6⅛ to the Veteran’s Land Board and ½6 th to the Butlers of the market value at the well of all gas produced and saved from the leased premises. Believing that the Vela case controls as to this lease provision, we hold that market value means the prevailing market value at the time of the sale and sale occurs at the time of delivery to the purchaser. Texas Oil & Gas Corporation v. Vela, supra; Brown, The Law of Oil and Gas Leases, Sec. 6.09 (1977); Hemingway, The Law of Oil and Gas, Sec. 7.4 (1971).

The next question is whether or not the division order, with the language quoted earlier, had the effect of changing the gas royalty from an amount based on market value at the well to an amount based on net proceeds at the well as provided for in the division order.

The trial Court concluded that the division orders were binding contracts until revoked. That holding finds support in J. M. Huber Corporation v. Denman, 367 F.2d 104 (5th Cir. 1966); Phillips Petroleum Co. v. Williams, 158 F.2d 723 (5th Cir. 1946). Also see 5 S.Tex.L.J. 1 at 14 (1960). A contrary holding appears in Craig v. Champlin Petroleum Company, 300 F.Supp. 119 (U.S.D.C.Okl.1969) aff’d, 421 F.2d 236 (10 Cir. 1970), where the Court said:

“ * * * The plaintiffs, being entitled to the prevailing market price for gas in the field where produced, are not estopped to claim royalties based on market price because they had accepted royalties under a 20-year gas contract providing for lower rates, since the lessee could contract for the sale of the gas, and without interference by the lessors. * * * »

We conclude that the better result is reached in the Craig case. Basically, a division order sets forth the interest of each owner for purposes of payment by the purchaser of the product being sold. It is executed without any consideration. As to Lease No. 510266, there was no provision for payment based on proceeds from the sale of gas. Exxon cannot claim an estop-pel in this case because there was no reliance to its detriment. Chicago Corporation v. Wall, 156 Tex. 217, 293 S.W.2d 844 (1956), is therefore distinguishable.

Thus, we believe that the Butlers are entitled to recover from Exxon a gas royalty payment for all gas sold under Lease No. 510266 based on market value at the time of delivery during the period from October 1, 1972, until October 1, 1975. In making such determination, we disapprove of the trial Court’s alternative conclusion that market value should be based upon the volume-weighted average of all committed gas delivered in the market area. While we may not make initial findings for the first time on appeal, we believe that since Exxon did not offer testimony to refute the conclusions reached by Mr. Powell as to market value, that the trial Court may take those figures of Mr. Powell as to market value each quarter and multiply them by the amount of gas delivered each quarter under Lease No. 510266 and properly arrive at the royalty due, plus such determination as may be made concerning interest for past due sums.

We sustain Appellant’s points of error concerning Lease No. 510266 which are consistent with this result. All others are overruled. The judgment of the trial Court is affirmed in part and in part reversed and remanded.

PRESLAR, Chief Justice,

dissenting.

I concur in the affirmance of the judgment as to the three leases, but I respectfully dissent as to the reversal of the trial Court’s judgment as to the Veterans’ Land Board lease. At the outset, I dissent from the separate consideration of the Veterans’ Land Board lease and the granting of any judgment as to it separate from the other leases. The Appellants, as Plaintiffs in the trial Court, did not seek such relief and they have no points of error on appeal as to that lease alone. The pleadings speak only of “the leases” and the points of error and discussions thereof speak only of “the leases” or the “Butler leases.” Clearly, the case was tried and is appealed as though only one form of lease was involved; Appellants plead a single clause as applicable to all leases. Both parties have briefed the case that way. It is now unfair to the Appellee for the Court to single out one lease and grant judgment based on its terms which were never put in issue and as to which there have been no assignments of error and no need or opportunity for Appellee to respond to. The case should be affirmed as to all leases or reversed as to all leases because that was the way the parties elected to try it. Appellants have waived any right to the relief granted by the majority opinion.

The majority has concluded that the Veterans’ Land Board lease is governed by the construction of the royalty clause in the Vela case. Texas Oil & Gas Corporation v. Vela, 405 S.W.2d 68 (Tex.Civ.App.—San Antonio 1966), aff’d in part, 429 S.W.2d 866 (Tex.1968). With that I am unable to agree.

I see the Vela lease and the Veterans’ Land Board lease in this case as containing two very different royalty clauses so that the construction given the one does not control the other. Neither lease is the typical or ordinary oil and gas lease as to gas royalty, for each contained only one applicable clause. Actually, the Vela lease contained a second clause providing for a share of the proceeds to be paid to the lessor, but that clause was limited to casinghead gas produced from oil wells while the Vela wells produced gas only, so it has only one clause applicable to such gas only production. As noted in the majority opinion, leases usually provide for free use of gas by the lessor or producer when used “on premises” because it is for the mutual benefit of the lessor and lessee. There is usually a clause providing for gas sold or used off the premises and a clause providing for outright sale of the gas. As distinguished from lessee’s free use of gas on the premises, this “sold or used off the premises” clause recognizes the fact that this is for lessee’s benefit alone and he should therefore account to the lessor for lessor’s share. Gas is a widely used fuel in the field in operating pumps and other machinery in the production of oil and the distribution of gas. The “sold or used” clause covers lessee’s use of such gas on his other leases in the area; it also covers the situation of sales to others in the field and recognizes that there is a local market for such gas in the immediate area. This clause as to use or sale in the local area is usually accompanied by “off the premises.” The use of “off the premises” in conjunction with “sold or used” characterizes it as not being the “free use on the premises,” but for the local area, and distinguishes it from a “sold” alone clause disposing of the total gas production to some transmission line. The use of such phrases as “market value” or “market price” is then necessary to the gas royalty clause for such local use or sales. As noted in the case of Phillips Petroleum Co. v. Johnson, 155 F.2d 185 (5th Cir. 1946) cert. denied: “In so far as this gas was ‘used’ there can be no ‘net proceeds’ * * There being no net proceeds where the lessee is using the gas off the lease, it becomes a question of what it is worth in arriving at the lessor’s royalty share, hence the “market value” phrase. Likewise, the provision for “market value” is needed for lessor’s sales on the local market under short term or day-to-day sales as distinguished from a long term fixed contract price. Also, as distinguished from long term contracts, the value of the gas on such short term or day-to-day sales or use would naturally be the time of delivery.

The royalty clauses in the Vela lease are:

“ ‘To deliver to the credit of lessor, free of cost, in the pipe line to which lessee may connect its or his wells, the equal one-eighth part of all oil produced and saved from the leased premises.
“ ‘To pay to lessor, as royalty for gas from each well where gas only is found, while the same is being sold or used off of the premises one-eighth of the market price at the wells of the amount so sold or used, * * *
“ ‘To pay to lessor as royalty for gas produced from any oil well and used by lessee for the manufacture of gasoline, one-eighth of the market value of such gas. If such gas is sold by lessee, then lessee agrees to pay lessor, as royalty, one-eighth of the net proceeds derived from the sale of said casinghead gas at the wells.’ ”

The Vela lease produced gas only so that the “net proceeds” clause never came into effect and, of course, the Court’s consideration was limited to the being “sold or used off of the premises” clause. But that is an entirely different situation from the leases before us. Three of them have “sold or used” clauses, but in addition thereto they have what is the usual or ordinary clause covering the sale of the gas with the price being a share of the net proceeds. It is this clause which covers the total disposition of the gas produced as distinguished from short term or local sales. This clause has no “used” provision. The Veterans’ Land Board lease differs in that it has a single clause. As to gas it provides for “one-sixteenth of the market value at the well of all gas produced and saved from the leased premises.” It has no “sold or used” and no “off the premises” provisions which would call for or justify Vela application. Lacking these characteristics of local use or local sales, it must also lack another characteristic — the fixing of the price as of the time of delivery. In the absence of such provisions for short term or local sales, the reason for fixing the price as of the time of delivery disappears. The purpose of an oil and gas lease is to obtain production and sell the same for the mutual profit of the lessor and lessee. If that purpose is to be fulfilled, the gas must be sold. This lease has but the single clause; it is the only clause under which the gas can be disposed of; it must be held to meet the purpose of the lease in disposing of the total production. Under it, the gas is sold just as it is sold under the other three leases under consideration. I would construe it the same way.

A most respected authority on oil and gas law has criticized the Vela decision in these words:

“The majority in Vela fails to recognize that the market, in the case of natural gas, is not a market of spot sales or deliveries, but of long term contracts made at a given point in time. The minority opinion, recognizing this, is entitled to close attention in any jurisdiction not committed by precedent to the result reached by the majority in Vela.”

3A Summers, Oil and Gas, Sec. 589 (2nd ed. 1958). This respected authority is further of the opinion that such gas royalty clauses are fraught with ambiguity and that the ambiguity should be resolved in favor of the lessee as a matter of law. This, because of the fact that gas can only be sold and must be sold by long term contracts as to which prices are almost certain to get out of line with contemporary prices, plus the implied but very real obligation of the lessee to market the gas with dispatch.

The majority holds as to the Veterans’ Land Board lease that “market value means the prevailing market value at the time of the sale and sale occurs at the time of delivery to the purchaser.” Like the dissenters in Vela, I find something wrong with this holding in that the lessee in meeting his obligation to market the gas must have both a sale and a delivery to complete the transaction. By the 20-year contract the lessee has set the price for the 20-year period as well as the delivery for that 20-year period. By the majority opinion, the lessor/royalty owners are permitted to accept the benefits of the contract as to delivery and to disavow it as to the price. This, in the face of the trial Court’s finding that this gas could only be marketed by long term contracts. This finding is unchallenged on appeal and it stands before us as an established fact. I would hold the lessor/royalty owners to their share of the net proceeds received by the lessee for the sale of the gas under this 20-year contract.

Appellants argue, and the majority is persuaded, that “market value” means the current value. They rely on the Vela case, supra; Foster v. Atlantic Refining Company, 329 F.2d 485 (5th Cir. 1964), and J.M. Huber Corporation v. Denman, supra. While I do not agree that this “dictionary approach” of defining a single phrase is the proper construction of the lease, yet I am convinced that under such a rule of construction Texas law is to the contrary as to the meaning of the phrase “market value.” As we have seen in Vela, and will see as to Foster, the term was applied to an unusual royalty provision. The Huber lease is an even more unusual royalty provision as compared to the one before us. At this point it might be well to note that Foster and Huber, being federal cases, are not controlling. To the contrary, it is the duty of the federal Courts to follow state law. Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). An examination of the law governing the production of oil and gas reveals that it is mostly case law. When the Supreme Court, or a Court of Civil Appeals if the Supreme Court has denied an application for a writ of error, has once given a definite effect to a specific writing or a particular fact situation, its determination is binding and conclusive on all subsequent suits involving the same subject matter. In recent years, a great volume of the cases involving oil and gas matters have been in the federal Courts and it becomes increasingly important that the law of Erie Railroad v. Tompkins, supra, be strictly observed.

Until the 1964 decision in the Foster case, supra, there was no problem with the meaning of the typical gas royalty clause in Texas. See Summers, supra at Sec. 589. That case was the authority relied on by the majority in Vela, and rightfully so to a limited extent because of some similarity of the royalty clauses — the use of the present tense, “while” the same is being used or sold. But the gas royalty clause in Foster is so different from the leases before us that it provides no basis for a similar interpretation or construction. It has a single royalty clause providing:

“ ‘The conventional royalties to be paid by Lessee are: (a) On oil and gas, including all hydro-carbons, one-eighth (⅛⅛) of that produced and saved from said land, the same to be delivered to the credit of the Lessor into the pipe line and to be sold at the market price therefor prevailing for the field where produced when run; * * *’”

As can be seen, the clause is to both oil and gas, and the important thing is that it is in the form of the usual oil royalty clause. Oil and gas are marketed under different provisions in Texas because the royalty clauses are separate, distinctly so, and the method of marketing is different. Under an oil and gas lease in Texas, full ownership of the gas in place (the full %ths) is in the lessee and is marketed by him without direction from the lessor, while as to the oil, the lessor directs what is to be done with it by the terms of the lease. The above clause is a typical oil royalty clause. There has been little change in the wording of the oil royalty clause throughout the years. Brown, The Law of Oil and Gas Leases, Sec. 6.01 (1958). The usual provision is for the lessee to be required to deliver the lessor’s oil to the pipeline to which the lessee’s wells are connected. The purchaser of the lessee’s oil usually buys the royalty oil and through division orders agrees to pay the “posted price” in the field, usually the purchaser’s posted price. The price varies, but applies when the oil is “run.” Brown, supra. It is “run” when physical possession changes from lessee’s wells or storage tanks to the pipeline or storage tanks of the purchaser. This unusual provision of the Foster lease of having gas in an oil royalty clause makes the gas royalty payable “when run” and at the then prevailing price. But this has no application to the gas royalty clauses when present in the lease as here; as to those there are no directions to the lessee to deliver to pipelines or to pay at prevailing prices “when run.” To the contrary, the gas is the property of the lessor and it is left to him to do with his own property and account to the lessor after any sale. Our leases have oil royalty clauses not unlike the Foster clause, but they also have gas clauses. To apply the Foster holding to them would be like applying their own oil clause to the disposition of their gas. The Foster case has no application to the one before us, but through a chain of other cases it is by judicial interpretation made to apply.

The royalty clause in the Huber case specified the price. It provided: “ ‘four cents per one thousand cubic feet for the first ten years of this contract, and thereafter, the market price of such gas, but in no event shall the price be computed at less than four cents per thousand cubic feet.’ ” The construction given that clause has no application to our clause of such a different wording.

The Texas Supreme Court has thrice defined “market value” as used by the Legislature in the Statutes taxing the production of natural gas. That definition should be given weight here because the Statute is applicable to these parties in the operation of these leases which we are considering. The former article, Tex.Rev.Civ.Stat.Ann. art. 7047b, provided that the producer shall pay a tax on all gas produced and saved which this State equivalent to 5.2 percent of the market value “as and when produced.” The Statute defined market value to be:

“ ‘ * * * the value thereof plus any bonus, or premium, or anything of value paid therefor, or any sum of money that such gas will reasonably bring if produced and sold in accordance with the laws, rules and regulations of this State, ⅛ * * > >>

W. R. Davis, Inc. v. State, 142 Tex. 637, 180 S.W.2d 429 (1944). The Supreme Court, without a dissenting vote, held:

“ * * * When this definition is read as a whole it is reasonably clear that it contemplates that ‘market value’ is the price for which the producer sells his gas. * * * »

W. R. Davis, Inc. v. State, supra at 432. The phrase “market value” was again held to mean the price for which the producer sells the gas in Calvert v. Union Producing Co., 258 S.W.2d 176 (Tex.Civ.App.—Austin 1953, no writ); Calvert v. Union Producing Co., 269 S.W.2d 525 (Tex.Civ.App.—Austin 1954), aff’d, 154 Tex. 479, 280 S.W.2d 241 (1955). Article 7047b has been supplanted by Tex.Tax. — Gen.Ann. arts. 3.01 and 3.02. Like the predecessor Statute, Article 3.01 provides that the tax on the business of producing gas be computed “on the amount of gas produced and saved * * * equivalent to seven and one-half per cent (7½%) of the market value thereof as and when produced.” Article 3.02 provides “market value of gas produced in this State shall be the value thereof at the mouth of the well; however, in case gas is sold for cash only, the tax shall be computed on the producer’s gross cash receipts.”

As late as 1970, the Supreme Court has construed the new tax Statute:

“ * * * We hold that the market value of gas at the mouth of the well in cases such as this is measured, as to all ownership interests, by the total proceeds of the sale of the component parts of the gas after processing, less transportation and processing costs * *

Mobil Oil Corporation v. Calvert, 451 S.W.2d 889 (Tex.1970). If, then, we are to decide the issue under the rule that the parties intended to use the phrase “market value” in its usual and ordinary sense, we have been told quite clearly what that meaning is.

I would hold that the intent of the parties to this lease is controlling of its construction. I find it completely unrealistic to assume that there was ever an intention by these parties that one of them would receive one price for his gas and the other a different price. The oil and gas lease is distinguished from other contracts in that it has a share provision, that is, that the parties will share in any oil or gas that may be found. As noted by Summers, supra at Sec. 590 entitled “Oil Royalties — A Share of the Production”:

“The consideration most usually given for the privilege of producing oil is a share, ordinarily one-eighth, or the value of such share, of the oil produced and saved from the premises, free of cost to the lessor. * * * ”

That the lessor’s share is ordinarily ⅛⅛ is so common that the Courts take judicial knowledge of it. Cheek v. Metzer, 116 Tex. 356, 291 S.W. 860 (1927); Gibson v. Turner, 156 Tex. 289, 294 S.W.2d 781 (1956). The purpose of both lessor and lessee was to find and produce the minerals for their mutual benefit. As is usual in such leases, everything to be done is left to the lessee; everything from exploration to production to sale, including compliance with all necessary governmental regulations, is left entirely to the lessee. It is the lessee who must bear the high cost of drilling, developing and operating, and he needs all the oil and gas he can produce in order to make a profit. The lessor, of course, has no expense but is vitally interested in the end results — the income from the production. Thus, the interests of the lessor and the lessee are identical in the desire to produce all of the oil and gas and sell it for the best price possible. There is nothing in this lease to even suggest that the parties intended anything but that they would share in the production and the proceeds thereof. I would give attention to the fact that they did not prepare this lease; rather, they simply selected a form. As material here, that form is common to the oil and gas industry. In selecting that form, the parties must have intended to give it the meaning that it had been given through wide use through the many years — that the proceeds of the gas production would be shared by them. I cannot agree with the holding that these people had a different intent from all of the other thousands of people who have executed the same or similar form.

The parties to the lease are charged with knowledge of the law and governmental regulations. In fact, such laws and regulations are held to be a part of their contract as if they were written therein. Under such rules and regulations, a long term contract for the sale of gas is a necessity. Gas cannot be carried in buckets; pipelines are required to market it. Before one can operate a pipeline, he must have a permit. Before he can obtain a permit, there must be a sufficient reserve of gas in the field to merit it. The pipeline carrier must have sufficient long term contracts for that gas to merit an award of the permit. This is an oversimplification of the law, but it is a body of law presumably known to the parties at the time of entering into their contract. Hence, the lessors knew when they entered into this oil and gas lease that the gas would be marketed by long term contract, and most importantly, they knew that the “market value” would be fixed by such long term contract. The Court has found, and the lessors admit in their briefs, that the only market for this gas was by long term contract. Clearly, the intent of the parties is established by the above. The amount received for the gas (the proceeds) is the market value.

While, as stated, I am of the opinion that on its face this oil and gas lease means that the lessee’s obligation is to pay the lessors their fractional share of the proceeds, any doubt as to this is resolved by the practical construction of the parties. Lone Star Gas Co. v. X-Ray Gas Co., 139 Tex. 546, 164 S.W.2d 504 (1942); Superior Oil Co. v. Stanolind Oil & Gas Co., 230 S.W.2d 346 (Tex.Civ.App.—Eastland 1950), aff’d, 150 Tex. 317, 240 S.W.2d 281 (1951); Livingston Oil Corporation v. Waggoner, 273 S.W. 903 (Tex.Civ.App.—Amarillo 1925, writ ref’d). The facts which show this construction are: (1) From the beginning of production in 1970 until October, 1975, lessee paid and the lessors accepted royalty payments based upon the amount realized from the gas sales under the 20-year contract. (2) Prior to receiving such royalty payments under these leases, the lessors executed “division orders” which, though modified slightly in 1973, remained in effect until they were revoked by the Appellants in April, 1975. These division orders stated: “Settlements for gas sold at wells or at a central point in or near the field where produced shall be based on the net proceeds at the wells.” This construction of the lease placed thereon by the parties themselves is evidence of their intent and should be given controlling effect. In distinguishing this case from the Vela case, it should be noticed that division orders were not executed by the Velas.

Another aspect of the division orders is that they should be held to be binding contracts until revoked. This is of no consequence under my interpretation of the lease, but under the majority construction of the lease, it would prevent any recovery for additional royalties prior to the revocation of the division orders in April, 1975. Contrary to the federal case relied on by the majority, Texas Courts have held division orders to be binding contracts until revoked. Chicago Corporation v. Wall, supra; Le Cuno Oil Company v. Smith, 306 S.W.2d 190 (Tex.Civ.App.—Texarkana 1957, writ ref’d n. r. e.), cert. denied, 356 U.S. 974, 78 S.Ct. 1137, 2 L.Ed.2d 1147 (1958).

I would affirm the judgment of the trial Court as to all four leases.

      . Compare the results in Reynolds v. McMan Oil & Gas Co., 11 S.W.2d 778 (Tex.Comm.App.1928), where the lease provided a fixed royalty for gas “used off the premises” but not for gas “sold”, and Magnolia Petroleum Co. v. Connellee, 11 S.W.2d 158 (Tex.Comm.App.1928), which provided a fixed royalty for casinghead gas “sold or used off the premises.”

      . Hemingway, supra, Sec. 7.4(C) at page 319, notes “that the cases, where actual sales of gas or petroleum products exist in the field, treat market value the same as market price, and generally indicate that an actual market in the field will be practically conclusive evidence of value.”


source: Caselaw Access Project

author: AKIN, Justice.

license: Public Domain

text:
    CORSICANA READY MIX, a partnership composed of Gilbert W. Sutherlin and Ernest Rylie, partners, Appellants, v. TRINITY METROPLEX DIVISION, GENERAL, PORTLAND, INC., Appellee.
    No. 19329.
    Court of Civil Appeals of Texas, Dallas.
    Nov. 22, 1977.
    John T. Barrett, Jr., Beard & Kultgen, Waco, for appellants.
    Stephen F. Fink, Thompson, Knight, Simmons & Bullion, Dallas, for appellee.
   AKIN, Justice.

Appellant, Corsicana Ready Mix, appeals from a default judgment granted appellee, Trinity Metroplex. Appellee sued Corsica-na Ready Mix, a partnership composed of Gilbert W. Sutherlin and Ernest Rylie, alleging a failure to pay for goods purchased on an open account. The individual partners, individually filed pleas of privilege and answers, but did not file an answer in the partnership name. Appellee argues that since suit was against the partnership only, and, since no answer had been filed specifically on behalf of the named defendant partnership, the default was proper. On the other hand, appellant contends that it was error for the trial court to enter a default judgment after an answer had been filed by all of the partners. We agree with appellant and hold that the answers of all individual partners is equivalent to an answer for the partnership. Accordingly, we reverse the judgment of the trial court and remand for further proceedings.

Trinity contends that default was proper under Tex.R.Civ.P. 239 because no answer was filed by the partnership, Corsicana Ready Mix as such. It reasons that the partners, as distinguished from the partnership entity, were not parties to the suit in their individual capacities. Thus, Trinity concludes that the answers filed by the partners individually are not answers on behalf of the partnership, Corsicana Ready Mix, and are a nullity insofar as the judgment against the partnership is concerned. In support of its position, Trinity points to Tex.R.Civ.P. 28 which permits suit against a partnership only, and to Tex.Rev.Civ.Stat. Ann. art. 6132b (Vernon 1970), which adopts the “entity” theory of partnership existence.

We cannot agree with Trinity’s argument. Although a plaintiff may elect to sue only the partnership entity, it does not follow that where all partners of the entity answer the suit on the merits, the answers are a nullity unless each answer specifically purports to be an answer for the partnership entity. The supreme court in Hammonds v. Holmes, 21 Tex.Sup.Ct.J. 51 (November 9, 1977), held that where parties had originally sued in their individual capacity and the suit had been dismissed with prejudice, a subsequent suit asserting the same cause of action by the same parties in the partnership name was barred by res judicata, stating:

If the partnership is to be viewed as a separate entity, the individual partners sued as its representatives in the former suit. It is said that the “[ijdentity of parties is not a mere matter of form, but of substance.” Id. at 51.

Since res judicata bars a suit in the partnership name after the individual partners’ suit on the same claim had been dismissed with prejudice, it logically follows that an answer for all of the individual partners is equivalent to an answer for the partnership. Since both partners had answered, we hold that the answers of the individual partners were sufficient to prevent a default by the partnership. To hold to the contrary would produce an absurd result and would place form above substance.

It is a well-settled rule that a default judgment rendered when an answer is on file is error. Kinnard v. Herlock, 20 Tex. 48 (1857); Bedwell v. Thompson, 25 Tex.Supp. 245 (1860); McKaughan v. Harrison, 25 Tex.Supp. 461 (1860); Stanford v. Lincoln Tank Co., 421 S.W.2d 412 (Tex.Civ.App.—Ft. Worth 1967, no writ); Martinec v. Maneri, 494 S.W.2d 954 (Tex.Civ.App.—San Antonio 1973, no writ). Since this is true, it follows that the trial court erred in rendering the default.

Trinity next argues that appellant waived this error because it failed to call to the court’s attention the answers on file. In support of this proposition it cites Robinson v. Mattison, 25 Tex.Supp. 451 (1860) and Hopkins v. Donaho, 4 Tex. 336 (1849) which held that if an answer was on file when a default had been rendered, the burden was on the defendant to bring the answer to the court’s attention by a motion to set aside the judgment; otherwise, this error could not be raised for the first time on appeal. Although we doubt the efficacy of this rule today in light of supreme court authority that no presumptions are indulged in favor of a default judgment, McKanna v. Edgar, 388 S.W.2d 927 (Tex.1965), the cases of Robinson and Hopkins, supra have not been limited or overruled by the supreme court. The facts here are distinguishable from the facts in those cases because the record affirmatively shows that the trial court was aware of the answers on file. Indeed, the court’s attention was directed to the answers of the individual partners by appel-lee’s motion for default judgment which alleges, as the sole ground of the motion, that these answers were not answers for the partnership. Apparently, the court granted the default judgment on this ground. Consequently, we do not regard appellant’s failure to call these answers to the court’s attention as being within the rule as stated in Hopkins and Robinson.

Reversed and remanded.

      . Since this case was appealed before the 1977 amendment to rule 324, Tex.R.Civ.P., we do not consider how this case would be affected by that amendment insofar as it provides, “Notwithstanding the foregoing, it shall be necessary to file a motion for new trial in order to present a complaint which has not otherwise been ruled upon.”


author: RAY, Justice.

text:
    GENERAL MOTORS CORPORATION, Appellant, v. Eddie and Patricia Ann Bell WASHINGTON, Appellees.
    No. 8494.
    Court of Civil Appeals of Texas, Texarkana.
    Nov. 22, 1977.

      Corbet F. Bryant, Jr., Carrington, Coleman, Sloman, Johnson & Blumenthal, Dallas, for appellant.
    Thomas L. Cox, Jr., Dallas, for appellees.
   RAY, Justice.

This is a venue case. Appellees (plaintiffs), Eddie and Patricia Ann Bell Washington, brought suit in Denton County against Leon McNatt Motor Company and appellant (defendant), General Motors Corporation (GMC), seeking damages for negligently failing to repair appellees’ motor vehicle and for violations of the Texas Deceptive Trade Practices Act, Tex.Bus. & Comm. Code Ann., Sec. 17.46 (Supp. 1976-1977). GMC filed its plea of privilege to be sued in Dallas County. The appellees filed their controverting affidavit asserting that venue was proper in Denton County by virtue of exceptions 4, 9a and 29a, Tex.Rev.Civ.Stat. Ann. art. 1995 (1968) and exception 31, Tex. Rev.Civ.Stat.Ann. art. 1995 (Supp. 1976-1977). The trial court overruled the plea of privilege. Appellant, General Motors Corporation, has perfected its appeal and submits six points of error for our consideration.

This case was originally filed in Dallas County against Leon McNatt Motor Company (McNatt). McNatt filed its plea of privilege and the case was transferred to Den-ton County where McNatt has its place of business. Thereafter, the appellees (plaintiffs) joined General Motors Corporation as a party defendant and General Motors filed its plea of privilege to be sued in Dallas County. The plea of privilege of General Motors was overruled and this appeal has followed.

The only person to testify was appellee (plaintiff), Eddie Washington. Eddie Washington is a resident of Dallas County.

Appellee Washington contacted Clyde DeLay, an automobile broker in Dallas County, seeking the purchase of a new Oldsmobile Cutlass. DeLay and Washington went to Denton, Texas, where DeLay ordered a car for Washington from McNatt Motor Company. The car was picked up on the 16th of November, 1973. About ten days later appellee’s wife started complaining about the transmission. Ap-pellee testified that he drove the car and it “jerked.” Appellee called Clyde DeLay and DeLay called McNatt. Washington was told by DeLay to take the car back to McNatt Motor Company in December of 1973. No work was done on the transmission. Later when the car had 11,048 miles on it, in the summer of 1974, the car was taken back to McNatt Motor Company with a request from Washington that the transmission be checked and the motor tuned. The car was approximately six months old and within the twelve months or twelve thousand mile warranty only as to defective or malfunctioning parts repair. The 90 day service adjustment period had expired. Washington testified that after the car had been taken to McNatt for the second time, “It kept doing the same thing.” Still later, when the car had over 21,000 miles on it, the transmission malfunctioned and had to be repaired at a cost of $442.00 at a dealership in Dallas.

Appellant states that Subd. 4 of Article 1995, supra, does not support the trial court’s ruling since there was no proof of any bona fide claim introduced against co-defendant McNatt, the resident defendant.

In order to hold venue under Subd. 4 of Article 1995, supra, the plaintiff has the burden of: (1) proving that one defendant resides in the county of suit; (2) alleging in his petition a joint cause of action against a resident and non-resident defendant, or a cause of action against the resident defendant so intimately connected with the cause of action against the non-resident defendant that the two may be joined together under the rule intended to avoid a multiplicity of suits; and, (3) he must plead and prove that he has, in fact, a cause of action against the resident defendant. H. Molsen & Co., Inc. v. Williamson, 510 S.W.2d 366 (Tex.Civ.App. Dallas 1974, no writ); 1 McDonald’s, Texas Civil Practice, Sec. 4.10.2.

A thorough examination of Appellee Washington’s testimony does not reveal that the malfunction in the transmission at 21,000 was from the same or a related cause connected with the “jerking” at 11,000. We have concluded that appellee has failed to establish by competent testimony that the repairs necessitated at 21,000 miles were the result of some negligence on the part of McNatt in failing to find and repair a defective part in the transmission before the warranty expired. Mileage on the car in excess of 21,000 miles is too remote to infer that the complaint at 11,000 miles was the same problem at 21,000 miles in absence of proof connecting the complaint with the subsequent malfunction and repair. To hold otherwise would lead to unwarranted speculation. There was no proof that the automobile had a defective or malfunctioning part prior to the expiration of 12,000 miles or that McNatt had failed to properly inspect the car during the warranty period. Appellant’s first point of error is sustained.

Appellant contends that Subd. 9a of Article 1995, supra, is not applicable in this case because appellees did not plead or prove any element of negligence related to GMC.

Appellant’s second point of error is sustained. Appellees in their brief do not dispute appellant’s second point of error. We have independently examined appellant’s point of error number two and find that appellees have failed to prove the venue facts necessary to establish venue in Denton County because there was no pleading or proof of any negligence on the part of GMC.

Appellant’s third, fourth and fifth points of error contend that Subd. 29a of Article 1995, supra, is not applicable when one defendant is a resident of the county where the suit is pending. Appellant’s third point of error is sustained because Subd. 29a applies only when no defendant resides in the county where suit is brought. Randall County v. Todd, 542 S.W.2d 236 (Tex.Civ.App. Amarillo 1976, no writ).

Appellant’s fourth and fifth points of error related to Subd. 29a are not reached.

Appellant states in its sixth point of error that Subd. 31 of Article 1995, supra, is not applicable since there was no proof of any of the four alternatives listed under the subdivision. It is appellant’s contention that the proof negated all of the four alternatives. Subdivision 31 provides the following:

“Suits for breach of warranty by a manufacturer of consumer goods may be brought in any county where the cause of action or a part thereof accrued, or in any county where such manufacturer may have an agency or representative, or in the county where the principal office of such company may be situated, or in the county where the plaintiff or plaintiffs reside.”

Subd. 31, supra, was added as an exception to the general venue statute in 1973. It has been noted by commentators, that in the instance of a manufacturer defendant which is a corporation, this new exception adds nothing except the alternative that suit may be brought in the county of the plaintiff’s residence. 1 McDonald’s, Texas Civil Practice, Sec. 4.37.1 (1976 Supp.). This is so because Subd. 23, Tex.Rev.Civ.Stat. Ann. art. 1995, always permitted suit to be brought against a corporate defendant in the three instances set forth in the first three alternatives in Subd. 31.

In the instant case, the last two alternatives do not apply since GMC has its principal office in Dallas County and the appel-lees (plaintiffs) reside in Dallas County.

The first alternative, “ . where the cause of action or a part thereof accrued, . . . ” was not established since appellees offered no proof that GMC violated any of the terms of its warranty in Denton County. Appellees state that “The question for this Court is the negligent action or in this case the inaction of defendant McNatt in attempting to implement appellant’s express warranty on appellant’s product chargeable to appellant as a breach of appellant’s express warranty.” Appel-lees failed to prove by a preponderance of the evidence that their damages were covered by the warranty of GMC.

Appellees insist that GMC has an agent or representative in Denton County. It is contended that “In the limited area of warranty implementation the appellant’s relationship with their factory authorized dealers can hardly be classified as an independent contractor relationship.” Appellees state further that “If a manufacturer’s product is merely sold then sale, standing alone is not sufficient, but an active role above sales, in the case at bar warranty implementation, is sufficient to establish venue in a county other than the residency (sic) of the manufacturer.” In appellees’ brief it is stated that affirmative acts on the part of a local dealer, when the local dealer is also a defendant, is sufficient to create a venue exception. We have difficulty in determining appellees’ contentions in their reply to appellant’s sixth point of error as it relates to “warranty implementation.” As we understand the issue presented, it is that appellees contend that McNatt Motor Company is an agent of GMC each time the purchaser of a General Motors automobile takes it in to a General Motors dealership to have work performed on a vehicle covered by GMC’s warranty (“warranty implementation”).

The only evidence introduced concerning GMC’s relationship to McNatt Motor Company was the dealership agreement. It provides that the dealer is an independent operating entity responsible for the acts or omissions of its agents or employees.

Appellees offered no proof of any facts of the relationship between GMC and McNatt Motor Company pertinent to agency. The province of the trier of facts is to determine only whether or not certain facts exist. It then becomes the duty of the court, if such facts do exist, to determine if they are legally sufficient to constitute the alleged agency. Minneapolis-Moline Company v. Purser, 361 S.W.2d 239, 241 (Tex.Civ.App. Dallas 1962, writ ref’d n. r. e.). The facts and circumstances surrounding the relationship existing between GMC and McNatt were developed by Appellant GMC only to the extent of the sales and service agreement between the two parties. Appellees introduced no evidence of the relationship between McNatt and GMC. We therefore conclude that appellees failed to prove an agency relationship between McNatt and GMC. General Motors Corporation v. Ewing, 300 S.W.2d 714, 718 (Tex.Civ.App. Waco 1957, no writ); Pierce v. Ford Motor Company, 401 S.W.2d 355 (Tex.Civ.App. Eastland 1966, writ dism’d); General Motors Corporation v. Washington, 377 U.S. 436, 84 S.Ct. 1564, 12 L.Ed.2d 430 (1964).

The judgment of the trial court is reversed and judgment is here rendered that the cause be transferred to one of the district courts of Dallas County, pursuant to Rule 89, Tex.R.Civ.P.

Reversed and rendered.


author: MASSEY, Chief Justice.

text:
    L. W. F., a minor, Appellant, v. STATE of Texas, Appellee.
    No. 17951.
    Court of Civil Appeals of Texas, Fort Worth.
    Nov. 22, 1977.
    Rehearing Denied Dec. 28, 1977.

      Robert D. Hoover and Allan K. Butcher, Fort Worth, for appellant.
    Tim C. Curry, Crim. Dist. Atty., and Can-dyce W. Howell, Fort Worth, for appellee.
   OPINION

MASSEY, Chief Justice.

The question is of propriety of certification of L. W. F., a minor, to be tried as an adult in the criminal district court of Tar-rant County, Texas.

On May 11, 1977, the domestic relations court of Tarrant County, Texas, sitting as a juvenile court, waived its jurisdiction and certified the minor to criminal district court to be tried as an adult for alleged violations of penal laws of the grade of felony. The minor appealed.

We affirm.

At time of the offense(s) charged the minor was of the age of sixteen years, as he was likewise at time of the hearing and certification by the juvenile court.

Besides five points of error which are all related to the charge of a want of due process of law in the handling of the case prior to the hearing on May 11, 1977, there is by point of error no. 1, the contention that there was insufficient evidence to support the juvenile court’s finding that the minor, L. W. F., on date of the hearing, had the sophistication and maturity requisite for his discretionary transfer to the criminal district court.

The single case upon which there is reliance in support of the contention of E. A. W. v. State of Texas, 547 S.W.2d 63 (Tex.Civ.App.—Waco 1977, no writ history). In that case it was an eleven year old minor who was charged to have engaged in delinquent conduct so as to have her adjudged delinquent so as to justify commitment to the Texas Youth Council. The case was not one where there was attempt to have the child certified to be tried for felony offense in a criminal district court. Further, the central issue to the appeal was whether the child “knowingly, intelligently, and voluntarily” waived her privilege against self-incrimination within the meaning of Tex. Family Code Ann. § 51.09(b) (1975) “Waiver of Rights” in executing the written confession which was introduced in evidence in support of the state’s case for commitment because of a burglary.

The holding of the Waco court of civil appeals reversing and remanding the judgment of commitment to the Texas Youth Council was justified by the following, quoted from the opinion: “Can an eleven year old girl of average intelligence for her age, with a sixth grade education, ‘knowingly, intelligently, and voluntarily’ waive her constitutional privilege against self-incrimination, where she has spent from midnight to 9:00 A.M. in the Juvenile Detention Center, and where she has had no guidance from or the presence of a parent or other adult in loco parentis, or an attorney? We think not. In our opinion, a child of such immaturity and tender age cannot knowingly, intelligently, and voluntarily waive her constitutional privilege against self-incrimination in the absence of the presence and guidance of a parent or other friendly adult, or of an attorney, [citing cases].”

In the instant case there was no tender into evidence any confession by the minor involved. The question before us relates to the existence of facts and circumstances by reason of which the trial court deemed itself clothed with the discretionary power to make the certification of the minor to be tried as an adult. On this the law to which reference must be made is to be found in the Tex.Family Code Ann. § 54.02(a) and § 54.02(f) (1975) as follows:

“54.02. Waiver of Jurisdiction and Discretionary Transfer to Criminal Court
“(a) The juvenile court may waive its exclusive original jurisdiction and transfer a child to the appropriate district court or criminal district court for criminal proceedings if:
“(1) the child is alleged to have violated a penal law of the grade of felony;
“(2) the child was 15 years of age or older at the time he is alleged to have committed the offense and no adjudication hearing has been conducted concerning that offense; and
“(3) after full investigation and hearing the juvenile court determines that because of the seriousness of the offense or the background of the child the welfare of the community requires criminal proceedings.
“(f) In making the determination required by Subsection (a) of this section, the court shall consider, among other matters:
“(1) whether the alleged offense was against person or property, with greater weight in favor of transfer given to offenses against the person;
“(2) whether the alleged offense was omitted in an aggressive and premeditated manner;
“(3) whether there is evidence on which a grand jury may be expected to return an indictment;
“(4) the sophistication and maturity of the child;
“(5) the record and previous history of the child; and
“(6) the prospects of adequate protection of the public and the likelihood of the rehabilitation of the child by use of procedures, services, and facilities currently available to the juvenile court.

From the sections quoted there is no doubt but that the discretionary power of the trial court was invoked. The only question is the state of the proof upon the sophistication and maturity on the minor involved. Impliedly conceded is that the evidence in the case was sufficient to satisfy all the other matters to be considered by the trial court in making the determination.

In the ordinary case the most authoritative evidence would lie in expert opinion upon the subject’s mental ability to know and understand the nature and effect of his voluntary actions and whether they were right or wrong according to society’s mores. While the intelligence quotient of the subject is undoubtedly to be taken into consideration both by the expert and the court, it is merely an element in the ultimate conclusion to be made. On the appeal there is the attempt to attribute more to have resulted from the minor’s want of intelligence, amply exemplified in the expert testimony, than is warranted by our law. The instant case is not to be distinguished from the ordinary, and the minor, L. W. F. was sufficiently shown to have been a subject with sophistication and maturity requisite to a proper transfer.

The minor introduced evidence — proof that after arrest (9:30 P.M.) minor was taken to a “sector headquarters,” and not until 5:00 A.M. the following day to juvenile division in downtown Fort Worth. About two hours after arrest he was taken before a magistrate.

On the complaints relative to due process of law — and that such was denied the minor in question because: (2) he was held 6-8 hours in facility not designated for juveniles, (3) without opportunity afforded to contact any other person, and (4) without notice to his parents we find no merit. Further, on the complaint that there was denial of due process because (5) antecedent to his arrest a photo-spread used in identification was unconstitutionally suggestive; and (6) because the court, after having been arrested and before the hearing from which the appeal was taken granted motions to allow the photographing and finger-printing of the minor without any notice to the minor’s attorney, we likewise find no merit.

In view of the question at hand the portion of due process of law with which we need be concerned relates to the occasion of and conduct of the hearing at which L. W. F. was certified to be tried as an adult. None of the complaints made relative to denial of due process of law had any necessary or causal relation to these proceedings. Assuming, though not deciding, that there was prior action by arresting officers and by the court which disregarded the rights of the minor — even amounting to the deprivation of his rights to due process of the law — it is clear from the complete record of the certification hearing that as applied thereto he was adjudged competent to be so tried pursuant to prescribed procedure and according to the law of the land.

The only possible meritorious complaint by the points of error upon the want of due process of law would be that made upon the photo-spread used in the identification of L. W. F. Charged is that the rape accomplished by him occurred on April 18, 1977; the first of the attempted rapes on April 16, 1977; and the second of them on April 19, 1977. L. W. F. was arrested about 9:30 P.M. on April 19, 1977. As indicated, we overrule the complaint. What occurred is that after the alleged offense of rape was committed on April 18th, the police officers went to the residence of the victim who reported the offense, taking with them photographs of several possible “suspects” including that of a person (never proved to have been that of L. W. F.) who was selected by the victim as one who “looked just like” the person who had committed the offense of rape. While in questions on cross-examination there was assumption that her identification was of L. W. F., she never so testified. Instead she made independent in-court identification of him as the person who had raped her.

Two other witnesses, both of whom made in-court identification of the minor, were women whom L. W. F. was charged to have attempted to rape. One of these never saw any pictures. The other saw pictures and in her testimony stated that “the one that they had looked as near like him as I could remember.” The photograph was not shown to have been a photograph of L. W. F. Though somewhat uncertain the photographic identification was apparently made prior to time of L. W. F.’s arrest. Both witnesses made independent in-court identifications of the minor as the person who had attempted to rape them.

Persuasive is the holding in Simmons v. United States, 390 U.S. 377, 384, 88 S.Ct. 967, 971, 19 L.Ed.2d 1247 (1968), where it was said that convictions based upon eyewitness identification at trial following a pretrial identification by photograph will be set aside on that ground only if the photographic identification procedure was so im-permissibly suggestive as to give rise to a very substantial likelihood of misidentification. Here no photographic identification was actually made prior to arrest; such as was made by two of three victims was not shown to have been of the minor actually involved; and all three victims made in-court identifications of such minor.

All points of error are overruled and the order of the juvenile court waiving its jurisdiction over the minor child and certifying him for trial as an adult is affirmed.


author: McKAY, Justice.

text:
    Charles Ben HOWELL, Appellant, v. The STATE of Texas, Appellee.
    No. 1060.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 23, 1977.
    Rehearing Denied Dec. 29, 1977.

      Tom S. McCorkle, Jr., Dallas, Waggoner Carr, Austin, Melvyn Carson Bruder, Dallas, for appellant.
    Robert C. Bass, Jr., Asst. Gen. Counsel, Austin, for appellee.
   McKAY, Justice.

This is a disbarment suit brought by the State of Texas, acting by and through its Grievance Committee for the Sixth District of the State Bar of Texas, appellee, against Charles Ben Howell, appellant, alleging that certain acts and conduct of appellant constituted malpractice, fraudulent and dishonorable conduct in willful violation of the Code of Professional Responsibility which warranted the disciplining of appellant under the State Bar rules. The prayer of appellee asked that appellant be disbarred, suspended or reprimanded. Trial was had before a jury, and the trial court disregarded part of the verdict and rendered judgment that appellant was guilty of professional misconduct in engaging in conduct prejudicial to the administration of justice, and that appellant be reprimanded. Appellant has perfected his appeal.

Appellant is a duly licensed attorney of the State of Texas and a member of the State Bar of Texas. It was alleged in ap-pellee’s pleadings that appellant appeared before Judge Dee Brown Walker, 162nd District Court, sitting for the Judge of Domestic Relations Court No. 2, Dallas County, and presented Judge Walker with the file of a bill of review and divorce proceeding from Domestic Relations Court No. 2 and moved for a default judgment on the grounds that no answer had been filed. It was further alleged that appellant did not tell Judge Walker that there was another case pending between the same parties for a divorce in Domestic Relations Court No. 3, and that Judge Dan Gibbs of that court had set a hearing on both cases for the following week, and that appellant had appeared before Judge Gibbs only two days before concerning both cases. Judge Walker rendered a default judgment awarding custody of the minor children. When Judge Walker learned of the facts concerning the case pending in Domestic Relations Court No. 3 he cited appellant for contempt and transferred the matter for a hearing before another judge.

Appellant later appeared before Judge Louis Holland, a retired district judge sitting in Domestic Relations Court No. 3, to determine whether appellant was guilty of contempt of court before Judge Walker. During the hearing appellant became a witness in support of his motion for continuance, and he testified that he had attempted to employ four different lawyers to represent him, and each of them had refused due to alleged fear of prejudice in future cases before Judge Walker. The assistant district attorney representing appellee asked appellant to name the four lawyers he contacted, and appellant refused to do so. Judge Holland then instructed appellant to answer the question and name the lawyers and appellant refused to do so, asked that his motion for continuance be withdrawn, and persisted in his refusal after being advised that he would be held in contempt of court. Judge Holland then ruled that appellant was in contempt of court. [See Ex parte Howell, 488 S.W.2d 123 (Tex.Cr.App.1973) for factual statement.]

The present suit is an outgrowth of the contempt matters before Judge Walker and Judge Holland. The trial court submitted the case to a jury on ten special issues. We are concerned in this appeal with issues 9 and 10. In issue 9 the jury found appellant failed to answer a question relating to his motion for continuance when he was instructed by Judge Holland to answer, and failed to find in issue 10 that such conduct was prejudicial to the administration of justice. Upon motion of appellee the trial judge set aside the jury’s answer to issue 10 and disregarded same, holding that issue 10 was a question of law which should be decided by the court. In its judgment the trial court held that, based upon the jury’s answer to issue 9, in its opinion appellant was guilty of professional misconduct “in that he did engage in conduct that was prejudicial to the administration of justice.” It was further ordered that appellant be reprimanded for his professional misconduct.

By his first three points appellant contends that the trial court erred in that appellant was denied due process of law, equal protection of law, and the right of trial by jury because (1) the facts do not indisputably establish the jury verdict to be so clearly wrong that reasonable minds cannot agree to the contrary; (2) the question as to whether the conduct of appellant was prejudicial to the administration of justice is not one of law to be decided by the court only; and (3) the trial court has no power to revise a jury verdict in a punitive or quasi-criminal case. The basic question raised by appellant in these points is whether a finding that conduct is prejudicial to the administration of justice is a fact issue for the jury or a question of law for the court. We hold that it is a function of the court and that the trial court properly disregarded the answer of the jury to issue 10.

Article 12, Sec. 28, State Bar Rules, V.T. C.S., provides in part:

“If the court shall find from the evidence in a case tried without a jury, or from the verdict of the jury, if there be one, that the defendant is guilty of no professional misconduct, he shall enter judgment so declaring and dismiss the complaint; but if he shall find the defendant guilty, he shall determine whether the party shall be (a) reprimanded, or (b) suspended from practice (in which case he shall fix the term of suspension), or (c) disbarred; and he shall enter judgment accordingly.”

As we view Sec. 28 the function of the trial court is (1) to make the actual determination whether the conduct of an attorney constitutes professional misconduct; and if it finds it was professional misconduct, (2) exercise its disciplinary authority. Article 12, Sec. 9, State Bar Rules, V.T.C.S., provides in part that:

“a. Professional misconduct consists of any of the following:
“(1) Misconduct as specified in DR1-102, Code of Professional Responsibility
Article 12, Sec. 8, DR1-102, provides in part:
“(A) A lawyer shall not:
“(5) Engage in conduct that is prejudicial to the administration of justice.”

The jury found (Issue 9) that appellant refused to answer the question as to the identity of the attorneys he contacted to represent him in his contempt hearing before Judge Holland after being instructed to do so by the court. Issue 10 asks whether such conduct was prejudicial to the administration of justice, to which the jury answered “no.” There were no definitions or explanations in the charge (and none requested) to guide the jury in its answers. Appellant argues that State v. Baker, 539 S.W.2d 367 (Tex.Civ.App.—Austin 1976, writ ref’d n. r. e.), is authority for submitting issue 10 to the jury. We disagree. The opinion (Page 371) states that such an issue was submitted to the jury, but nowhere does it approve or disapprove of such issue as being proper.

Appellant’s contention that the trial court has no power to revise a jury verdict in a punitive or quasi-criminal case is without merit. The trial here was a civil suit, and the trial court was authorized to disregard on its own motion any issue that was immaterial or one which constituted a question of law. Art. 12, Sec. 21, State Bar Rules; C & R Transport, Inc. v. Campbell, 406 S.W.2d 191 (Tex.1966); Grubb v. Grubb, 525 S.W.2d 38 (Tex.Civ.App.—El Paso 1975, writ ref’d n. r. e.). The case of Archer v. State, 548 S.W.2d 71 (Tex.Civ.App.—El Paso 1977, writ ref’d n. r. e.), a disbarment suit, has the following language:

“Appellant contends that the Court’s act of disregarding the jury’s answer to Special Issue No. 1(a) violated his right of trial by jury as provided in the Code. The provision of the Code is that the accused attorney shall have the right of a trial by jury in the county of his residence. It cannot be given the construction that Appellant places on it, for the Code also says that the Rules of Civil Procedure shall govern, and, under those rules, the Court can disregard an issue. Appellant’s contention has been decided otherwise in the case of State v. Baker, supra. It was there held that the trial Court erred in not granting the State’s motion for judgment non obstante vere-dicto.”

Points 1-A, 1-B, and 1-C are overruled.

By his next three points appellant maintains that Article 12, sec. 8, DR1-102(A)(5), State Bar Rules, is vague and indefinite (1) on its face, (2) as construed by the courts of Texas, and (3) as construed and applied in this case, and is unconstitutional because it violates the due process and equal protection clauses of the Constitution of Texas. We disagree. It is undisputed in the record that appellant, in the capacity of a witness, refused to answer a question after instructed to do so by the trial court and after being advised that his failure to do so would result in appellant being in contempt of court. Was such conduct on the part of appellant “prejudicial to the adminstration of justice”? In our opinion it was. “Prejudicial” has been defined as tending to injure or impair; detrimental; harmful; hurtful; injurious. 33 Words and Phrases, page 471; Webster’s Seventh New Collegiate Dictionary, G & C Merriam Co. 1969. “Administration of justice” has been described thusly: “The administration of justice consists in the trial of cases in the court, and their judicial determination and disposition by orderly procedure, under rules of law, and putting of the judgment into effect.” Massey v. City of Macon, 97 Ga.App. 790, 794, 104 S.E.2d 518, 521-522 (1958).

We do not believe that the language “a lawyer shall not: . . engage in conduct that is prejudicial to the administration of justice” is so vague and indefinite that it violates the due process and equal protection clauses of the Constitution of Texas. Conduct prejudicial to the administration of justice may consist of any one or more of many acts too numerous to list. See 7 C.J.S. Attorney and Client sec. 23, p. 741, et seq. However, although the State Bar rule may be in general terms, in our opinion conduct which falls within the above definitions is prejudicial to the administration of justice and is professional misconduct.

The Supreme Court of Kansas has written on the question as to whether State Bar Rule DR1-102(A)(5) is vague in State v. Nelson, 210 Kan. 637, 639, 504 P.2d 211, 214 (1972):

“With respect to issue 3, respondent argues that the word ‘prejudicial’ as it appears in DR1-102(A)(5) is unconstitutionally vague and casts a ‘chilling effect on First Amendment freedoms’. Respondent’s position is unsupported in both instances. The word ‘prejudicial’ is universally found throughout the legal and judicial system. Specific definitions are found in any dictionary. In Prunty v. Light Company, 82 Kan. 541, 108 P. 802, this court, referring to Webster’s Universal Dictionary, defined prejudicial as ‘hurtful’, ‘injurious’, ‘disadvantageous’. It cannot be seriously contended that ‘prejudicial’ does not sufficiently define the degree of conduct which is expected of an attorney.”

The Supreme Court of Oregon has also addressed the question in Complaint of Rook, 276 Or. 695, 556 P.2d 1351, 1357 (1976):

“As for the contention by the accused that the terms of DR1-102(A)(5) are unconstitutionally vague, we believe that as standards of professional conduct they are sufficiently definite for the purpose of a professional disciplinary proceeding. . We have previously held that such a proceeding is not a criminal proceeding, and that the technicalities of criminal law, which are properly invoked to safeguard the liberty of citizens, are not necessarily relevant in the investigation of unethical conduct by an attorney.

We conclude that the conduct of appellant was injurious, hurtful and detrimental to the orderly trial of the case before the court, and such conduct was prejudicial to the administration of justice. These points are overruled.

In his next three points appellant contends that the trial court erred in overruling his plea to the jurisdiction and his alternative plea alleging lack of a competent plaintiff because members of the Grievance Committee were at all material times un-sworn, never having taken the oath of office as provided in Article 16, sec. 1, Constitution of Texas. Appellant also filed a motion to dismiss and a motion for directed verdict on the same grounds. The provision in Article 16, sec. 1 of the Texas Constitution reads in part:

“The Secretary of State, and all other appointed officers, before they enter upon the duties of their offices, shall take the following Oath and Affirmation:

The Legislature by Article 320a-l, V.T. C.S., sec. 4, subdivision (a), provided that

“From time to time as the court may seem proper, the Supreme Court of Texas shall prepare and propose rules and regulations for disciplining, suspending, and disbarring attorneys at law; . .”

Pursuant to the specific legislative grant of power the Supreme Court, in Article 12, State Bar Rules, promulgated rules for disciplining members of the State Bar of Texas, and such rules include the establishing of grievance committees and the appointing of members to those committees.

The “office” of a grievance committee member is created by rule promulgated by the Supreme Court of Texas pursuant to a specific statutory act. It was not created by the Constitution of Texas, and the constitutional oath required of officers appointed pursuant to a specific or implied constitutional grant is not required. In Lopez v. State, 487 S.W.2d 268 (Tex.Crim.App.1969), it was held that a special prosecutor was not required to take the constitutional oath of office before appearing in the case. It is specifically pointed out in State v. Sewell, 487 S.W.2d 716, 719 (Tex.1972), that “the Grievance Committee is an administrative agency of the Judicial Department and is the arm of the Supreme Court in the discharge of its professional policing duties.” Before becoming a licensed attorney every person admitted to practice law takes an oath, Article 309, V.T.C.S., and we hold that when a member of the State Bar of Texas is appointed to a Grievance Committee, such attorney is not required to take the constitutional oath of office. See Smith v. Grievance Committee, 475 S.W.2d 396, 399 (Tex.Civ.App.—Corpus Christi 1972, no writ). These points are overruled.

In his last three points appellant maintains that the trial court erred in overruling his plea to the jurisdiction because the Grievance Committee decision to proceed by a formal complaint was not made by a majority vote of the Grievance Committee; that the trial court erred in sustaining ap-pellee’s special exception to appellant’s pleading under oath that the Grievance Committee members failing to attend a grievance hearing were disqualified to vote, thus causing a less than majority vote to proceed by formal complaint; and that the court erred in not dismissing the case or directing the verdict for appellant when appellant pleaded under oath that there was no majority vote by the Grievance Committee to institute a formal complaint, and appellee rested its case without controverting appellant’s sworn allegation.

Appellant argues that the trial court was without jurisdiction because less than a majority of the Grievance Committee was present when a vote was taken to file a formal complaint against appellant. The record reflects that the Grievance Committee had twelve members, and at a meeting on September 7, 1972, there were eight members present. No decision was made or action taken at that meeting. Thereafter, on January 18, 1973, there were ten members of the committee present at the meeting, and the minutes of that meeting read:

“CHARLES BEN HOWELL — 'The committee voted a six-month’s suspension in connection with Mr. Howell’s contempt of court matter. Only the members present at the time of the hearing voted on this. Larry Beason did not vote. Mr. Burleson is to advise Mr. Howell of this decision. If he does not accept, the committee voted to proceed with filing suit for suspension or disbarment.

Of the ten members present on January 18, 1973, six of those were present at the meeting on September 7, 1972.

Article 12, sec. 5 of the State Bar Rules provides:

“. . .A majority of the [grievance] committee shall constitute a quorum for all purposes.”

The record shows that there were seven or more members present on September 7, 1972, and on January 18, 1973, and seven members constituted a quorum. A majority of the quorum was authorized to act. “Majority” means the greater number, or the number greater than half of any total. Black’s Law Dictionary, Fourth Ed. Appellant argues that there had to be a majority of the members of the committee voting for the bringing of this suit before such action could be taken. We disagree. If a majority of the committee was present, which majority constituted a quorum, then a majority of the quorum could act. There being ten members present at the January 18, 1973, meeting, only six were required to vote for the filing of the present suit. When a majority constitutes a quorum of a deliberative body, it can take any action the body has power to transact. Herring v. City of Mexia, 290 S.W. 792 (Tex.Civ.App.—Waco 1926, writ ref’d). These points are overruled.

Judgment of the trial court is affirmed.

      . “SPECIAL ISSUE NO. 1
      “Do you find from a preponderance of the evidence that on or about the 26th day of May, 1971, at the time he obtained a default judgment in an action pending in Domestic Relations Court Number 2 involving divorce, property, and custody of minor children, Charles Ben Howell did not tell Judge Walker that another action involving the same parties regarding divorce, property, and custody of minor children was pending in Domestic Relations Court Number 3?
      “Answer ‘yes’ or ‘no’.
      “ANSWER ‘No’.
      [Issues 2, 3, 4, 6, 7 and 8 not answered according to instructions]
      “SPECIAL ISSUE NO. 9
      “Do you find from a preponderance of the evidence that Charles Ben Howell failed to answer a question relating to his motion for continuance when he was instructed by Judge Holland to answer?
      “Answer ‘yes’ or ‘no’.
      “ANSWER ‘yes.’
      “If you have answered Special Issue No. 9 ‘yes’, and only in that event, you will answer the following Special Issue:
      “SPECIAL ISSUE NO. 10
      "Do you find from a preponderance of the evidence that when Charles Ben Howell failed to answer a question relating to his motion for continuance which he was instructed by Judge Holland to answer, if you have so found, that he engaged in conduct that was prejudicial to the administration of justice?
      “Answer ‘yes’ or ‘no’.
      “ANSWER ‘no.’ ”


text:
    Alvin B. WALKER, Appellant, v. REPUBLIC NATIONAL BANK OF DALLAS, Appellee.
    No. 1065.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 23, 1977.
    Robert O’Donnell, Dallas, for appellant.
    William D. White, Jr., White, McElroy, White, Sides & Rector, Dallas, for appellee.
   McKAY, Justice.

This is an appeal from a summary judgment for the plaintiff on a promissory note. Appellee Republic National Bank of Dallas sought recovery on a promissory note from Flower Mound Investment Company and appellant Alvin B. Walker. Appellee’s motion for summary judgment was supported by the affidavit of Michael L. Pool, one of its banking officers. The affidavit stated that he was competent to testify to the matters contained therein and all statements were made upon his personal knowledge and were true and correct; that he had authority from his employer to make such affidavit; that on September 17,1974, Alvin B. Walker executed a promissory note in the principal amount of $4,501.43 with interest thereon at the rate of ten percent per annum due in full on March 17, 1975; that repeated demands had been made for payment; that no payment had been received and default had occurred; that the interest through June 7, 1976, amounted to $775.73 and continues to accumulate at the rate of $1.23 per day; that the original of said note is in possession of appellee; that a true and correct copy of same was attached; and that the amount specified is due and owing.

Appellant’s answer to appellee’s motion for summary judgment was supported by his own affidavit. The answer and affidavit allege a lack of consideration and that appellant signed as guarantor.

Appellant’s affidavit states:

“[WJhile I do not deny, under oath, the execution of the note, I have no independent recollection of the execution of such note. That if I did execute such note I did not receive any money as consideration for the execution of such note . . ; that if I did in fact execute the promissory note in question, I did so under the mistaken impression that I was executing a promissory note as a corporate officer and not as an individual.”

Appellant’s signature appears on the promissory note in question as follows:

Flower Mound Investment Co., Inc.
By: /s/ Alvin B. Walker Alvin B. Walker
By: /s/ Alvin B. Walker Alvin B. Walker, Indiv.

The trial court found there was no genuine issue of material fact raised by appellant’s affidavits and granted summary judgment for appellee, from which appellant has perfected this appeal.

In his sole point of error, appellant contends only that the trial court erred in granting summary judgment.

Under Rule 166-A of the Texas Rules of Civil Procedure, the party moving for summary judgment has the burden of proving by means of summary judgment proof independent of the pleadings that there is no genuine issue of fact as to one or more of the essential elements of plaintiff’s cause of action, and that he is entitled to judgment as a matter of law. Gibbs v. General Motors Corp., 450 S.W.2d 827, 828 (Tex.1970). In an action on a motion for summary judgment, where the motion is supported by affidavits and other extrinsic evidence sufficient on their face to establish facts which, if proven at the trial, would entitle the movant to an instructed verdict, the opponent must show opposing eviden-tiary data which will raise an issue as to a material fact, or must justify his inability to do so and seek appropriate protection. Allen v. Western Alliance Insurance Co., 162 Tex. 572, 349 S.W.2d 590, 594 (1961).

In order for a controverting affidavit to be considered as raising a genuine issue of material fact, it must recite that it was made on the personal knowledge of the affiant. The trial judge should not be required to speculate as to whether the affi-ant could establish the facts stated in his affidavit if he were testifying from the witness stand. Youngstown Sheet & Tube Co. v. Penn, 363 S.W.2d 230, 233 (Tex.1963). Appellant’s affidavit is defective in that it fails to recite that it was made on the personal knowledge of Walker and we cannot consider it. McDonald v. Clemens, 464 S.W.2d 450, 455 (Tex.Civ.App.—Tyler 1971, no writ).

However, in our opinion, assuming appellant’s controverting affidavit could be considered, it does not raise any fact issue. He does not deny execution of the promissory note. Although he states that he personally failed to receive any consideration, he does not state that Flower Mound Investment Co., Inc., failed to receive any consideration. He then states only that he mistakenly signed the note in an individual capacity. In his brief, appellant fails to direct us to any issues of fact which are raised. He states only that “the Defendant’s controverting affidavit raises a genuine issue of fact.” We hold that appellant has failed to show any opposing evidentiary data which will raise an issue as to a material fact, and appellee was entitled to summary judgment.

Therefore, appellant having presented no competent summary judgment evidence to controvert the summary judgment evidence presented by appellee, we find that there is no genuine issue of material fact as to appellee’s cause of action, and Republic National Bank of Dallas is entitled to judgment as a matter of law.

Accordingly, appellant’s point of error is overruled, and the judgment of the trial court is affirmed.