author: J. CURTISS BROWN, Chief Justice.

text:
    Leonard WALKER and Sandra Walker dba Walker & Associates, Realtors, Appellants, v. Robert L. RUGGLES et ux., Appellees.
    No. 1287.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    July 21, 1976.

      William J. Rohrbach, Jr., Law Offices of Philip P. Mabry, Houston, for appellants.
    Worth B. McCauley, McCauley & Henni-gan, Houston, for appellees.
   J. CURTISS BROWN, Chief Justice.

This is an action for slander of title.

Robert L. Ruggles and his wife, Marjorie Jane Ruggles (the Ruggles or appellees), brought suit in the district court of Harris County against Leonard Walker and Sandra Walker, d/b/a Walker & Associates (the Walkers or appellants), seeking to recover damages for the slander of their title to certain realty. They also sought the removal and expungement from the Harris County deed records of an instrument filed of record by the Walkers. Following a nonjury trial, the trial court entered a judgment awarding the Ruggles $2,000.00 actual damages and $1,500.00 exemplary damages, and ordering the instrument in question expunged from the deed records. The Walkers have perfected this appeal.

In 1971 Robert Ruggles, a government employee, was required to move from Sea-brook, Texas to South Carolina. In May of 1971 the Ruggles listed their house for sale with the Walkers’ real estate agency. On July 12 the Walkers sent to the Ruggles in South Carolina an earnest money contract signed by two prospective purchasers. The Ruggles refused to sign the contract on the ground, at least in part, that it did not contain a description of a certain encroachment by their property onto adjacent property, which the Walkers had previously agreed to include in any sales agreement. On July 22 the Walkers filed the unexecut-ed earnest money contract in the Harris County deed records. Since the contract was not prepared as agreed, the Ruggles subsequently listed the house with another agency after the expiration of the Walker listing. The new agency was not able to sell the house. The Walkers sent the letter set out below to the real estate agency then listing the Ruggles’ house. They sent the same letter to all of the title companies in the area and to all real estate agents known to the Walkers to be active in the area. This letter read exactly as follows:

“TO WHOM IT MAY CONCERN:
Please be advised as to the standing judgement against Mr. Robert L. Ruggles and 107 Bayou View, El Lago. On May 29, 1971, we listed this house for $22,500, to be sold on a new loan, FHA or VA. On July 11, 1971, we presented to Mr. & Mrs. Rugles a full price FHA contract, which he refused to sign. We have recorded these instruments in the Harris county deed records. We have also obtained an attorney. We have a FHA appraisal for the full amount plus a waiver from FHA on the encroachment.
Please be assured if this house is ever sold, we plan to collect our full commission.”

Subsequently the Ruggles took the house off the market and began renting it in July of 1972. They then brought this action.

It is well settled in Texas that in order for a party to recover in an action for “slander of title” he must allege and prove: (1) the uttering and publishing of the disparaging words, (2) that they were false, (3) that they were malicious, (4) that he sustained special damages thereby, (5) and that the plaintiff possessed an estate or interest in the property disparaged. Associates Investment Co. v. Tyler, 378 S.W.2d 717 (Tex.Civ.App.—San Antonio 1964, no writ); Humble Oil & Refining Co. v. Luckel, 171 S.W.2d 902 (Tex.Civ.App.—Galveston 1943, writ ref’d w. o. m.); Stovall v. Texas Co., 262 S.W. 152 (Tex.Civ.App.—Fort Worth), writ ref’d per curiam, 114 Tex. 582, 278 S.W. 1115 (1924).

Appellants do not attack the findings of the trial court that they published material which disparaged appellees’ title to the property in question, that such disparagement was false, and that the appellees owned an interest in the property. Their attacks are aimed at the third and fourth requirements above: malice and special damages.

Appellants’ first four points of error attack the sufficiency of the evidence to support a finding of malice. Malice as a basis for recovery of actual damages in slander of title cases has been defined to mean merely that the act must have been deliberate conduct without reasonable cause. Kidd v. Hoggett, 331 S.W.2d 515 (Tex.Civ.App.—San Antonio 1959, writ ref’d n. r. e.). The supreme court in Clements v. Withers, 437 S.W.2d 818 (Tex.Sup.1969) stated that a recovery of compensatory damages for the tort of interference with an existing contractual relationship required only a showing of intentional and knowing interference. A slander of title action is essentially one for interference with economic relations or prospective economic advantage, and so is very similar to an action for interference with contractual relations. See W. Prosser, The Law of Torts, § 128, at 917 (4th ed. 1971); Green, Relational Interests, 30 Ill.L.Rev. 1, 37-39 (1935).

In the present case appellants filed of record an unexecuted earnest money contract and circulated among numerous title companies and real estate agencies a letter stating that they had a “standing judgment” against appellees. This was false. Their interference was deliberate and knowing and without reasonable cause. Therefore, there was sufficient evidence of malice to sustain an award of actual damages.

An award of punitive damages requires a finding of actual malice: ill will, spite, evil motive, or such reckless disregard for the rights of others as to amount to a wilful or wanton act of harm. Clements, v. Withers, supra; Kidd v. Hoggett, supra.

In the present case Mrs. Walker testified that the unexecuted earnest money contract was filed on the advice of counsel. The finder of fact was not bound by this testimony from an interested witness. Furthermore, the “To Whom It May Concern” letter sent wholly without justification to third party title companies and others dealing in real estate in the area constituted the publication of false and disparaging material. There is no claim that appellants sent this letter on the advice of counsel. The letter was a blatant attempt on the part of appellants to interfere with appellees’ economic relations, as well as with appellees’ existing contractual relations. The letter could not have served to protect any legitimate interest of appellants in a commission, because they had none. The purpose was to prevent appellees from selling their house and to force them to pay an unearned commission. We hold that there was sufficient evidence of ill will, spite, and reckless disregard for the rights of others to support an award of punitive damages against appellants.

Appellants’ points of error numbers seven through nine assert that appellees’ failure to plead or prove the loss of a specific sale as a result of the disparaging material precludes a judgment in appellees’ favor. Regarding the “special damages” element in slander of title cases, several Texas courts have stated that the plaintiff must plead and prove a pending sale that was defeated by the disparagement complained of. Shell Oil Co. v. Howth, 138 Tex. 357, 159 S.W.2d 483 (1942); Humble Oil & Refining Co. v. Luckel, supra; Houston Chronicle Pub. Co. v. Martin, 5 S.W.2d 170 (Tex.Civ.App.—El Paso 1928, writ dism’d); cf. Ross v. Jarrett, 146 S.W.2d 219 (Tex.Civ.App.—Fort Worth 1940), aff’d, 139 Tex. 560, 164 S.W.2d 550 (1942).

It appears to us, however, that the trend in the law is away from an overly rigid circumscription of special damages in actions such as slander of title, disparagement, trade libel, and injurious falsehood, all of which might fall under the general rubric, “intentional interference with economic relations.” See Annot., 150 A.L.R. 716 (1944); Annot., 39 A.L.R.2d 840, § 7 (1955); 53 C.J.S. Libel and Slander § 276 (1948); 50 Am.Jur.2d Libel and Slander § 546 (1970); W. Prosser, The Law of Torts § 128, at 922-24 (4th ed. 1971); 1 F. Harper & F. James, The Law of Torts § 6.1, at 477-78 (1956); Note, Trade Libel and Its Special Damage Requirement, 17 Hastings L.J. 394 (1965).

We do not believe that our supreme court would adhere to a rule that a plaintiff may not recover in a slander of title action absent proof of the loss of a specific pending sale. In Reaugh v. McCollum Exploration Co., 139 Tex. 485, 163 S.W.2d 620 (1942), the supreme court adopted Restatement of Torts § 633, comment d (1938) as stating the proper rule to be applied in assessing damages in slander of title cases. We are of the opinion that § 633 of the Restatement is a salutary rule and should be applied in its entirety to disparagement cases, including slander of title cases. Section 633 and its “comments” relevant to this case read as follows:

“§ 633. PECUNIARY LOSS.
The pecuniary loss for which a publisher of disparaging matter is liable under the rules stated in §§ 624 and 626-627 is restricted to
(a) that pecuniary loss which directly and immediately results from the impairment of the vendibility of the thing in question caused by publication of the disparaging matter, and
(b) the expense of litigation reasonably necessary to remove the doubt cast by the disparagment upon the other’s property in the thing or upon the quality thereof.

Comment:

* * * * * *
f. Loss caused by prevention of a sale to unknown purchasers. The disparaging matter may, if widely disseminated, cause pecuniary loss by depriving its possessor of a market in which, but for the disparagement, his land or other thing might with reasonable certainty have found a purchaser. In such case the impossibility or the great difficulty of showing the identity of the particular person or persons who were dissuaded from purchasing the thing by the publication of the disparaging matter makes evidence of the owner’s inability to avail himself of a ready market for the thing in question sufficient proof of the loss and often of its extent; indeed, this inability to dispose of readily marketable things is also sufficient evidence that the defamatory matter has come to the knowledge of unknown possible purchasers and has led them to refrain from buying. '
Thus, a tradesman whose goods are denounced as adulterated can prove not only the existence of the pecuniary loss necessary to recovery but also its extent by showing that after the-dissemination of the disparaging matter the sales of his goods have fallen off to an extent explainable only as the result of the defamatory publication. (See Illustration 1.) So too a holder of an oil lease, who is prevented from selling the lease by the dissemination of the defendant’s statement that the holder had no title to it, may prove his loss of a sale to some one of the persons who are buying such leases, by showing that similar leases are readily marketable. In such case, he is entitled to recover the price for which such a lease as his could probably have been sold, even though subsequently the lease became valueless by the discovery that the leased land was outside of the oil-producing area. (See Illustration 2.) Illustrations:
******
2. The sale value of land in a particular locality is greatly increased by the prospect that a bridge will be built affording access to an important business center. A is prevented from taking advantage of the inflated market for his land by B’s false statement that A’s title is defective. The projected building of the bridge is abandoned and the land resumes its normal value. A is entitled to recover the difference between the price at which he could have sold on the inflated market and the price at which his land is salable after the abandonment of the bridge project is known.
* * * * * *

Comment on Clause (b):

i. The rule stated in this Clause is primarily applicable to the disparagement of property in land since in the majority of jurisdictions the person whose land is disparaged by matter of record may bring a bill in equity to remove the cloud cast upon his title by the disparaging publication. The rule, however, is applicable where by statute or otherwise similar relief may be obtained by an action at law or proceedings in equity to remove the cloud cast by the publication of disparaging matter upon the title to chattels or intangible things or upon the quality of land or other things. It is, however, confined to the expense of litigation. It does not include the expense of an advertising campaign, the purpose of which is to convince the public that the disparaging statements are untrue.

Illustration :

6. A agrees to buy B’s farm. On hearing from C that D claims a perpetual easement to haul stone from his adjacent quarry over B’s land, A refuses to complete the purchase of the land until B can offer a clear title. B, by successfully bringing equitable proceedings against D, removes the cloud falsely cast by C upon his title and A completes the purchase. B is entitled to recover the expense of the proceedings.”

Section 624, referred to in § 638, states:

“One who, without a privilege to do so, publishes matter which is untrue and disparaging to another’s property in land, chattels or intangible things under such circumstances as would lead a reasonable man to foresee that the conduct of a third person as purchaser or lessee thereof might be determined thereby is liable for pecuniary loss resulting to the other from the impairment of vendibility thus caused.”

We therefore conclude that a plaintiff is not precluded from recovering damages in a slander of title action merely because of his inability to prove defeat of a particular sale.

Appellants’ points of error numbers five, six, and ten attack the sufficiency of the evidence to support a finding that appellees incurred special damages that were proximately caused by appellants’ publication of the disparaging material. The trial court awarded appellees $2,000.00 for actual damages.

The first item of damages recoverable in a disparagement action is the financial loss which results directly from the loss of sales or leases which, but for the disparaging statements, would have been made to known or unknown purchasers. We believe this includes not only any loss in the salable value of the property, but also any reasonable expense incurred in maintaining the property during the time that its vendibility is impaired by the disparaging matter. For appellees to show that the vendibility of their property had been impaired, it was necessary to show that property similar to theirs was readily marketable at comparable prices. This requirement is satisfied by the statement of Mrs. Walker that

“[w]hen we got the first appraisal back, and it came back $20,050, I worked up a bunch of comparables on other homes in the area that had sold, and we sent it back through the FHA and they reissued another appraisal, raising it to $22,500.”

The second item of damages recoverable is the reasonable expense of litigation necessary to remove the doubt, or cloud, from the property or title thereto. By way of a trial amendment, appellees sought the expungement from the Harris County deed records of the unexecuted earnest money contract filed therein by appellants on July 22, 1971. Therefore, appel-lees’ reasonable expenses of litigation were recoverable.

Appellees pleaded four items of special damages: (1) $648.00 for one year’s interest on their mortgage, (2) $80.00 for one year’s care of the yard, (3) $1,300.00 for the loss of broker’s fees which the government would have refunded had the house been sold within one year of Mr. Ruggles’ change of assignment, (4) $45.00 for FHA appraisal fees. With respect to the maintenance of the yard and the interest paid on the mortgage for one year, we think these items are recoverable and are supported by sufficient evidence.

In addition to the pleaded items of damages, evidence relating to certain travel expenses incurred by appellees was admitted without objection. It was shown that at least $1,265 of these expenses were related to litigation necessary to remove the cloud on the title to their property caused by the disparagement. To that extent, the travel expenses were recoverable. We therefore hold that there was sufficient evidence to support an award of $2,000.00 actual damages, and that such award was not unreasonable or excessive. We further hold that the award of $1,500.00 exemplary damages was not excessive.

All of appellants’ points of error having been overruled, the judgment of the trial court is affirmed.

Affirmed.


source: Caselaw Access Project

author: COULSON, Justice.

license: Public Domain

text:
    PENTAGON ENTERPRISES, Appellant, v. SOUTHWESTERN BELL TELEPHONE COMPANY, Appellee.
    No. 1405.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    July 21, 1976.
    Rehearing Denied Sept. 8, 1976.
    John M. O’Quinn, Riddle, Murphrey, O’Quinn & Cannon, Robert A. Markowitz, Houston, for appellant.
    Charles G. King, Bracewell & Patterson, Houston, for appellee.
   COULSON, Justice.

This is an appeal from a judgment non obstante veredicto. Pentagon Enterprises sued Southwestern Bell Telephone Company for a continuing trespass by telephone poles erroneously erected on a tract of land. The jury returned a verdict favorable to Pentagon. Judgment non obstante veredic-to was entered for Bell. We affirm.

Pentagon engages in building and then leasing commercial structures such as warehouses. On June 2, 1972 Pentagon contracted to purchase a tract of land from Seymour Sacks located in Houston. Pentagon planned to build and lease a warehouse on this tract. Financing for the tract’s purchase was contingent on Pentagon obtaining a major tenant committed to lease a portion of the building. Pentagon obtained a tenant, Western Merchandisers, to lease 10,000 square feet of the 38,000 square feet in the planned warehouse. Pentagon was to close the real estate transaction in August of 1972 and to construct Western Merchandisers’ warehouse space by January 1, 1973.

A survey of the tract showed two telephone poles and electrical equipment encroaching on the property, approximately 4 feet and 10 feet off an adjacent easement. Both poles had been erected and in place since 1950. Bell was contacted about removing its encroaching poles in September of 1972. The poles and equipment were not completely removed until January 17, 1973. On January 18, 1973 Pentagon completed the land purchase from Sacks and took title to the property.

Pentagon sued Bell for the continuing trespass claiming damages as a result of Bell’s delay in removing its poles and equipment. Pentagon claimed that because of the delay the warehouse cost more to build, that there were added extra costs of interim financing, that Pentagon incurred expenses in borrowing money to cover added expenses and losses, and that Pentagon lost Western Merchandisers as its major tenant. The jury found that Bell’s delay in removing its poles was negligent which proximately caused damages of $71,643.76 to Pentagon. The trial court entered judgment non obstante veredicto that Pentagon take nothing from Bell.

The primary issue is whether Pentagon had a right to sue and recover damages from Bell for a continuing trespass to property to which Pentagon had neither possession nor title. Pentagon had only an equitable right to the property under its contract with Sacks. The contract specifically provided that “possession of the premises shall be delivered to Purchaser (Pentagon) on the date of closing.” It is evident that Pentagon did not have title or actual or constructive possession until after the continuing trespass had been abated by Bell. Under these facts we hold that Pentagon possessed no right to sue and recover damages from Bell for its continuing trespass.

The gist of an action of trespass to realty is the injury to the right of possession. 75 Am.Jur.2d Trespass § 22 (1974); 87 C.J.S. Trespass § 22 (1954). See also Restatement (Second) of Torts § 162 (1965); W. Prosser, Law of Torts 68 (3rd ed. 1964). Constructive possession is sufficient to enable the owner to maintain an action for trespass. 75 Am.Jur.2d Trespass § 24 (1974). And, an equitable title coupled with the right of possession has been held sufficient to maintain trespass. 87 C.J.S. Trespass § 26 (1954). But, a vendee under an executory land contract who has neither actual possession nor an immediate right to possession under the contract can not maintain the action. Annot., 151 A.L.R. 942 (1944). Here, Pentagon was a vendee under an executory contract having neither actual nor an immediate right to possession and consequently can not maintain the action against Bell for trespass.

We are aware that Texas & P. Ry. v. Bullard, 127 S.W. 1152 (Tex.Civ.App.—1909, no writ) allowed recovery for a trespass which occurred before the vendee had actual or constructive possession to the land, but this case is contrary to the general rule as discussed above and as followed in Boyd v. Schreiner, 116 S.W. 100 (Tex.Civ.App.—1909, writ ref’d). Boyd upholds the general rule that a conveyance of land does not transfer the grantor’s right of action for damages for a trespass theretofore accruing. If Bell’s trespass had continued after Pentagon took title or possession (actual or constructive) to the land, then Pentagon could have maintained an action for trespass for the period after Pentagon had acquired title or possession. See Restatement (Second) of Torts § 162, comment d at 292 (1965).

The judgment non obstante veredicto is affirmed.

J. CURTISS BROWN, Chief Justice, not participating.


text:
    GOODYEAR TIRE & RUBBER COMPANY, HOUSTON CHEMICAL PLANT, Appellant, v. Max SANFORD, Appellee.
    No. 1273.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    July 21, 1976.
    Rehearing Denied Sept. 8, 1976.

      Richard R. Brann, Baker & Botts, Houston, for appellant.
    George Dixie, Chris Dixie, Dixie, Wolf & Hall, Houston, for appellee.
   J. CURTISS BROWN, Chief Justice.

This is a suit to vacate a labor arbitrator’s award.

Max Sanford (Sanford or appellee) filed suit in the district court of Harris County against Goodyear Tire & Rubber Company, Houston Chemical Plant (Goodyear or appellant) seeking to vacate a labor arbitration award. The arbitrator had upheld Sanford’s discharge by Goodyear. After a non-jury trial, the trial court entered a judgment that vacated the arbitrator’s award, reinstated Sanford as an employee of Goodyear in the same position that he would have been in had he not been terminated, and awarded Sanford back pay. Goodyear has perfected this appeal. Points attacking the judgment of the trial court have been duly filed by appellant on all available grounds.

Most of the facts relevant to this appeal have been stipulated by the parties. On October 6, 1971 Sanford, while in the employment of Goodyear, was involved in an altercation with his supervisor, Ray Graves. Sanford accused Graves of striking him. On October 8 Sanford’s labor union representatives filed a grievance on his behalf, requesting “that immediate and positive action be taken regarding this matter.” On the same day Sanford filed simple assault charges against Graves in the Municipal Court of Houston.

At the time of this incident there was a labor agreement between Goodyear and Local 347, International Union of Operating Engineers, of which Sanford was a member. Article IV(C) of the agreement provided that

“neither party shall bring suit or other action in the court or a public administrative agency on any matter of dispute which is subject to the grievance procedure until said procedure has been exhausted. . . . ”

On October 21 Goodyear notified Sanford that his employment was being terminated because he had violated this provision.

On October 27, Sanford’s union filed another grievance on his behalf, this one seeking Sanford’s reinstatement and Graves’s removal from a supervisory capacity. After a hearing at which Sanford and several other persons testified, the arbitrator upheld Sanford’s discharge. Sanford then filed suit in the district court claiming that Goodyear had breached the collective bargaining contract between Goodyear and Local 347 by discharging him without “just cause.” The trial court vacated the arbitrator’s award on the ground that “it is contrary to accepted public policy since it imposes a restriction on the right of citizens to prompt, uninhibited access to our Criminal Courts to redress violations of Texas Penal laws.”

Section 301 of the Labor Management Relations Act, 1947, 29 U.S.C. § 185, gives United States district courts jurisdiction of “[sjuits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ... or between any such labor organizations. . . . ” Section 301 did not divest state courts of jurisdiction of suits for violations of contracts between employers and labor organizations. Charles Dowd Box Co. v. Courtney, 368 U.S. 502, 82 S.Ct. 519, 7 L.Ed.2d 483 (1962). However, the federal courts have been authorized to fashion a body of federal law for the enforcement of collective bargaining agreements, and it is this federal law that governs. Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957). A state law that is compatible with the purpose of § 301 may be “absorbed” as federal law in order to find and apply the rule that will best effectuate the federal policy. Id. Incompatible doctrines of local law must give way to principles of federal law. Local 174, Teamsters v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). Section 301 applies equally to suits brought by individual employees seeking to protect their rights under collective bargaining agreements as to suits in which a labor organization is a party. Smith v. Evening News Association, 371 U.S. 195, 83 S.Ct. 267, 9 L.Ed.2d 246 (1962).

This appeal presents us with three questions: (1) Does the federal law recognize public policy as a proper basis on which a court may vacate (or refuse to enforce) a labor arbitration award? (2) Does the award in the instant case contravene a federal public policy or a state public policy that is not inconsistent with federal policy? (3)Should the award be vacated in the instant case?

The first question, then, is whether federal law recognizes public policy as a proper basis on which a court may vacate a labor arbitration award. The starting point in this inquiry must of necessity be United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593, 80 S.Ct. 1358, 4 L.Ed.2d 1424 (1960), one of the famous Steelworkers Trilogy, in which the Court said:

“The refusal of courts to review the merits of an arbitration award is the proper approach to arbitration under collective bargaining agreements. The federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of the awards. .
“. . . Nevertheless, an arbitrator is confined to interpretation and application of the collective bargaining agreement; he does not sit to dispense his own brand of industrial justice. He may of course look for guidance from many sources, yet his award is legitimate only so long as it draws its essence from the collective bargaining agreement. When the arbitrator’s words manifest an infidelity to this obligation, courts have no choice but to refuse enforcement of the award.” Id. at 596-97, 80 S.Ct. at 1361.

Thus, it is appropriate that we recognize at the outset the very limited scope of review given to courts when they are asked to enforce or vacate an award made by a labor arbitrator. It is clear that “if, by reason of expansive judicial oversight, the risk of judicial displacement of the award were to become substantial, the workability of the system would be seriously jeopardized.” Dunau, Scope of Judicial Review of Labor Arbitration Awards, N.Y.U. 24th Conf. on Lab. 175, 177 (1972).

Nonetheless, exceptions have been recognized that go beyond the literal language in Enterprise that the award must draw its essence from the collective bargaining agreement. For example, it has been held that a labor arbitration award which requires one or both parties to violate the law will not be enforced. Glendale Manufacturing Co. v. Local 520, ILGWU, 283 F.2d 936 (4th Cir. 1960), cert. denied, 366 U.S. 950, 81 S.Ct. 1902, 6 L.Ed.2d 1243 (1961). If the award is arbitrary, capricious, or not adequately grounded in the basic collective bargaining contract, it will not be enforced. Dallas Typographical Local 173 v. A. H. Belo Corp., 372 F.2d 577 (5th Cir. 1967).

Further, it is possible that the United States Arbitration Act, 9 U.S.C. § 1 (1970) may apply to suits founded on LMRA § 301. If so, the provisions of § 10 of that Act could be considered additional exceptions to the general rule of non-reviewability. Of particular interest in the instant case is § 10(d), which requires vacation of the award “[w]here the arbitrators exceeded their powers. . . . ” Though the Supreme Court has not yet decided the issue, numerous lower courts have concluded that labor arbitration awards are within the scope of the Arbitration Act. See, e. g., International Association of Machinists v. General Electric Co., 406 F.2d 1046 (2d Cir. 1969); Newark Stereotypers’ Local 18 v. Newark Morning Ledger Co., 397 F.2d 594 (3d Cir.), cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365 (1968); Pietro Scalzitti Co. v. Operating Engineers Local 150, 351 F.2d 576 (7th Cir. 1965).

Besides the instances mentioned above, a number of federal courts have suggested that labor arbitrators’ awards which contravene public policy will be vacated. See Local 453, Electrical Workers v. Otis Elevator Co., 314 F.2d 25 (2d Cir.), cert. denied, 373 U.S. 949, 83 S.Ct. 1680, 10 L.Ed.2d 705 (1963); Metal Products Workers Local 1645 v. Torrington Co., 358 F.2d 103, 106 (2d Cir. 1966); Machinists District 8 v. Campbell Soup Co., 406 F.2d 1223 (7th Cir.), cert. denied, 396 U.S. 820, 90 S.Ct. 57, 24 L.Ed.2d 70 (1969); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123, 1128-29 n. 27 (3d Cir. 1969); Botany Industries, Inc. v. New York Joint Board, Amalgamated Clothing Workers, 375 F.Supp. 485, 490-91 (S.D.N.Y.), vacated as moot sub nom. Robb v. New York Joint Board, Amalgamated Clothing Workers, 506 F.2d 1246 (2d Cir. 1974); Local 1852, Waterfront Guard Association v. Amstar Corp., 363 F.Supp. 1026, 1033 (D.Md.1973); UAW Local 985 v. W. M. Chace Co., 262 F.Supp. 114 (E.D.Mich.1966); cf. Washington-Baltimore Newspaper Guild Local 35 v. Washington Post Co., 143 U.S. App.D.C. 210, 442 F.2d 1234, 1239 (1971); Gulf States Telephone Co. v. Local 1692, Electrical Workers, 416 F.2d 198, 201 (5th Cir. 1969).

In Local 453, Electrical Workers v. Otis Elevator Co., supra, the case most often cited for this proposition, the court said:

“It is no less true in suits brought under § 301 to enforce arbitration awards than in other lawsuits that the ‘power of the federal courts to enforce the terms of private agreements is at all times exercised subject to the restrictions and limitations of the public policy of the United States. * * * ’ Hurd v. Hodge, 334 U.S. 24, 34-35, 68 S.Ct. 847, 852-53, 92 L.Ed. 1187 (1948). The public policy to be enforced is a part of the substantive principles of federal labor law which federal courts, under the mandate of Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957), are empowered to fashion. Cf. Local 174, Teamsters, etc., v. Lucas Flour Co., 369 U.S. 95, 82 S.Ct. 571, 7 L.Ed.2d 593 (1962). Thus, when public policy is sought to be interposed as a bar to enforcement of an arbitration award, a court must evaluate its asserted content.” Id. at 29.

In addition, numerous commentators have concluded that labor arbitrators’ awards may be overturned on public policy grounds. See Blumrosen, Public Policy Considerations in Labor Arbitration Cases, 14 Rutgers L.Rev. 217 (1960); Griffin, Judicial Review of Labor Arbitration Awards, 4 Suffolk L.Rev. 39, 62-67 (1969); Jones, The Nature of the Court’s “Jurisdiction” in Statutory Arbitration Post-Award Motions, 46 Calif.L.Rev. 411 (1958); Markham, Judicial Review of an Arbitrator’s Award under Section 301(a) of the Labor Management Relations Act, 39 Tenn.L.Rev. 613, 636-42 (1972); Symposium-Arbitration and the' Courts, 58 Nw.U.L.Rev. 466, 545-56 (1963); Note, Judicial Review of Labor Arbitration Awards After the Trilogy, 53 Cornell L. Rev. 136,145-47 (1967).

Based on the above authorities, we conclude that public policy is a proper basis on which a court may vacate a labor arbitration award. While it is federal law that controls in this instance, we note that a number of state courts have reached the same or a similar conclusion. Cf. Smith v. Gladney, 128 Tex. 354, 98 S.W.2d 351 (1936); Black v. Cutter Laboratories. 43 Cal.2d 788, 278 P.2d 905 (1955), petition for cert. dismissed, 351 U.S. 292, 76 S.Ct. 824, 100 L.Ed. 1188 (1956); Avco Corp. v. Preteska, 22 Conn.Sup. 475, 174 A.2d 684 (1961); Tandy v. Elmore-Cooper Live Stock Commission Co., 113 Mo.App. 409, 87 S.W. 614 (1905); Western Union Tel. Co. v. American Communications Ass’n, 299 N.Y. 177, 86 N.E.2d 162 (1949).

Having answered the first question in the affirmative, we turn to the second question: Does the award in the instant case contravene a federal public policy or a state public policy that is not inconsistent with federal policy?

The labor agreement forbade either party from bringing “suit or other action in the court or a public administrative agency on any matter of dispute which is subject to the grievance procedure until said procedure has been exhausted.” As interpreted by the arbitrator, this provision forced those who desired to use the grievance procedure to delay the filing of any criminal charges growing out of the incident until after the procedure had been exhausted. There is testimony in the record indicating that it is not unusual for completion of the grievance procedure to require several months. We note that in the present case the formal award of the arbitrator was dated 104 days after the incident and 83 days after appellee’s second grievance was submitted. The terms of the labor agreement require that “[a]ll employee grievances must originate in the first step of the grievance procedure within five (5) working days of their occurrence.”

The agreed stipulation between the parties contained an offer of a Houston attorney who was familiar with such practice to testify that “the practice and policy of both the City Attorneys assigned to the Municipal Courts as well as to the Houston Police Department is not to accept complaints of simple assault against any individual unless the complaints are filed soon after the conduct giving rise to the filing of the assault charges.” Even without such a policy we could not ignore the reality that a delay in the prosecution of a criminal case almost invariably works to the disadvantage of the prosecution. Thus, any substantial delay has the effect of hindering law enforcement.

There can be no doubt that an agreement that has the effect of delaying the reporting or prosecution of violations of the law is contrary to the public policy of the United States. In the case of In re Quarles, 158 U.S. 532, 15 S.Ct. 959, 39 L.Ed. 1080 (1895), the Supreme Court stated:

“It is the duty and the right, not only of every peace officer of the United States, but of every citizen, to assist in prosecuting, and in securing the punishment of, any breach of the peace of the United States. It is the right, as well as the duty, of every citizen, when called upon by the proper officer, to act as part of the posse comitatus in upholding the laws of his country. It is likewise his right and his duty to communicate to the executive officers any information which he has of the commission of an offense against those laws. .
“The right of a citizen informing of a violation of law, like the right of a prisoner in custody upon a charge of such violation, to be protected against lawless violence, does not depend upon any of the amendments to the constitution, but arises out of the creation and establishment by the constitution, itself of a national government, paramount and supreme within its sphere of action. .
“The right of the private citizen who assists in putting in motion the course of justice, and the right of the officers concerned in the administration of justice, stand upon the same ground. . . . ” Id. at 535-36, 15 S.Ct. at 960-61.

An agreement which tends to stifle criminal prosecution is void as an attempt to obstruct the enforcement of the laws. Bank of Tucson v. Adrian, 245 F.Supp. 595 (D.Minn.1964), aff’d per curiam sub nom., Bank of Tucson v. Bjornnes, 351 F.2d 949 (8th Cir. 1965). “It is public policy . . . everywhere to encourage the disclosure of criminal activity. . . . ” Lachman v. Sperry-Sun Well Surveying Co., 457 F.2d 850, 853 (10th Cir. 1972).

Such an agreement also violates the public policy of the State of Texas. Cf. Merrell v. Timmons, 138 Tex. 250, 158 S.W.2d 278 (1941); Wegner Bros. v. E. J. Biering & Co., 65 Tex. 506 (1886); Prim v. Farmers’ Nat. Bank, 44 S.W.2d 943 (Tex.Com.App.1932, holding approved); Duncan v. Piper, 79 S.W.2d 172 (Tex.Civ.App.-Dallas 1935, no writ); Robertson v. Shinn Grocery Co., 34 S.W.2d 367 (Tex.Civ.App.-Austin 1930, writ ref’d); Bradley v. Gilliam, 260 S.W. 289 (Tex.Civ.App.-Dallas 1924, no writ).

Appellant emphasizes that appellee was not obligated to use the grievance procedure; from this it reasons that appellee’s discharge was not on account of his institution of criminal charges, but rather was because he attempted to invoke criminal procedures after he had voluntarily decided to use the grievance procedure. This argument misses the point. It was the very choice offered appellee that offended public policy. For the orderly functioning of our society, people must be completely free from all forms of coercion against reporting violations of the law. Indeed, it is their duty to do so. In re Quarles, supra. As interpreted by the arbitrator, an agreement such as the present one tends to entice them away from the prompt performance of that duty by offering some benefit in return— here the availability of the grievance procedure. As a result, the interest of the public in seeing that law violators are brought to justice is likely to be thwarted.

We hold that the award of the arbitrator under article IV(C) of the labor agreement in question is repugnant to both federal and state public policy to the extent that it forces employees using the grievance procedure to delay the filing of criminal charges growing out of the subject matter of the grievance until the grievance procedure has been exhausted.

Having concluded that public policy is a proper basis on which a court may vacate a labor arbitrator’s award, and that the award in the instant case does contravene public policy, we now address the question of whether the present award should be vacated.

A number of commentators have suggested that courts should use a balancing approach in determining whether a labor arbitration award should be vacated on public policy grounds. See Griffin, Judicial Review of Labor Arbitration Awards, 4 Suffolk L.Rev. 39 (1969); Symposium—Arbitration and the Courts, 58 Nw.U.L.Rev. 466, 545 (1963); Note, Judicial Review of Labor Arbitration Awards After the Trilogy, 53 Cornell L.Rev. 136 (1967). At least two federal courts have expressly employed such an approach. See Botany Industries, Inc. v. New York Joint Board, Amalgamated Clothing Workers, supra; Local 1852, Waterfront Guard Association v. Amstar Corp., supra. We agree that a balancing of policies is called for, and feel that the following commentary reflects a reasonable means of utilizing such an approach:

“Accepting the necessity of some judicial review into the merits of arbitration awards, the problem becomes one of how much and under what circumstances. Although tests have been devised to resolve these issues, the nature of the problem is not susceptible of determination by hard and fast rules. Each case presents unique circumstances which require a careful weighing of particular matters of public policy. Given the diverse settings in which such policy may require departure from the arbitration ideal, it is submitted that the only workable approach is a balancing of policies on an ad hoc basis.
“If arbitration is to be an effective means of settling disputes, the primary objective must be to give arbitration awards maximum finality. Other important legislative and judicial policies, however, cannot be ignored. In each case, the policy favoring arbitration must be balanced against the particular public policy allegedly violated. In order to promote the policy favoring arbitration to the fullest extent possible, only clear violations of important public policies should justify the vacating of awards.” Symposium — Arbitration and the Courts, supra at 548 (footnotes omitted).

Relying on Washington-Baltimore Newspaper Guild Local 35 v. Washington Post Co., supra, and Gulf States Telephone Co. v. Local 1692, Electrical Workers, supra, appellant argues that the arbitrator’s award in the instant case should be upheld because it did not compel conduct contrary to public policy. There is dicta in these opinions that supports this proposition, and it is true that until the grievance was actually filed appel-lee was not compelled to refrain from reporting the assault to law enforcement officials. However, we decline to adopt this dicta as an absolute rule. We feel that the better approach is to let such factors be a consideration in the balancing of the conflicting policies.

On the one hand, then, we have a strong national policy favoring arbitration as a means of settling labor disputes. Each time a court overturns an -arbitrator’s award the finality of such awards is diluted and the attractiveness of the arbitration system is diminished in the eyes of those it was designed to serve. On the other hand, we have the policy favoring enforcement of criminal laws, and disfavoring conduct which tends to interfere with effective law enforcement. As we noted previously, delay in the reporting or prosecution of violations of criminal law works to the disadvantage of the public interest in the prompt disposition of criminal charges.

It is our opinion that in this case the policy favoring effective law enforcement must prevail. The policy of keeping people completely free from coercion against filing criminal complaints is of paramount importance to the orderly functioning of our society. In virtually any criminal case substantial delay is a serious obstacle for the prosecution to overcome. Further, if we were to hold otherwise, it is all too likely that in the future other employees, in order to take advantage of the right to bring a grievance, would forego their right and duty of reporting similar criminal violations until the grievance procedure had been exhausted.

A proceeding by a criminal court is not to adjudicate private rights, but to effectuate a public policy. Such proceedings are not an alternate remedy to the grievance procedure. Therefore, any coercion used to discourage, retard, or defeat free access to the criminal courts is beyond the legitimate interests of an employer. All of appellant’s points have been carefully considered and are overruled. The judgment of the trial court is affirmed.

Affirmed.

      . In this opinion the use of the word “vacate” also includes the meaning “or refuse to enforce.”


text:
    Joseph C. W. SMITH, Appellant, v. Alton HUES et ux., Appellee.
    No. 1311.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    July 21, 1976.
    Rehearing Denied Sept. 8, 1976.

      Frank G. Harmon, James Plummer, Baker & Botts, Ansel M. Kahn, Houston, for appellant.
    Eugene Pitman, DeLange, Hudspeth, Pit-man & Katz, Houston, for appellees.
   J. CURTISS BROWN, Chief Justice.

This is a suit for specific performance of a contract for the sale of real estate.

Alton Hues and his wife, Bethine Hues (the Hues or appellees), brought suit against Joseph C. W. Smith (Smith or appellant) to obtain specific performance of, or in the alternative damages for defendant’s breach of, a contract for the sale of land in which plaintiffs were the purchasers and defendant was the seller. After a non-jury trial, the trial court entered a judgment decreeing specific performance. Smith has perfected this appeal.

Shortly prior to February 11, 1971 the parties verbally agreed on a sale by Smith to the Hues of certain land for a price of $1,000 per acre, the exact acreage of the property to be determined by a future survey. On February 11 the parties met with Smith’s attorney to discuss a proposed draft of an earnest money contract. One provision of that draft gave the seller a reasonable time not to exceed ninety days in which to cure any objections to the title to the property. At the meeting there was a discussion of an apparently forged deed which purported to convey the property from Smith to a third party. As a result of that discussion the above provision was changed to allow the seller eighteen months to cure such objections. The contract was signed on February 11, 1971. The Hues subsequently found that the title company designated as the escrow agent in the contract was unwilling to accept the earnest money deposit. After contacting Smith’s attorney they placed the money with a different title company.

In August, 1971 Smith filed suit to clear his title to the property. A judgment clearing his title was eventually entered in May of 1974. Meanwhile, the Hues had the land surveyed to determine the exact acreage, and in August of 1972, shortly before the expiration of eighteen months from the date the contract was signed, tendered to Smith 10% of the purchase price in cash along with a promissory note for the remainder, which the contract required. Smith failed to tender to appellees a deed, and this suit was brought shortly thereafter.

Appellant’s first point of error asserts that the decree of specific performance is improper because time was of the essence in the contract, and appellees failed to consummate the purchase within the specified time. The contract provided, inter alia:

“Notwithstanding printed provisions to the contrary, the parties to this contract hereby agree as follows:
* * * * * *
“(2) Purchaser shall have sixty (60) days from date of execution hereof in which to consummate said purchase.
* * * * * *
“(4) Purchasers will not be required to perform said contract and Sellers sole remedy will be liquidated damages the amount of money deposited in escrow by the purchasers.”

Appellant argues that clause (2) above evidences an intention that time should be of the essence, and in addition, that clause (4) above makes the contract an option contract in which time is always of the essence. From this he reasons that appellees’ tender came long after the contract had expired by its own terms.

We agree with appellant that since he, as seller, had a mandatory obligation to accept the sum stipulated to be liquidated damages in lieu of appellees’ further liability, thereby relieving appellees of the obligation to pay the purchase price, this contract was an option contract and not an absolute agreement of sale and purchase. Paramount Fire Insurance Co. v. Aetna Casualty & Surety Co., 163 Tex. 250, 353 S.W.2d 841 (1962); Texlouana Producing & Refining Co. v. Wall, 257 S.W. 875 (Tex.Com.App., 1924, jdgmt. adopted); Tabor v. Ragle, 526 S.W.2d 670 (Tex.Civ.App., Fort Worth 1975, writ ref’d n. r. e.); Gala Homes, Inc. v. Fritz, 393 S.W.2d 409 (Tex.Civ.App., Waco 1965, writ ref’d n. r. e.). It has long been the rule that time is always of the essence in an option contract. Johnson v. Portwood, 89 Tex. 235, 34 S.W. 596 (1896); White v. Miller, 518 S.W.2d 383 (Tex.Civ.App., Tyler 1974, writ dism’d).

However, even where time is of the essence, the stipulated time limit may be extended either by agreement or by waiver. Puckett v. Hoover, 140 Tex. 1, 202 S.W.2d 209 (1947); Langley v. Norris, 141 Tex. 405, 173 S.W.2d 454 (1943); Laredo Hides Co. v. H. & H. Meat Products Co., 513 S.W.2d 210 (Tex.Civ.App., Corpus Christi 1974, writ ref’d n. r. e.). Such a waiver “not only may be shown by parol, but may be made to appear from the circumstances or course of dealing.” Puckett v. Hoover, supra, 202 S.W.2d at 212.

The trial court filed findings of fact and conclusions of law, among which are the following:

“10. That Defendant, by and through his actions and actions of his duly authorized attorneys, led Plaintiffs to believe and represented to Plaintiffs that Plaintiffs would have such time for the completion of the purchase of the property described in Plaintiffs’ Exhibit No. 1 as was required for Defendant to remove the cloud upon Defendant’s title cast by the document, Plaintiffs’ Exhibit No. 2, but not exceeding 18 months from the date of said contract, within which to consummate Plaintiffs’ purchase of the property from Defendant, pursuant to Plaintiffs’ Exhibit No. 1.
“11. That the Plaintiffs reasonably relied upon such actions and representations on the part of the Defendant and Defendant’s attorneys.
“12. That all actions and representations made and demonstrated to Plaintiffs by Defendant’s said attorneys were expressly authorized by the Defendant.
“13. That all actions and representations made by Defendant’s attorneys to Plaintiffs and demonstrated to Plaintiffs were within the apparent authority of Defendant’s said attorneys.
“14. That the Plaintiffs reasonably relied upon the apparent authority conferred upon Defendant’s attorneys by Defendant.
“15. That the Defendant is estopped to deny that the Plaintiffs attempt to conclude their purchase pursuant to Plaintiffs’ Exhibit No. 1 was timely.
“16. That the Defendant agreed that the time for performance of the contract, Plaintiffs’ Exhibit No. 1, by the Plaintiffs would extend to and include the time necessary for Defendant to remove the cloud cast upon his title by Plaintiffs’ Exhibit No. 2, but not exceeding 18 months after the date of said Plaintiffs’ Exhibit No. 1.
******
“18. That Defendant’s attorneys agreed that the time for performance of the obligations of Plaintiffs for the purchase of property as described in Plaintiffs’ Exhibit No. 1 would extend to and include such time as was necessary for Defendant to cause the cloud cast upon his title to said property by Plaintiffs’ Exhibit No. 2 to be removed and cancelled, but not to exceed 18 months after the date of Plaintiffs’ Exhibit No. 1.”

In his original brief, appellant had no points of error attacking or challenging these findings. After this cause was submitted on oral argument, appellant filed a motion for leave to file a “Reply and Amended Brief.” We denied appellant’s motion for leave to file an amended brief in which new points were raised, and granted his motion for leave to file a reply brief in which no new points were raised. In a “Reply Brief,” appellant has challenged the above findings of fact as being erroneous because the appellees failed to affirmatively plead estoppel and waiver, as required by Tex.R.Civ.P. 94. This is a new point, not raised in appellant’s original brief, and we decline to consider it. See Green Light Co. v. Moore, 485 S.W.2d 360 (Tex.Civ.App., Houston [14th Dist.] 1972, no writ); Reynolds v. Steves, 356 S.W.2d 200 (Tex.Civ.App., San Antonio 1962, no writ); Krumb v. Porter, 152 S.W.2d 495 (Tex.Civ.App., San Antonio 1941, writ ref’d).

It is well settled that absent a proper attack on material findings of fact they are binding on appellant and must be accepted by this court. Whited v. Mullins, 515 S.W.2d 159 (Tex.Civ.App., Houston [1st Dist.] 1974, no writ); Cortez v. Cortez, 457 S.W.2d 131 (Tex.Civ.App., San Antonio 1970, no writ); Hardeman v. Mitchell, 444 S.W.2d 651 (Tex.Civ.App., Tyler 1969, no writ); Curtis v. National Cash Register Co., 429 S.W.2d 909 (Tex.Civ.App., Amarillo 1968, writ ref’d n. r. e.); Kroger Co. v. Warren, 420 S.W.2d 218 (Tex.Civ.App., Houston [1st Dist.] 1967, no writ); McKenzie v. Carte, 385 S.W.2d 520 (Tex.Civ.App., Corpus Christi 1964, writ ref’d n. r. e.); Thompson v. Larry Lightner, Inc., 230 S.W.2d 831 (Tex.Civ.App., San Antonio 1950, writ ref’d n. r. e.); Curry v. E. E. Stone Lumber Co., 218 S.W.2d 293 (Tex.Civ.App., El Paso 1948, writ ref’d n. r. e.). Being a question of intention, the issue of waiver is one of fact where it is a matter of inference. Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855 (1958). Therefore, even though time was of the essence in this contract, we are bound by the trial court’s findings that appellant had waived the 60-day time limitation, had agreed to allow appellees eighteen months in which to consummate the purchase, and is now estopped to deny that the appellees made a timely tender of performance. Appellant’s first point of error is overruled.

Appellant’s second point of error asserts that the contract is unenforceable because it lacks mutuality of obligation and mutuality of remedy. For evidence of the asserted lack of mutuality, appellant points to the aforementioned provision relieving appel-lees of the obligation to perform the contract and requiring appellant to accept the deposited earnest money as his sole remedy in case of a breach by appellees.

We have held that the provision in question made this contract an option contract. By their very nature such contracts lack mutuality of obligation and remedy at their inception. Yet if the option is properly accepted the optionor is bound thereby and the optionee may obtain specific performance. Humble Oil & Refining Co. v. Westside Investment Corp., 428 S.W.2d 92 (Tex.Sup.1968).

Moreover, mutuality of remedy at the inception of the contract is not an essential element in a suit for specific performance of any contract, because the required mutuality may be supplied by performance by the party seeking specific performance. Adams v. Abbott, 151 Tex. 601, 254 S.W.2d 78 (1952). Appellant’s second point is overruled.

Appellant’s third point of error asserts that the contract is unenforceable because appellees failed to deposit the earnest money with the proper escrow agent. The contract indicated that the appellees were to place a deposit of $250.00 as earnest money in escrow with “Houston Title Guaranty Company.” The evidence showed that when appellees attempted to do this, the Houston Title Company refused to accept their deposit because it was representing an individual claiming title to the same property through the forged deed referred to above. Appellees immediately contacted appellant’s attorney, who told them to deposit the earnest money with the Stewart Title Company. Appellant argues that any agreement to change the escrow agent to Stewart Title Company was not in writing, as required by the Statute of Frauds, and was therefore ineffective to modify the express terms of the contract designating the Houston Title Company as escrow agent. Appellant contends that the depositing of the earnest money with the specified title company was a condition precedent to the formation of an enforceable contract, which condition the appellees failed to perform.

We do not believe that this is the sort of oral modification that falls within the prohibition of the Statute of Frauds. In the case of Garcia v. Karam, 154 Tex. 240, 276 S.W.2d 255 (1955), the supreme court stated that in determining whether or not an oral modification of a written contract is prohibited by the Statute of Frauds a court should look to the written contract before modification and to the character of the modification itself.

“If neither the portion of the written contract affected by the subsequent modification nor the matter encompassed by the modification itself is required by the Statute of Frauds to be in writing, then the oral modification will not render the contract unenforceable.” Id. 276 S.W.2d at 257.

In Garcia, the parties had entered into an agreement whereby one was to accept $20,-000.00 worth of merchandise as a portion of the consideration to be paid him. The written contract indicated that an inventory of this merchandise would be required. However, it was alleged that the contract had been orally modified so as to eliminate the necessity of taking an inventory. The court held that such a modification was not prohibited by the Statute of Frauds, noting that

“the modification did not constitute a change in the character or value of the consideration originally contracted for. It amounted only to a change of one incidental condition relating to the time and manner of evaluating the agreed-upon stock of merchandise. . . 276 S.W.2d at 257.

We think the modification in the instant case was of just such an “incidental condition,” and neither constituted a change in the character or value of the consideration originally contracted for nor was required to have been stated in writing in the original contract. Therefore the modification did not need to be stated in writing for the contract to be enforceable. Cf. Dracopoulas v. Rachal, 411 S.W.2d 719 (Tex.Sup.1967); Grayson Enterprises, Inc. v. Texas Key Broadcasters, Inc., 390 S.W.2d 346 (Tex.Civ.App., Eastland 1965, writ dism’d).

Further, the trial court made the following findings of fact relevant to this issue:

“6. On February 11,1971 and after execution of Plaintiffs’ Exhibit No. 1 by Plaintiffs and Defendant, the parties discovered that Houston Title Guaranty Company, a Company designated as the Escrow Agent in Plaintiffs’ Exhibit No. 1 was unwilling to accept such escrow, Defendant’s attorney, Mr. Charles Laswell, agreed that such contract and earnest money be escrowed with Stewart Title Company at Conroe, which agreement was evidenced by memorandum in writing thereafter (Plaintiffs’ Exhibit No. 3). “7. That Defendant’s attorney, Charles Laswell, had authority from Defendant to amend Plaintiffs’ Exhibit No. 1 to the extent of agreeing upon escrow of Plaintiffs’ Exhibit No. 1 and the earnest money with Stewart Title Company.
“8. That Defendant’s attorney, Charles Laswell, had apparent authority from Defendant to amend Plaintiffs’ Exhibit No.
1 to the extent of agreeing upon escrow of Plaintiffs’ Exhibit No. 1 and the earnest money with Stewart Title Company. “9. That Plaintiffs relied upon such apparent authority of the Defendant’s attorney, Charles Laswell, to amend Plaintiffs’ Exhibit No. 1 to the extent of changing the escrow agent from Houston Title Guaranty Company to Stewart Title Company.”

As with the trial court’s other findings of fact, appellant has no points of error expressly attacking these findings and is therefore bound by them. In any event, we have examined the record and concluded that the above findings are supported by some evidence of probative value. Appellant’s third point of error is overruled.

Appellant’s fourth point of error asserts that appellees failed to properly tender performance under the contract. His complaint goes to the manner in which the promissory note was to be paid. The note tendered by appellees was exactly as the contract required, except that the following words were added:

“[A]nd as payments are made, they shall first be applied to the payment of all interest accrued to the time of such payment, and the balance, if any shall be applied in reduction of the principal hereof. .. . ”

It is this addition that appellant contends rendered appellees’ tender of performance improper.

The contract obviously contemplated some sort of prepayment of principal. There were numerous clauses providing for “partial releases” from the lien securing payment of the note upon payment of $1,200.00 per acre for each acre sought to be released. Two of the paragraphs regarding such releases were stated as follows:

“Payments of principal sums for partial releases shall be credited to the subsequently maturing principal installments in order of maturity.
“Sums paid on the principal of the above note shall entitle purchaser to the partial release of tracts later to be designated by purchaser to the same extent as if such payment had been made expressly for the purpose of obtaining a partial release.”

Considering the option for partial releases contained in the contract, the provision in the note directing the order in which payments were to be applied as between principal and interest was not inconsistent with the terms of the contract. Certainly it is not such a material breach of the contract as would prevent appellees from obtaining specific performance. See Cowman v. Allen Monuments, Inc., 500 S.W.2d 223 (Tex.Civ.App., Texarkana 1973, no writ); Restatement of Contracts § 375 (1932); cf. Bowen v. Briscoe, 453 S.W.2d 287 (Tex.Sup.1970). Appellant’s fourth point of error is overruled.

In his fifth point of error appellant asserts that the contract is too vague and indefinite to be enforceable by specific performance. He argues that the contract does not recite a definite purchase price, an amount of the vendor’s lien note, or a date or place of payment of the note, and does not provide any specific terms of the deed of trust.

The provision of the contract relating to price and payment reads as follows:

“The consideration for the sale and conveyance of said property is $1,000.00 per acre, payable as follows: 10% of purchase price cash to be paid by Purchaser contemporaneously with the conveyance of said property by Seller to Purchaser; and the balance of said purchase price to be evidenced by and paid in accordance with the terms and conditions of that one certain promissory note for ninety (90%) per cent of the purchase price of said land, bearing interest at the rate of eight (8%) per cent per annum, interest payable semiannually, the principal being payable in ten equal annual installments with the first installment of principal being due and payable on or before one (1) year from date of closing and with a like installment being due and payable the same day of the same month of each succeeding year, until said note, both principal and interest, is paid in its entirety.”

The well-established test for determining if specific performance may be decreed is whether or not the essential terms of the contract are expressed with reasonable certainty. Johnson v. Snell, 504 S.W.2d 397 (Tex.Sup.1973); Bryant v. Clark, 163 Tex. 596, 358 S.W.2d 614 (1962); Langley v. Norris, 141 Tex. 405, 173 S.W.2d 454 (1943). See also Restatement of Contracts § 370 (1932).

In the instant case the purchase price is definitely established by the contract, subject only to a determination of the exact acreage of the property. This is sufficiently certain to allow specific performance. Cf. Johnson v. Snell, supra. The amount of the vendor’s lien note, likewise dependent only on a determination of acreage and a simple mathematical calculation, is also sufficiently certain. Although the contract names no specific date for payment of the note, the requirements that the first installment be paid within one year of the date of closing and that the remaining payments be made on the same day of the same month of each succeeding year are not so uncertain as to preclude specific performance. Cf. Gorme v. Axelrad, 519 S.W.2d 139 (Tex.Civ.App., Houston [14th Dist.] 1975, no writ); Buhler v. McIntire, 365 S.W.2d 237 (Tex.Civ.App., Austin 1963, writ ref’d n. r. e.). Where no place of payment is specified in a promissory note, the law establishes the proper place of presentment. Faulk v. Futch, 147 Tex. 253, 214 S.W.2d 614 (1948); Hamilton v. Newbury, 412 S.W.2d 801 (Tex.Civ.App., Dallas 1967, writ ref’d n. r. e.). See also Tex.Bus. & Comm.Code Ann. § 3.504(b)(3) (1968). Therefore, the absence of such a provision in a contract creates no uncertainty. Finally, the failure of a real estate sales contract to provide the fundamental provisions of a deed of trust does not render it unenforceable by specific performance. Johnson v. Snell, supra, 504 S.W.2d 397 at 399. We hold that the present contract is not so vague or indefinite that it may not be enforced by specific performance. Appellant’s fifth point of error is overruled. The judgment of the trial court is affirmed.

Affirmed.


author: McKAY, Justice.

text:
    George W. ROSS, Appellant, v. Lon W. STINNETT, Appellee.
    No. 925.
    Court of Civil Appeals of Texas, Tyler.
    July 22, 1976.

      Mike Hatched, Ramey, Flock, Hutchins, Grainger & Jeffus, Tyler, for appellant.
    Glen M. Ashworth, Fields, Fields & Har-dee, Athens, for appellee.
   McKAY, Justice.

Lon W. Stinnett, appellee, filed suit against George W. Ross, appellant, to recover $3,065.35 as the unpaid balance allegedly due on a contract to build a house. Appel-lee was the building contractor and appellant was the homeowner.

In the early part of 1973, appellant decided to build a new home on a lot he owned on Cedar Creek Lake. Appellant began oral negotiations with appellee for construction of the house in February of 1973. The parties agreed that certain plans and specifications would be followed in constructing the house subject to change at the option of appellant.

On July 18, 1973, the parties executed a mechanic’s and materialmen’s lien contract. Insofar as pertinent, the lien contract provides:

“WHEREAS, the parties of the first part (appellant) are desirous of building, erecting and constructing certain improvements, to-wit:
“Being the construction of a one story brick residence; 3 bedrooms, 2 baths, concrete slab foundation, three ply slab coated roof, tile floors, paneling in living and dining area, central heat and air, dishwasher, vent-a-hood, range-oven, wash/dry connections, 1 wood burning fireplace, concrete patio, drive and porch.
“to be built, erected and constructed by the party of the second part (appellee) upon the following described tract, lot or parcel of land belonging to said parties of the first part .
(property description)
“NOW, THEREFORE, in consideration that the party of the second part has agreed and does by these presents agree with the parties of the first part, that party of the second part will make, erect, build and finish in a good, substantial and workmanlike manner, by the 18th day of December, 1973, the said above mentioned improvements on the above described premises, performing or causing to be performed all of the labor in the erection and construction of the same, and furnishing all of the material of whatsoever kind necessary to be used in the erection and construction of the same, and paying all expenses incident to the said labor and furnishing of material; the said improvements to be build of good, substantial material and to be erected and constructed strictly according to the plans and specifications signed by the parties hereto for identification and made a part hereof, the parties of the first part hereby agree to pay to the party of the second part at Malakoff, Texas, the sum of Twenty Four thousand five hundred and No./lOO — Dollars, as follows:
“By the delivery of one certain Mechanic’s Lien note in the principal sum of $24,500.00 bearing interest from date at the rate of 8½ per cent per annum, of even date herewith, executed by George W. Ross to L. W. Stinnett, or order, both principal and interest being due and payable on or before the 18th day of December, 1973 ...”

Construction began and the house was eventually completed. At the request of appellant, some changes in the plans and specifications had been made during the course of construction. After the house was completed conflict arose between the parties concerning the amount owed by appellant to appellee. Appellee asserted that appellant had orally agreed, prior to the execution of the written mechanic’s and materialmen’s lien contract, to pay cost plus fifteen per cent to have the house built. Appellant, however, insisted that the mechanic’s and materialmen’s lien contract which specified a consideration of $24,-500.00 was the binding agreement of the parties. On October 11,1973, following the advice of counsel, appellant closed the transaction with the title company and paid the promissory note for $24,500.00 as provided in the mechanic’s and materialmen’s lien contract. Appellant refused to pay the additional sum of $3,065.35 which appellee contends was owing under the alleged oral cost plus fifteen per cent contract.

Appellee then filed suit against appellant on the alleged prior oral contract. In the alternative, appellant also plead in quantum meruit. Only two issues were submitted to the jury, and they were answered favorably for the appellee. In answer to issue one, the jury found that appellant agreed to pay appellee the cost of construction plus fifteen per cent for construction of the home. In issue two, the jury found that the cost of constructing appellant’s house was $23,-969.88. There were no issues requested on quantum meruit.

The court rendered judgment for appellee for $3,065.35 which sum represents the cost of construction plus fifteen per cent less $24,500.00 already paid by appellant on the promissory note.

Appellant brings three points of error each of which concern the trial court’s admission of parol evidence as to the alleged oral contract providing for cost plus fifteen per cent. Appellant asserts that the parol evidence rule bars admission of evidence pertaining to the oral contract because such evidence contradicts the express terms of the subsequently written mechanic’s and materialmen’s lien contract providing for a consideration of $24,500.00. In points two and three, appellant argues that since evidence of the oral contract was inadmissible under the parol evidence rule, there is no evidence to support the jury’s answer to issue one and the evidence is factually insufficient to support the jury’s answer to issue one. Since each of appellant’s points are based on an alleged violation of the parol evidence rule, they will be treated together.

The parol evidence rule is to the effect that in the absence of fraud, accident or mistake, parol or extrinsic evidence is not admissible to contradict or vary the terms or a written instrument. Jackson v. Hernandez, 155 Tex. 249, 285 S.W.2d 184 (1955). Moreover, the parol evidence rule is not a rule of evidence at all, but a rule of substantive law. Hubacek v. Ennis State Bank, 159 Tex. 166, 317 S.W.2d 30 (1958). Evidence admitted in violation of the rule is incompetent and without probative force, and it cannot properly be given legal effect. Miami Petroleum Company v. Neal, 333 S.W.2d 876 (Tex.Civ.App.—El Paso 1960, writ ref’d, n. r. e.); Borden v. Hall, 255 S.W.2d 920 (Tex.Civ.App.—Beaumont, 1951, no writ).

Appellee did not plead fraud, accident or mistake in the trial court and has not made such a contention on appeal. Rather, appellee relies upon the rule announced in Bell v. Mulkey, 7 S.W.2d 115 (Tex.Civ.App.—Amarillo) aff’d, 16 S.W.2d 287 (Tex.Com.App.1929). In Bell v. Mulkey, supra, the court said, “The (parol evidence) rule ‘can be applied only when a written agreement is proved to exist between the parties, and consequently parol evidence is admissible to show that a writing, although purporting on its face to be a contract, was not in fact intended by the parties to be such.’ ” In this connection, appellee argues that the written instrument was never intended to be the binding agreement between the parties, and was signed only as a sham and matter of form to enable the appellant to secure a loan. Ap-pellee contends that the oral cost plus fifteen per cent contract was the true agreement of the parties regarding construction of the house.

We do not agree with appellee’s contention. In our opinion, evidence of the alleged oral agreement to construct the house on a cost plus fifteen per cent basis contradicts the subsequently written mechanic’s and materialmen’s lien contract providing for a consideration of $24,500.00. Appel-lee’s reliance upon the rule stated in Bell v. Mulkey is misplaced. Bell v. Mulkey, supra, was discussed in Trout v. Wichita State Bank & Trust Co., 23 S.W.2d 871 (Tex.Civ.App. — Fort Worth, 1929, no writ), a case similar to the one at bar. In the Trout case, the contractor and the homeowner had a written mechanic’s and materialmen’s lien contract almost identical to the one here in question, but providing for a consideration of $15,000.00. The contractor sought to prove that the real contract between the parties was an oral cost plus ten per cent agreement. The contractor argued that the written mechanic’s and materialmen’s lien contract was merely a sham executed to obtain credit and cited Bell v. Mulkey, supra. The homeowner contended that admission of evidence of the oral agreement violated the parol evidence rule. In Trout, the court stated that the rule announced in Bell v. Mulkey, supra, applies “only when the written contract sought to be avoided by parol proof of a prior agreement at variance therewith is a sham in its entirety, and not merely that some of its terms are not in accord with the prior parol agreement, while the validity of other material parts of the agreement are not challenged.” (Emphasis added.) The court then went on to hold that parol evidence of the oral agreement violated the parol evidence rule since the mechanic’s and materialmen’s lien contract was not a sham in its entirety.

Appellee does not challenge the validity of the entire mechanic’s and mate-rialmen’s lien contract. Appellee argues that the written contract is a sham only insofar as it concerns consideration for construction of the house. That being the position of appellee, we believe and hold that evidence of the alleged prior oral agreement was inadmissible under the parol evidence rule. Furthermore, in the case of a valid written contract, such as the written mechanic’s and materialmen’s lien contract involved here, all prior negotiations that the parties may have had, previous to the execution of the contract, must be considered as either waived or as merged into the written contract. In the absence of allegations of fraud, accident or mistake, it will be conclusively presumed that the written contract contained the whole agreement of the parties, and parol evidence of representations, statements or warranties not disclosed by the contract was inadmissible. Distributors Inv. Co. v. Patton, 130 Tex. 449, 110 S.W.2d 47 (Tex.Com.App.1937, opinion adopted).

Appellee also asserts that the written contract was incomplete because it would have been impossible to build the house using only the plans and specifications contained in the writing. Appellee maintains that a cost plus fifteen per cent agreement would be more consistent with the option appellant had to make changes and alterations in the basic plans for construction. In our opinion, however, the writing is a complete statement on the subject of consideration. Where a document embodies part of the dealings between the parties and is silent or only lightly touches on other elements of the same transaction, only such extrinsic evidence as varies or adds to the terms of the particular phase covered by the writing is to be excluded. 2 McCormick & Ray, Texas Evidence, Sec. 1611 (2d ed. 1956).

We are aware of the general rule that extrinsic evidence is admissible to show the real consideration for a written agreement. 23 Tex.Jur.2d Evidence sec. 368 (1961). This rule, however, is subject to the qualification that the consideration proved must not be inconsistent with that expressed in the writing. 23 Tex.Jur.2d Evidence sec. 370 (1961). Additionally, where the consideration recited in a written instrument is promissory or contractual in nature and there are no allegations of fraud, accident, or mistake, extrinsic evidence is ordinarily not admissible to vary or contradict the recited consideration. Jackson v. Hernandez, supra; 23 Tex.Jur.2d Evidence sec. 371 (1961).

The judgment of the trial court is reversed and judgment is here rendered that appellee take nothing.


text:
    Alfred Eugene COLLINS, Appellant, v. Virgie Juanita COLLINS, Appellee.
    No. 956.
    Court of Civil Appeals of Texas, Tyler.
    July 22, 1976.
    Duane G. Stephens, Stephens, Corn & Rosenstein, Tyler, for appellant.
    Roland Matthews, Troup, for appellee.
   McKAY, Justice.

This is a divorce case involving the sole question of whether there was an abuse of discretion by the trial court in dividing the property.

Alfred Eugene Collins, appellant, and Virgie Juanita Collins, appellee, married in 1959. At the time of the marriage appellee owned a residence in Wilmer, Dallas County. In 1965 the parties bought a residence and an extra lot near Whitehouse in Smith County. During the marriage the community acquired various items of personal property, but some items of furniture were found by the court to be the separate property of appellant.

The trial court judgment awarded to appellant as his separate property: (1) one dining room suite, (2) one living room suite, (3) one china and silver set, and (4) one bedroom suite. The judgment set aside to appellee as her separate property her residence in Wilmer. All other property was found to be community.

The personal community was also divided by the court. Appellant received: (1) a 1974 Ford truck, (2) a 1969 Mercury automobile, (3) T.V. business and inventory, (4) a Diesel tractor and trailer, and (5) all other personal property in his possession on July 15, 1975. Appellee received: (1) a 1969 Ford automobile, (2) a 1967 Ford automobile; and (3) all other personal property in her possession on July 15, 1975.

The court also found that the community had expended $3,500.00 on the separate property residence of appellee, and that appellant was entitled to be reimbursed in the sum of $1,750.00 for his community share.

The court found that the community residence in Smith County was incapable of partition and appointed a receiver to sell the property and divide the proceeds. The court ordered that after the expenses of the sale and the receiver’s fee were paid the receiver should pay to appellant from the net proceeds of the sale the sum of $1,750.00 as reimbursement for funds expended on the separate property of appel-lee.

By his first point appellant complains that the trial court abused its discretion in not correctly determining the amount of reimbursement due the community for community funds expended on appellee’s separate property. Appellant contends that the court should have ordered reimbursement to the community of a sum equal to the enhanced value of appellee’s separate property caused by the expenditure of community funds instead of ordering only the reimbursement of the funds expended. By his second point appellant claims an abuse of discretion by the court in not properly taking into account appellee’s fraudulent dissipation of the community estate.

No findings of fact and conclusions of law were filed and none were requested. In such a case the appellate court must presume that every disputed fact issue was found by the trial court in support of the judgment rendered. Morris v. Texas Elks Crippled Children’s Hospital, Inc., 525 S.W.2d 874, 881 (Tex.Civ.App.-El Paso 1975, writ ref’d n. r. e.); Washington v. Law, 519 S.W.2d 953 (Tex.Civ.App.-Houston [14th Dist.] 1975, writ ref’d n. r. e.).

Divorce courts are given wide discretion in making a division of the property of the parties and such discretion will not be disturbed on appeal unless it has been clearly abused. Bell v. Bell, 513 S.W.2d 20, 22 (Tex.1974); Tex. Family Code, Sec. 3.63.

Appellant argues that the community funds expended on appellee’s separate property plus his labor on and maintenance of such premises enhanced the value of appellee’s separate property residence; and, accordingly, the community estate should have received more reimbursement. Appellant also maintains that appellee gave clocks and pianos to her daughters which were bought with community funds and that such gifts constituted a fraud on the community. The trial court is vested with wide discretion in the division of community property in divorce cases, and the court is not required to divide community property equally between the parties. Dobbs v. Dobbs, 449 S.W.2d 119 (Tex.Civ.App.-Tyler 1969, no writ); Mercer v. Mercer, 503 S.W.2d 395 (Tex.Civ.App.-Corpus Christi 1973, no writ). The trial court may divide the property in such a way as will seem right, just and proper to the court. Mea v. Mea, 464 S.W.2d 201 (Tex.Civ.App.-Tyler 1971, no writ); Hensley v. Hensley, 496 S.W.2d 929 (Tex.Civ.App.-El Paso 1973, no writ). The trial court may also consider the disparity in the earning power of the parties and their business opportunities, capacities and abilities in making a division of the property in a divorce case. In re Marriage of McCurdy, 489 S.W.2d 712 (Tex.Civ.App.-Amarillo 1973, writ dism’d). In view of the wide discretion of the trial court, we find no reversible error in the conduct complained of. Appellant’s points one and two are overruled.

Appellant next complains that the court abused its discretion in not awarding to him the correct amount of reimbursement due as his share of the funds expended on appellee’s separate property. We agree with appellant’s complaint. Under the court’s order the $1,750.00 reimbursement was to be taken from the net proceeds of the sale of the Smith County community residence before any distribution was made to the parties. Such a procedure would result in appellant being reimbursed only in the sum of $875.00 since the $1,750.00 payment to him was to be made out of the undivided community funds. He already owned one-half of the $1,750.00 ordered paid to him; therefore, the judgment should have provided that after the net proceeds from the sale of the community residence were divided, $1,750.00 should be paid from the share of appellee to appellant.

We hold that the provisions of the judgment did not properly reimburse appellant for his share of the $3,500.00 found by the court to be owing to the community by the separate estate of appellee. Therefore, the judgment of the trial court is reformed to provide that after the net proceeds from the sale of the community real estate are equally divided between the parties, the sum of $1,750.00 should be subtracted from appellee’s share and awarded to appellant.

The judgment of the trial court is reformed, and as reformed, is affirmed.


author: McDONALD, Chief Justice.

text:
    BANK OF DALLAS et al., Appellants, v. REPUBLIC NATIONAL BANK OF DALLAS et al., Appellees.
    No. 5535.
    Court of Civil Appeals of Texas, Waco.
    July 22, 1976.
    Rehearings Denied Aug. 26, 1976.

      Morgan & Crouch, Greenville, Golden, Potts, Boeckman & Wilson, Claude R. Wilson, Jr., H. David Herndon, Dallas, for appellants.
    Thompson, Knight, Simmons & Bullion, John A. Mackintosh, Jr., Luke Ashley, Carter, Jones, Magee, Rudberg, Moss & Mayes, Charles D. Mayes, William W. Sweet, Jr., Dallas, for appellees.
   OPINION

McDONALD, Chief Justice.

The issues to be decided are: 1) can the income, and/or 2) the corpus, of an irrevocable spendthrift trust, created by the set-tlor for the settlor and her children’s benefit, be reached by garnishment for a debt of the settlor.

For background of this case see Fewell v. Republic National Bank, CCA (Eastland), NRE, Tex.Civ.App., 513 S.W.2d 596.

Bank of Dallas filed application for Writ of Garnishment against Republic National Bank of Dallas, Garnishee and Trustee of the Patricia Murray Fewell Trust, seeking to garnish effects of Patricia Murray Fe-well and her husband George H. Fewell, to satisfy a $30,471.88 judgment, Bank of Dallas had obtained against the Fewells.

The Republic National Bank answered that it was Trustee of the Patricia Murray Fewell Trust, and that both the income and principal of the trust were exempt from garnishment.

Trial was before the court which: 1) decreed Bank of Dallas recover $5,473.83 from Republic National Bank as Trustee of the Patricia Murray Fewell Trust (finding such sum to be the total income of the Trust on hand at time of filing the writ of garnishment plus income received prior to filing of answer by Republic Bank); 2) denied garnishment of the corpus of the trust.

Thus the trial court 1) decreed the income of the Trust could be reached by garnishment for a debt owed by Patricia Murray Fewell, but 2) decreed that the corpus of the Trust could not be reached by garnishment for a debt owed by Patricia Murray Fewell.

Bank of Dallas, Patricia Murray Fewell and George H. Fewell appeal from that portion of the judgment decreeing the corpus of the trust could not be reached by garnishment; and Republic National Bank, William Murray Ross, Malcolm Carl Ross, and Mary Helen Ross appeal from that portion of the judgment decreeing the income of the trust could be reached by garnishment for the debt of Patricia Murray Fe-well. By stipulation of the parties, Bank of Dallas, Patricia Murray Fewell and George H. Fewell will be referred to as appellants, and Republic Bank and the other parties will be referred to as appellees.

Patricia Murray Fewell as Settlor, on January 28, 1971, transferred certain properties to the trustee for the “use and benefit of herself and of her children”, and thereafter amended such Trust.

The Trust as amended provides in Article 1(a):

“Distributions. The trustee shall pay to the Settlor for her uncontrolled use and benefit, all of the net income of the trust during her lifetime. Whenever the trustee determines that the income of the Settlor from all sources known to the trustee is not sufficient for her reasonable support, comfort, and health and for the reasonable support and education of Settlor’s descendants, the trustee may in its discretion pay to, or use for the benefit of, Settlor or one or more of Settlor’s descendants so much of the principal as the trustee determines to be required for those purposes.”

Article 11(b) provides that upon the death of the settlor the trustee shall distribute or hold the then remaining principal and undistributed income as the settlor may have appointed by will. If the settlor has not exercised her power to appoint by will, then upon her death any property remaining in the trust shall be apportioned into separate, equal trust, “one for each then living child of Settlor and one for the then living issue collectively, of each deceased child of Set-tlor”.

Article II Sec. 2.3 provides in part that if upon death of the Settlor she has no living descendants, any undisposed portion of the trust shall be distributed to her brother and sister.

Article III Sec. 3.2 contains a spendthrift provision containing customary spendthrift language and * * * “nor shall such income or corpus or any portion of same be subject to execution, garnishment * * * or other legal proceeding of any character * * * to the payment of such beneficiary’s debts * * *

Appellants contend:

The trial court erred in holding that no part of the corpus, transferred by Patricia Murray Fewell as Settlor to the Patricia Murray Trust, under which she receives all of the income from all corpus for her lifetime, and under which she holds a general power of appointment exercisable at her death by will, is garnishable.

Appellees contend:

1) The trial court correctly held that the corpus of the trust was not subject to garnishment; and by crosspoint contend:

2) The trial court erred in holding that the income was subject to garnishment.

The courts of Texas recognize the validity of spendthrift trusts created by a Settlor for others, and no part of the spendthrift trust estate can be taken on execution or garnishment by creditors of the beneficiary. Caples v. Buell, Com.Appls., 243 S.W. 1066; Hines v. Sands, CCA (NWH), Tex.Civ.App., 312 S.W.2d 275; Highlands State Bank v. Gonzales, CCA (Waco), NWH, Tex.Civ.App., 340 S.W.2d 828.

But the rule is otherwise in cases where the settlor creates a spendthrift trust, and makes himself the beneficiary thereof. And where a settlor creates a trust for his own benefit, and inserts a spendthrift clause, it is void as far as then existing or future creditors are concerned, and they can reach his interest under the trust by garnishment. Glass v. Carpenter, CCA (San Antonio), NRE, Tex.Civ.App., 330 S.W.2d 530; McFaddin v. Commissioners Internal Revenue, Fifth Circuit, 148 F.2d 570, 76 Am.Jur.2d 404; Bogert Trusts & Trustees 2d Edition, Section 223 p. 665.

Restatement of Trusts 2d, Section 156 states the rule thusly:

2) Where a person creates for his own benefit a trust with a provision restraining the voluntary or involuntary transfer of his interest, his transferee or creditors can reach his interest.
2) Where a person creates a trust for his own benefit, a trust for support, or a discretionary trust, his transferee or creditors, can reach the maximum amount which the trustee under the terms of the trust could pay to him or apply for his benefit.

Thus the interest of Patricia Murray Fewell in the trust is not protected by the spendthrift provisions from claims of her creditors. Since the trust provides: “The trustee shall pay to Settlor for her uncontrolled use and benefit, all of the net income of the trust during her lifetime,” Mrs. Fewell’s interest includes all such net income, and the trial court correctly held the net income of the trust subject to garnishment by her creditors.

As to the corpus the issue is more complex, as Mrs. Pewell is not the sole beneficiary. The trust provides that the trustee may exercise its discretion to invade principal under certain circumstances “for the benefit of Settlor’’ or “one or more of Set-tlor’s descendants”.

Also the settlor’s children have a remainder, though the settlor can defeat such interest by exercising her general powers of appointment under Article 11(b).

Section 156c Restatement, Trusts & Trustees 2d, p. 326 states: “Reservation of general power to appoint principal. If the set-tlor reserves for his own benefit not only a life interest, but also a general power to appoint the remainder by deed or will, his creditors can reach the principal of the trust as well as the income;” and section 156d, at page 327 states: “Trust for set-tlor’s support. Where the settlor creates a trust for his own support, * * * it can be reached by his creditors. They can compel the trustee to pay to them the maximum amount which he could pay to the settlor-beneficiary or apply for his benefit.”

And Section 156e states: “Discretionary trust for the settlor. Where by the terms of the trust a trustee is to pay the settlor or apply for his benefit as much of the income or principal as the trustee may in his discretion determine, * * * creditors can reach the maximum amount which the trustee could pay to him or apply for his benefit.”

Applying the foregoing rules of law to the facts, we hold the interest of Mrs. Fe-well in the trust is such that the corpus may be reached by her creditors.

Appellants’ contention is sustained, and appellees’ contentions are overruled.

The judgment is affirmed in part; and reversed and remanded in part, with instruction to the trial court to render judgment against the trustee for the amount due on appellants’ judgment.

AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

      . William Murray Ross, Malcolm Carl Ross and Mary Helen Ross, minor children of Patricia Murray Fewell and her former husband William C. Ross, III; Patricia Alice Fewell and Deborah Fewell, minor children of Patricia Murray Fewell and George H. Fewell; and Fulton Murray, Jr., Beverly Murray Wilson, the brother and sister of Patricia Murray Fewell were all defendants with Republic Bank.


text:
    Steve S. ALEXANDER, Appellant, v. Linn C. ALEXANDER et al., Appellees.
    No. 5552.
    Court of Civil Appeals of Texas, Waco.
    July 22, 1976.

      Steve S. Alexander, pro se.
    John B. McNamara, Jr., Waco, for appel-lees.
   OPINION

McDONALD, Chief Justice.

This is an appeal from an Order of the Trial Court Confirming Report of Sale of certain real estate by the Court Appointed Receiver, pursuant to a previous judgment entered in a partition suit.

Linn C. Alexander and Mozell Alexander Hesterly sued Steve S. Alexander alleging the three were joint owners of an approximate 8-acre tract of land, and praying for a partition of the property.

Trial was to a jury which determined the property was incapable of being divided in kind. The trial court rendered judgment on the verdict; finding the three parties equal owners of the property; that it was incapable of being divided in kind; and appointed C. Sam Appell Receiver to sell the property.

Thereafter the Receiver reported sale of the property for $172,000. Appellant objected to such sale contending the amount of same was not the fair market value of the property. Trial to a jury resulted in finding that $172,000. was a fair and adequate price for the property; and that the proposed sale for $172,000. was for the fair market value of the property.

The trial court entered an order on the verdict confirming the sale, and ordering conveyance by the receiver to the purchaser, upon his paying the $172,000.

Appellant Steve S. Alexander appeals on 17 points which we construe contend as follows:

1) The trial court erred in overruling appellant’s motion for continuance.
2) The price offered for the property was not its fair market value.

Hearing on the Receiver’s report of sale was set for September 18, 1975. The transcript reflects Appellant filed motion for continuance “because the absence of a material witness makes it unsafe for him to go to trial at this time (John Milberger).” The motion further states it is the first written motion for continuance filed herein; and that “a supporting affidavit is attached, showing sufficient cause for this continuance to be granted.” The transcript contains no supporting affidavit, but does reflect the order of the trial court overruling such motion for continuance, which recites that the motion overruled was appellant’s third motion for continuance.

Rules 251 and 252 TRCP provide among other matters that continuance may be granted for “Sufficient cause supported by affidavit”; that on an application for want of testimony, the testimony must be material; that the party has used due diligence to procure the testimony; and that on first motion it is not necessary to show that the absent testimony cannot be procured from any other source.

The granting of a continuance rests in the sound discretion of the trial judge. Hernandez v. Heldenfels, Tex., 374 S.W.2d 196. The absence of a material witness is “sufficient cause”, but only if proper diligence has been used to procure the testimony of the witness. Fritsch v. English Truck Line, Inc., 151 Tex. 168, 246 S.W.2d 856.

In the instant case there was no showing as to what the witness would testify to, that due diligence had been used to procure his testimony, or that his testimony could not be procured from any other source. There was no showing of any compliance with Rules 251 or 252 TRCP. Middleton v. Vaughn, Tex.Civ.App., Waco, NWH, 530 S.W.2d 925.

Appellant’s 2nd point was not raised in his motion for new trial.

The jury found that $172,000. was a fair and adequate price for the property, and that $172,000. was a fair market value of the property. The receiver, C. Sam Appell an experienced real estate dealer in commercial properties testified he had had the property for sale for over a year; that he had advertized it in the Waco paper some 49 times; that he had placed a number of signs on the property and showed it to a number of people; that $172,000. represented the most he was able to get for the property, and that in his opinion it was the fair market value. Walstein Smith, Jr., a real estate dealer and appraiser testified that he appraised the property and in his opinion it was worth $171,850. Appellant testified $172,000. was not fair market value of the property and that in his opinion it was worth $8.00 per square foot or about $1,032,000. Another witness concurred with appellant.

Moveover, this case is before us on a partial statement of facts. The record reflects that some 20 exhibits were admitted into evidence which have not been brought forward by appellant. In the absence of a complete statement of facts (which is appellant’s burden and duty to bring forward), it must be presumed on appeal that the evidence supports the verdict and judgment of the trial court. Baker v. Rutherford, Tex.Civ.App., Waco, NRE, 293 S.W.2d 669; Englander v. Kennedy, Tex., 428 S.W.2d 806; Levitz Furniture Co. v. State of Texas, Tex.Civ.App., Waco, NRE, 471 S.W.2d 452.

All appellant’s points and contentions are overruled. Affirmed.