author: AKIN, Justice.

text:
    Joe SPIRITAS, Trustee, Appellant, v. Daniel P. ROBINOWITZ, Individually, and as Trustee, and First National Bank in Dallas, Appellees.
    No. 19048.
    Court of Civil Appeals of Texas, Dallas.
    Nov. 12, 1976.
    Rehearing Denied Dec. 16, 1976.

      Harold Hoffman, Wynne & Jaffe, Dallas, for appellant.
    A. L. Vickers, Ungerman, Hill, Unger-man, Angrist, Dolginoff & Teofan, Dallas, for Robinowitz.
    G. R. Poehner, Coke & Coke, Dallas, for First National Bank.
   AKIN, Justice.

This is an appeal by plaintiff Joe Spiritas, one of two joint venture owners of a tract of land, from an adverse judgment, rendered on a jury’s verdict, that declared valid a second lien placed on the joint venture property by the other joint venturer, Daniel Robinowitz, and given to the First National Bank of Dallas as security for a $6,500,000 personal loan to Robinowitz. Additionally, this judgment denied Spiritas recovery against Robinowitz for breach of the joint venture agreement. By cross-points, the bank complains of an instructed verdict on its counterclaim seeking to hold Spiritas personally liable on Robinowitz’s $6,500,000 note, although neither Spiritas nor the joint venturer’s name appeared on the note.

The bank contends that its second lien on the joint venture property is protected by Tex.Rev.Civ.Stat.Ann. art. 7425b-8 (Vernon 1960), the Texas Blind Trust Act, and alternatively, that it is valid under Tex.Rev.Civ. Stat.Ann. art. 6132b, § 10(3) (Vernon 1970), of the Texas Uniform Partnership Act. Likewise, Spiritas argues that he should prevail under either statute. We hold that the Texas Blind Trust Act does not apply here because no trust was created; instead, we hold that article 6132b, § 10(3) of the partnership act governs. Since Spiritas had the burden of proof under § 10(3) and since he failed to submit and obtain jury findings necessary for him to prevail under § 10(3) of the act, we affirm the judgment with respect to the bank’s lien. With respect to the take-nothing judgment against Robi-nowitz, we reverse and remand for a new trial because, although the jury’s verdict will support a holding that Robinowitz breached the agreement, we are unable, from this record, to ascertain what damages have occurred. As to the counterclaim of the bank against Spiritas, we affirm because we hold that the bank has failed to plead and prove an action against Spiritas or the joint venture.

This controversy emanates from a joint venture agreement between Spiritas and Robinowitz which created an entity known as the “Collin 1040 Associates.” The purpose of this venture was to purchase a tract of land known as the Tucker Tract. Robi-nowitz contributed his right under a contract of sale to purchase this tract, and Spiritas agreed to pay the carrying costs (taxes, assessments, interest, closing costs, etc.). The agreement was actually between “Spiritas, Trustee,” and “Robinowitz, Trustee.” This form was used to permit Spiri-tas to transfer part of his interest to family members and to allow Robinowitz to do likewise for employees, while limiting actual participation in the venture to the two men. The agreement provided that it should be governed by the Texas Uniform Partnership Act, unless otherwise indicated. It also specified that title to the property would be taken in the name of “Robinowitz, Trustee.”

Acting upon this agreement and on behalf of the venture, Robinowitz and Spiritas purchased the Tucker Tract for $7,000 an acre as a speculative investment. Title was taken in the name of “Robinowitz, Trustee.” At the time the Tucker Tract was purchased, there was a land boom in the metroplex, and the parties anticipated that they would be able to sell the property in a short period of time for a substantial profit. The purchase price of the Tucker Tract was $7,136,700, of which $2,000,000 was paid in cash at the closing, and a promissory note, which was due on October 16, 1976, was executed for the remainder. This note was secured by the property only; neither ven-turer had personal liability on it. Approximately four months after the acquisition of the Tucker Tract, Robinowitz purchased an adjacent tract, known as the Underwood Tract. To finance this purchase, he borrowed $6,500,000 from the First National Bank in Dallas and secured the note with a first lien on the Underwood Tract and a second lien on the Tucker Tract. Although title to the Underwood Tract was likewise taken in the name of “Robinowitz, Trustee,” the evidence is undisputed that Spiri-tas had no interest in this tract and the jury found that Robinowitz did not intend for the joint venture to have an interest in it. Robinowitz contends that the purchase of this tract was necessary in order to assemble a large enough block of land to make an attractive package to prospective buyers.

Due to the end of the speculative land boom, the venture has been unable to sell the Tucker Tract and Robinowitz is now in bankruptcy. Spiritas is suing (1) to have the second lien on the Tucker Tract canceled because the bank knew or should have known that Robinowitz did not have authority to grant the lien and, alternatively, (2) to recover from Robinowitz for any damages suffered by the joint venture due to Robinowitz’s actions. The bank is counterclaiming against Spiritas on the ground that the $6,500,000 note is a joint venture obligation, and Spiritas is, therefore, liable to the bank for payment of the note.

The jury found as follows: That Spiritas did not expressly authorize Robinowitz to place the $6,500,000 lien upon the Tucker Tract; that Robinowitz did not intend for Spiritas to have any ownership interest in the Underwood Tract; that at the time of making the $6,500,000 loan, the bank did not know that Robinowitz did not intend for Spiritas to have an ownership interest in the Underwood Tract; that the bank, at the time of the making of the $6,500,000 loan to Robinowitz, knew that Spiritas had an interest in the Tucker Tract; that the act of the bank in placing a lien upon the Tucker Tract was not a wilful and malicious act resulting in injury to Spiritas; that the act of Robinowitz in placing the second lien upon the Tucker Tract was not a wilful and malicious act resulting in injury to Spiritas; that within twenty-one days of the time Spiritas first learned that Robinowitz had placed the $6,500,000 lien upon the Tucker Tract, Spiritas gave written notice to Robi-nowitz to have the lien removed; that after Robinowitz failed to remove the lien from the Tucker Tract, Spiritas gave an additional written notice to Robinowitz demanding that the lien be removed; that the market value of the Tucker Tract on March 28, 1974, not considering the liens against it, was $7,000 per acre; that the market value of the Tucker Tract at the date of trial, not considering the liens against it, was $7,000 per acre; that the placing of the $6,500,000 lien on the Tucker Tract was not reasonably necessary or fit for carrying on a usual way of business of the joint venture composed of Robinowitz and Spiritas; that Robinowitz had apparent authority from the joint venture to grant the $6,500,000 lien to the bank; that Robinowitz did not have implied authority from Spiritas to grant the lien to the bank; and that the use of the $6,500,000 loan proceeds by Robinowitz was pursuant to his good faith and belief that its use in purchasing the Underwood Tract was in the best interest of the joint venture. Acting upon these answers of the jury to the special issues, the trial court rendered the judgment from which Spiritas appeals.

1. Standing

Both Robinowitz and the bank have challenged Spiritas’s standing to bring this action on his own behalf based upon the rule that where individual parties bring suit to enforce a partnership right, the suit should be in the name of all of the partners. Roberson v. McIllhenny, Hutchins & Co., 59 Tex. 615 (1883). The purpose of this rule is, however, to protect third parties from the possibility of multiple actions and recoveries. Edmondson v. Carroll, 65 S.W.2d 1107, 1108-09 (Tex.Civ.App. — Fort Worth 1933, writ dism’d); cf. Taylor v. Republic Grocer, 483 S.W.2d 293, 295 (Tex.Civ.App. — El Paso 1972, no writ). Since both partners are parties to the lawsuit, this rule has no application here.

2. Spiritas’s Action Against the Bank

The bank argues that its second lien on the Tucker Tract was protected by the Blind Trust Act, Tex.Rev.Civ.Stat.Ann. art. 7425b — 8 (Vernon 1960) which states:

Where a trust is created, but is not contained or declared in the conveyance to the trustee, or when a conveyance or transfer is made to a trustee without disclosing the names of the beneficiary, or beneficiaries, the trustee shall be held to have the power to convey or transfer or encumber the title and whenever he shall execute and deliver a conveyance or transfer or encumbrance of such property, as trustee, such conveyance or transfer or encumbrance shall not thereafter be questioned by any one claiming as a beneficiary under such trust or by any one claiming by, through, or under an undisclosed beneficiary, provided that none of the trust property in the hands of said trustee shall be liable for personal obligations of said trustee. [Emphasis added.]

Because no trust concerning the property was actually created, this act is inapplicable. As a prerequisite to the application of the Blind Trust Act, the trust claimed must fall within the ambit of article 7425b-7 entitled “Requisites of a Trust.” This statute expressly refers to ways in which an “express” trust may be created. Nothing within article 7425b-7 includes a partnership agreement where one of the partners takes title to the partnership property in his name as “trustee.” Designation of a party as “trustee” does not in itself create a trust. Costello v. Hillcrest State Bank, 380 S.W.2d 780, 782 (Tex.Civ.App. — Dallas 1964, no writ).

To create a trust, the beneficiary must be identified with certainty. Unthank v. Rippstein, 386 S.W.2d 134, 136 (Tex.1964). In the joint venture agreement, the requirement that Robinowitz take title as trustee does not show, with certainty, an intent that the venture property be held in trust for the venture as distinguished from the common situation in which one partner holds title for the benefit of the partnership. This is true because one of the partners was “Robinowitz, Trustee.” This designation was made because the parties contemplated that Robinowitz would act for the benefit of certain employees to be named later. Since the venture agreement does not state that “Robinowitz, Trustee” was to take title in a capacity of trustee for the joint venture rather than as “Robinowitz, Trustee,” one of the partners, we conclude that the agreement does not create an additional trust for the benefit of the venture. On the contrary, the agreement provides that the relationship of the parties is to be governed by the Texas Uniform Partnership Act. We cannot impose a trust where parties have contemplated another relationship. G. Bogert, Trusts & Trustees, § 45 at 316 (2d ed. 1965). Thus, the use of “trustee” in the deed is merely a description and without legal effect. It is as if title were in Robinowitz individually. Barker v. Temple Lumber Co., 12 S.W.2d 175, 180 (Tex.Com.App.1929), rev’d on other grounds, 120 Tex. 244, 37 S.W.2d 721 (1931); Annot. 137 A.L.R. 460, 462-65 (1942). We conclude that the Texas Blind Trust Act has no application here, and that article 6132b, § 10(3) of the Texas Uniform Partnership Act, Tex.Rev.Civ.Stat.Ann. art. 6132b (Vernon 1970) governs, as both the bank and Spiritas alternatively contend.

The parties differ, however, in their construction of art. 6132b, § 10(3). That statute states:

Where title to real property is in the name of one or more but not all the partners, and the record does not disclose the right of the partnership, the partners in whose name the title stands may convey title to such property, but the partnership may recover such property if the partners’ act does not bind the partnership under the provisions of paragraph (1) of Section 9, unless the purchaser or his assignee, is a holder for value, without knowledge. [Emphasis added.]

Section 9, paragraph 1 provides:

Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument, for apparently carrying on in the usual way the business of the partnership of which he is a member binds the partnership, unless the partner so acting has in fact no authority to act for the partnership in the particular matter, and the person with whom he is dealing has knowledge of the fact that he has no such authority. [Emphasis added.]

Spiritas and the bank each take the position that judgment in its favor was required under this statute, but each relies upon a different jury finding. Spiritas argues that he is entitled to judgment under § 10(3) because of the jury’s answer to this issue:

No. 14 Do you find that the grant of the $6,500,000 lien in question to the First National Bank in Dallas was reasonably necessary or fit for carrying on in the usual way the business of the joint venture composed of Robinowitz and Spiri-tas? [Emphasis added.]
Answer: We do not.

He contends that this is a finding that Robinowitz’s act in granting the second lien was not carrying on in the usual way the business of the partnership and that, therefore, Robinowitz’s act did not bind the partnership; hence, the partnership was entitled to recover the property (remove the lien given).

The bank contends that it is entitled to judgment under § 10(3) because of the jury’s answer to issue number sixteen as follows:

No. 16 Do you find that Robinowitz had apparent authority from the joint venture to grant the $6,500,000 lien to the First National Bank in Dallas? [Emphasis added.]
Answer: We do.

The bank argues that this answer is tantamount to a finding that Robinowitz’s act of granting the lien was “for apparently carrying on in the usual way the business of the partnership.” Spiritas replies that § 10(3) supplants the common law standard of apparent authority by a more specific statutory standard. Although we are inclined to agree with Spiritas in this respect, we do not reach the question of whether the jury’s answer to issue number sixteen requires judgment for the bank. If common law apparent authority, as submitted in issue number sixteen, is not controlling, no other apparent authority issue has been submitted. Issue number fourteen is not the statutory apparent authority issue because it omits the controlling word “apparently.” The words “reasonably necessary or fit,” as used in the issue, are not equivalent because they do not take into consideration the perspective of the bank’s employees who dealt with Robinowitz. Consequently, this issue did not submit, even approximately, the ultimate fact issue under the statute. Common law apparent authority, as submitted in issue number sixteen, is a nearer approximation of the issue than is issue number fourteen. If judgment for the bank is not supported by the answer to issue number sixteen, then neither can a judgment for Spiritas be rendered on the basis of issue number fourteen.

Since the proper issue was not submitted, we must determine the effect of the absence of this essential fact finding. Spi-ritas argues that the burden of proof on the ultimate issue of whether Robinowitz’s act was “apparently carrying on in the usual way of business of the partnership” was on the bank because it was an affirmative defense. We cannot agree. The burden of proof was on Spiritas because he was attempting to assert an interest contrary to the title records on which purchasers and creditors are normally entitled to rely. This interpretation of the act is supported by Professor Alan R. Bromberg in the Source and Comments to Section 10 where he states:

Paragraphs (3) to (5) cover situations where legal title is not in the partnership but in one or more of the partners individually. Paragraph (3) resembles paragraph (1) in recognizing the passage of legal title. But it goes farther and places the burden on the partnership in a contest with the grantee (and not just with a bona fide purchaser from the grantee). This is reasonable because, by hypothesis, the deed records will show legal title exclusively in the persons who convey. This provision facilitates the use of nominees to hold partnership realty. [Emphasis added.]

This comment by Professor Bromberg is both logical and equitable. Spiritas permitted Robinowitz to hold legal title to the partnership property and should, therefore, have the burden of proving, in a suit to recover the partnership property from a third party (bank), that the act of Robinow-itz in placing the lien on the partnership property was not apparently carrying on in the usual way the business of the partnership. See Crane and Bromberg on Partnership § 49, at 275 (1968).

Since we have held that Spiritas had the burden of proof under § 10(3) and since he did not request the proper issue in statutory language, a determination of this question by the jury has been waived by him. Consequently, he cannot now complain because judgment was not rendered in his favor on this issue. Tex.R.Civ.P. 279; Gasperson v. Christie, Mitchell & Mitchell, 418 S.W.2d 345, 349 (Tex.Civ.App.—Fort Worth 1967, writ ref’d n. r. e.).

3. The Bank’s Counterclaim Against Spiritas

The bank argues that the trial court erred in granting an instructed verdict on its counterclaim against Spiritas on the $6,500,000 note. The note was executed by Robinowitz, trustee, and at the time it was given, the bank did not know whether Robi-nowitz was acting for himself or some unknown third party. Nevertheless, the bank urges that, because of the jury finding of apparent authority to grant the lien, the underlying note is necessarily a joint venture obligation, and, therefore, Spiritas is personally liable. We cannot agree. The bank did not plead this theory as a basis of recovery against Spiritas. On the contrary, the bank pleaded that it did not know that Robinowitz was acting for the joint venture, but that Robinowitz had actual authority to incur the indebtedness on behalf of the venture. The evidence is, however, to the contrary. The joint venture agreement expressly prohibited Robinowitz from incurring indebtedness on behalf of the venture in excess of $5,000 without Spiritas’s consent. Likewise, the bank’s pleadings state that the loan was for the joint venture’s benefit; however, the evidence is that it was solely for Robinowitz’s benefit as found by the jury. The bank cannot, therefore, rely upon a ground of recovery neither pleaded nor proved. The bank’s argument, even if pleaded, is fallacious because a finding that Robinowitz had apparent authority to grant the lien is not tantamount to a finding that he had apparent authority to execute the $6,500,000 note. Consequently, we conclude that the trial court correctly instructed a verdict against the bank with respect to its counterclaim against Spiritas.

4. Spiritas’s Action Against Robinowitz

Acting on the jury finding that Robinowitz acted in “good faith” in placing the second lien in favor of the bank on the Tucker Tract, the trial court rendered judgment that Spiritas take nothing against Ro-binowitz. In support of the court’s action in this respect, Robinowitz contends that the joint venture agreement provides that he has no liability for actions taken as manager of the venture due to its exculpatory clause, which reads:

The Manager of the Venture shall perform his duties under this Agreement with ordinary prudence and in a manner characteristic of a businessman in similar circumstances; but said Manager shall not have any liability whatsoever to the Venture, or to any Venturer, for any loss suffered by the Venture which arises out of any mistake in judgment of said Manager or if said Manager, determined that such conduct was in the best interest of the Venture, or if said Manager acted, in good faith based on the advice of independent counsel. [Emphasis added.]

Robinowitz contends that, since the jury found he was acting in “good faith” in granting the lien, he is not liable for any resulting loss. We cannot agree because this provision applies only to the “good faith” performance of “his duties under this agreement.” The basis for his liability to Spiritas is that he acted outside the scope of his power under the agreement. Consequently, the jury finding of “good faith” is not a valid defense to the breach of the agreement by Robinowitz. Indeed, as managing partner, he owed Spiritas one of the highest fiduciary duties recognized in law. Huffington v. Upchurch, 532 S.W.2d 576, 579 (Tex.1976). Thus, we are presented with the question of whether Robinowitz breached the agreement by granting the lien. His authority to grant a lien on the venture property is governed by articles 10 and 11 of the agreement. Article 10, entitled “Manager of the Venture,” provides:

The responsibilities of the Manager of the Venture in addition to any provided for above include but are not limited to the following:
(a) Conducting the business of the Venture in the ordinary course of its business including negotiation and execution of all contracts, loans, and leases
(f) Signing any notes, mortgages and other agreements and performing any acts which may be necessary or expedient to carry out the purposes of this agreement .

Article 11, entitled “Management and Control,” provides:

Subject to the provisions of Article 10, the Venturers hereby delegate to the Manager of the Venture the responsibility for the day-to-day management, ministerial acts and other herein provided acts of the Venture. All other affairs of the Venture including the following shall be decided by unanimous vote of the Ven-turers unless otherwise provided or permitted herein, to-wit:
(c) To execute or modify any mortgage, pledge, or other security agreement or encumbrance affecting the Property;
(d) To make any capital improvement or incur any debt or obligation the cost of which shall exceed Five Thousand Dollars, or to initiate any program of capital improvements;
(f) To execute any bonds, guaranty, indemnity or accommodation endorsement;
(h) To any act in contravention of this Agreement or to amend this Agreement. [Emphasis added.]

Robinowitz would have us read the phrases “subject to the provisions of article 10” and “unless otherwise provided or permitted herein” in article 11 to mean that his activities in granting the lien are within his power as manager and should, therefore, be subject to the “good faith” exculpatory clause. However, as we read the agreement, the provisions of article 11 are not controlled by the provisions of article 10. The “subject to” clause must be read in conjunction with the remainder of the sentence of which it is a part. That sentence is an affirmative grant of routine power, as previously limited and defined by article 10. This shows clearly that article 11 is intended to control over article 10. Nor does the “unless otherwise provided” clause require that article 10 control. The basic rule of contract construction is that all parts of the agreement are intended to have some meaning, Fruhman v. Nawcas Benevolent Auxiliary, 436 S.W.2d 912, 915 (Tex.Civ.App. — Dallas 1969, writ ref’d n. r. e.), and they must be given some meaning unless necessarily repugnant to another contract clause. Williams v. J. & C. Royalty Co., 254 S.W.2d 178, 179 (Tex.Civ.App. — San Antonio 1952, writ ref’d). To read article 10(a) and (f) as giving Robinowitz absolute discretion, subject only to good faith judgment, to take out loans and encumber the property would be to render article 11(c), (d), (f) and (h) meaningless. As we read this language, the “subject to” clause refers to specific exceptions to the unanimous consent rule. These exceptions are stated elsewhere in the contract, such as article 6(d)(3)(b)(ii), which authorizes Robinowitz to sell property on any terms he chooses provided that Spiritas is given a ten-day option to purchase the property on identical terms.

In support of his interpretation of this language, Robinowitz urges the rule that, if two provisions of a contract are conflicting, the provision which appears first controls. This is, however, a secondary rule of construction that is resorted to only if there is an irreconcilable conflict between the provisions. Benskin v. Barksdale, 246 S.W. 360, 363 (Tex.Com.App.1923, holding approved); see Southland Royalty Co. v. Pan American Petroleum Corp., 378 S.W.2d 50, 57 (Tex.1964). Where the court can reasonably harmonize apparently conflicting provisions, it should do so. Southland Royalty, supra at 57.

Thus, as we read the agreement, article 11 requires that unanimous consent be given before debts over $5,000 can be incurred or before a mortgage can be executed on the property; article 10 provides that Robi-nowitz will negotiate the terms of a loan or mortgage with the lender, subject to the approval of Spiritas, and that Robinowitz will sign instruments on behalf of the venture. The jury’s finding that Spiritas did not expressly authorize Robinowitz to place the lien on the property establishes that Robinowitz’s act was a breach of agreement. The jury also found that, in so doing, Robinowitz was guilty of misappropriation, which was defined by the court as “intentionally using the property of another person for his own purposes, without the other’s consent or permission amounting to a known breach of duty and not to mere negligence or mistake.” [Emphasis added.] Accordingly, we conclude, and so hold, that Robinowitz is liable to Spiritas for any damages that may flow from this breach. In view of this holding, we would render judgment for Spiritas if we could ascertain the damages suffered by Spiritas as a result of Robinowitz’s wrongful act in placing the second lien on the joint venture property.

Spiritas argues that since breach of the agreement by Robinowitz has been established by the verdict, we should render judgment against Robinowitz in the amount of $1,026,211.50, which he claims is his equity in the property. His contention is that, since the jury found that the property was worth $7,189,000 at the time Robi-nowitz imposed the second lien on the property, the $6,500,000 second lien in addition to the $5,136,577 first lien rendered valueless his equity because the entire tract cannot be sold for $11,600,000 to satisfy both liens. '

The fallacy of this argument is that it assumes that the second lien will not be discharged by any method other than the sale of the Tucker Tract. The $6,500,000 note is secured by the Underwood Tract as well as the Tucker Tract, and the value of the Underwood Tract is not established. Consequently, insofar as this record shows, the Underwood Tract may be sold for sufficient funds to satisfy the second lien. Likewise, since this note is a personal obligation of Robinowitz, it is possible that funds may be forthcoming from Robinowitz’s bankrupt estate to satisfy or reduce the note secured by the second lien. Because there is no showing that the lien will necessarily be foreclosed against the Tucker Tract, we are not certain that Spiritas has suffered any pecuniary damage at this time. In the event that the lien is discharged in some other manner, Spiritas will be in the same position with respect to the venture property as he was prior to the imposition of the lien except for the expenses incurred by him in this litigation. Nor does this record show that the joint venture has lost a sale of the Tucker Tract because of the existence of the bank’s lien. Consequently, damages due to the breach are at this time speculative and will be so until Spiritas suffers some ascertainable loss caused by the existence of the lien. A contingency which cannot be determined with reasonable certainty cannot be made the basis for recovery of a definite amount of damages. Reilly v. Birmingham, 53 S.W.2d 825, 826 (Tex.Civ.App. — Austin 1932, writ dism’d w. o. j.). Nevertheless, it is obvious that Spiri-tas has a substantial risk of incurring large damages as a result of Robinowitz’s wrongful act and that events may ripen these potential damages so that he may be able to prove them at a subsequent trial. For these reasons, we reverse and remand this cause. Cf. Travelers Insurance Co. v. Employers Casualty Co., 380 S.W.2d 610, 615 (Tex.1964). On another trial, perhaps the amount of damages can be more definitely established. Since the liability issues are contested by Robinowitz, the entire cause with respect to the controversy between Robinowitz and Spiritas must be remanded for a new trial. Tex.R.Civ.P. 434.

4. Jury Strikes

Spiritas complains of the trial court’s granting six jury strikes to each defendant. This would be error if it was evident to the trial court, from the pleadings and information disclosed by pretrial procedures or from information specifically called to the court’s attention, that the defendants were not antagonistic in relation to any questions to be decided by the jury. Perkins v. Freeman, 518 S.W.2d 532, 534 (Tex.1974). However, the supreme court, in Tamburello v. Welch, 392 S.W.2d 114, 117 (Tex.1965), held that denial of jury strikes is subject to the harmless error rule. We conclude that the error here, if any, was harmless in view of our disposition severing and affirming the action against the bank and remanding the cause against Robinow-itz on other grounds. The action against the bank does not require remand on this point, even if error, because the judgment for the bank is based upon a waiver by Spiritas of his theory of recovery under article 6132b, § 10(3) rather than on jury findings. Under article 6132b, § 10(3) the jury question necessary to defeat the bank’s lien was not requested by Spiritas or submitted by the court. Consequently, any error in granting each defendant six jury strikes was harmless with respect to the judgment for the bank.

5. Robinowitz’s Cross-Points with Respect to Evidentiary Rulings

Robinowitz has several cross-points of error relating to evidentiary matters which were intended apparently to prevent this court from reversing and rendering judgment for Spiritas. In view of our decision to remand on other grounds, we address these points as guidance for the trial court in the event of another trial.

Robinowitz first complains of the trial court’s refusal to permit his counsel to inspect a memorandum used by the witness Davidoff to refresh his memory pri- or to entering the courtroom to testify. No objection was made by Spiritas’s counsel on the ground that the memo was used by the witness out of court; consequently, we need not address the question of whether opposing counsel is entitled to inspect documents used outside of the courtroom to refresh a witness’s memory prior to testifying. An objection was made, however, on the ground that the memo contained privileged information in addition to that which was the basis of the witness’s testimony. Spiri-tas’s counsel then prepared an edited version of the memorandum for opposing counsel’s use and offered to let the trial court compare it to the original to determine if any relevant material had been deleted. The trial court declined to inspect the original and ruled that Robinowitz’s counsel would be allowed to see only the edited version. The trial court also denied a request by Robinowitz’s counsel to have the original memorandum sealed and transmitted to this court for use in reviewing the ruling. We hold that the trial court had a duty to personally inspect the original before making its ruling and to permit opposing counsel to see any relevant and material portions of the memorandum which were not privileged. See Crane v. Tunks, 160 Tex. 182, 328 S.W.2d 434, 440 (1959). Furthermore, the better practice in this situation is for the trial court to have the original sealed and transmitted to this court for use on appeal. See Dobbins v. Gardner, 377 S.W.2d 665, 669 (Tex.Civ.App. — Houston 1964, writ ref’d n. r. e.).

Robinowitz also contends that the trial court erred in excluding certain evidence pertaining to joint venture expenditures made by Spiritas for the purpose of running cattle on the joint venture property. He argues that this evidence should have been admitted to show a prior breach of the joint venture agreement by Spiritas. In support of this contention, he cites eases such as Gulf Pipe Line Co. v. Nearen, 135 Tex. 50, 138 S.W.2d 1065, 1068 (1940), and Jessen v. LeVan, 161 S.W.2d 585, 586 (Tex.Civ.App. — El Paso 1942, no writ). These decisions concern the breach of a condition precedent or a concurrent condition. They are not applicable here because we do not find any evidence of a breach of a condition precedent to the duties of Robinowitz as a managing partner. Furthermore, Robinow-itz did not refuse to pay the bills incurred by Spiritas and, therefore, his right to assert any such breach as relieving him of his obligations as managing partner has been waived.

Robinowitz also urges that this testimony should have been admitted to show the procedures by which the parties consented to activities which were required to be authorized by unanimous vote. We fail to see how the jury could logically infer, from the excluded evidence concerning an alleged oral modification of the agreement to permit the cattle operation on venture property, that the agreement had also been orally modified to give Robinowitz authority to place a lien on the property for his individual benefit. We conclude, therefore, that this excluded testimony was irrelevant and, therefore, properly excluded by the trial court. Pittman v. Baladez, 158 Tex. 372, 312 S.W.2d 210, 216 (1958).

Robinowitz also argues that the trial court erred in excluding evidence concerning a $613,334 note which Spiritas allegedly owed Robinowitz in connection with another venture. Robinowitz does not plead this note as an offset to Spiritas’s claim against him. Rather, he contends that the note is relevant because of an agreement between the parties that this note would become due and payable only upon the return of a certain $1,000,000 certificate of deposit which Spiritas had deposited with a New Orleans bank in order to secure the $2,000,000 loan for the down payment on the Tucker joint venture property. He reasons that, since Spiritas was allowed to testify that he put up the certificate of deposit as security for the $2,000,000 loan, Robinowitz should be allowed to show that his loan was subject to the terms of the certificate of deposit, thereby indicating that Robinowitz, as well as Spiritas, stood to suffer a loss if the property was lost. He contends, therefore, that it was more likely that Spiritas would authorize the lien to the bank. We fail to see what relevance this evidence bears on the question of whether Robinowitz had authority to encumber the property. We conclude, therefore, that it was properly excluded. Dallas Ry. & Terminal Co. v. Oehler, 156 Tex. 488, 296 S.W.2d 757, 759 (1956). The evidence pertaining to the $1,000,000 certificate of deposit was, however, relevant to the question of damages; likewise, had Robinowitz asserted an offset, the $613,334 note would have been relevant.

Robinowitz next contends that evidence of the $613,334 note was admissible for impeachment purposes because Spiri-tas’s son, Steve, testified that he told officers of other banks that the Spiritas family did not have any outstanding loans when in fact they did owe the note to Robinowitz. We cannot agree because these discussions which the witness had with officials of other banks relating to the indebtedness of the Spiritas family are collateral matters not subject to impeachment. Christi v. Brewer, 374 S.W.2d 908, 914 (Tex.Civ.App.—Austin 1964, writ ref’d n. r. e.). We conclude, therefore, that this evidence was properly excluded by the trial court.

Robinowitz’s final contention is that all statements made by the parties after January 1, 1975, are inadmissible because the parties were engaged in settlement negotiations. We cannot agree. The law does not support such a broad conclusion. To the extent that any statements constitute an admission of liability, they are admissible even though made in the context of settlement negotiations. Charter Oak Fire Insurance Co. v. Adams, 488 S.W.2d 548, 550 (Tex.Civ.App.—Dallas 1972, writ ref’d n. r. e.). It is the offer of compromise that is protected; an admission of liability will be excluded only if it is so entwined with the compromise offer that the trial court is unable to determine whether it was made as a statement of fact or as a concession for purposes of negotiation. Merchants’ Cotton Oil Co. v. Acme Gin Co., 284 S.W. 680, 682 (Tex.Civ.App.—Eastland 1926, no writ); 2 C. McCormick & R. Ray, Texas Evidence, § 1142 (2d ed. 1956).

Accordingly, the judgment of the trial court with respect to the validity of the second lien held by the bank is affirmed; likewise, the action of the trial court in instructing a verdict against the bank on its counterclaim against Spiritas is also affirmed; and both of these causes are hereby severed and made final. That part of the trial court’s judgment denying Spiritas recovery against Robinowitz is reversed and remanded. Costs are hereby taxed fifty percent to Robinowitz and fifty percent to Spiritas.

      . The wording of article 7425b-8 is identical to that of its predecessor, article 7425a, which has never been repealed, although it is included within the Texas Trust Act. Presumably, the legislature intended for it to be construed together with other provisions of the act.


source: Caselaw Access Project

author: MOORE, Justice.

license: Public Domain

text:
    GULF COAST STATE BANK, Appellant, v. J. C. EMENHISER et al., Appellees.
    No. 943.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 18, 1976.

      Leroy McCall, McCall & McCall, Ham-shire, Harry S. Long, Beaumont, for appellant.
    George A. Weller, Weller, Wheelus & Green, Beaumont, John H. Kennamer, Krist & McConnico, Houston, for appellees.
   MOORE, Justice.

This is a suit by a bank to recover funds advanced to an alleged agent of the payee on a sight draft which subsequently proved to be uncollectable. Plaintiff, Gulf Coast State Bank (Bank), brought suit against defendants, J. C. Emenhiser, a rice farmer; Lillian Emenhiser, his divorced wife; and their landlords, hereinafter referred to as the Doornbos defendants. The Bank alleged that on March 13, 1969 a sight draft in the amount of $16,255.21, payable to “Gulf Coast State Bank a/c J. C. Emenhiser,” drawn on Rex Rice Company, Inc., Eunice, Louisiana, was presented to the Bank for collection by the defendants acting by and through their agent, Waldo Hebert; that pursuant to his request the Bank made a provisional settlement of the draft by advancing Hebert the sum of $16,255.21 in cash; that pursuant to the request of Hebert the Bank then issued two cashier’s checks in the amount of $12,366.66 and $3,888.55 payable to the Commodity Credit Corporation (CCC) showing Rex Rice Co. and J. C. Emenhiser as the remitters; that Hebert took the two cashier’s checks and turned them over to CCC in full and complete payment of a mortgage indebtedness owed by defendants to the CCC on a large quantity of rice which defendants had previously sold and delivered to Rex Rice Company. The Bank further alleged that after accepting the draft, the Bank duly presented it to the drawee bank for collection in compliance with banking customs but that the draft was subsequently dishonored due to the insolvency of Rex Rice Company; that notwithstanding the Bank’s demand for reimbursement of the funds advanced their agent, Hebert, the defendants refused to reimburse it for the amount of the funds advanced. Defendants denied generally the allegations of the petition and specially denied that Hebert was their agent or that they authorized Hebert to present the draft and request a provisional settlement. Defendants further denied that they authorized the Bank to issue the two certified checks to the CCC on their behalf. They denied any knowledge of the transaction between the Bank and Hebert until called upon by the Bank for reimbursement. They further alleged that the Bank acted as a volunteer in advancing the funds to Hebert upon the sight draft and, therefore, acted as a volunteer and advanced its own funds in order to assist Hebert in paying the mortgage indebtedness to the CCC which had been previously assumed by Rex Rice Company as a part of the purchase price of the rice purchased from defendants. Alternatively, the defendants alleged that the Bank was negligent in failing to timely present the draft to the drawee bank, Louisiana Bank & Trust Co. and that such negligence proximately caused the draft to be dishonored.

After a trial before a jury, a take nothing judgment was rendered against the Bank from which judgment the Bank perfected this appeal.

We affirm.

The material facts, for the most part, are not in dispute. The defendants were engaged in rice farming and stored their harvest in the Co-Op at Winnie, Texas, where Waldo Hebert acted as manager. In early February, 1969, defendants entered into an agreement to sell a large quantity of bulk rice to Rex Rice Company for the sum of $24,652.23. The rice stored in the Co-Op was subject to two mortgages held by the CCC in the amount of $12,366.66 and $3,888.55. The CCC would not allow rice to be removed from storage until it issued an “authorization for removal” known as Form 681. On February 17,1969, the CCC issued the necessary authorizations and mailed a copy to Rex Rice Company. The forms listed the names of defendants and stated in part two that the CCC had authorized a “release for sale” to Rex Rice Company. The evidence shows that the instruction “you will remit” on the authorization form refers to the purchaser and means that the purchaser, Rex Rice, was required to deduct the indebtedness from the purchase price and remit the amount of the mortgage indebtedness directly to the CCC. The authorization form dated February 17, 1969, was executed only by a representative of the CCC and not by the defendants or Rex Rice. On February 25, 1969, Rex Rice took delivery of the rice from the Co-Op before any payment to any of the parties had been made. It is undisputed that the defendants negotiated the sale to Rex Rice Company and that the Co-Op did not act as the sales agent for defendants.

After the sale was consummated, Waldo Hebert, the manager of the Co-Op, prepared what is known in the trade as a distribution sheet showing the amount sold; the purchase price; the amount due the rice farmer and the landlord; the amount due Co-Op for storage; and the amount due to be paid the CCC in order to discharge the mortgage. A copy of the distribution sheet was sent to Rex Rice in order that it could make payment accordingly.

On March 4, 1969, Rex Rice undertook to make payment by mailing the Co-Op four sight drafts payable as follows: (1) a sight draft for $144.50 payable to the Co-Op for fees and storage, (2) a sight draft payable to the landlord, the Doornbos defendants, for the sum of $1,178.93, (3) a sight draft in the amount of $7,073.59 payable to J. C. Emenhiser and Lillian Emenhiser, and (4) the $16,255.21 sight draft made the basis of this suit payable “Gulf Coast State Bank a/c J. C. Emenhiser.” The latter draft was in the same amount as the total mortgage indebtedness held by CCC. All drafts were mailed to the Co-Op and the Co-Op in turn mailed the drafts to the respective defendants along with a copy of the distribution sheet showing how the proceeds of the sale were disbursed. It listed the $16,255.21 draft as follows: “Gulf Coast State Bank a/c J. C. Emenhiser $16,255.21.” The defendants received their drafts and deposited them for collection in their respective banks in a different city. Waldo Hebert kept the $16,255.21 sight draft in the safe at the Co-Op. On March 13, 1969, he took the draft to Janell Labay, Assistant Cashier of the Gulf Coast State Bank, and requested that she advance him cash on the draft immediately so that he could purchase two cashier’s checks totaling $16,255.21 payable to the CCC showing Rex Rice Company and J. C. Emenhiser as the remitters. She testified that she handled many sight drafts for Mr. Hebert and on this occasion he came in and wanted immediate credit on the sight draft to go and pay off the CCC; that at his request she treated the sight draft as a cash item and not as a collection item and advanced cash on the draft because that was the way he wanted it. She repeatedly testified that she treated the draft as if it were a check or cash. She testified that the reason she handled the transaction in this manner was because Mr. Hebert handled numerous business transactions with the Bank in this manner and she usually followed his instructions. She admitted that she did not contact any of the defendants with regard to the transaction and that neither J. C. Emenhiser nor any of the other defendants endorsed the draft nor authorized her to accept the draft on their behalf, nor did they authorize her to treat the draft as a cash item and pay out cash on it immediately. She further testified that she did not enter the draft in her collection register as a collection item and did not send it directly to the drawee bank in Louisiana, but rather sent it out for collection as a cash item as if it were a check and that since J. C. Emenhiser did not have an account at the Bank she did not credit his account with the amount of the draft. Waldo Hebert died before his testimony could be taken. Sam J. Lucas, president of the Bank, testified that Mrs. Labay had authority to issue cashier’s checks on sight drafts drawn on Rex Rice Company and to handle the draft in question as a cash item and that the Bank regularly cashed sight drafts drawn on rice companies. When asked who purchased the two cashier’s checks prepared by Mrs. Labay and made payable to the CCC, he answered “Rex Rice Company.” The evidence shows that the reason the transaction was handled in the foregoing manner was because the CCC would not accept sight drafts or checks in discharge of the indebtedness.

In its brief the Bank explains its conduct as follows:

“This procedure of making the drafts payable to the bank for the account of the farmer was used to enable the Co-op’s employee to obtain bank checks made payable to the Commodity Credit Corporation in the amount of each farmer’s lien on the batch of rice that had been sold without having to first chase the farmer down and obtain his endorsement on the draft. It must be kept in mind that the Co-op’s employee processed many drafts in this manner and the procedure saved the employee a substantial amount of time that would have been lost if he had had to track down each and every farmer who had sold rice through the Co-op subject to a Commodity Credit Corporation Rice Mortgage. * * * Plaintiff bank does not deny that the credit of the payor of the draft, the primary obligor, the rice mill, was behind the payment of the draft, just as the primary obligor of any check or draft would be; * * *”

There is no evidence that the defendants requested the Bank to make a provisional settlement of the draft and there is no evidence that any of the defendants expressly authorized Waldo Hebert to act as their agent in presenting the sight draft to the Bank and causing the same to be converted into cash nor is there any evidence that they authorized him to purchase the cashier’s checks payable to the CCC. In an effort to show apparent authority on the part of Hebert, the Bank offered evidence showing that defendants had sold rice stored at the Co-Op on two previous occasions and that the defendants were given distribution sheets showing the amount of the mortgage indebtedness to be allocated to “Gulf Coast State Bank a/c J. C. Emen-hiser” and on both occasions the Bank cashed drafts and delivered to Hebert cashier’s checks payable to the CCC in payment of the mortgage indebtedness as was done in this instance. Defendants denied any knowledge of the method employed by Hebert in discharging the mortgage indebtedness on the two previous occasions and the record is devoid of any evidence showing that the defendants knew of the Bank’s custom in cashing the sight drafts and issuing cashier’s checks to the CCC. Defendants take the position that Rex Rice Company assumed payment of the indebtedness and that the debt discharged was that of Rex Rice and not the debt of the defendants.

By its first point of error the Bank contends that the trial court erred in refusing to allow it to introduce evidence showing that the Bank acted in compliance with its local custom by advancing cash on sight drafts made payable to the Bank for the account of all local rice farmers who had sold rice on which there was an outstanding indebtedness owed the CCC. The Bank argues that defendants must be held to have agreed to govern themselves by the custom and mode of doing business on the part of the Bank whether they had actual knowledge of such custom or not.

Defendants objected to the proof of the Bank’s local custom on the ground that there was no pleading to support such proof. We have concluded that the proffered testimony was properly excluded. While the Bank’s petition contained allegations that the Bank complied with banking customs in presenting the draft for collection, we find no allegations that it was the Bank’s local custom to treat all rice farmers’ sight drafts in the same manner as it treated the sight draft in question. Moreover, there is no allegations that such local custom was known to defendants.

In order for a usage or custom of a particular bank to govern and modify the law in relation to the dealings of the parties, it must appear that such custom was known to the party dealing with the Bank. See 10 Am.Jur.2d Banks, sec. 6, p. 31. There is no evidence whatsoever that the defendants knew of the custom or procedure followed by the Bank in cashing sight drafts drawn on the purchasers of the rice or in issuing cashier’s checks to discharge an indebtedness to the CCC on rice which had been delivered to the purchaser. The Bank’s first point is overruled.

Under the Bank’s pleadings the controlling issue in this case is whether Waldo Hebert was the agent of defendants when he took the sight draft to the Bank and requested and received the sum of $16,-255.21 in cash thereon. In order to subject the defendants to liability for reimbursement, the Bank had the burden to prove that Hebert had authority to act for the defendants as their agent. Cummer Mfg. Co. of Texas v. First Nat. Bank of Center, 173 S.W. 536 (Tex.Civ.App.—Texarkana 1915, no writ); see generally, 2 Tex.Jur.2d Agency sec. 248 and the eases cited therein.

The issue of agency was submitted to the jury in Special Issue No. 3. The jury found that the Bank failed to establish by a preponderance of the evidence that Hebert was the agent of defendants. The Bank has no point of error challenging the finding nor does the Bank have any point asserting that an agency relationship was established as a matter of law. In order for the Bank to establish a cause of action against the defendants, it was essential that the Bank obtain a favorable finding on the issue of agency. As there was no such finding and the Bank failed to challenge the jury’s “negative” finding on the agency issue, it must be held that the Bank failed to discharge its burden of establishing a cause of action against defendants.

Under its eleventh point the Bank contends the court erred in refusing to submit its specially requested issues Nos. 1, 2, 3 and 5. We do not agree with this contention. The requested issues amount to nothing more than a request to have the jury find on various phases or different shades of the issue of agency. As stated, the trial court submitted an issue on agency in Special Issue No. 3. The Bank registered no objection to the form or substance of Special Issue No. 3. Assuming that the requested issues were more accurate than the issue given, a request to give them, not coupled with any objection to the form or wording used by the court, will not be given effect as an objection to the issue as given. Isbell v. Lennox, 116 Tex. 522, 295 S.W. 920 (1927); City of Dallas v. Priolo, 150 Tex. 423, 242 S.W.2d 176 (1951). Under Rule 274, Texas Rules of Civil Procedure, “A party objecting to a charge must point out distinctly the matter to which he objects and the ground of his objection.” The failure of the Bank to object to Special Issue No. 3 as submitted by the court is not cured by requesting other special issues on the same subject even though the requested issues may be correct. Cimarron Insurance Co. v. Price, 409 S.W.2d 601 (Tex.Civ.App.— Austin 1966, writ ref’d n. r. e.); City of Dallas v. Priolo, supra. Since no objection was made by the Bank to the form or substance of the agency issue, any complaint of the issue was waived.

Under points two through seven and points nine and ten, the Bank asserts that the court erred in submitting numerous special issues and special instructions covering the defendants’ defense to negligence on the part of the Bank in failing to send the sight draft directly to the drawee Bank for collection. The jury found that the Bank was guilty of negligence by employing the method it used to collect the draft and that such negligence proximately caused the draft to be dishonored. These issues would arise only if the Bank established the existence of an agency relationship. In view of our conclusion that the Bank failed to discharge its burden to prove agency, we do not reach these points.

The judgment of the trial court is affirmed.

      .

      . “SPECIAL ISSUE NO. 3: Do you find from a preponderance of the evidence that Winnie Rice Farmers Cooperative Association or Waldo Hebert, acted as agent for J. C. Emenhiser, Lillian Emenhiser and the Dornbosses [sic] in presenting to the Gulf Coast State Bank the draft in question?
      “ANSWER: We do not.”


text:
    HILLCREST STATE BANK, Appellant, v. BANKERS LEASING CORPORATION OF TEXAS, Appellee.
    No. 19029.
    Court of Civil Appeals of Texas, Dallas.
    Nov. 18, 1976.
    Rehearing Denied Dec. 16, 1976.

      Paul E. Lokey, Dallas, for appellant.
    James D. Stevenson, Douglas Riley, Jr., Dallas, for appellee.
   AKIN, Justice.

This is an interpleader suit in which two parties claim the right to a $21,214.87 payment under a lease contract. Hillcrest State Bank contends that it is entitled to the funds under an assignment from the lessor, Bankers Leasing Corporation. Bankers Leasing replies that the assignment was intended only as security for a note and that, since the note has been discharged, it is entitled to any further benefits under the contract. Following a jury trial, judgment was rendered for Bankers Leasing Corporation. The bank appeals. We affirm.

Bankers Leasing Corporation entered into a lease agreement with Rauscher Pierce Securities Corporation whereby Bankers Leasing agreed to purchase and lease to Rauscher Pierce certain office equipment. To secure the funds for the equipment, Bankers Leasing borrowed $1,173,032.10 from the Hillcrest State Bank and secured the note with an assignment to the bank of its rights under the Rauscher Pierce lease. The lease required Rauscher Pierce to make fifty-nine payments of $19,-881.90 (totaling $1,173,032.10) all of which it made to the bank in accordance with the assignment of the lease to the bank. Thus, the bank’s note was discharged.

The lease gave Rauscher Pierce the option, which it exercised, to purchase the equipment for $21,214.87. Because of conflicting claims to this fund between Bankers Leasing and the bank, Rauscher Pierce interpleaded both claimants and paid the sum into the court’s registry.

The assignment of the lease reads:

FOR VALUE RECEIVED, Bankers Leasing Corporation of Texas hereby assigns all its rights, title and interest in the Rauscher Pierce Securities Corporation lease of July, 1970, to Hillcrest State Bank, Dallas, Texas, without recourse on us. [Emphasis added.]

The bank contends that the assignment, by its clear terms, shows that it is an absolute assignment and not a security interest. However, merely because an assignment is absolute on its face does not prevent a court from treating it as security for a debt if it was so intended. Kaufman v. Blackman, 239 S.W.2d 422, 427 (Tex.Civ.App. — Dallas 1951, writ ref’d n. r. e.); cf. Wilbanks v. Wilbanks, 160 Tex. 317, 330 S.W.2d 607, 608 (1960). This intent may be shown by parol evidence or by a separate written instrument. Kaufman v. Blackman, supra at 427.

The sole question presented by this appeal is whether the note signed by Bankers Leasing and the assignment of the lease show an intent that the assignment be for security only and not absolute. We hold that it does. The note provides:

To secure the payment of the loan evidenced by this combined note, loan statement and security agreement, and truth in lending disclosure, borrower hereby grants to lender a security interest in the following described property (hereinafter referred to as collateral) to wit: see supplement attached hereto. [Emphasis added.]

The clear meaning of this language is that the bank received only a security interest in instruments which were collateral for the note. The question then is: was the lease a part of the collateral “attached hereto?” This question was answered by the bank in response to the requests for admissions of fact pursuant to Tex.R.Civ.P. 169. In its answers to these requests, the bank admitted that the language above reading “see supplement attached hereto” refers to the lease between Rauscher Pierce and Bankers Leasing and to the assignment of this lease to the bank. Consequently, the bank had only a security interest in the lease and it makes no difference that the assignment is absolute on its face and is “without recourse.”

The trial court could have instructed a verdict for Bankers Leasing on the ground that the bank had only a security interest. Instead it chose to submit an issue to the jury inquiring whether Bankers Leasing intended to absolutely assign its right under the lease to the bank. The jury answered this issue in the negative based upon these instruments as well as oral testimony offered by Bankers Leasing. Therefore, even if the intent of the parties in this respect should be considered a question of fact, the jury resolved that question in favor of Bankers Leasing. Since it is established that the assignment of the lease was intended to be security for the note and that the debt to the bank has been discharged, Bankers Leasing is entitled, as a matter of law, to the return of its collateral. Quinn v. Dupree, 157 Tex. 441, 303 S.W.2d 769, 775 (1957). This includes, of course, the lease and any benefits flowing from it including the $21,214.87 paid into the court’s registry.

Affirmed.


author: REYNOLDS, Justice.

text:
    Phyllis RAINWATER, Appellant, v. Deborah Ann HADDOX, Appellee.
    No. 8734.
    Court of Civil Appeals of Texas, Amarillo.
    Nov. 22, 1976.

      Thompson, Coe, Cousins & Irons, Larry L. Gollaher, Dallas, for appellant.
    Blankenship & Potts, John A. Stewart, Dallas, for appellee.
   REYNOLDS, Justice.

Upon the defendant’s failure to comply with its order to answer interrogatories in this suit for personal injuries, the trial court imposed sanctions and, hearing evidence of damages, rendered its monetary judgment for plaintiff. Among the sanctions imposed over the objections of defendant’s counsel were the removal of the cause from the jury docket and the denial to counsel of the right to participate in the hearing on damages. The determinative question is whether these sanctions were, and we hold that they were not, authorized or just. Reversed and remanded.

Deborah Ann Haddox brought this suit to recover damages from Phyllis Rainwater for injuries Haddox sustained in an automobile collision with Rainwater. Rainwater timely answered. A jury fee was paid and the cause was placed on the jury docket.

More than a year after Rainwater answered, Haddox propounded to Rainwater’s attorneys requests that Rainwater admit certain facts and answer certain interrogatories. After five months had elapsed without a response to the requests, Haddox applied for an order to compel answers to the interrogatories. The court, after notice and a hearing, ordered Rainwater to answer, allowing her approximately two and one-half months to comply. There was no compliance and, some two months following the ordered compliance date, Haddox moved the court to impose sanctions. Within three weeks thereafter, Rainwater’s attorneys asked leave of the court to withdraw as counsel because, despite their verified diligent efforts, they had been for almost a year and were then unable to locate Rainwater to secure her cooperation in the defense of the suit.

After notice of and a hearing on the motions, the court denied the written motion by Rainwater’s counsel to withdraw and his oral motion for continuance made at the hearing, and imposed sanctions on Rainwater. The sanctions invoked were: Rainwater’s answer was stricken, a jury trial was denied, Haddox was granted judgment subject to proving her unliquidated damages before the court, and Rainwater’s counsel was denied any participation in the inquiry into the amount of Haddox’s unliq-uidated damages. To each of these sanctions, Rainwater’s counsel objected.

On the day previously set for the jury trial, the court heard evidence of Haddox’s damages and denied to Rainwater’s counsel, over his objections, the right to make objections and to cross-examine. The court rendered its judgment that Haddox recover from Rainwater the sum of $9,000, composed of $98 awarded for lost wages and $8,902 awarded for past and future pain and suffering, together with interest thereon and all costs. From this judgment an appeal has been perfected with seven points of error.

At the outset, we note that there was no error in the denial of the oral motion for a continuance. For a continuance, Rules 251 and 252 require an application accompanied by affidavit setting forth sufficient cause. Where an application for continuance fails to conform to the rules, the denial of a continuance comes within the sound discretion of the court and it will be presumed, absent a showing of abuse of discretion, that the court properly exercised its discretion. D_ F_ v. State, 525 S.W.2d 938, 941 (Tex.Civ.App. — Houston [1st Dist.] 1975, no writ). The court did not abuse its discretion in denying the oral motion for continuance when it developed there was no reasonable expectation of locating Rainwater. The sixth point of error is overruled.

Unchallenged is the validity of the court’s order directing Rainwater to answer the interrogatories, and it is conceded that a court may impose sanctions for the refusal to comply with its valid order. The question on this appeal, however, is whether the trial court was authorized to impose, or justified in imposing, the sanctions it did.

When a party refuses to answer any question after being directed to do so by the proper court, the court is authorized by Rule 215a to consider the refusal as a contempt, or to make such orders as are just, including those permitted by Rule 170, the rule establishing the consequences of a refusal to make discovery. For the refusal to obey the court’s order, Rule 170, in addition to authorizing the recovery of incurred expenses not material here, permits:

(a) an order that the matters regarding the character or description of the thing, or the contents of the paper, or any other designated facts shall be taken to be established for the purposes of the action in accordance with the claim of the party obtaining the order;
(b) an order refusing to allow the disobedient party to support or oppose designated claims or defenses, or prohibiting him from introducing in evidence designated documents or things or items of testimony;
(c) an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or proceeding or any part thereof, or rendering a judgment by default against the disobedient party.

Notwithstanding, a litigant’s basic rights are not lightly disregarded and they should be curtailed only when formally sanctioned under the circumstances. Illustratively, the Supreme Court, in considering the then existing Rule 202 provision denying a party the right to present his grounds for relief or his defenses if he fails to appear in answer to a deposition subpoena, said, “The penalty provided in the Rule is a harsh one and should be imposed only when clearly authorized.” Sears, Roebuck & Company v. Hollingsworth, 156 Tex. 176, 293 S.W.2d 639, 642 (1956). We see no reason why the same view should not be taken of the other rules which allow sanctions.

Thus, in the light of the stated factual circumstances and the legal principles, the court was clearly authorized and justified in striking Rainwater’s answer and in rendering judgment by default against her subject to proof of Haddox’s unliquidated damages. Points four and five are overruled.

There is, however, no specific authorization in the above-mentioned rules for the removal of a cause from the jury docket or for the denial of participation in the inquiry into the matter of unliquidated damages following a default judgment. If the authority exists, it is because the court’s order would be just under the circumstances or because it flows from some other source.

It is not clear from the record which party paid the jury fee and placed the cause on the jury docket; but, assuming that Haddox did so, the authority for removing the cause from the jury docket is found in Rule 220, which, effective January 1, 1971, reads:

When any party has paid the fee for a jury trial, he shall not be permitted to withdraw the cause from the jury docket over the objection of the parties adversely interested. If so permitted, the court in its discretion may by an order permit him to withdraw also his jury fee deposit. Failure of a party to appear for trial shall be deemed a waiver by him of the right to trial by jury.

Rainwater’s counsel, who had been denied leave to withdraw, appeared for trial and objected to the removal of the cause from the jury docket. The query, then, is whether Rainwater’s failure to personally appear waived her right to trial by jury. It long has been the principle in Texas that whatever a man sui juris may do for himself may be done by his attorney. Parker v. Poole, 12 Tex. 85, 86 (1854). This is made manifest by Rule 7 which states: “Any party to a suit may appear and prosecute or defend his rights therein, either in person or by an attorney of the court.”

Accordingly, we hold that, for the purposes of Rule 220, a party, although not personally present, appears for trial when his attorney is present. Therefore, when Rainwater’s counsel appeared for trial and objected to the removal of the cause from the jury docket, the court was not authorized to do so by Rule 220. Moreover, under the circumstances where Rainwater’s right to a trial by jury was not forfeited under the rule and because this cause was previously set for a trial to a jury on the same day the court heard the matter of damages non-jury, we cannot say that the order removing the cause from the jury docket was a just one. The first point of error is sustained.

The judgment by default, which we have held was authorized and justified, did not, as the trial court recognized, dispense with the necessity for evidence of Haddox’s un-liquidated damages. Rule 243; Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312, 314 (Tex.Civ.App. — Dallas 1975, writ ref’d). During the hearing, however, Rainwater’s counsel was denied the opportunity to interpose objections to the testimony of, and to cross-examine, the witness presented by Haddox on the matter of damages.

None of the rules permitting sanctions specifically provides for denial to a defendant against whom default judgment has been rendered on an unliquidated claim the right to protect himself from the testimony of damages given by plaintiff’s witnesses. It is the Texas rule, as well as the general rule, that upon an inquiry into the amount of unliquidated damages after a default judgment, the defendant has the right to be present, to interpose objections to testimony offered by plaintiff’s witnesses and to cross-examine them in order that, by the exclusion of improper evidence, a proper judgment may be rendered on competent and sufficient evidence. St. Louis S. W. Ry. Co. v. Denson, 26 S.W. 265, 266 (Tex.Civ.App.1894, no writ); Maywald Trailer Co. v. Perry, 238 S.W.2d 826, 827-28 (Tex.Civ.App. — Galveston 1951, writ ref’d n. r. e.); 47 Am.Jur.2d, Judgments, § 1187.

It follows that the imposition of a sanction that is not specifically authorized in derogation of a clearly established legal right cannot be just. Points two and three are sustained.

The unauthorized and unjust sanctions imposed require that the judgment be reversed. For this reason, we do not discuss the seventh point of error which presents the contention of an excessive judgment.

The judgment is reversed and the cause is remanded.

       All rules cited are the Texas Rules of Civil Procedure.


author: WALTER, Justice.

text:
    COASTAL STATES GAS PRODUCING COMPANY et al., Appellants, v. LOWER COLORADO RIVER AUTHORITY, Appellee.
    No. 4904.
    Court of Civil Appeals of Texas, Eastland.
    Nov. 24, 1976.
    Supplemental Opinion Dec. 23, 1976.

      Tracy N. Dubose, Houston; William R. Vance, Bryan, for Coastal States.
    Jefferson D. Giller, M. W. Parse, Jr., Russell H. McMains, Robert B. Dillon and Daniel K. Hedges, Fulbright & Jaworski, Houston, John M. Lawrence III, Lawrence, Thornton, Payne & Watson, Bryan, Joseph Jaworski, John H. Buck, Bracewell & Patterson, Houston, for Lo-Vaca.
    William T. Moore, Bryan, Mac Umstattd, Hume Cofer, Austin, James C. Winters, Michael J. Wood, David L. Griffis, David Kocian, Winters Deaton, James & Briggs, Houston, for appellee.
   WALTER, Justice.

Lower Colorado River Authority recovered a judgment against Coastal States Gas Producing Company for $25,218,060.67 for breach of contract. Coastal and intervenor, Lo-Vaca Gathering Company, have appealed. We reverse and render.

LCRA entered into a contract in 1962 with Coastal to purchase all the natural gas required to fuel its electric generating units until January 1, 1985, at fixed unit prices. The contract provided it could not be assigned without the written consent of the other party. On October 21, 1963, Coastal assigned the contract to Lo-Vaca without the consent of LCRA. In 1972, the parties amended the contract. LCRA was constructing a generating unit at its Granite Shoals Plant and was desirous of having gas delivered to that plant. The amended contract provided in part:

“WHEREAS, Coastal States Gas Producing Company, by and through its wholly owned subsidiary Lo-Vaca Gathering Co., a Delaware corporation (hereinafter called COASTAL), with performance by such subsidiary being guaranteed by Coastal States Gas Producing Company, is willing to do or cause to be done the things desired by LCRA under the terms and conditions set out herein;
“This agreement and its relationship to the CONTRACT is entire, and it is not intended that the obligations and rights thereunder or hereunder be in any way severable. The CONTRACT shall be deemed to be and is hereby amended and supplemented only to the extent necessary to give effect to the specific provisions hereof, but not otherwise.”

This amended contract was executed by Coastal, Lo-Vaca and LCRA.

The Railroad Commission on January 5, 1973, issued its statewide order setting priorities on gas for all gas utilities. In the order, all gas utilities were directed to file a curtailment plan. In February, 1973, Lo-Vaca filed its plan which provided for a higher priority to electric generating customers than the statewide order. LCRA supported Lo-Vaca’s curtailment plan before the Commission. It filed a motion with the Commission requesting that Lo-Vaca’s curtailment program be made effective immediately on an interim basis. LCRA asserted in this motion:

“The status of the customers receiving gas from the Lo-Vaca system is best known to Lo-Vaca since it possesses the most information as to the whole group and is best acquainted with their needs; consequently, the Order of Priority presented by Lo-Vaca should have been conceived on the basis of the relative needs for and uses of gas of its various customers and should be reasonable and fair to all concerned. This Order of Priority places electric generating entities such as LCRA in Priority A(3) which is substantially higher than its priority under the statewide order.”

Thereafter, Lo-Vaca filed an amended application under Articles 6053 and 6054 of the Revised Civil Statutes of Texas for a review and revision of prices and rates under existing agreements for the sale of gas to its customers. LCRA filed a motion to be dismissed from this proceeding, asserting its contract was with Coastal and it did not consent to the assignment. Coastal was permitted to intervene and became a co-applicant with Lo-Vaca.

LCRA says:

“Since LCRA was involuntarily dependent upon a gas pipeline system that was fast running out of gas, LCRA, along with other parties to Docket 500, suggested to the Commission that Lo-Vaca be granted an interim rate so that it could maintain its gas supply until the Commission could make a final decision in the proceeding . . . ”

In the matter of Lo-Vaca’s application to review and revise existing contracts, LCRA delivered to the Commission its suggested emergency rate order in part as follows:

“(1) That LO-VACA and COASTAL STATES have been and are jointly engaged in the operation of a natural gas utility with LO-VACA servicing sales contracts upon which COASTAL STATES is obligated and being furnished financing for its operations by COASTAL STATES;
(2) That the Commission has jurisdiction over COASTAL STATES and LO-VACA for all purposes of this order;
(3) That the public interest requires that the gas supply of LO-VACA be increased with all possible dispatch in order that sufficient gas supplies be available to meet the needs of the consumers of gas and electricity who are depending upon the LO-VACA system and that because of LO-VACA’s presently deficient gas supply a public emergency exists;
(4) That LO-VACA’s gas supply position cannot be satisfactorily improved in the absence of an emergency rate in excess of that now collectible under existing customer contracts. Such a rate must yield sufficient revenue to cover LO-VACA’s cost of operations and the cost of purchased gas resold through the LO-VACA system; . . . ”

The Commission rendered its interlocutory order on September 27, 1973, in part as follows:

“IT IS THEREFORE ORDERED By the Railroad Commission of Texas that, pending final decision in the combined rate and curtailment applications of Lo-Vaca and Coastal States in Gas Utilities Docket Nos. 500 and 505, as well as related proceedings, the rules of practice and procedure of the Gas Utilities Division are hereby suspended, pursuant to Rule 58 thereof; and
IT IS FURTHER ORDERED That, pending a final decision in the combined rate and curtailment proceedings presently underway, an interim rate is hereby granted and shall be applicable to all customers of Lo-Vaca now paying a lower rate, providing that no such customer shall be required to make any increased payments except upon the following conditions concerning such rates and refunds:
1. All revenues collected by Lo-Vaca in excess of existing contract prices or rates shall be subject to refund upon review by the Commission or in the event final determination in Docket No. 500 establishes lower rates in the public interest, or this proceeding is otherwise terminated;
2. Customers with contract prices or rates below the interim rate shall be entitled to reject this interim rate in its entirety within ten (10) days of the effective date of this order; and any failure to timely file such rejection with the Railroad Commission shall be tantamount to an agreement and approval thereof; and any customers filing á rejection shall not be allocated pursuant to the curtailment program adopted in Docket No. 508, any gas supply or deliverability added to the Lo-Vaca system after the effective date of this order;
3. Customers accepting the interim rate and customers at rates higher than the interim rate shall share in the allocation of additional gas volumes in accordance with the Commission’s curtailment order affecting Lo-Vaca;
4. Applicants herein shall refund all increased amounts, including statutory interest, that are not finally determined to be in the public interest. Customers now paying a higher price for gas shall not be affected by this interlocutory order, except that any excess amounts paid by such customers during the time this interim rate is in effect over the final rate established by the Commission in the public interest, shall be subject to refund or reimbursement by Lo-Vaca.
The interim rate shall include a cost of gas, or commodity, element which will be the weighted average cost of gas to Lo-Vaca as of June, 1973, indicated by Lo-Vaca’s evidence to be 24.55$/MCF. This cost of gas shall be adjusted each month after June, 1973, and the average cost of gas for the calendar month ended two months prior to the first day of the billing month.
The interim rate shall also include a factor relating to fixed and variable costs that is intended to allow Lo-Vaca to recoup its costs, excluding the cost of purchased gas, and is not designed to afford Lo-Vaca a rate of return on its investment. This portion of the rate is hereby fixed at 5$ per MCF of delivered gas to be applied in all monthly billings to customers as a flat rate charge.
IT IS FURTHER ORDERED That nothing contained herein is intended to affect the rights and obligations of the parties to this proceeding as between themselves or otherwise, except to the extent of affecting rates during the effective period of this interim rate.
IT IS FURTHER ORDERED That the revenue generated by this interim rate shall be used for the sole purpose of increasing the gas supply and delivery capability of the Lo-Vaca system, and that no funds shall be paid to Coastal States Gas Producing Company, or any other company in the Coastal States family, for any purpose other than acquiring gas supplies, and any monies paid by Lo-Vaca to any of the Coastal States family of companies, or agreements made between Lo-Vaca and any such companies, shall be subject to Commission review and approval.
IT IS FURTHER ORDERED That Coastal States Gas’ Producing Company and Coastal States Gas Corporation shall make contributions to the capital of Lo-Vaca Gathering Company in an amount up to $2,500,000 per month, cumulatively during the term of this Order, upon demand or request of the supervisor-manager of Lo-Vaca Gathering Company, for use by the management of Lo-Vaca in making necessary pipeline and gathering line extensions and natural gas treating facilities and for use as working capital for advance payments for purchase of new gas . . (Emphasis added)

On November 9, 1973, the Commission issued its letter order as follows:

“Honorable Charles Herring
General Manager
Lower Colorado River Authority
P.O. Box 220
Austin, Texas 78767
IN RE: Gas Utilities Docket No. 500, Interlocutory Order of September 27, 1973
Dear Mr. Herring:
The Commission has reviewed the application filed on November 5, 1973, by Lo-Vaca Gathering Company and Coastal States Gas Producing Company (applicants) regarding your letter of October 30,1973, and the position the Lower Colorado River Authority (LCRA) is taking toward the captioned order.
The Interlocutory Order covered the applicants, Coastal States Gas Corporation, and all customers involved in Gas Utilities Docket No. 500, and was issued for the purpose of providing Lo-Vaca the financial ability to augment its natural gas supply in order to avert human hardship during the coming winter heating season. The Commission’s Interlocutory Order was issued in the public interest, and contained a specific provision preserving the rights and obligations of the parties involved in the captioned rate case. Legal remedies are available for determining such rights and obligations and the courts provide the proper forum for such determinations.
The LCRA is subject to the Interlocutory Order issued September 27, 1973, and must pay Lo-Vaca the interim rate provided therein.”

LCRA contends it has never challenged the interlocutory order or the interim rate. LCRA says all it seeks is a determination of whether Coastal is obligated contractually to reimburse it for the difference between the contract price and the interim rate. It says the interlocutory order did not alter the price provision of the LCRA-Coastal contract.

The letter order of the Commission states LCRA is covered by the interlocutory order and must pay Lo-Vaca the interim rate. This order in direct terms refutes the contention there was no revision of the LCRA-Coastal contract.

After the Commission’s letter order, LCRA delivered to Coastal the following letter:

“November 29, 1973
Mr. Harry G. Fair, President
Coastal States Gas Producing Company
Five Greenway Plaza East
Houston, Texas 77046
Dear Mr. Fair:
I am enclosing two checks payable to Coastal States Gas Producing Company. These checks are in response to a statement sent us by your supplier, Lo-Vaca Gathering Company, but since our contract is with Coastal States Gas Producing Company we are making our payments to you under our contract.
The reference on the statement sent us by Lo-Vaca Gathering Company mentions that it is for gas furnished during the month of October ‘under Contract No. 5207 dated 10-10-72’ and, of course, we have no such contract but are assuming the statements for gas for the month of October cover the gas being furnished us by Lo-Vaca Gathering Company on your account under our contract with your company dated October 10, 1962.
Check No. 94005, dated November 27, 1973, is enclosed in the amount of $451,-933.68 which, according to our calculations attached thereto, is the amount we owe under our contract of 1962.
I am also enclosing our Check No. 94004, dated November 27, 1973 in the amount of $209,137.60. This check is being sent under protest and only because of the letter order issued by the Railroad Commission on November 9, 1973. We do not consider that the Railroad Commission has the authority to change our contractual relationships with Coastal States Gas Producing Company; therefore, I would like it clearly understood that this particular check is being paid under protest and with no direct or indirect implication or admission that it is validly owed, and all rights of the Lower Colorado River Authority existing under its contract with your company are specifically retained and reserved.
Yours very truly,
s/Charles Herring
Charles Herring
General Manager
H/w
Enclosures”

Each month thereafter LCRA paid the interim rate under protest.

In the case at bar, LCRA recovered the difference between the original contract price and rate fixed by the Commission. Appellants contend the court had no jurisdiction to entertain LCRA’s suit for the difference between the contract price and the interim rate set by the Commission because it is an impermissible collateral attack upon the Commission’s orders. We agree.

Coastal, the parent corporation of Lo-Vaca, and all subsidiaries of the holding company’s system were deemed to be applicants before the Commission in Lo-Vaca’s application for a review and revision of rates. The 1962 contract executed by LCRA to Coastal was assigned to Lo-Vaca without the consent of LCRA. However, as between Coastal and Lo-Vaca, the effectiveness of the assignment is not challenged and Lo-Vaca has supplied gas to LCRA under the contract from the beginning.

The interlocutory order recited “. An interim rate is hereby granted and shall be applicable to all customers of Lo-Vaca now paying a lower rate . . .” The Commission regarded LCRA as a customer of Lo-Vaca. As we will discuss later, we are of the opinion LCRA was estopped as a matter of law to deny it was a customer of Lo-Vaca. Prices, rates, rules, and regulations and conditions of service in contracts with a gas utility are subject to change by the Commission.

Art. 6054, Tex.Rev.Civ.Stat.Ann., provides:

“All orders and agreements of any company or corporation, or any person or persons controlling such pipe lines establishing and prescribing prices, rates, rules and regulations and conditions of service, shall be subject to review, revision and regulation by the Commission on hearing after notice as provided for herein to the person, firm, corporation, partnership or joint stock association owning or controlling or operating the gas pipe line affected. Acts 1920, 36th Leg., 3rd C.S., p. 18, ch. 14, § 3.”

In Texarkana & Ft. S. Ry. Co. v. Houston Gas & Fuel Co., 121 Tex. 594, 51 S.W.2d 284 (1932), the court said:

“In construing statutes enacted directly by the Legislature it is the duty of the court to look to the entire act, including the caption, the body of the act, and even the emergency clause, to determine the legislative intent. When the legislative intent is once determined it is the law. If such is the rule as applied to legislative acts, we think the same rule should apply to the rules and rate orders promulgated by our railroad commission. In other words, when we come to interpret and construe the rules and rate orders of the commission it is the intent of the commission, fairly expressed in the rule or rate order, which should govern, and when such intent is once ascertained it should be given effect. Furthermore as above stated, where the commission has officially interpreted its own rules and rate orders, such interpretation should be considered a part thereof. West Texas Compress Co. v. Railway Co., supra [Tex.Civ.App., 7 S.W.2d 597].” (Emphasis added)

The Commission, acting in the public interest, has revised the contract and increased the price to be paid by customers of the utility. When these contracts were executed, the parties were charged with knowledge the Commission could override contract prices and decrease or increase prices.

In Gillies v. La Mesa Lemon Grove and Spring Valley Irr. Dist., 54 Cal.App.2d 756, 129 P.2d 941 (1942) the court said:

“The action for damages was based on a violation of the terms of the Flume Company contract which had been superseded by the rates established by the commission. As the rates established in the contract cannot be enforced between the parties it follows that violation of the terms of that contract can furnish no ground for an action for damages.”

In 73 C.J.S. Public Utilities § 16, it is said:

“Inasmuch as the sovereign power of the state to fix rates for the product or service of a public utility cannot be defeated or taken away by contract, as discussed supra subdivision a of this section, any such contract relating to rates must yield to the regulatory powers of the state unless excepted therefrom by constitutional or statutory provisions; and an unexpired contract does not authorize or compel a utility to charge a different rate from that provided by effective schedules established by the state. Every such contract is conclusively deemed to be made with knowledge and in contemplation of the sovereign power of the state to alter it, . .

In Crawford v. McDonald, 88 Tex. 626, 33 S.W. 325 (1895), the court said:

“A direct attack on a judgment is an attempt to amend, correct, reform, vacate, or enjoin the execution of same, in a proceeding instituted for that purpose, such as a motion for a rehearing, an appeal, some form of writ of error, a bill of review, an injunction to restrain its execution, etc.
A collateral attack on a judgment is an attempt to avoid its binding force in a proceeding not instituted for one of the purposes aforesaid, as where, in an action of debt on a judgment, defendant attempts to deny the fact of indebtedness; or where, in a suit to try the title to property, a judgment is offered as a link in the chain of title, and the adverse party attempts to avoid its effect, etc.”

Article 6059, Tex.Rev.Civ.Stat.Ann., provides, in part, as follows:

“If any gas utility or other party at interest be dissatisfied with the decision of any rate, classification, rule, charge, order, act or regulation adopted by the Commission, such dissatisfied utility or party may file a petition setting forth the particular cause of objection thereto in a court of competent jurisdiction in Travis County against the Commission as defendant . . . ”

The general rule is announced by numerous cases that orders of the Commission within its delegated authority are immune from collateral attack unless they appear to be void on their face. Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681 (1941); Railroad Commission of Texas v. Royal Petroleum Corporation, 93 S.W.2d 761 (Tex.Civ.App. — Amarillo 1936, writ dism’d).

We hold this suit constitutes an invalid collateral attack on the interlocutory orders. The Commission raised the price of gas delivered to LCRA and LCRA ignores those orders and seeks to recover for breach of the contract as it was written before the Commission reviewed and revised the rates. The terms of the contract relating to rates must yield to the Commission’s orders.

LCRA voluntarily supported Lo-Vaca’s proceedings before the Commission in its capacity as a customer of Lo-Vaca seeking a higher priority for electric generating entities than its priority under the statewide order. It has knowingly received gas from Lo-Vaca under the Commission’s orders. It has taken the benefits of the orders as a customer of Lo-Vaca and cannot reject its obligations to pay for the gas under the interim rate established by the Commission. We sustain appellants’ contention that as a matter of law LCRA cannot occupy the inconsistent position of being a Lo-Vaca customer for purposes of obtaining gas but not being a Lo-Vaca customer for purposes of payment for gas delivered under the interim rate.

In Cincinnati Siemens-Lundgren Gas Illuminating Co. v. Western Siemens-Lundgren Co., 152 U.S. 200, 14 S.Ct. 523, 38 L.Ed. 411 (1894), the court said:

“. . . The Chicago corporation after-wards transferred all its franchises and property, including its rights and interest in this contract, to the plaintiff. The Ohio company carried on its correspondence, and sent its orders for goods to the gas illuminating company, and, though notified of the transfer to the plaintiff, declined, in its letters to recognize such transfer. At the same time it received the goods, and did not return them, and received them knowing that they were sent by the plaintiff. Upon this the defendant invokes the rule laid down in Arkansas Valley Smelt. Co. v. Belden Min. Co., 127 U.S. 379, 8 S.Ct. 1308 [32 L.Ed. 246], and insists that the contract was of such a nature that it could not be assigned by the gas illuminating company to plaintiff without the consent of defendant, which consent was positively refused. But that doctrine has no application, under the circumstances of this case. Defendant could not accept these goods from the plaintiff, and then refuse to pay for them. It is immaterial whether there was an assignment from the gas illuminating company to the plaintiff or not, or whether, if there was one, it was ever assented to by the defendant or not. When the defendant ordered the goods from the gas illuminating company, and the plaintiff forwarded the goods upon that order, the defendant might have returned them, and declined to have any dealings with the plaintiff; but it could not accept the goods and use them, and then say it never ordered the goods from the plaintiff, never had any contract with it, and never assented to any assignment to the plaintiff of its contract with the illuminating company.”

In 22 Tex.Jur.2d Estoppel § 11, it is stated in part:

“A person will not be permitted to accept the beneficial part of a transaction and repudiate the disadvantageous part. In other words, one who retains benefits under a transaction cannot avoid its obligations, and is estopped to take a position inconsistent therewith. Similarly, one cannot accept and reject the same instrument, or, having availed himself of the benefits conveyed by a part of an instrument, reject its other provisions . .”

In Daniel v. Goesl, 161 Tex. 490, 341 S.W.2d 892 (1960), it is said:

“Dr. Goesl having elected to retire and having demanded and accepted the benefits accruing to him as provided for in the agreement cannot accept that part of the contract beneficial to him and deny the application of other provisions of the contract which may be detrimental. Doty v. Barnard, 92 Tex. 104, 47 S.W. 712. To paraphrase what we said in Guadalupe-Blanco River Authority v. City of San Antonio, 145 Tex. 611, 200 S.W.2d 989, 997, Dr. Goesl seeks to retain the beneficial part of the transaction and to repudiate the disadvantageous part because of the alleged fraud of the other party. This he may not do.”

The judgment is reversed and judgment is rendered that LCRA take nothing from Coastal.

SUPPLEMENTAL OPINION

PER CURIAM:

Coastal States Gas Producing Company and Lo-Vaca Gathering Company have filed a motion for modification of judgment. They assert:

“. . . However, as a result of the trial court judgment’s obscuring the fact that Coastal States Gas Producing Company was awarded its counterclaim of ONE MILLION FIVE HUNDRED TWENTY-THREE THOUSAND SIX HUNDRED FORTY-ONE DOLLARS ($1,523,641.00) as a credit offset, this Court apparently overlooked such award in the rendition of its judgment on appeal
The judgment provides in part as follows: “It is therefore ordered, adjudged and decreed by the Court that the plaintiff, Lower Colorado River Authority, shall have and recover of and from the defendant, Coastal States Gas Producing Company, the sum of $25,218,060.67, which amount represents the aforesaid amount of $26,741,701.67 less an offset credit to defendant of $1,523,641.00, together with interest on said amount of $25,218,060.67 from June 24, 1975 until paid, at the rate provided by applicable law.”

We hold the pleadings and proof support the trial court’s award of the offset credit to Coastal of One Million Five Hundred Twenty-Three Thousand Six Hundred Forty-One Dollars ($1,523,641.00) on its uncontested counterclaim.

It is therefore ordered that Lower Colorado River Authority take nothing from Coastal as we have heretofore held in our original opinion and judgment, and it is further ordered that Coastal States Gas Producing Company recover One Million Five Hundred Twenty-Three Thousand Six Hundred Forty-One Dollars ($1,523,641.00) from Lower Colorado River Authority plus interest from the date of said judgment, July 28, 1975, plus costs.