author: KLINGEMAN, Justice.

text:
    Read KILLGORE, Appellant, v. GUARDIANSHIP OF Read KILLGORE, mentally incompetent, Appellee.
    No. 16016.
    Court of Civil Appeals of Texas, San Antonio.
    June 28, 1978.
    William H. Russell, San Antonio, for appellant.
    Waynene C. Combest, Veitch & Britt, San Antonio, for appellee.
   KLINGEMAN, Justice.

This is an appeal from an order of the County Court of Bexar County, Texas, appointing James Gamble guardian of the person and estate of Read Killgore, mentally incompetent. Appellant Read Killgore asserts two points of error: (1) the probate court erred in conducting proceedings in appellant’s guardianship after the court, by appropriate order, approved appellant’s guardian’s final account and discharged such guardian and the surety on her bond and closed the estate; (2) the probate court erred in superseding an appointment of a temporary guardian for the appellant by the appointment of a permanent guardian without a jury hearing as to appellant’s competence.

The judgment appointing James Gamble guardian of the person and estate of Read Killgore was signed on October 19, 1977, and was filed on October 19, 1977. The bond for costs is dated November 30, 1977, and was approved and filed on December 1, 1977. It is seen that the costs bond was filed 42 days after the date of the judgment appealed from. The transcript contains no motion for new trial.

Rule 356, Tex.R.Civ.P., requires bonds for costs on appeal to be filed within 30 days after the date of judgment or order overruling motion for new trial. Compliance with this rule has been held to be mandatory and jurisdictional to an appeal. The time limits prescribed cannot be dispensed with or enlarged by this court for any reason. Glidden Company v. Aetna Casualty and Surety Company, 155 Tex. 591, 291 S.W.2d 315 (1956); Texas Employers’ Insurance Association v. Dixson, 546 S.W.2d 124 (Tex.Ciy.App.—Beaumont 1977, no writ); Juarez v. Marchan, 537 S.W.2d 129 (Tex.Civ.App.—Corpus Christi 1976, no writ); Harmon v. Miller, 530 S.W.2d 173 (Tex.Civ.App.—Tyler 1975, no writ); Washington v. Golden State Mutual Life Insurance Co., 405 S.W.2d 856 (Tex.Civ.App.— Houston), writ ref’d, 408 S.W.2d 227 (Tex.1966).

On initial examination, it would appear that the bond for costs might have been timely filed in that such bond for costs recites that on November 17,1977, the court rendered a judgment appointing James Gamble guardian of the person and estate of appellant and that appellant desires to take an appeal from such judgment. However, an examination of the transcript shows that the judgment here under attack and from which appellant is attempting to appeal was signed and filed on October 19, 1977. The only order dated November 17, 1977, is an order directing James Gamble, guardian of the person and estate of Read Killgore, to contact Dr. Pat Nixon as to the advisability of permitting Read Killgore to leave Evergreen Nursing Home and reside in his home on West Summit Avenue in San Antonio.

It is clear that the judgment here appealed from was rendered, signed, and filed on October 19, 1977, and that the bond for costs was not filed within the 30-day time limit required by the Rules of Civil Procedure. This court is without jurisdiction to hear such appeal and the appeal is dismissed.

      . It appears from the transcript that on April 18, 1977, Thelma Melliff was appointed guardian of the person and estate of Read Killgore, mentally incompetent, and that thereafter this order was vacated because of lack of proper service. In such order vacating such judgment, the guardian was ordered to render her final account. Pursuant to such order, Thelma Mel-liff filed her final account. Such account was approved by the court, Thelma Melliff was discharged from her trust as guardian, the sureties were discharged, and the estate was ordered closed.


source: Caselaw Access Project

author: AKIN, Justice.

license: Public Domain

text:
    James R. GARRETT and Efton M. Henson, Appellants, v. Edwin E. KOEPKE and William H. Wood, Jr., et al., Appellees.
    No. 19493.
    Court of Civil Appeals of Texas, Dallas.
    June 30, 1978.
    Rehearing Denied Aug. 18, 1978.

      Ivan R. Williams, Jr., Price & Williams, Austin, for appellants.
    Hugh L. Berryman, Reppeto & Berry-man, Herbert W. Marshall, Shearin, Collins & Marshall, Dallas, for appellees.
   AKIN, Justice.

The principal question presented by this appeal is whether limited partners lose their limited liability status, as a matter of law, where the partnership had failed to comply with the Uniform Limited Partnership Act, Tex.Rev.Civ.Stat.Ann. art. 6132a (Vernon 1970), which requires filing with the Secretary of State a certificate setting forth certain information pertaining to the limited partnership. A corollary question is whether certain limited partners lost their status with respect to limited liability where they exercised control over the partnership assets. We hold that since art. 6132a is a notice statute and since appellants already had the information that would have been provided by compliance with the statute prior to dealing with the limited partnership, the failure to comply with art. 6132a does not cause appellees to lose their status as limited partners. We also hold that, under the facts here, the limited partners did not become liable as general partners by exercising control of certain partnership assets. Accordingly, we affirm.

This is an appeal from three separate summary judgments denying appellants any recovery against appellees. Appellants, Garrett and Henson, sued appellees for a debt resulting from the alleged breach of a lease for a motel sign. Appellants had formerly owned the Continental Longview Motor Inn but sold it to a partnership in which appellees were limited partners. The partnership had assumed and had agreed to pay the sign payments. This limited partnership was created by an agreement executed in February of 1971 for the purpose of purchasing and operating the Continental in Longview, Texas. Appellees were denominated as limited partners in this agreement. Neither the limited partnership agreement nor a certificate containing the information required by art. 6132a was filed with the Secretary of State. Appellant Garrett’s deposition shows, however, that he knew that he was dealing with a limited partnership and understood the consequences of dealing with such an entity. In September 1972, because the general partner resigned, appellees assumed control of the partnership to effect collection of partnership assets so that they could be distributed to the limited partners.

Appellants argue first that since a certificate of limited partnership was never filed with the Secretary of State, a question is presented as to whether the partnership-became a general one, thus making appel-lees liable as general partners. Secondly, they assert that even if a valid limited partnership was formed, an issue exists as to whether when certain of the limited partners took control of the business, they lost their limited liability. Finally, appellants urge that because the limited partners failed to promptly renounce their respective interests in the partnership assets when they discovered that no limited partnership certificate had been filed, they lost their limited liability, citing Tex.Rev.Civ.Stat. Ann. art. 6132a § 12 (Vernon 1970). We hold, however, that since appellants were on notice that the entity with which they were dealing was in fact a limited partnership, appellees’ failure to comply with art. 6132a is immaterial. We hold further that no limited partner took such a part in the control of the business so as to lose his shield of limited liability. In view of these holdings, we do not address whether the limited partners promptly renounced their interests.

Appellees admit that they had failed to file a certificate of limited partnership as required by Tex.Rev.Civ.Stat. Ann. art. 6132a (Vernon 1970). Appellants contend, therefore, that appellees are liable for the debt sued upon as general partners. We cannot agree with this contention. We see no logical reason to strip appellees of their limited liability under their partnership agreement merely because they failed to comply with art. 6132a. The purpose of the filing requirements under the act is to provide notice to third persons dealing with the partnership of the essential features of the partnership arrangement. Hoefer v. Hall, 75 N.M. 751, 411 P.2d 230 (1966); Tiburon National Bank v. Wagner, 265 Cal.App.2d 868, 71 Cal.Rptr. 832 (1968); Davis v. Davis, 247 Or. 352, 429 P.2d 808 (1967). Since appellants knew that the entity with which they were dealing was a limited partnership, as well as the consequences of dealing with such an entity, they were in no way prejudiced by the failure to comply with the statute. We see no compelling policy reason here for holding that appel-lees became general partners by requiring technical compliance with these notice provisions. Indeed, such was not the intent of the legislature in enacting the statute; instead, its’ intent was to provide notice of limited liability of certain partners to third parties dealing with a partnership. R. H. Sanders Corp. v. Haves, 541 S.W.2d 262, 265 (Tex.Civ.App.—Dallas 1976, no writ). The nature and legal existence of a partnership does not depend upon any filing required by a statute. Tracy v. Tuffly, 134 U.S. 206, 226, 10 S.Ct. 527, 33 L.Ed. 879 (1890). We hold, therefore, that where a party has knowledge that the entity with which he is dealing is a limited partnership, that status is not changed by failing to file under art. 6132a. Indeed, the Houston Court of Civil Appeals in Voudouris v. Walter E. Heller & Co., 560 S.W.2d 202, 207 (Tex.Civ.App.—Houston [1st Dist.] 1977, writ pending) held that the failure to file the limited partnership agreement with the Secretary of State did not result in the formation of a general partnership.

Appellants rely on Lowe v. Arizona Power & Light Co., 5 Ariz.App. 385, 427 P.2d 366 (1967) and Hoefer v. Hall, supra, for the proposition that in order to obtain protection as a limited partner, there must be compliance with the statutory requirements. In Lowe, a certificate of limited partnership had been filed but after the withdrawal of one of the general partners the remaining partners executed and filed a certificate of partnership which did not indicate whether a general or limited partnership was intended. The court held that even though the certificate of partnership did not specify a general partnership it did not refer back to the certificate of limited partnership nor indicate an amendment to it and, therefore, the second certificate of partnership superceded the limited partnership certificate. Accordingly, that court held Lowe liable as a general partner. Lowe is distinguishable on the ground that plaintiffs there did not have actual notice that a limited partnership existed. Thus, we do not consider it controlling. Hoefer held that the failure to record a certificate of limited partnership did not preclude the existence of the partnership insofar as the parties to the agreement are concerned. Although Hoefer quotes the “rule” requiring compliance with the statute in order to have a limited partnership, that court arrived at the same conclusion as we have here where all parties had knowledge of the nature of the partnership. We do not agree, however, with Hoefer insofar ■ as it states that compliance with the statute is necessary to have a limited partnership.

Appellants next contend that some of the limited partners lost their shield of limited liability when they took a control position in the business of the partnership citing art. 6132a, § 8. We cannot agree. The debt upon which appellants are suing arose when the’ general partner controlled the motel. The alleged participation of ap-pellees in the business that may jeopardize their limited liability occurred after this debt was incurred. Thus, assuming that they participated in the management and control of the limited partnership so as to make them liable as general partners, their liability for obligations incurred before they were general partners can only be satisfied out of partnership property. Consequently, they cannot be held personally liable for this debt. Tex.Rev.Civ.Stat.Ann. art. 6132b, § 17 (Vernon 1970); Miller v. Doughty, 520 S.W.2d 586 (Tex.Civ.App.—Corpus Christi 1975, no writ).

Affirmed.

GUITTARD, C. J., not participating.


author: RAY, Justice.

text:
    William F. HAMILTON, Appellant, v. MOTOR COACH INDUSTRIES, INC., Appellee.
    No. 8551.
    Court of Civil Appeals of Texas, Texarkana.
    July 5, 1978.
    Rehearing Denied Aug. 1, 1978.

      Henry Stollenwerck, Dallas, for appellant.
    John L. Lancaster, III, Jackson, Walker, Winstead, Cantwell & Miller, Dallas, for appellee.
   RAY, Justice.

This is a products liability case. Appellant (plaintiff), William F. Hamilton, brought suit against appellee (defendant), Motor Coach Industries, Inc. (MCI), seeking damages for an injury which blinded him in one eye. The case was tried before a jury, but after Appellant Hamilton had rested, the district court instructed a verdict and rendered judgment that Hamilton take nothing. Appellant has perfected his appeal and submits one point of error for our consideration. The point of error is as follows:

“The Honorable District Court erred in holding that Hamilton had failed to produce evidence of a complete cause of action based upon the tort of having placed an unreasonably dangerous product into the channels of commerce.”

We agree that the trial court erred and its judgment will be reversed and the cause remanded for further proceedings.

REVIEW OF AN INSTRUCTED VERDICT

In reviewing the judgment of the trial court following the granting of an instructed verdict, we must review the evidence in the light most favorable to the appellant. 3 McDonald’s, Texas Civil Practice, Sec. 11.28.1 and Sec. 11.28.2. An instructed verdict is proper only where there is no evidence, or where the evidence is of such a character as to be of no probative force or value. Mundy v. Stiles, 257 S.W.2d 750, 752 (Tex.Civ.App.Waco 1953, writ ref’d n. r. e.).

THE FAVORABLE FACTS

Appellant Hamilton sought damages for injuries he received in 1975 when he was undertaking to repair or rebuild a spring loaded air cylinder which was either manufactured by the appellee, MCI, or built to its specifications. Appellee contended that Hamilton was not a “user” or “consumer” within the meaning of Restatement (Second) of Torts, Sec. 402A (1965); that appellant failed to carry his burden of showing that the air cylinder reached him without substantial change from the condition in which it left appellee MCI; and, that because Hamilton was a mechanic experienced in the repair and handling of air cylinders, there was no duty to warn him of a danger of which he should have been aware by virtue of his experience and training.

Appellant Hamilton only sought damages for his injuries under the strict liability tort action covered by Restatement (Second) of Torts, Sec. 402A (1965). Sec. 402A states the following:

“(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if
(a) the seller is engaged in the business of selling such a product, and
(b) it is expected to and does reach the user or consumer without substantial change in the condition in which it was sold.
(2) The rule stated in Subsection (1) applies although
(a) the seller has exercised all possible care in the preparation and sale of his product, and
(b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.”

The evidence establishes that the air cylinder which injured appellant was either placed in a bus manufactured by MCI or as a part thereof or was sold directly as a replacement part.

The air cylinder was purchased by Texas, New Mexico, and Oklahoma coaches (TNMO) from MCI either as original equipment on a bus or as an original replacement, and, without any alteration in it, other than use, the cylinder was sent by TNMO to West Tex Industries (West Tex) for reconditioning.

When the cylinder was placed into the channels of commerce, MCI anticipated that it would be subject to the action of corrosion and would need to be serviced and repaired by a workman on separate occasions. MCI was also aware that mechanics without formal training might work on the air cylinder.

No restrictions were placed on the product in the sale which MCI made relative to those who could perform repair work on the cylinder. MCI knew that the presence of the spring in the cylinder presented a potential danger to anyone who might be required to work on the air cylinder and such fact was known to MCI when the cylinder was placed into the channels of commerce. The cylinder had no warning on it concerning the potential dangers of or the presence of the spring. MCI recognized that the potential danger existed and that a warning was needed and provided a warning in its parts manuals which were made available to those persons who purchased a bus.

When MCI placed the cylinder into the channels of commerce, it knew that under certain conditions the piston in the cylinder might stick in a position so that the spring was depressed. The evidence established that when the spring was depressed, it could achieve two hundred fifty pounds of force and eleven hundred pounds per square inch of pressure. The two hundred fifty pounds of spring force was expected by MCI.

Appellant Hamilton picked up the package containing the cylinder dispatched from TNMO to West Tex. Appellant did not know that the cylinder was spring loaded nor did it occur to him that it was. Hamilton undertook to repair the cylinder and while doing so the spring loaded piston and shaft inexplicably released and were propelled into his right eye, blinding him in that eye.

THE CAUSAL CONNECTION ISSUE

The evidence in this case establishes a fact issue relative to causal connection between the seller’s placing its product into the stream of trade and whether such contributed to the user’s injury. It is clear that MCI was engaged in the business of marketing air cylinders and that it placed this air cylinder into the stream of trade. The favorable evidence indicates that Hamilton was injured as a result of the air cylinder having been placed into the stream of trade. It is now settled law in Texas that a cause of action exists against a seller who may be a manufacturer of an unreasonably dangerous product when such dangerous condition contributes to the user’s or consumer’s injury. Shamrock Fuel & Oil Sales Co. v. Tunks, 416 S.W.2d 779 (Tex.1967); McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787 (Tex.1967). See Green, Strict Liability Under Sections 402A and 402B: A Decade Of Litigation, 54 Texas L.Rev. 1185, 1197 (1976); Green & Smith, Negligence Law, No Fault, and Jury Trial —III, 51 Texas L.Rev. 207, 217-22 (1973).

THE DUTY OF THE SELLER

The duty of the seller under Sec. 402A is to refrain from placing a product into the stream of trade in an unreasonably dangerous, defective condition. Or put another way, the seller is under a duty not to market a product which subjects the consumer or user or someone in the vicinity of its use to an unreasonable risk of harm. Keeton, Products Liability — Inadequacy of Information, 48 Texas L.Rev. 398 (1970). Likewise, the courts have expanded Sec. 402A and the risks that fall within its scope, and subject a seller to liability if he introduces an unreasonably dangerous, though nondefective product into the stream of trade without adequate warning of its danger or without adequate directions for its use. Further, a seller is subjected to liability if he introduces into the channels of commerce a nondefective product that he can anticipate will undergo change and become unreasonably dangerous if the seller does not warn the consumer or user of such danger. Sharp v. Chrysler Corporation, 432 S.W.2d 131, 136 (Tex.Civ.App.Houston— 14th Dist.1968, writ ref’d n. r. e.); Darryl v. Ford Motor Company, 440 S.W.2d 630 (Tex.1969); General Motors Corporation v. Hopkins, 548 S.W.2d 344, 351 (Tex.1977). Comment “1” of Section 402A of the Restatement recognizes that a “user” includes those who are utilizing the product for the purpose of doing work upon it for the ultimate buyer. Appellant Hamilton falls within the category of a user. See Helicoid Gage Div. of American Chain & Cable Co. v. Howell, 511 S.W.2d 573, 578 (Tex.Civ.App.Houston — 14th Dist.1974, writ ref’d n. r. e.), and Ethicon, Inc. v. Parten, 520 S.W.2d 527, 538 (Tex.Civ.App.Houston— 14th Dist.1975, no writ); Sales & Perdue, The Law Of Strict Tort Liability In Texas, 14 Hous.L.Rev. 1, pp. 129-130 (1976-77). In the present case the favorable evidence shows that MCI expected the air cylinder to undergo change from its use; that the cylinder would need servicing; that the cylinder might become unreasonably dangerous; and that it could be expected that the cylinder might be serviced by untrained or uninformed workmen. It is our opinion that the seller, MCI, owed a duty to Hamilton, a user, to refrain from placing an unreasonably dangerous air cylinder into the stream of trade without an adequate warning of its dangers. Green, Strict Liability Under Sections 402A and 402B: A Decade Of Litigation, 54 Texas L.Rev. 1185, 1200 (1976). It is a fact issue as to whether the air cylinder was unreasonably dangerous as will be discussed next.

THE VIOLATION OF DUTY ISSUE

A more perplexing issue raised by the evidence is whether MCI violated its duty to Hamilton by placing its air cylinder into the stream of trade. The language of Sec. 402A makes it clear that “One who sells any product in a defective condition unreasonably dangerous to the user . . ” violates the seller’s duty. Likewise, one who sells a nondefective unreasonably dangerous product without adequate warning violates the seller’s duty. The failure to warn is the wrongful conduct which violates the duty owed by the seller to the consumer or user that imposes liability for the injury done by the seller’s marketing the product that injured the consumer. The evidence establishes a fact issue as to whether the warning contained in the parts manual delivered to the purchaser of a bus is sufficient warning to Hamilton, a user, who was attempting to service or repair the air cylinder. The trier of fact must, of course, first determine whether the product was in an unreasonably dangerous condition when sold. If the product was not unreasonably dangerous or was not dangerous at all, there can be no liability even though the consumer in both instances might suffer injuries as a result of using the product. There is no duty to warn if the product is not unreasonably dangerous at the time sold and when used by the consumer. The product need not be defective at all, but if the product is unreasonably dangerous when sold or placed into the channels of commerce, that is enough if not accompanied by an adequate warning. In such a case, the phrase “failure to warn” is a substitute for “in a defective condition.” However, if the product is not defective and not unreasonably dangerous at the moment that the seller parts with possession of the product, but the manufacturer-seller can anticipate that through use the product will change and become unreasonably dangerous, then the product is deemed defective and unreasonably dangerous at the time sold, thus requiring an adequate warning. Sharp v. Chrysler Corporation, supra, at 136.

There was some evidence of a design defect in that the piston inside the cylinder was not made of non-corrosive stainless steel. The evidence indicates that the reason the piston stuck in a depressed position was because it had rusted or corroded from accumulated vapor inside the cylinder. If the case is tried as a design defect case, the Texas Supreme Court has defined the test or standard to be used in determining the violation of duty issue. Henderson v. Ford Motor Company, 519 S.W.2d 87, 92 (Tex.1975), established a bifurcated test for determining whether a product is unreasonably dangerous and thus defective. The test as adopted by the majority of the court in that opinion is that a product will not be considered unreasonably dangerous unless either (1) a reasonably prudent manufacturer aware of the risk involved in its use would not place it into the channels of commerce, or (2) the product would not meet the reasonable expectations of the ordinary consumer as to its safety.

Those who use a product for the first time do not expect to receive a dangerously defective product. The question in a strict liability case is not what was expected, but what the consumer or user actually received and consumed or used. The litigation issue is limited to the specific product and its condition when sold and when consumed or used. The consumer has a right to expect that he will receive from the manufacturer a product that is safe. If the product is unreasonably dangerous, then the manufacturer must warn the consumer or user of the dangers involved in consuming or using the product. The adequacy of the warning or directions may be and usually is a question for the jury. Bituminous Casualty Corp. v. Black & Decker Mfg. Co., 518 S.W.2d 868, 873 (Tex.Civ.App.Dallas 1974, writ ref’d n. r. e.). Sales & Perdue, The Law Of Strict Tort Liability In Texas, 14 Hous.L.Rev. 1, p. 23 (1976-77). In a negligence action against a manufacturer, the violation of duty is based on the foreseeability of the risk of harm and the failure to use ordinary care to avoid the risk. „ In a Sec. 402A action, the violation of the seller’s duty is not based on the foreseeability of the risk of harm, but upon tracing the consumer’s injury by hindsight back to the seller’s placing the product in the stream of trade. Thus, one who sells a nondefective unreasonably dangerous product without communicating the dangerousness of the product to the one who is injured by the product, is liable for the injuries inflicted by the unreasonably dangerous item. Green, Strict Liability Under Sections 402A and 402B: A Decade Of Litigation, 54 Texas L.Rev. 1185, 1219 (1976).

In determining whether the seller has violated his duty to the consumer, the jury must be instructed concerning the defensive evidence presented. Assumption of risk may be raised by the evidence and the test is whether the consumer or user voluntarily exposed himself to the risk of injury with knowledge and appreciation of the danger. Henderson v. Ford Motor Company, supra.

The defense of “misuse” may not-aiWays be an absolute bar to recovery. General Motors Corporation v. Hopkins, supra. There also seems to be a move away from “assumed risk” as being an absolute bar to recovery. California has abolished the defense of “assumption of risk” in strict products liability cases to the extent that it is a form of contributory negligence. Daly v. General Motors Corporation, 20 Cal.3d 725, 144 Cal.Rptr. 380, 575 P.2d 1162 (1978). In both instances comparative fault has been extended to actions founded on strict products liability so that misuse and assumed risk are no longer total bars to recovery. /a formula using pure comparative fault or~hegligence has been applied such that the plaintiff’s recovery of damages is reduced by the percentage to which his own negligence contributed to his injury; thus the defendant seller does not escape responsibility under the doctrine of strict liability in a products case by proving that the plaintiff assumed the risk of being injured or that the plaintiff misused the product, but neither does the plaintiff recover the full amount of damages proved. - The all or nothing-at-all recovery seems to have been eroded. Daly v. General Motors Corporation, supra, 144 Cal.Rptr. at 387, 575 P.2d at 1169; Li v. Yellow Cab Company, 13 Cal.3d 804, 119 Cal.Rptr. 858, 532 P.2d 1226 (1975).

In the present case we have an experienced mechanic who was about to attempt repair of a spring loaded air cylinder which contained no warning on the cylinder itself and a cylinder with which the mechanic was unfamiliar, which had undergone expected change from the time it was sold to the time it was picked up for servicing by Hamilton. Was it necessary that MCI give any warning to an experienced air cylinder repairman who was unfamiliar with spring loaded air cylinders? We believe that the question is one for the jury. Another jury question is whether the warning was adequate.

The Texas Supreme Court has rejected for this State the defense of negligent failure to discover a defect or to foresee the danger. Shamrock Fuel & Oil Sales Co. v. Tunks, supra. Thus, contributory negligence of the plaintiff is not a defense when such negligence consists merely in a failure to discover the defect in the product or to guard against the possibility of its existence. Hamilton is not barred from recovery if he negligently failed to discover the defect in the product, or negligently failed to guard against the possibility of its existence. Henderson v. Ford Motor Company, supra.

The favorable facts raised an issue concerning whether or not MCI could anticipate a set of conditions causing the piston to stick in a position so that the spring was depressed and that the air cylinder would become unreasonably dangerous to the uninformed or untrained repairman, necessitating an adequate warning.

We have concluded, and therefore hold, that the evidence presented by appellant Hamilton, viewed in the light most favorable to him, was sufficient to raise all the issues of a Sec. 402A cause of action and that the trial court erred in instructing a verdict and rendering judgment in favor of appellee, Motor Coach Industries, Inc. The judgment of the trial court is reversed and the cause is remanded for further proceedings.


author: JAMES, Justice.

text:
    LAWYERS TITLE COMPANY OF HOUSTON, Appellant, v. Frederick A. AUTHUR et al., Appellees.
    No. 5851.
    Court of Civil Appeals of Texas, Waco.
    July 6, 1978.

      Joseph C. Lipper, Bailey, Blum & Lipper, Houston, for appellant.
    Iris Hefter Robinson and Arthur M. Glover, Jr., Hicks, Hirsch, Glover & Robinson, P. C., A. D. Downer, Plummer & Downer, Houston, for appellees.
   OPINION

JAMES, Justice.

This is a suit for a bond premium and attorneys’ fees, together with a Third Party Cross-Action by the Defendants for indemnity. Plaintiff Higdon Compton Insurance Agency brought this suit against Defendants Frederick A. Authur, A. 0. Authur and wife Velma Authur, and Eldred Keith Kamman and wife Patsy Authur Kamman for one year’s bond premium in the amount of $1260.00 plus $420.00 attorneys’ fees. The Defendants Frederick A. Authur et al filed a Third Party Cross-Action against the Appellant Lawyers Title Company of Houston for indemnity to reimburse Defendants for any amounts, if any, that Defendants might be obliged to pay Plaintiff. Said cross-action was based upon a claim that Lawyers Title was negligent in its failure to record a release of the lien which was the subject matter of the bond in question, which alleged failure occasioned an additional year’s bond premium sued for by Plaintiff.

Trial was to the court without a jury, after which Plaintiff Higdon Compton was awarded judgment against Defendants Frederick A. Authur et al in the amount of $1228.95 and costs with a denial of attorneys’ fees; also Defendants Frederick A. Authur et al were awarded a judgment of indemnity in the same amount of $1228.95 and costs against Lawyers Title.

Cross-Defendant Lawyers Title has appealed from the trial court’s judgment and Plaintiff Higdon Compton has appealed from the trial court’s refusal to award Plaintiff attorneys’ fees. We overrule all points of error and affirm the trial court’s judgment.

Appellant Lawyers Title asserts two points of error, to wit: (1) the trial court erred in failing to apply the two-year statute of limitations to the action filed by Defendants Authur et al against Lawyers Title, and (2) the trial court erred in failing to file findings of fact and conclusions of law after demand was made by Appellant.

Plaintiff Higdon Compton asserts one point of error, namely, that the trial court erred in failing to award attorneys’ fees to Plaintiff under the provisions of Article 2226, Vernon’s Texas Civil Statutes.

Defendant Frederick A. Authur was the owner of a tract of real estate upon which he planned to construct a shopping center. Barksdale Mortgage Corporation had filed a lien against said real estate in the amount of $31,500.00, which lien clouded the title and which hampered Defendant Authur’s efforts to get financing so as to proceed with the construction of his shopping center.

On or about January 4,1973, Frederick A. Authur secured a bond from Plaintiff Hig-don Compton Insurance Agency for the purpose of indemnifying Barksdale Mortgage Corporation concerning the lien filed by Barksdale hereinabove mentioned. Said bond was made with Maryland American General Insurance Company as surety, and with Frederick A. Authur and the other above-named Defendants as principals. Said bond application provided that a premium be paid to Higdon Compton at the rate of $1260.00 per year, and that said bond would continue in effect from year to year until the issuing company (Maryland) was furnished with conclusive evidence that there could be no further liability on the bond.

Defendant Authur paid the first year’s premium to Higdon Compton for the period from January 4, 1973, through January 4, 1974. With this bond having been made, Defendant Frederick A. Authur was free to secure, and did secure, a loan from Hunt-wick Bank by which he was enabled to have sufficient money to pay off the lien to Barksdale and other debts and to proceed with the shopping center construction. With the acquiescence and/or approval of the Huntwick Bank, Defendant Authur secured the services of Lawyers Title to act as escrow and disbursing agent of the loan funds and to issue the necessary title insurance policy for the Bank. For these services rendered by Appellant Lawyers Title, Authur paid Appellant a fee. On December 21, 1973, Authur’s loan with Huntwick Bank was closed by Lawyers Title, and said loan funds were disbursed, included in which disbursement was payment to Barks-dale Mortgage Corp. the amount required to discharge the lien which Barksdale had filed against Authur’s property. Higdon Compton Insurance Agency needed to be furnished a release of this Barksdale lien in order to stop the necessity of Authur’s having to pay a second year’s bond premium, which was due January 4, 1974. However, Higdon Compton never was furnished a copy of the Barksdale release. Authur was not a lawyer, and had no lawyer to represent him at the December 21, 1973, loan closing. It is apparent from the record that at the time of the closing and for some time thereafter Authur did not realize and understand that Higdon Compton needed this release in order to “stop” the bond premium from running. Be that as it may, Lawyers Title’s employee, one Buck Eckels, handled the loan closing for Authur, and as part of the closing agreed with Authur that Lawyers Title would record all necessary releases. Authur testified that when the loan closing transaction was completed, Eckles assured him (Authur) that everything necessary to the closing had been accomplished, and that Authur could go ahead with construction of his shopping center. Authur testified that the Barksdale release was executed and that he (Authur) saw this release in Eckels’s file at the time of the closing; however, Eckels denied this. At any rate, Mr. Higdon Compton testified that he checked the official records in the early part of 1974, and the Barksdale release had never been recorded. Meanwhile, Higdon Compton made several demands on Authur to pay the second year’s bond premium of $1260.00 which Authur refused to pay. After considerable wrangling between Higdon Compton, Authur, and Lawyers Title, Lawyers Title finally secured the necessary Barksdale release on November 26, 1974, which was filed for record on December 5, 1974, thus stopping the bond premium from running any further.

We revert to Appellant Lawyers Title’s first point, to wit, that the trial court erred in failing to apply the two-year statute of limitations to the action filed by Authur et al against Lawyers Title. The argument is that Authur definitely knew in May of 1974 that he needed the Barksdale release, which was more than two years before he sued Lawyers Title on June 8, 1976. We overrule this contention.

Lawyers Title in its relationship with Authur was in the position of an in-demnitor under an implied contract of indemnity. For a cash fee paid by Authur, Lawyers Title agreed to handle Authur’s real estate loan closing; and as part of such closing, Lawyers Title agreed to record all necessary releases. This would include the recording of the Barksdale release, which was not done until nearly a year after the loan closing. Authur testified that Eckels, the executive vice president of Lawyers Title, assured him that “everything necessary to the closing had been accomplished.” The trial court was authorized to believe this testimony, and to make an implied finding that Lawyers Title had thereby become an indemnitor of Authur should Authur later be called upon to suffer financial loss because all of the proper releases had not been filed at the time of closing.

Under these circumstances Authur’s cause of action against Lawyers Title did not accrue until liability against him became fixed and certain, which was at the time of rendition of a judgment against him (Authur). This being so, limitations did not commence to run upon Authur’s cause of action against Lawyers Title until the date of Higdon Compton’s judgment against Authur, same being May 5,1977. Russell v. Lemons (Amarillo CA 1947) 205 S.W.2d 629, NRE; Bernard v. L. S. S. Corporation (Austin CA 1976) 532 S.W.2d 409, NRE; 30 Tex.Jur.2d “Indemnity,” section 13, page 458. We therefore overrule Appellant Lawyers Title’s first point of error.

Appellant Lawyers Title’s second and remaining point complains of the trial court’s failüre to make findings of fact and conclusions of law. See Rules 296 through 299, inclusive. The record shows that Lawyers Title took timely steps to preserve this point of error. We recognize that it is error for the trial court to fail or refuse to make findings of fact and conclusions of law when proper and timely request has been made; however, it is not reversible error if the record before the appellate court affirmatively shows that the complaining party has suffered no injury in the premises. Wagner v. Riske (Tex.1944) 142 Tex. 337, 178 S.W.2d 117. Also see Diaz v. Trevino (Waco CA 1968) 430 S.W.2d 742, no writ; Fraser v. Goldberg, (Beaumont CA 1977) 552 S.W.2d 592, NRE; Beneficial Finance Co. v. Williams (Beaumont CA 1976) 539 S.W.2d 90, writ dismissed. In the case at bar, we are of the opinion and hold that the record before us affirmatively shows that Lawyers Title has suffered no injury because of the failure of the trial court to make findings of fact and conclusions of law. In the record before us we have what purports to be a complete statement of facts. The only point of error asserted by Lawyers Title (other than failure to make findings and conclusions) is that the trial court erred in failing to apply the two-year statute of limitations to Authur’s cause of action against Lawyers Title. The facts are undisputed concerning this point of error, which .point turns not on the evidence but on a point of law concerning indemnity, which has been hereinabove discussed. Therefore, the trial court’s failure to make findings of fact and conclusions of law did not prevent Appellant Lawyers Title from making a proper presentation of its case to the appellate court, and the error shown here under this state of the record is harmless. Rule 434, Texas Rules of Civil Procedure.

Lastly, Plaintiff-Appellant Higdon Compton asserts in its sole point of error that the trial court erred in failing to award attorneys’ fees to Plaintiff-Appellant under the provisions of Article 2226, Vernon’s Texas Civil Statutes. Higdon Compton argues that part of the amount which it (Hig-don Compton) sued to recover from Frederick A. Authur represents Hidgon Compton’s commission on the bond premium, which Plaintiff-Appellant retained out of the amount owed by Authur before forwarding the remainder of the bond premium to the bonding company. Plaintiff-Appellant contends that its commission is in essence payment for “personal services,” and that attorneys’ fees can be recovered in suits for personal services under Article 2226, citing Huff v. Fidelity Union Life Ins. Co. (Tex.1958) 158 Tex. 433, 312 S.W.2d 493 and the authorities therein cited on pages 498 and 499. We overrule this contention, because in our opinion Huff and the cases cited therein are not applicable to the case at bar.

In the instant case, Higdon Compton’s suit against Authur was on a written contract of guaranty which did not provide for attorneys’ fees. Said contract provided that Defendants Frederick A. Authur et al pay bond premiums at the rate of $1260.00 per year, and this suit was for the second year’s premium. At the time this case was tried and judgment entered, Article 2226 was in effect with the wording as it was prior to the August 29, 1977, amendment.

We are of the opinion and hold that Plaintiff-Appellant Higdon Compton’s suit against Authur et al is based upon a “special contract,” and that attorneys’ fees are not recoverable therefor. Meaders v. Biskamp (Tex.1958) 159 Tex. 79, 316 S.W.2d 75; Guay v. Schneider, Bernet, & Hickman (Waco CA 1960) 341 S.W.2d 461, writ refused, NRE, by memorandum opinion by Supreme Court, 161 Tex. 560, 344 S.W.2d 429; Eisenbeck v. Buttgen (Dallas CA 1970) 450 S.W.2d 696, no writ.

All points of error asserted by both Appellants are overruled. Judgment of the trial court is accordingly affirmed.

AFFIRMED.


author: DUNAGAN, Chief Justice.

text:
    Loquita BREEDLOVE, Appellant, v. UNITED STATES of America, DEPARTMENT OF the AIR FORCE, Appellee.
    No. 1108.
    Court of Civil Appeals of Texas, Tyler.
    July 6, 1978.

      Pat M. Reed, Dallas, for appellant.
    John H. Hannah, Jr., U. S. Atty., Otis W. Carroll, Jr., Asst. U. S. Atty., Tyler, for appellee.
   DUNAGAN, Chief Justice.

Appellant filed an application for writ of garnishment on October 27, 1975, in the 15th Judicial District Court of Grayson County against the United States of America, Department of the Air Force as garnishee, to aid in the enforcement of a child support order granted in a previous divorce decree rendered January 19, 1971, in a suit brought by her. The respondent in the divorce action, Robert Hartford, was a retired Air Force employee and received military retirement pay. Appellant sought $14,850 as the unpaid balance due and owing by Robert Hartford for child support.

Robert Hartford, the former husband of appellant, was not made a party to the application for writ of garnishment and nothing appears in the record to show that he was ever in any way notified of this claim against him. Whether or not Robert Hartford is in arrears in the amount of $14,850 has not been put in issue between the one claiming and the one obligated to pay it, and the former husband has not had the opportunity to defend against such claim. The garnishment suit brought against a third party, the United States Government, resulted in a default judgment. In its bill of review and its motion for summary judgment the Government alleges that Robert Hartford’s retirement military pay “is constitutionally exempt from garnishment under the provisions of Article 16, sec. 28 of the Texas Constitution and Article 4099 of Vernon’s Revised Civil Statutes.” The trial court granted appel-lee’s motion for bill of review and after a hearing the appellee’s motion for summary judgment was granted, and appellant’s cause of action was dismissed.

Appellant presents this appeal on two points of error. That (1) the bill of review was improperly granted because the appel-lee made no showing they were prevented from asserting a meritorious defense because of fraud, accident or wrongful act of appellant; (2) the granting of the summary judgment was improper because the monthly retirement pay due Robert Hartford, the respondent in the divorce case, was constitutionally exempted from garnishment under the provision of Article 16, see. 28 of the Constitution of the State of Texas, and Article 4099, V.A.C.S. However, this appeal will be disposed of for other reasons.

In the absence of former husband, Robert Hartford, being named as party or showing that he had ever been notified of claim for unpaid child support or showing of any judicial determination that he was in arrears, allowance of prejudgment garnishment of former husband’s military retirement pay violated due process. Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556, rehearing denied, 409 U.S. 902, 93 S.Ct. 177, 34 L.Ed.2d 165 (1972); Texas Commerce Bank National Association v. Tripp, 516 S.W.2d 256 (Tex.Civ.App.-Fort Worth 1974, n. w. h. ); United States of America v. Fleming, 565 S.W.2d 87 (Tex.Civ.App.-El Paso 1978, n. w. h.). Rule 663a, T.R.C.P., which became effective January 1, 1978, provides for notice in such situations. This case was brought prior to the amendment of the Rules of Civil Procedure affecting garnishment in Texas.

There is no point of error concerning any of these obvious defects for which the appellant is responsible, but the absence of the alleged debtor from the garnishment case because of lack of notice to him, resulted in absence of an indispensable party and presented fundamental error of which this Court is required to take notice. Jurisdiction over indispensable party to suit is as essential to court’s right and power to proceed to judgment as its jurisdiction of subject matter. United States v. Fleming, supra; Petroleum Anchor Equipment, Inc. v. Tyra, 406 S.W.2d 891 (Tex.1966).

The Fleming case is on all fours with the case at bar and is controlling thereof. In this case, as in the Fleming case, the claim for child support was reduced to judgment without any notice to the one obligated to pay it. Judgment was rendered without notice, and therein lies the fault of this case.

In view of the probability of another trial, we call attention to the Consumer Credit Protection Act, 15 U.S.C., sec. 1672; Evans v. Evans and the United States of America, Garnishee, 429 F.Supp. 580, U.S. District Court W.D. Oklahoma (1976); Samples v. Samples (United States of America, Garnishee), 414 F.Supp. 773, U.S. District Court W.D. Oklahoma (1976).

In view of the Rules of Civil Procedure having been amended to remove the constitutional defects, the judgment is reversed, and the cause is remanded to the trial court to enable the appellant to proceed under the amended rules effective January 1, 1978.


author: O’QUINN, Justice.

text:
    NATIONAL BANCSHARES CORPORATION of Texas, et al., Appellants, v. Bob BULLOCK, Comptroller of Public Accounts of the State of Texas, et al., Appellees.
    No. 12750.
    Court of Civil Appeals of Texas, Austin.
    July 12, 1978.
    Rehearing Denied Aug. 9, 1978.

      Harry M. Reasoner, Vinson & Elkins, Houston, and C. W. Wellen, Fulbright & Jaworski, Houston, for appellants Bank Holding Companies.
    Willis Witt, Liddell, Sapp, Zivley & Brown, Houston, for appellant Reidy International, Inc.
    John L. Hill, Atty. Gen., Gilbert J. Ber-nal, Jr., Asst. Atty. Gen., Austin, for appel-lees.
   O’QUINN, Justice.

Eight bank holding companies brought this lawsuit in September of 1974 to recover in excess of $2,000,000.00 in franchise taxes paid under protest to the Comptroller of Public Accounts. Subsequently, in January of 1976, one additional bank holding company intervened, and in March of 1976 an ordinary business corporation, holder of certificates of deposit of national banking associations situated in Texas, also intervened to be allied with plaintiffs. In addition to the Comptroller, the Attorney General and the State Treasurer were made parties defendant as required by statute.

The principal issue to be decided is whether the State may treat dividends and interest flowing from a stock held in national banks as part of the holding corporation’s “gross receipts from business done in Texas” for purposes of ascertaining the franchise tax. Challenged by plaintiffs below, who are appellants, and to be tested for validity, is Comptroller’s Ruling 80-0.18 (1974), which on its face claims authority for such treatment under provisions of revised 12 U.S.C. Sec. 548 (1969, effective 1973), also known as Public Law 91-156. This suit also involves interpretation of an amendment, codified under Article 20.02, V.A.C.S., Taxation-General (1971), by which Act the Legislature of Texas undertook to control the effects of the federal statute (12 U.S.C. Sec. 548) on the Texas tax system.

To place the main issue of this cause in proper focus, it is appropriate to review the statutory, administrative, and case law developments established prior to the Comptroller’s Ruling of 1974, which rested upon the Act of Congress, and together spawned the controversy leading to this litigation.

Every domestic and foreign corporation, chartered or authorized to do business in Texas or doing business in Texas, must pay a Texas franchise tax pursuant to requirements of Article 12.01, V.A.T.S., Tax.-Gen. Each corporation liable for payment of a franchise tax must determine, in compliance with Article 12.02(l)(a), “. the portion of its entire taxable capital taxable by the State of Texas by multiplying same by an allocation percentage which shall be the percentage relationship which the gross receipts from its business done in Texas bear to the total gross receipts of the corporation from its entire business.” (Emphasis added)

The same basic franchise tax allocation formula in Article 12.02 was used in Article 7084, Y.A.T.S., the source of the present statute. Article 7084 did not designate the receipts which were to be included as the corporation’s “business done in Texas,” and to supply certainty, in curing the omission, administrators of the Texas franchise tax adopted the “location of payor test” in allocating receipts from intangibles to a corporation’s “business done in Texas.” Only receipts from intangibles paid by a payor located in Texas were considered under this test to be a part of the corporate taxpayer’s business done in Texas.

Thus receipts from intangibles paid to a corporation by an out-of-state payor were not treated as within the meaning of “business done in Texas” and were not included in applying the formula. Although it was recognized by the Supreme Court of Texas that such administrative policy was not obligatory, the Court nevertheless in 1967 held that the doctrine was of such long standing it should not be changed or departed from “in the absence of clear statutory authorization.” Humble Oil & Refining Co. v. Calbert, 414 S.W.2d 172, 180 (Tex.Sup.1967).

A large portion of the gross receipts from business activities of the taxpayers in this lawsuit consists of dividends and interest received from national banks in which the several taxpayers own stock. National banks are not Texas corporations but are created under the National Bank Act (12 U.S.C. Sec. 21 et seq.) which constitutes “. . .by itself a complete system for the establishment and government of national banks.” Deitrick v. Greaney, 309 U.S. 190, 60 S.Ct. 480, 84 L.Ed. 694 (1940).

Prior to the dispute in this lawsuit, the Comptroller excluded dividends and interest, flowing from stock held in national banks, from a taxpayer’s “gross receipts from its business done in Texas.” In this case the Comptroller insists that even prior to this controversy the Comptroller could have treated national banks as domestic corporations if the Comptroller had chosen to do so. In apparent support of this contention, the Comptroller makes the singular argument that heretofore there was some “doubt” respecting the “domicile” of a national bank, and claims that the Comptroller resolved any doubt regarding the location of the payor national bank in favor of a status as a non-Texas corporation.

The provision of 12 U.S.C. Sec. 548 (P.L. 91-156), enacted by Congress in 1969 and effective in 1973, upon which the Comptroller rests the Ruling of 1974, is in this language:

“For the purpose of any tax law enacted under authority of the United States or any State, a national bank shall be treated as a bank organized and existing under the laws of the State or other jurisdiction within which its principal office is located.” (Emphasis added)

The Comptroller contends that any doubt regarding location of payor which the Comptroller entertained prior to 1973 was removed automatically by the Congressional Act because “An ancillary effect of the statute was to eliminate prior uncertainties as to the domicile of national banks.”

Prior to its amendment by the 91st Congress in 1969, 12 U.S.C. Sec. 548 provided a list of taxes which could be imposed on national banks by state legislatures. The permissible levies named were the only taxes which could be imposed by a state on any national bank. The statute was designed explicitly to restrict the power of state legislatures in levy of taxes on national banks. See 2 U.S.Code Cong. & Admin.News (1969), p. 1594.

The restrictions imposed under 12 U.S.C. Sec. 548 prior to amendment were not applicable of course to state taxation of state banks and thereby created an inequality between state and national banks. As early as 1943, the Legislature of Texas moved to remedy this inequality with enactment of Article 342-908, V.A.T.S., by which Texas voluntarily restricted its authority to tax state banks except in the same manner it imposed taxes on national banks.

The language of the statute, amended in 1963 and again in 1965, embodies the basic purpose and effect of the law as originally passed in 1943:

“State and national banks are hereby declared to be within the same class under the Constitution and laws of this state. It is not the intention of the Legislature to discriminate between state banks, national banks, and private banks. To the extent that the State of Texas has power to legislate with reference to national banks, all laws of this state shall apply alike to state banks, private banks, and national banks domiciled in this state; and state banks and private banks shall be subject to only such taxes heretofore or hereafter imposed by the state, or any political subdivision thereof, as could lawfully be imposed upon such state banks or private banks were they operating as national banks.” (Emphasis added)

Revised 12 U.S.C. Sec. 548, although enacted by Congress in 1969, was not made effective until 1973. In that interim the Legislature of Texas reacted to revision of the federal statute by enacting, among various amendments of tax statutes, Article 7 of that Act, which expressly foreclosed “any additional tax or taxes upon the institutions affected thereby” Public Law 91— 156 (12 U.S.C. Sec. 548).

Article 7 in its full text provided:

“Section 1. The passage of Public Law 91-156 by the Congress of the United States shall not operate to impose or permit the imposition of any additional tax or taxes upon the institutions affected thereby unless:
(a) The tax or taxes were being imposed prior to January 1, 1971, or
(b) Such institutions are specifically designated as being subject to such additional tax or taxes other than the limited sales and use tax by an Act of the Legislature passed subsequent to the effective date of Public Law 91-156.” (Acts 1971, 62nd Leg., p. 1193, 1206, ch. 292, Art. 7, eff. July 1, 1971; see also Note V.A.T.S. Tax.-Gen., art. 20.02).

Nearly three years later, the Comptroller, in April of 1974, published Ruling 80-0.18, the essential parts of which are set out:

“General: The ‘location of payor’ test is used in determining whether dividends and interest are attributable as receipts from business done in Texas under Article 12.02(l)(b). In accordance therewith, dividends and interest paid by a domestic corporation are includable in gross receipts from business done in Texas, whereas dividends and interest paid by a foreign corporation do not constitute Texas gross receipts under the statute.
“State Banks: Dividends and interest paid by a bank organized under the Banking Code of Texas are includable in gross receipts from business done in Texas pursuant to Article 12.02(l)(b).
“National Banks : Prior to January 1, 1973, national banks were considered to be foreign corporations for franchise tax purposes and, consequently, dividends and interest paid by a national bank located in Texas were not attributable as Texas gross receipts. Public Law 91-156 amended Section 5219 of the Revised Statutes to provide, effective January 1, 1973, that for the purposes of any tax law enacted under the authority of any state a national bank shall be treated as a bank organized and existing under the laws of the state within which its principal office is located. Accordingly, dividends and interest paid on and after January 1,1973 by a national bank whose principal office is located within Texas are includable in gross receipts from business done in Texas pursuant to Article 12.02(l)(b).”

In reliance on the Ruling of 1974, the Comptroller assessed additional franchise taxes against appellant taxpayers in the amount of $1,022,803.77 for 1974 and $1,087,731.43 for 1975. Appellants paid the taxes for 1974 under protest and within ninety days thereafter brought this action for refund, and again in 1975 the taxes were paid under protest and appellants amended their pleadings to include the taxes paid for both 1974 and 1975.

The cause was tried before the court without a jury, and the court entered judgment on June 27,1977, that plaintiffs below take nothing by their suit. The district court’s judgment was based on the court’s conclusion that as a matter of law appellants were not “institutions affected by the passage of Public Law 91-156 within the meaning of” Article 7 of the Legislative Act of 1971 (Note, Article 20.02, V.A.T.S., Tax.-Gen.).

We will reverse the judgment of the trial court and will render judgment that appellant taxpayers recover the taxes assessed pursuant to Ruling 80-0.18 and paid under protest.

In addition to the conclusion of law already noted, the trial court found the following facts:

(1) Franchise Tax Ruling 80-0.18, which held that dividends and interest from national banks with principal offices in Texas were “gross receipts from its business done in Texas,” was promulgated as a direct result of the enactment of Public Law 91-156.
(2) The publication of Ruling 80-0.18 was the first formal pronouncement of the Comptroller’s policy with respect to the effect of Public Law 91-156 on the Texas franchise tax treatment of dividends and interest from national banks.
(3) Acts 1971, 62nd Legislature, p. 1206, ch. 292, art. 7, Sec. 1, codified as a footnote to Article 20.02, V.A.T.S., Tax.Gen., was adopted by the Legislature in 1971.
(4) The rule set forth in Ruling 80-0.18 increased the amount of franchise taxes payable by the taxpayers.
(5) Such increase was not being imposed prior to 1971.
(6) The taxpayers in this suit have not been specifically designated as being subject to such increase by any act of the Legislature passed after the effective date of 12 U.S.C. Sec. 548.
(7) Prior to the effective date of revised 12 U.S.C. Sec. 548, corporations receiving interest or dividends from Texas national banks were not required to include the same in their “gross receipts from its business done in Texas” for franchise tax purposes.

Appellants bring two points of error. First, appellants contend the trial court erred in concluding that the taxpayers are not “institutions affected” by passage of Public Law 91-156 and therefore not entitled to relief or protection purportedly provided by Article 7 of the Legislative Act of 1971, now annotated as a footnote to Article 20.02, V.A.T.S., Tax.-Gen. Second, appellants urge error because the trial court concluded that Public Law 91-156 automatically imposed, or permitted, without State legislation, an additional tax on appellants. In essence this claim is that revision of 12 U.S.C. Sec. 548 dealt with equal taxation of state and national banks, and that since the revised statute was not concerned with taxation of corporations owning stock in national banks, the Comptroller was without authority to use the federal statute as authority for publishing Ruling 80-0.18.

The State defends the trial court’s judgment principally on three grounds: (1) that the corporate taxpayers are not “institutions” within the meaning of Article 7 of the Act of 1971 (Art. 20.02, footnote); (2) that appellants are not “affected” by revision of 12 U.S.C. Sec. 548 within the meaning of Article 7; and (3) that the substantially increased franchise tax, resulting from Ruling 80-0.18, is not an “imposition of additional taxes” within the meaning of Article 7.

The State further contends that construction of Article 7 of the Act of 1971, as urged by appellants, would lead to an “unjust result in that it would cause inequality of taxation among banks, bank holding companies and corporations generally.” This contention obviously is based on the Comptroller’s view that the purpose and effect of revised 12 U.S.C. Sec. 548 is to change the preexisting franchise tax structure for corporations owning stock in national banks.

In view of this contention, we deem it more orderly to consider first the purpose of revised 12 U.S.C. Sec. 548, at issue under appellants’ second point of error, and thereafter consider the import of Article 7, in the Legislative Act of 1971, at issue under the first point.

The theory of the State, that revised 12 U.S.C. Sec. 548 authorizes the Comptroller to change the State’s policy on the inclusion of dividends and interest in the stockholder’s “gross receipts from its business done in Texas,” is equivocal and wanting in consistency. The legislative history of revised 12 U.S.C. Sec. 548 shows that the specific purpose of the revision was “. .to provide authorization for the States ... to levy modern types of taxes on national banks . . .” (Emphasis added) See 2 U.S.Code Cong. & Admin.News (1969), p. 1599. The Congress believed there was “. . .no longer any justification for continuing to grant national banks immunities from State taxation which are not afforded State banks . . . ” (Emphasis added) 2 U.S. Code Cong. & Admin.News (1969), p. 1595.

In this suit the State insists that an “ancillary” and “automatic” effect of the revision was to alter the taxation of corporations owning national bank stock, but the contention is without support or a showing that such policy was of concern to the drafters of the revision or that such a change is mandated by the federal statute.

To the contrary, it appears that because Article 342-908, set out earlier, declares state and national banks equal for purposes of state taxation of the banks, revised 12 U.S.C. Sec. 548 does not abrogate the State’s taxation scheme, but merely removes restrictions on state taxation of national banks, thereby enlarging taxation permissible for both state and national banks. As observed earlier, the specific purpose of revised 12 U.S.C. Sec. 548 was to provide authorization for the states to levy modern types of taxes on banks which were not authorized under the statute before its amendment.

Prior to revision, 12 U.S.C. Sec. 548 restricted only state taxation of national banks. The statute did not prohibit state taxation of dividends and interest flowing from stock in national banks to corporations owning such stock. The Legislature of Texas voluntarily excluded this income of corporations from “gross receipts from its business done in Texas” under the doctrine of “location of payor rule,” since national banks were and are created under federal law, not state law.

It does not follow that 12 U.S.C. Sec. 548, when revised to remove restrictions on state taxation of national banks, also altered a long established procedure in Texas which had been in no manner controlled by the restrictions of the statute prior to its revision. As revised, the federal statute simply allows the states to treat national banks as state banks for purpose of equal taxation of banks. The concept thus provided is for equal taxation of banks and is unrelated to taxation of dividends and interest from national bank stock in the hands of corporate stockholders.

It is also apparent that exclusion of national bank stock dividends and interest from “gross receipts from its business done in Texas” by the taxpayers does not conflict with the stated purpose of the revised federal statute, and therefore no change is mandated by the revision. The ends of 12 U.S.C. Sec. 548 are not defeated by allowing a state to treat national banks as non-Texas corporations, for purposes of computing the stockholders’ franchise tax, because there is no resulting inequality in the tax treatment of banks themselves. In fact, this procedure, of treating national banks as non-Texas corporations for purposes of the stockholders’ franchise tax, has existed harmoniously in Texas for forty-five years with this State’s system of equality for state and national banks. The Legislature made clear its intention in Article 342-908 (1943) not to “discriminate between state banks, national banks, and private banks.”

This harmonious coexistence demonstrates that the principle of treating national banks as non-Texas corporations, for purposes of the stockholders’ franchise tax, results in no discrimination between state and national banks and does not cause “inequality of taxation among banks,” as urged by the Comptroller. The Comptroller’s present position on this question is out of harmony with past performance. In the more than forty years since the Legislature declared state and national banks equal for purposes of state taxation of banks, the Comptroller has at no time challenged the exclusion of dividends and interest on national bank stock from the stockholders’ “gross receipts from its business done in Texas” on the ground that the practice created an inequality between state and national banks. The Comptroller before this Court in 1972 urged the identical proposition now advanced by the appellants and was successful in Silco, Inc. v. Calvert, 482 S.W.2d 56, 59 (Tex.Civ.App. Austin 1972, writ ref’d n.r.e.). In that case this Court held: “This statute (Article 342-908) requires only that state and national banks be treated equally under the state laws. The statute does not in any way require an equal treatment of any other corporations that are not state banks or national banks.” (Emphasis added)

In the present case the trial court found that Ruling 80-0.18 was promulgated as a direct result of revised 12 U.S.C. Sec. 548. The federal statute becomes the Comptroller’s only authority to support his attempt to alter the established franchise tax system, and the argument seems to be that the amended statute removed “doubt” as to “domicile” of national banks. Yet Article 342-908 made it clear that there has been no question of “domicile” simply by mandating equal treatment of state banks, private banks, and “national banks domiciled in this state.” (Emphasis added) The question of domicile had been determined long ago without violence to compatibility of the two concepts under examination in this case. The Comptroller is committed to his own contention in Silco, supra, when interpreting the impact of a federal statute ' precisely of the same nature as Article 342-908.

The State’s essential complaint appears reduced to deploring “inequality of taxation among bank holding companies and corporations generally.” Since this matter of inequality presents no conflict with the revised federal statute, the Comptroller’s challenge goes to the inherent inequality of the “location of payor test” itself. The Supreme Court placed that challenge beyond authority of the Comptroller in Humble Oil & Refining Co. v. Calvert, supra, and held there that the “location of payor test” may be changed only by action of the Legislature. (414 S.W.2d 180, col. 2)

We turn now to consideration of the Legislature’s action in 1971 to forestall the levy of additional taxes on institutions affected by passage of Public Law 91-156.

We conclude that even if the Comptroller should be correct in the contention that the federal statute as revised had as its purpose the cure of unequal franchise tax treatment of corporations owning stock in national banks, and we have held that the statute had no such purpose, nevertheless the State may not prevail in this lawsuit. The Legislature in 1971 prohibited precisely the type of change the Comptroller undertook to make in the tax structure acting under authority claimed to be derived from 12 U.S.C. Sec. 548.

The Legislature, being aware of the revision by Congress of 12 U.S.C.A. See. 548, acted without delay, in fact two years before the federal statute would become operative, to anticipate changes in the State’s tax system, which might be improvidently undertaken because of the federal statute, and enacted laws to prevent changes not first considered and approved by the Legislature. The legislative intent could hardly be expressed more clearly or more forcefully than in the text reading, “The passage of Public Law 91-156 (12 U.S.C.A. Sec. 548) by the Congress of the United States shall not operate to impose or permit the imposition of any additional tax or taxes upon the institutions affected thereby . . .” (Emphasis added)

It is the State’s position that the Act of 1971 (Article 7) does not apply to bank holding companies and other corporations owning stock in national banks, and in its attempt to sustain this position the State reveals a basic flaw in the argument that the revised federal statute gives the Comptroller authority to change the established corporate franchise tax structure. The State argues that one of the purposes of the federal law was to cure unequal treatment of corporations owning stock in national banks. The State insists that such treatment is not in keeping with the spirit of 12 U.S.C.A. Sec. 548, and that an “ancillary effect” of the statute was to correct this inequality. Further, the State claims, the greatly increased franchise tax, achieved by Ruling 80-0.18, is an “automatic effect” of the federal law and therefore the federal statute is authority for the administrative Ruling.

The State continues with the argument that the corporations owning stock in national banks are not “institutions affected” by the federal statute within the meaning of the Act of 1971 (Article 7) because the federal amendment was adopted by Congress to cure unequal treatment of banks and therefore banks are the only “institutions affected.”

Thus it is clear that the Comptroller attempted to use a federal statute as authority for increasing the franchise tax payable by these appellants by more than one million dollars annually and yet claim that the federal law does not “affect” these institutions. The finding of the trial court that Ruling 80-0.18 was promulgated as a direct result of revised 12 U.S.C. Sec. 548, and the further finding that the Ruling was the formal pronouncement of the Comptroller’s policy, with respect to the effect of the federal law on the Texas franchise tax, make inescapable the conclusion that the Comptroller acted on belief that 12 U.S.C. Sec. 548 permits the imposition of increased taxes and that the federal law in fact “affected” appellant corporations in the ordinary dictionary sense. Appellants were affected when the effect produced was “the imposition of any additional tax or taxes” upon them, actually, in this case, at the annual rate of more than one million dollars.

It appears that the only remaining question is whether the required inclusion of dividends and interest in the stockholders’ “gross receipts from its business done in Texas,” resulting in substantially increased taxes, constitutes “the imposition of any additional tax or taxes” within the meaning of Article 7. We hold that inclusion of the dividends and interest, resulting in significant increases in the franchise tax of appellants, amounted to “imposition of . additional . . . taxes,” in contravention of the prohibition the Legislature enacted in Article 7 of the Act of 1971. Yoakum Industries, Inc. v. Calvert, 414 S.W.2d 171 (Tex.Sup.1967); Calvert v. Electro-Sci ence Investors, Inc., 509 S.W.2d 700 (Tex.Civ.App. Austin 1974, no writ).

Upon the holdings and reasoning stated, we reach the conclusion that the Comptroller acted without authority and in contravention of an explicit Act of the Legislature in promulgating and enforcing Ruling 80-0.18 to increase the franchise taxes of appellant corporations owning stock in national banks, and that the additional taxes collected ought to be refunded to the taxpayers.

The judgment of the trial court is reversed, and judgment is rendered that appellant taxpayers recover the taxes paid under protest as shown by the record in this cause.

SHANNON, J., not participating.


text:
    Garrett Clyde MILLER, Appellant, v. Charlotte Elaine MILLER, Appellee.
    No. 16004.
    Court of Civil Appeals of Texas, San Antonio.
    July 12, 1978.
    Henry W. Christopher, Jr., Johnson & Christopher, San Antonio, for appellant.
    Don McManus, San Antonio, for appellee.
   KLINGEMAN, Justice.

This is a divorce suit brought by appellee, Charlotte Elaine Miller, against appellant, Garrett Clyde Miller. Appellant did not answer or appear and on March 28, 1977, the trial court entered a default judgment. Thereafter, on April 26, 1977, the trial court, in response to appellee’s motion for partial new trial, entered an order granting a partial new trial as to the division of community property, debts, and attorneys’ fees. On May 11, 1977, the trial court Entered a new decree of divorce finding that a divorce was granted between the parties on March 28, 1977; entered additional orders as to the division of property more favorable to appellee; and decreed that appellant pay certain attorney’s fees to appellee’s attorney. Both the March 28,1977, judgment and the May 11, 1977, judgment recite that appellant was duly and legally served with process but failed to appear and wholly made default. Such judgments further recite that the court heard evidence.

This case is before us without a statement of facts.

Appellant’s first point of error complains that the trial court erred in making no record of the proceedings, which precluded him from obtaining a statement of facts. Appellant’s other point of error complains that, after entering a default judgment on March 28, 1977, the trial court erred in granting a partial new trial and entering another default judgment on May 11, 1977, when no notice of such hearing had ever been provided to appellant.

Appellee has filed a motion to dismiss the appeal, which we will first consider.

Such motion to dismiss is premised on appellee’s contention that appellant has voluntarily accepted certain benefits under the judgment and has waived his right to appeal. In support of such contention, she alleges that (1) appellant transferred a TV Appliance Store which was awarded to him in the May 11 decree; and (2) appellant pledged as security a promissory note which was awarded to him in such decree. Appellant denies that he has voluntarily accepted any benefits under such judgment.

As a general rule, a litigant cannot treat a judgment as both right and wrong, and if he has voluntarily accepted the benefits of a judgment he cannot afterward prosecute an appeal therefrom. Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002 (1950); Trader v. Trader, 531 S.W.2d 189 (Tex.Civ.App.—San Antonio 1975, writ dism’d). There are certain exceptions to this rule as set forth in Carle v. Carle, supra, and McCartney v. Mead, 541 S.W.2d 202 (Tex.Civ.App.—Houston [1st Dist.] 1976, no writ). The problem here involved is that this case is before us without a statement of facts. Appellee alleges on this appeal that appellant has voluntarily accepted the benefits under the judgment and appellant alleges that he has not. Under the record before us, there is no evidence of the acceptance of any benefits under the judgment. Certainly, there is no showing in the record of an intentional acquiescence in the judgment by voluntarily accepting benefits thereunder.

Appellee’s motion to dismiss is denied.

We will next consider appellant’s point of error asserting that no official court reporter attended the trial and that no notes were taken of the evidence, which prevented him from obtaining a statement of facts.

There are a number of recent cases which are pertinent in this regard. Rogers v. Rogers, 561 S.W.2d 172 (Tex.1978); Smith v. Smith, 544 S.W.2d 121 (Tex.1976); Robinson v. Robinson, 487 S.W.2d 713 (Tex.1972); Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312 (Tex.Civ.App.—Dallas 1975, writ ref’d).

A late case, Garcia v. Kelly, 565 S.W.2d 112 (Tex.Civ.App.—Corpus Christi 1978), is basically similar to the case before us. Defendant did not appear or answer in such case and a default judgment was taken. Appellant (defendant below) sought a reversal and remand because he was unable to obtain a statement of facts due to the absence of a court reporter. The Corpus Christi Court of Civil Appeals reversed and remanded the case for a new trial, saying:

If an appellant exercises due diligence and through no fault of his own is unable to obtain a proper record of the evidence, a new trial should be granted in order to preserve his right of review, [citations omitted].
If the appellant was not present and was not represented by counsel when the testimony was taken, and he later discovers that no record was made, the lack of a record cannot reasonably be waived, [citations omitted]. Moreover, ‘An appellant is not required to undertake to agree with an adversary upon the facts adduced at the trial or to rely upon the unaided memory of the trial judge who decided the merits of the case in order to obtain a Statement of Facts’. Rogers v. Rogers, 561 S.W.2d 172, 173 (Tex.Sup.1978).

We consider Garcia directly in point. Under the holdings of Morgan Express, Inc. v. Elizabeth-Perkins, Inc., supra, Rogers v. Rogers, supra, and Garcia v. Kelly, supra, this case must be reversed and remanded for a new trial. We do not deem it necessary to discuss appellant’s second point of error.

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

      . In Morgan Express, Inc. v. Elizabeth-Perkins, Inc., 525 S.W.2d 312 (Tex.Civ.App. — Dallas 1975, writ refd), appellant was served with citation but failed to file an answer or appear, and a default judgment was taken against it. On appeal, appellant requested a statement of facts, but the official court reporter certified that he was not at the hearing and none was made. The Dallas Court of Civil Appeals reversed and remanded the case, holding that (a) if appellant was not present and not represented by counsel when the testimony was taken, and later discovers that no record was made, the lack of a record cannot reasonably be deemed as waived; (b) an appellant who was not present and who was not represented when the testimony was taken is in no position to agree with his opponent concerning the substance of the testimony, and neither should he be required to rely on the unaided memory of the trial judge. This case contains an excellent discussion of Art. 2324, Tex.Rev.Civ.Stat.Ann. (1971), which requires the official court reporter to attend all court sessions and take shorthand notes.
      Subsequent to Morgan Express, supra, the legislature amended Art. 2324 by adding the words, “upon request.” This amendment was construed by the Austin Court of Civil Appeals in Rogers v. Rogers, 541 S.W.2d 471 (Tex.Civ. App. — Austin 1977, writ granted). In Rogers, the husband did not file an answer and did not appear in court either personally or by counsel. The court reporter did not make any notes of the testimony and consequently the husband was unable to obtain a statement of facts, which was the basis of his sole point of error. The court discusses Morgan Express, supra, and held that the amendment of Art. 2324 eliminated the basis for the holding in Morgan Express and that Art. 2324, as amended, no longer places a mandatory duty upon the court reporter to attend all sessions of court and take notes of the testimony offered, but instead the court reporter is burdened with that duty only after request of counsel or a party.
      The Supreme Court granted writ of error in Rogers and rendered an opinion reversing and remanding the Rogers case for a new trial. Rogers v. Rogers, 561 S.W.2d 172 (Tex. 1978). The Supreme Court pointed out that the holding of the Court of Civil Appeals in Rogers conflicted with Smith v. Smith, 544 S.W.2d 121 (Tex. 1976). Both Smith and Rogers were divorce cases, and the Supreme Court, in Rogers, discussed in some detail the applicable provisions of the Tex. Family Code. The Supreme Court noted some procedural and factual differences in Smith and Rogers, one of which was that, in Smith, the petitioner filed responsive pleadings but did not appear personally or by counsel at the hearing on the merits, while in Rogers, the appellant neither appeared nor answered; but in both cases, the court reporter did not attend the trial. The court stated that the procedural and factual differences were without materiality or significance, and that the residual and controlling facts in Rogers and Smith corresponded, in that, in both cases the appealing party was unable to obtain a statement of facts from the official court reporter because the court reporter did not attend the trial of the case. The Court then said:
      However, the Court of Civil Appeals misapprehends the purport of Smith as it rests upon neither Art. 2324 nor Family Code § 11.14(d). The Smith opinion applies and reaffirms the rule in Robinson v. Robinson, 487 S.W.2d 713 (Tex. 1972), that says: '. . . if an appellant exercises due diligence and through no fault of his own is unable to obtain a proper record of the evidence introduced, this may require a new trial where his right to have the case reviewed on appeal can be preserved in no other way.’

      . The record reflected that no court reporter was present and that there is no official court reporter in the County Court at Law and that the attorney appearing on behalf of appellee did not request or provide a court reporter for the transcription of testimony.


author: RALEIGH BROWN, Justice.

text:
    Frank TERRELL, Appellant, v. Nellie GRAHAM, Appellee.
    No. 5152.
    Court of Civil Appeals of Texas, Eastland.
    July 13, 1978.
    Rehearing Denied Aug. 10, 1978.
    Richard Don Coan, Coan & Terrill, Ste-phenville, for appellant.

      Garry Lewellen, McMillan & Lewellen, Stephenville, for appellee.
   RALEIGH BROWN, Justice.

This case involves the construction and effect of instruments of conveyance.

Nellie Graham sought to quiet title against E. H. Richardson and Frank Terrell to an undivided one-half interest in 121¼ acres of land located in Erath County, Texas. Trial before the court resulted in a judgment for Graham. Only Terrell appeals. We reverse and render.

E. H. Richardson and H. R. Richardson by deed dated January 26, 1945, became the owners as tenants in common of the land in controversy. On or about March 10, 1969, the brothers executed separate instruments, which were in the form of general warranty deeds conveying the land to the other as grantee. Each instrument contained the provision that it was written under Article 1296, T.R.C.S., “and shall take effect and become absolute on my death.” The instruments were simultaneously filed for record in the deed records of Erath County on March 11, 1969.

H. R. Richardson died in 1975 leaving a written will naming Nellie Graham as the sole devisee of his entire estate. This will has been admitted to probate. On April 9, 1976, E. H. Richardson and wife, Ollie, executed a deed to Terrell purporting to convey the entire interest in the land formerly owned by H. R. and E. H. Richardson. Nellie Graham brought the instant suit and the court concluded under the facts “no title passed either to or from H. R. Richardson or E. H. Richardson, as between the two brothers.” The judgment was entered based on such conclusion of law.

Terrell argues there are neither legal nor factual grounds to support the court’s judgment awarding Nellie Graham an undivided one-half interest in the land. We agree.

First, we must determine the character of the instruments exchanged by the brothers. Unless the instruments are deeds, they are ineffective, because they are not executed according to the statutory requirements for a will. The instruments are neither wholly in the handwriting of either brother nor attested by two or more credible witnesses above the age of fourteen. Tex.Prob.Code Ann. § 59.

The instruments have the general form of deeds. They were duly acknowledged before a notary and filed for record as deeds by the brothers. The instruments have none of the indicia of wills unless the phrase that it was written under Article 1296, T.R.C.S., “and shall take effect and become absolute on my death.”, makes the instruments testamentary in character.

The court in Texas Pacific Coal & Oil Co. v. Bruce, 233 S.W. 535 (Tex.Civ.App.—Fort Worth 1921, no writ) considered an instrument containing the language, “This deed, however, under no condition or circumstances is to be made a matter of record or become absolute until after my death.”, and held it to convey a present estate to take effect on grantor’s death as against the contention that it was intended as a will and was void for noncompliance with requirements for execution of a will.

In McLain v. Garrison, 39 Tex.Civ.App. 431, 88 S.W. 484 (1905, writ dism’d), the court held an instrument substantially in the form of a deed, containing all the elements of a deed and concluding with the usual habendum and warranty clauses, but reciting, “This deed is to take effect at my death and not before.”, was not testamentary in character but was a deed. See also: Davis v. Zeanon, 111 S.W.2d 772 (Tex.Civ.App.—Waco 1937, writ ref’d); Richardson v. Richardson, 270 S.W.2d 307 (Tex.Civ.App.—Dallas 1954, writ ref’d).

The court in North v. North, 2 S.W.2d 481 (Tex.Civ.App.—Waco 1927, no writ) considering a deed containing the language, “This deed is to take effect after each of us is dead, and not before then and until our death we reserve the title and possession of said land in us.”, held:

“Similar instruments have been before our courts for construction many times. In the absence of the valid reservation of a right to dispose of the property or to revoke the instrument, or language from which such reservation will be necessarily implied, the courts have with practical unanimity held such instruments . effective to convey a present interest in the property described therein, notwithstanding the full title thereto and the right to the possession and enjoyment thereof are postponed to some future date . . . ”

In Turner v. Montgomery, 293 S.W. 815 (Tex.Comm’n App.1927), the court said:

“The line of demarcation between deeds and wills, briefly stated, appears to be, the former vests the estate in prae-senti, while the latter is operative for no purpose until the death of the testator.
Article 1296, Revised Civil Statutes 1925, provides:
‘An estate or freehold or inheritance may be made to commence in futuro, by deed or conveyance, in like manner as by will.’
This is a remedial statute to meet the rigor of the common-law rule that a freehold to commence in futuro could not be conveyed by deed. Glenn v. Holt (Tex.Civ.App.) 229 S.W. 684. We do not understand this statute to change in any wise the essentials of a deed or conveyance with respect to its efficacy from the day and date of its execution, but its purpose evidently was to provide in effect that by deed of conveyance an estate may be made to commence in futuro . . ”

The court in Glenn v. Holt, 229 S.W. 684 (Tex.Civ.App.—El Paso 1921, no writ) in considering what is now Article 1296, T.R. C.S., said:

“. . . This statute was enacted to abrogate the rule of the common law that a freehold to commence in futuro could not be conveyed, for the reason that the title would be in abeyance from the execution of the conveyance until the future estate of the grantee should vest. Both the estates in reversion and remainder were known to the common law, and as to them its imperative feudal dogma that a distinct independent freehold estate in land to commence in futuro could not be created had no application, for the reason that the particular estate supported the seizin and fee. The statute in question has reference to estates in expectancy other than estates in reversion and remainder . . . ”

We hold the instruments exchanged by the brothers are not testamentary in character but are deeds which created present estates in expectancy each to the other of an undivided one-half interest in the property.

We must now determine if such estates in expectancy terminate by the death of the grantee prior to the occurrence of the event which would bring the grantee’s right to possession and enjoyment into being.

Equity recognized in Texas the right to convey expectancies. An expectancy is the mere possibility that a person may acquire by inheritance or otherwise. 22 Tex. Jur.2d Estates § 14.

The court in Barre v. Daggett, 105 Tex. 572, 153 S.W. 120 (1913) was presented the question, “Is an expectancy in the estate of a parent a present right and the subject of sale?” In answering the issue, the court held:

“. . . The facts bring the case within the letter and spirit of Hale v. Hollon, 90 Tex. 427, 39 S.W. 287, 36 L.R.A. 75, 59 Am.St.Rep. 819, in which this court held that the expectancy of a brother in the estate of a non compos sister under guardianship was a present existing right which was a proper subject of sale .
. The effect of the deed was at that time to vest the right of Mrs. Barre in the estate named; it was in no sense executory .
. and, as owner of the expectancy, had authority to make the deed, thereby parting with her right in the estate named . . . ”

See also, Hammett v. Farrar, 8 S.W.2d 236 (Tex.Civ.App.—El Paso 1928), aff’d, 29 S.W.2d 949 (Tex.Comm.App.1930); Burges v. Gray, 211 S.W.2d 776 (Tex.Civ.App.—San Antonio 1948, writ ref. n. r. e.).

Such an expectancy, however, could fail or lapse if the potential recipient predeceased the holder of the antecedent estate. Joyner v. Christian, 131 Tex. 274, 113 S.W.2d 1229 (1938).

In Holt, supra, the court held Article 1296, T.R.C.S., applied to estates in expectancy. 31 C.J.S. Estates § 15 defines estates in expectancy as:

“. . . one where the right to the possession or enjoyment is postponed to a future period, although the' estate or interest has a present legal existence . . ”

As held in North, supra:

“. . . such instruments effective to convey a present interest in the property described therein, notwithstanding the full title thereto and the right to the possession and enjoyment thereof are postponed to some future date . . . ”

The deeds exchanged by H. R. and E. H. Richardson conveyed more than mere expectancies. The deeds contained no reservation of a right to dispose of the property, or to revoke the instruments by grantors and did not require survivorship of the grantees. The death of the grantee would not effect his estate in expectancy.

An estate in expectancy, under the common law, could be devised by will. Article 1296 authorizes the conveyance of such estates by deed, “in like manner as by will.” Therefore, under the provision of Article 1296, T.R.C.S., an estate in expectancy being a present interest in the property becomes such an interest or estate in land, as may be conveyed or devised. Skipper v. Davis, 59 S.W.2d 454 (Tex.Civ.App.-Texarkana 1932), rev’d, 125 Tex. 364, 83 S.W.2d 318 (1935).

Tex.Prob.Code Ann. § 58 provides:

“Every person competent to make a last will and testament may thereby devise and bequeath all the estate, right, title, and interest in possession, expectancy, reversion, or remainder, which he has, or at the time of his death shall have, of, in or to any lands, tenements, heredita-ments, or rents charged upon or issuing out of them, or shall have of, in or to any personal property whatever, including choses in action, subject to the limitations prescribed by law . . . ”

H. R. Richardson devised his entire estate to Nellie Graham. A part of that estate was an estate in expectancy to an undivided one-half interest in the 121¼ acres of land. She presently holds that estate. The court erroneously held that “no title passed either to or from H. R. Richardson or E. H. Richardson as between the two brothers.”

We reverse the judgment of the trial court and render judgment that Frank Terrell has fee title to the 121¼ acres burdened with an estate in expectancy in Nellie Graham to an undivided one-half interest, the possession and enjoyment of which is to take effect on the death of E. H. Richardson.

      . “An estate or freehold or inheritance may be made to commence in futuro, by deed or conveyance, in like manner as by will.”


author: ROBERTSON, Justice.

text:
    Charles E. CARLOCK, Appellant, v. Henry WADE et al., Appellees.
    No. 19717.
    Court of Civil Appeals of Texas, Dallas.
    July 17, 1978.

      Mike Aranson, Dallas, for appellant.
    James K. Johnson, Asst. Dist. Atty., Joseph G. Werner, Asst. City Atty., Dallas, for appellees.
   ROBERTSON, Justice.

This is a mandamus proceeding instituted under article 1824 of the Texas Revised Civil Statutes, by which Charles E. Carlock, relator, seeks to compel “the Judge of the 68th Judicial District Court of Dallas County, Texas” to proceed to trial and final judgment in a cause pending in that court. It is conceded that the respondent has not been notified of these proceedings through proper service of process. Since respondent has not been afforded notice and an opportunity to defend against this application, we conclude that we lack jurisdiction to issue the writ. Notice to all interested parties is a constitutional prerequisite to the issuance of a writ of mandamus. Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063 (1926); see Old River Rice Irrigation Co. v. Stubbs, 133 S.W. 494 (Tex.Civ.App. — 1911, writ refused).

Application for writ of mandamus denied.

GUITTARD, C. J., not sitting.