author: SHANNON, Justice.

text:
    Ceil MOORE et al., Appellants, v. John Stevenson WARDLAW et al., Appellees.
    No. 12168.
    Court of Civil Appeals of Texas, Austin.
    March 12, 1975.
    Rehearing Denied May 14, 1975.

      W. B. Browder, Jr., Stubbeman, McRae, Sealy, Laughlin & Browder, Midland, James G. Noland, Austin, for appellants.
    George S. Finley, Smith, Davis, Rose, Finley & Hofmann, San Angelo, for appel-lees.
   SHANNON, Justice.

This appeal requires the construction of the will of Blossie Wardlaw Moore, who died on March 8, 1963. The grandchildren of the testatrix, John Stevenson Wardlaw, Warren P. Wardlaw, and H. R. (Winkie) Wardlaw III, filed suit against Ceil Moore individually and as independent executrix of the estate of John I. Moore, deceased, in the district court of Tom Green County for an accounting for certain properties and money. Upon trial to the court, judgment was entered awarding some of the properties to each of the parties, from which all parties have appealed. In this opinion Blossie Wardlaw Moore’s grandchildren will usually be referred to as “plaintiffs.” Ceil Moore will be designated “defendant,” and Blossie Wardlaw Moore will usually be termed “Mrs. Moore” or “testatrix.”

A preliminary resumé of necessary facts follows. In 1911, Dr. H. R. Wardlaw married the testatrix. They had one child, a son, H. R. (Jake) Wardlaw, Jr., who in time married and had three children, the plaintiffs in this cause. After the death of Dr. Wardlaw, and in May of 1938, the testatrix married John I. Moore, a West Texas oil man. They had no children. John Moore had no close relatives except a brother who died in 1955. During his marriage to the testatrix, Mr. Moore was actively engaged in the oil and gas business, and in 1951, he and H. R. (Jake) Wardlaw purchased the Red Town Ranch in Anderson and Houston Counties which they operated as a partnership.

The testatrix died on March 8, 1963. Her will was duly probated in the probate court of Tom Green County. She was survived by her husband, her son, and her three grandchildren.

In 1965, John Moore married the defendant, Ceil Moore. He died in 1972. He and the defendant had no children. The will of John Moore, dated March 2, 1971, and probated in the probate court of Tom Green County, Texas, left substantially all of his property to his surviving widow, Ceil Moore.

The will of Blossie Wardlaw Moore was dated October 12, 1961. The significant portions of that will are as follows:

I.

“I have heretofore conveyed my right, title and interest to H. R. (Jake) Wardlaw in and to that part of a tract of land containing approximately 13,000 acres situated in Tom Green County and lying North of the Arden Road.

I own a tract of land lying on the South side of the Arden Road along the Middle Concho River, approximately 1,800 acres. I hereby give, devise and bequeath a life estate to my son, H. R. Wardlaw and the remainder interest to my three grandchildren, to-wit: H. R. (Winkie) Wardlaw, III, Warren P. Wardlaw, and John Stevenson Wardlaw.

III.

“RED TOWN RANCH

My husband and I together with H. R. (Jake) Wardlaw, Jr. have acquired a ranch in Anderson and Houston Counties, Texas. Jakes owns an undivided one-half interest in said lands. My husband and I together own the other undivided one-half interest, each one-fourth (¼) interest together will a full interest in other lands adjoining. I give, devise, devise [sic] and bequeath my undivided one-fourth (¼) interest in said ranch and one-half (½) interest in the adjoining lands to the three grandchildren hereinbefore named, subject however, to the right hereby vested in my said husband to hypothecate or dispose of same during his life time, as he may see fit, the proceeds derived from the disposition of said property to be applied first to the payment of debts, if any, owing by my estate. If my husband does not during his life time dispose of said one-fourth interest, then and in that event I hereby give, devise and bequeath the same share and share alike to the three grandchildren hereinbefore named.

“OIL, GAS, MINERAL AND OTHER PROPERTIES

I hereby give, devise and bequeath to my husband my community interest in and to all the oil, gas properties, royalties, minerals, fee land, machinery, equipment and all other personal property wherever located, save and except Red Town Farm hereinbe-fore mentioned which he may sell or dispose of in any manner as to him may seem fit. So much of said property as is not disposed of by my husband during his life time, I give, devise and bequeath a life estate in one half to my son, H. R. Wardlaw, Jr.; the other one-half to my three grandchildren herein named.

I own a mineral interest in and to the H. R. Wardlaw, Jr. lands in Irion and Tom Green Counties, Texas. This mineral interest, I give, devise and bequeath to my grandson, John Stevenson Wardlaw. I hereby appoint H. R. (Jake) Wardlaw, Jr. Independent Executor without bond, and John I. Moore.”

* * *

It should be observed that H. R. Ward-law, Jr., assigned to the plaintiffs all of his interest in and to the properties of the estate of the testatrix.

John and Blossie Moore had accumulated a substantial amount of community property at the time of her death. In general, the bulk of that property was a one-half interest in the Red Town Ranch, consisting of about 6,515 acres in Houston and Anderson Counties. In addition, they owned the full interest in about 517 acres situated in Houston and Anderson Counties which was operated as part of the Red Town Ranch. The other primary category of property owned by them was a considerable number of mineral and royalty interests located in West Texas. They also owned two lots in Midland, the surface interests in 244 acres in Crockett County, the fee in forty-one acres in Crockett County, and the deep rights production payment reserved by Mr. Moore in the sale of oil and gas properties to Signal Oil and Gas Company.

After the death of the testatrix, John Moore and Jake Wardlaw were appointed co-independent executors of her estate, and the operation of Red Town Ranch and the oil and gas properties continued as before her death without interruption or change. No estate books were kept in connection with Mrs. Moore’s estate, and all monies attributable to her community property were taken by John Moore and commingled and used with his own funds.

The plaintiffs’ pleading was general. In their petition the plaintiffs asserted that upon the death of the testatrix, her husband came into custody and control of most of her property, and the property continued in his custody and control until he died. Plaintiffs alleged further that John Moore conveyed his interest and their interest in the Red Town Ranch and took into his custody and control all of the proceeds of that sale consisting of about $250,000.00 in cash and a note executed by the purchaser for $522,584.18. The plaintiffs did not join in this sale, and did not receive any of the proceeds received by John Moore. The plaintiffs prayed for an accounting by the defendant of all properties which were jointly owned by John and Blossie Moore, and a showing of what disposition was made of such properties and a judgment for those amounts due them under the accounting. The plaintiffs also requested injunctive relief to preserve the status quo of the estate of John Moore.

The defendant’s trial pleading consisted of a second amended original answer and cross-action. In general, the defendant claimed in her cross-action that the will of the testatrix empowered John Moore to sell the Red Town Ranch during his lifetime in any manner as he deemed fit, and that since he sold Red Town Ranch there was nothing left to distribute to plaintiffs, and that plaintiffs had no title or interest for any of the proceeds or property acquired by the proceeds obtained from the sale of the ranch. With respect to those properties described in the will as “Oil, Gas, Mineral and Other Properties,” the defendant, in effect, took the position in her pleading that the will should be construed to have granted fee-simple title absolute to those properties to John Moore.

The court entered an order restraining the defendant from disposing of any property acquired by her from John Moore during their marriage. Later, and by agreement, an order temporarily enjoining defendant from disposing or alienating certain properties was entered.

Upon trial, the court entered its judgment construing the will of Blossie Ward-law Moore to have the effect of devising the plaintiffs Red Town Ranch, if such ranch were in existence at the death of John Moore, and of giving John Moore the right to hypothecate or dispose of the ranch during his lifetime. The court further construed the will to mean that any traceable proceeds or mutations from such disposition of the ranch which remained intact at the death of John Moore were devised to the plaintiffs.

In response to its construction of the paragraph of the will concerning Red Town Ranch, the court awarded plaintiffs an undivided 48.945% interest in the packing company note in the original sum of $522,584.18 and in the United States Treasury Bonds in the face amount of $350,000, subject to the lien held by the bank. The court further awarded plaintiffs an undivided one-half interest in the royalty interests reserved by the grantor at the time of the sale of Red Town Ranch. Also, as a result of its construction of paragraph III of the will, the court ordered that plaintiffs recover $16,124.58 which represented an undivided 48.945% of the interest paid by the packing company in the past and the same percentage of the interest to be received in the future from the abovemen-tioned note.

The court construed the will to have the following effect with respect to the interest of Blossie Moore to those properties described in the will as “Oil, Gas, Mineral and Other Properties”: If John Moore still owned the properties at the time of his death then the plaintiffs would take an undivided one-half interest in such properties in fee-simple title, and the remaining undivided one-half interest in such properties would rest in H. R. (Jake) Wardlaw, Jr. (and his successors in title) for and during his life, and on his death, such undivided one-half interest in such properties would rest in the heirs and devisees of John Moore. Moore had the right to sell or dispose of any of such properties during his lifetime without him or his representatives being required to account to plaintiffs for the proceeds or mutations of such dispositions, whether or not such proceeds or mutations could be traced to such dispositions, and whether or not such traceable proceeds and mutations were on hand and intact at the death of John Moore.

The court determined that any stock ownership of John Moore in Moore Brothers Corporation was the separate property of John Moore, that the testatrix had no interest therein, and that plaintiffs were not entitled to any part of the properties which were conveyed to John Moore in the dissolution of that corporation.

Pursuant to its construction of that part of the will concerning “Oil, Gas, Mineral and Other Properties,” the court held that plaintiffs were not entitled to any part of the cash proceeds of the sale of properties to Signal Oil and Gas Company which took place after the death of the testatrix and any such proceeds, including the mutations of such proceeds into certificates of deposit with the First National Bank of Midland, Texas, were deemed to be the property of the defendant.

Though both sets of litigants perfected their appeal from the judgment, neither is completely dissatisfied with the judgment. The defendant complains of the judgment by twenty-one points, while the plaintiffs have seven points and subpoints of error.

The defendant first complains of the court’s construction of that part of the will relating to, the disposition of Red Town Ranch. She claims that the will bestowed upon John Moore a general inter vivos power of appointment which he had a legal right to exercise for his own benefit, and that the plaintiffs’ rights were expressly contingent upon the nonexercise by Moore of his right to dispose of Blossie Wardlaw Moore’s interest in any manner which he deemed proper. The defendant’s argument continues that since Moore sold Red Town Ranch there was nothing left to distribute to the plaintiffs, and that the plaintiffs had no title or interest in any of the proceeds or property acquired by the proceeds obtained from the sale of Red Town Ranch.

The defendant says further that the law does not permit the tracing of proceeds or mutations of property sold by the person holding the right or power of sale or disposition. The defendant relies upon a number of cases for support of this argument, some of those being, McMurray v. Stanley, 69 Tex. 227, 6 S.W. 412 (1887), Feegles v. Slaughter, 182 S.W. 10 (Tex.Civ.App.1915, writ ref’d), and Norton v. Smith, 227 S.W. 542 (Tex.Civ.App.1920, writ dism’d).

The plaintiffs, as well, claim error in the court’s construction of that branch of the will relating to the disposition of Red Town Ranch. They maintain that, properly construed, the will permitted John Moore to sell the testatrix’ interest in the ranch during his lifetime, but that John Moore’s estate is accountable to them for all of the proceeds from the testatrix’s interest as John Moore had no ownership in the testatrix’s interest in the cash proceeds or promissory notes received in the sale of the ranch.

With respect to the Red Town Ranch, the will reads, “I give, devise, devise (sic) and bequeath my . . . interest ... in said ranch ... to the three grandchildren hereinbefore named, subject however, to the right hereby vested in my said husband to hypothe-cate or dispose of same during his life time, as he may see fit, the proceeds derived from the disposition of said property to be applied first to the payment of debts, if any, owing by my estate.” (Emphasis added)

A reading of the quoted language demonstrates that the devise of Blossie’s interest in Red Town Ranch to the three grandchildren is in the form of a fee-simple grant. Tex.Rev.Civ.Stat.Ann. Art. 1291. At no place in the will is there a devise of any interest in the ranch to John Moore nor is there any devise to Moore of any of the proceeds derived from the sale of the ranch. The only rights given Moore by the will with respect to Mrs. Moore’s interest in Red Town Ranch were those to “hy-pothecate” and the right to “dispose of,” those rights being given only during his lifetime. The will directs that Moore might dispose of Blossie’s interest “as he may see fit.” We view the phrase, “dispose of as he may see fit,” to mean that Moore might exercise his judgment when and under what circumstances to sell the ranch, thereby converting it into another form of property.

The grandchildren were the first takers and only takers under the will, and they had all of the powers enjoyed by a fee-simple owner except for those reserved to John Moore to hypothecate or dispose of the interest. To “hypothecate” is to pledge property without delivering possession of it to the pledgee. Black’s Law Dictionary (4th Ed. 1951). The use of that term cannot imply a devise of Blos-sie’s interest in the ranch to Moore. To “dispose of” ordinarily means to sell or alienate. See Lowe v. Ragland, 156 Tex. 504, 297 S.W.2d 668 (1957). The power “to dispose of” the ranch could not constitute a devise of the ranch since the power of disposition is not an estate, but instead is simply authority derived from the will to dispose of the fee. Edds v. Mitchell, 143 Tex. 307, 184 S.W.2d 823 (1945).

Contrary to the defendants’ view we are of the opinion that the authority to hypoth-ecate and to dispose of the ranch was not a power of appointment. A power of appointment is defined in the Restatement of Property, § 318 as follows:

“(1) Except as stated in Subsection (2), a power of appointment, as the term is used in this Restatement, is a power created or reserved by a person (the donor) having property subject to his disposition enabling the donee of the power to designate, within such limits as the donor may prescribe, the transferees .of the property or the shares in which it shall be received.
“(2) The term power of appointment does not include a power of sale, a power of attorney, a power of revocation, a power to cause a gift of income to be augmented out of principal, a power to designate charities, a charitable trust, a discretionary trust, or an honorary trust.”

The essence of a power of appointment is that it gives to the donee the power to cause some person to receive less and another person to receive more. A power of appointment is dispositive in nature. On the other hand, a power of sale merely permits the donee to substitute money for the property sold, but does not permit him to alter the disposition of the substituted value. As such, a power of sale is administrative in nature, and is not a power of appointment. Restatement of Property, § 318, Comment on Subsection (2).

The authority to “dispose of” Red Town Ranch constituted a power of sale given to John Moore, the exercise of which permitted him to substitute money or notes for the ranch, but it did not permit Moore to alter the disposition of the substituted value. Moore did not appoint Red Town Ranch causing Vernon Calhoun Packing Company to receive more and the grandchildren to receive less, but instead he sold the ranch under the power of sale contained in the will and received proceeds, some of which were traceable and intact at his death.

In all will construction cases, the purpose is to ascertain the intent of the testator. Philleo v. Holliday, 24 Tex. 38 (1859). To that end extrinsic evidence may be admitted to discover the testator’s intent as to the sense of the words actually used in the will. Such extrinsic evidence may be considered without regard as to whether the terms of the will are ambiguous. Stewart v. Selder, 473 S.W.2d 3 (Tex.1971).

The extrinsic evidence supports the above construction of that part of the will relating to Red Town Ranch. The testatrix’s family relationship was such that the natural objects of her bounty were her son and her grandsons. She desired to leave her interest in Red Town Ranch in such a way to serve two purposes: (1) so as not to hinder her husband’s operation of the ranch, and (2) so as to finally vest it in her grandsons.

John and Blossie Moore married relatively late in life and had no children. John Moore had no family relationships of his own which could in any way be considered close, particularly after the death of his brother in 1955.

Mrs. Moore’s relations with her grandsons were especially close. The boys were reared in San Angelo practically in the shadow of their grandmother’s house. As small children, and as youths, the boys spent a great deal of time with their grandmother. Winkie, as a youngster, usually spent one night a week at her house, and as long as a month or more during summers when his parents were out of town or on vacation. While in college, the boys would still stay overnight in their grandmother’s home when in San Angelo for holidays or on weekends.

As the boys matured, their grandmother continued to be interested in what they were doing. When they were away at college she wrote them frequently, and occasionally called them by telephone. When Winkie was at Southern Methodist University, Mrs. Moore visited him on campus several times.

The record makes clear that doing things for her grandsons was one of Mrs. Moore’s pleasures. She remembered their birthdays, graduation days, and Christmas days with expensive presents. She gave the two older grandsons an automobile each. She had offered on several occasions to buy Winkie another automobile when he enrolled in college, but he had told her that the old one was still serviceable. She also gave the boys money, rifles, and fine paintings. When the boys went on trips she usually gave them money for expenses.

Mrs. Moore’s love for her grandsons continued without interruption until her death. One illustration suffices as a demonstration of her intention of continuing to surround herself with those whom she loved most. She caused her old house to be pulled down, and on the same lot she caused to be built a large residence known as River Terrace. River Terrace had two kitchens and five bedrooms. She assigned each grandson a bedroom for his use then or in later years so that if he lived away from San Angelo he and his family, if married, could stay close to her while visiting in San Angelo.

The extrinsic evidence also aids in understanding Mrs. Moore’s intent concerning the need for flexibility in the management of her property represented by her interest in Red Town Ranch. She knew John Moore to be a shrewd businessman and she doubtless had confidence in his ability, as changed conditions required, to convert the investment represented by the ranch into other forms of property. Red Town Ranch, located on the Trinity River in Anderson and Houston Counties, was not convenient for either John Moore or Jake Wardlaw to supervise. A visit to the ranch entailed a 690-mile round trip by automobile from Tom Green County, or a plane trip to Dallas and a trip by a rented automobile from Dallas to the ranch. By 1961, both Moore and Wardlaw were getting old, and Wardlaw was not in good health. At the time that she signed her will, Mrs. Moore could well foresee that in the future consideration might have to be given to the sale of the ranch. Moreover, it is common knowledge that cattle ranching is a business subject to rather dramatic market fluctuations, and that the price of land during the time involved was increasing without regard to income to be derived from its utilization in farming or ranching. That being so, Mrs. Moore was doubtless interested in giving her husband a free hand to dispose of the ranch when an advantageous offer was made.

The plaintiffs were entitled to trace and obtain the proceeds or mutations from the sale of Red Town Ranch. See Edds v. Mitchell, supra. The holding of that case is that if a testator devises his land to one for a term of years or for life, with the right of full disposition and the right to use the proceeds without accounting to anyone, then the remainderman is entitled to trace the proceeds of a sale. In the case at bar, the testatrix devised her interest in land to her grandchildren in fee, subject only to the right of her husband to dispose of the same during his lifetime, but without leaving him any estate in the land and without leaving him any right to use the land or use the proceeds of the sale of the land. In our judgment if a remainder-man is permitted to trace the proceeds of a sale of the land, then a fee owner must surely be accorded that right.

The wills involved in McMurray v. Stanley, supra, Feegles v. Slaughter, supra, and Norton v. Smith, supra, gave title in fee to the first taker, and also in each of those wills to the first taker was given the right to “use” and “control” the property. In the case at bar, the will of Mrs. Moore devised Red Town Ranch to her grandchildren who are not only the first takers, but are also the only takers, no estate being allotted to Mr. Moore.

The plaintiffs also complain that the court erred in not entering judgment in their favor for 48.945% of $132,351.98 which represented the sums received by Moore for the sale and lease of cotton allotments from Red Town Ranch during the years 1965 through 1968. The court made no specific finding of fact concerning the sums received by Moore from the sale or lease of cotton allotments, but the plaintiffs’ contention was disposed of unfavorably by the court in that part of the judgment which reads, “IT IS FURTHER ORDERED, ADJUDGED AND DECREED that all relief prayed for herein by Plaintiffs, not specifically granted in this Judgment, is denied.”

The plaintiffs’ complaint will not be sustained. An examination of the record shows that the cattle operation on the Red Town Ranch, on the whole, was not a very profitable venture for John Moore and H. R. Wardlaw, Jr. In 1965 and 1966 there was no distribution of money to the partners, though in 1967 and 1968 each partner received $24,365.54 and $15,297.00 respectively. At the time of the sale of the ranch to Vernon Calhoun Packing Company there was considerable indebtedness of the operation. During the years 1965 through 1968 there were sales of livestock together with the sales and leases of the cotton allotments. Balancing the income against the expenses, there were operating losses during those years. There was no showing that Mr. Moore received during those years a profit from the operation of ranch nor was there a showing that he took more money from the ranching operation than he paid into it. In effect the court rendered an accounting between the parties, based upon the credible evidence, and was convinced that no sums of money were due to the plaintiffs from the sale and lease of the cotton allotments.

That part of the will concerning “Oil, Gas, Mineral and Other Properties” reads as follows:

“I hereby give, devise and bequeath to my husband my community interest in and to all the oil, gas properties, royalties, minerals, fee land, machinery, equipment and all other personal property wherever located, save and except Red Town Farm here-inbefore mentioned which he may sell or dispose of in any manner as to him may seem fit. So much of said property as is not disposed of by my husband during his life time, I give, devise and bequeath a life estate in one half to my son, H. R. Ward-law, Jr.; the other one-half to my three grandchildren herein named.”

With respect to that part of the will concerning “Oil, Gas, Mineral and Other Properties,” the defendant claims that the testatrix’s language should have been construed so as to grant John Moore a fee simple absolute. The defendant says further that Moore’s fee interest should not have been diminished by the “ambiguous, uncertain subsequent clause naming the plaintiffs and their father, H. R. Wardlaw, Jr.”

The plaintiffs also complain of the court’s constructipn of this part of the will. The plaintiffs say that the court erred in holding that Moore had the right to sell or dispose of those properties during his lifetime without being required to account to the plaintiffs for the proceeds of such dispositions whether or not such traceable proceeds and mutations were on hand at the death of Moore. The plaintiffs also complain that the court erred in construing the will to the effect that the remainder interest in an undivided one-half of the “Oil, Gas, Mineral and Other Properties” on the death of H. R. (Jake) Wardlaw, Jr., vested in the heirs and devisees of John Moore, rather than in the plaintiffs.

At common law and in many states the rule is that wherein there is a devise by language sufficient to pass the fee, a purported limitation over of so much of the property as is not disposed of by the first taker is void as being repugnant to the grant of the fee-simple estate in the first taker. Page, Wills § 37.26 (1961). That is not the rule in Texas. McMurray v. Stanley, 69 Tex. 227, 6 S.W. 412 (1887). In Texas an executory limitation over of property undisposed of by the first taker of the fee is recognized. First National Bank of Corsicana v. DeFoe, 384 S.W.2d 926 (Tex.Civ.App.1964, writ ref’d).

In the case at bar, the first sentence of the “Oil, Gas, Mineral and Other Properties” paragraph of Mrs. Moore’s will, standing alone, would pass a fee-simple title of her interest to her husband by the express terms of Tex.Rev.Civ.Stat.Ann. Art. 1291. The second sentence in that paragraph, however, constitutes a valid limitation as to the property undisposed of at the death of her husband. The estate of her husband in those properties, as so limited, has been termed as a conditional or de-feasible fee. Harrell v. Hickman, 147 Tex. 396, 215 S.W.2d 876 (1948), First National Bank of Corsicana v. DeFoe, supra.

By the terms of the above paragraph John Moore was empowered “. . . during his lifetime . . .” to dispose of the property. (Emphasis added) He could not, though, devise the property by will. Kilpatrick v. Cassel, 19 S.W.2d 805 (Tex.Civ.App.1929, no writ). John Moore held title to any proceeds or mutations of sales of the property made during his lifetime, and such property was subject to his testamentary disposition. First National Bank of Corsicana v. DeFoe, supra.

The third sentence in the “Oil, Gas, Mineral and Other Properties” paragraph provides that the plaintiffs take an undivided one-half of the devised property which had not been disposed of during Moore’s lifetime. The plaintiffs are deemed to have taken that interest in fee. Tex.Rev.Civ.Stat.Ann. Art. 1291. By virtue of the same sentence H. R. Wardlaw, Jr. took a life estate in one-half of the devised property that Moore had not disposed of during his life. The will failed to provide a remainder interest to take upon the death of H. R. Wardlaw, Jr. As mentioned above, the trial court construed this part of the will to mean that the remainder interest in an undivided one-half of the “Oil, Gas, Mineral and Oother Properties” upon the death of H. R. Wardlaw, Jr., vested in the heirs and devisees of John Moore.

In terms of the law of future interests the issue presented is whether an executo-ry limitation of less than a fee (the life estate in H. R. Wardlaw, Jr.) will operate to defeat the preceding estate (the defeasible fee of John Moore), or whether the lesser estate will be “carved out” of the preceding estate, thereby making the defeasible fee absolute at the termination of the lesser estate. 140 A.L.R. 941. We have not found Texas authority to resolve the problem.

Our view is cthat the language of this portion of the will created a possibility of reverter in the testatrix and upon the termination of the life estate of H. R. Ward-law, Jr., one-half of the property which remained undisposed of at the death of John Moore vested in her heirs, the plaintiffs. The rationale for this view follows. When the testatrix devised the defeasible fee in the “Oil, Gas, Mineral and Other Properties” she conveyed less than she had. Considering the paragraph as written, not only had Mrs. Moore devised less than she had to the first taker, John Moore, but upon the termination of John Moore’s de-feasible fee, she had devised less than she had to the executory taker. See Simes & Smith, The Law of Future Interests § 284 (1956). In addition, we view this construction as consistent with the testatrix’s stated intent to limit the interest of her husband in the property to the period of his lifetime.

We have discussed those points of error which we view as controlling. The judgment of the district court will be modified to read that the remainder interest in an undivided one-half of the “Oil, Gas, Mineral and Other Properties” of Blossie Ward-law Moore on the death of H. R. (Jake) Wardlaw, Jr., vested in the heirs of Blossie Wardlaw Moore. Except as indicated, the judgment of the trial court is in all things affirmed.

Judgment modified, and as modified, affirmed.

      . The court found as a fact that the community interest of Blossie Moore in the Bed Town Ranch lands was sold by John Moore to Vernon Calhoun Packing Company in July of 1971, which sale included the fee ownership and title of John Moore and H. R. (Jake) Wardlaw, Jr., in said land, and, in addition, 81.516 acres of land acquired by John Moore after the death of Blossie Moore.
      The sale to the packing company was made for a cash consideration, and the further consideration that grantee assume the balance due and owing on a promissory note in the original principal sum of $300,000.00 and for the further consideration of the packing company’s vendor’s lien note to H. R. (Jake) Wardlaw, Jr., in the principal sum of $421,554.74, and the packing company’s vendor’s lien note to John Moore, in the principal sum of $522,584.-18 bearing six and one-half percent interest.
      The court further found that the packing company note payable to John Moore was part of the consideration for the undivided ⅛ interest in the 6515.675 acres, the full interest in the 517.532 acres and the full interest in the 81.516 acres of land abovementioned. 81.516/3856.88 or 2.11% of said note, amounting to $11,026.53, was for said 81.516 acres. 97.89% of said note, amounting to $511,557.65, was a part of the consideration for what had been the community interest of John Moore and Blossie Moore in such lands. 48.945% of said note constituted proceeds of Blossie Moore’s community interest in the Bed Town Ranch mentioned in her will.
      The packing company’s vendor’s lien note in the amount of $522,584.18 was pledged by John Moore to the First National Bank of Midland, Texas, in January, 1972, to secure his note of the same date to said bank in the principal sum of $279,178.64. The proceeds of the Moore note were used in their entirety to purchase United States Treasury Bonds in the face amount of $350,000.00 which such Treasury Bonds were on hand at the date of John Moore’s death, but were additionally pledged to secure the Moore note to the bank. The parties to the lawsuit did not contest the validity of the lien and security interest of the bank in and to the packing company note and the Treasury Bonds.
      In July of 1972, the packing company paid an installment on its note, which installment was in the total amount of $189,719.53, of which amount $156,775.25 was principal and $32,944.28 was interest. The amount of this payment was paid through the First National Bank of Midland, Texas, and the principal amount was applied to Moore’s note at the bank. The interest paid by the packing company was delivered by the bank to the defendant.


source: Caselaw Access Project

author: PHILLIPS, Chief Justice. SHANNON, Justice

license: Public Domain

text:
    Bessie SILBERSTEIN, Appellant, v. The STATE of Texas, Appellee.
    No. 12235.
    Court of Civil Appeals of Texas, Austin.
    April 16, 1975.
    Rehearing Denied May 14, 1975.

      Robert W. Norris, Phillips & Norris, Austin, for appellant.
    John L. Hill, Atty. Gen., Watson C. Arnold, Asst. Atty. Gen., Austin, for appellee.
   PHILLIPS, Chief Justice.

This is a condemnation case involving a partial taking of property adjacent to and on the east side of Interstate Highway 35 in Austin, Travis County, Texas. The case was tried before a jury that found the value of the land taken was $153,894.00; that the value of the entire tract prior to the taking was $208,235.20; and that the value of the remainder after taking was $54,341.20. These findings were in answer to special issues numbers 1, 2 and 3. The court entered judgment accordingly. We affirm this judgment.

Appellant is before us on a number of points of error. The first of which complains that there is no evidence, consequently, insufficient evidence, of probative value on which the jury could base its answer to special issues numbers 1, 2 and 3. Appellant also maintains that the jury’s verdict with respect to these issues is so contrary to the overwhelming weight and preponderance of the credible evidence as to make it manifestly wrong and unjust. We overrule these points.

The jury’s findings in response to the three special issues were as stated above. The effect of the jury’s verdict is that there was no damage to the remainder.

The State’s expert witness Tieken valued the whole property prior to the date of taking at $182,200.00. He valued the part taken at $134,650.00. The remainder before taking was valued at $47,550.00. These values were based on a unit figure of $3.50 per square foot. He testified that there was no damage to the remainder.

Appellant’s expert witness Reed valued the whole property at $368,489.00 and the part taken at $280,185.00. He valued the remainder before taking at $88,305.00, and the value of the remainder after taking at $40,756.00. It was his opinion that there was approximately $47,000.00 worth of damage to the remainder. Appellant offered another value witness who testified that the market value of appellant’s remainder after taking was $33,960.00.

Appellant relies on Roberts v. State of Texas, 350 S.W.2d 388 (Tex.Civ.App.1961, no writ), wherein the court reversed a condemnation award made in the trial court because it was so contrary to the great weight and preponderance of the evidence as to be manifestly wrong and unjust. Here (as in the case at bar) the jury found that the remainder had a value greater than that found by any of the witnesses. Also see City of Irving v. Caster, 397 S.W.2d 952 (Tex.Civ.App. 1965, no writ). In view of the facts before us, the jury’s finding on the value of the remainder does not require us to reverse this case. The principles announced in Roberts first restrict the jury only to the lowest figure testified to when finding the value of the remaining land after taking. Secondly, we note that Roberts cites many cases with approval holding that a jury is at liberty to reach its conclusion by blending all of the evidence admitted before them, aided by their own experience and knowledge of the subject of inquiry; that they are not compelled to accept all the testimony of any witness or to reject it all. Moreover, opinion evidence is not conclusive and a jury may consider and accept or reject such opinions or it may find its own opinion from evidence and by utilizing its own experience in matters of common knowledge. While we do not necessarily commit ourselves to the first proposition announced in Roberts, we do accept the second as the law in Texas and will apply it accordingly.

The trial of this case lasted six days during which the jury heard extensive and complicated testimony pertaining to the value of appellant’s property. The State’s appraisal witness Tieken is an independent fee appraiser with a master’s degree and sixteen years’ experience in the field. He based his opinion of value on a study of comparable sales located near the subject property on the same side of Interstate Highway 35. The comparable sales which Mr. Tieken relied on sold for $2.53, $3.16, $3.89 and $3.51 per square foot.

After evaluating the comparable sales offered in evidence, Mr. Tieken testified that the whole property had a market value of $182,200.00. He then valued the part taken at $134,650.00 and the remainder before the taking at $47,550.00. He valued the remainder after the taking at $47,550.-00. These values were based on a unit figure of $3.50 per square foot.

Tieken further testified that, in his opinion, there was no damage to the remainder as a result of the taking. He based this opinion on the fact that the remaining land would still have excellent access to the frontage road going into 19th Street. Furthermore, he stated that the lay of the land, the angle of the street and the twenty-foot alley at the rear of the property were all very similar to the remainder before taking. Tieken further testified that in his opinion there was even a possibility that the value of the remainder was enhanced by the taking.

The evidence established the fact that generally property on the east side of Interstate Highway 35 is of less value than that on the west side. The subject property is on the east side. Nonetheless, appellant’s value witness Reed testified to sales of property, not only on the west side of the highway, but property located in an area where values are generally higher than those in which the subject property is located. Witness Reed explained this discrepancy by stating that the subject property was in same traffic flow with that of higher value. Be that as it may, the jury, evidently, thought otherwise.

The jury was not required to accept any specific figure testified to by any one witness. It was free to accept or reject the testimony of any witness and to reach its own conclusion by blending all the evidence, aided by its common sense and experience. Roberts v. State, supra. Indeed, the higher figure found by the jury inured to appellant’s benefit so she should not be heard to complain here. See Cannon v. State, 473 S.W.2d 325 (Tex.Civ.App.1971, no writ).

Appellant also complains that the testimony of her several witnesses as to the value of the buildings on the subject property was disregarded by the jury in making its award. We overrule this contention for two reasons. First, the comparables offered by the State included buildings. Secondly, there was evidence presented by Tieken that the buildings had no value. He based this testimony on the fact that the value of the subject land had increased to the point where the buildings thereon would no longer produce an acceptable return on this increased value. Consequently, the point had been reached where it would actually benefit the land to raze the buildings. Again, the jury believed this testimony and we have no valid reason but to affirm the finding. In summation, we hold that there was ample evidence upon which the jury based its findings to the special issues in question.

Next we move to appellant’s point urging error in the trial court in admitting the estate tax return and the inventory of the estate of Sam Silberstein in evidence over appellant’s objection. We overrule this point.

The tax return and inventory were used by appellee to impeach appellant’s value witness Reed’s testimony. There was no predicate laid for the introductory of these documents which appellee maintains were admissible under authority of Art. 3726, Vernon’s Civil Statutes. Appellant contends that appellee did not comply with the notice requirements of the statute and, further, that this statute only allows such records to be offered in evidence without the necessity of proof of execution provided that such instruments are otherwise admissible. We have no quarrel with this statement of the law, nonetheless, it is our opinion, pretermitting any discussion of the admissibility of the inventory which, we believe, is irrelevant here, that the tax return was admissible. A rendition of taxes made by a landowner may be introduced at trial to show a variance in market value from that claimed by the landowner. Boyer and Lucas v. St. Louis, S. F. & T. Ry. Co., 97 Tex. 107, 76 S.W. 441 (1903). The basis for admissibility in that case, not a condemnation proceeding, was as an admission by a party. The rule in Boyer has been applied in condemnation cases where tax renditions of the subject property made by a landowner-condemnee or his agent are admissible (if offered by the condemnor) as either an admission of a party, and/or as a circumstance tending to show the market value of the property.

For our purposes, we can see no difference between a tax return and a tax rendition. Here the return was not introduced by the landowner, but counsel for appellee introduced the return under Art. 3726, Vernon’s Civ.St.Ann. We must agree with appellant that the State failed to give the proper notice required by the statute; however, under the record before us, while this was error, it was harmless error. Rule 434, Texas Rules of Civil Procedure. See Hinton v. Uvalde Paving Co., 77 S.W.2d 733 (Tex.Civ.App.1934, writ ref’d); Miller v. Unsicker, 5 S.W.2d 624, 625 (Tex.Civ.App.1928, no writ).

We turn next to appellant’s point which asserts the error of the trial court in allowing appellant’s witnesses to answer questions asked them by counsel for the State as to the total amount of compensation appellant would be entitled to receive if the jury accepted their opinion of the market value of the whole property prior to taking, the market value of the part taken, the market value of the remainder immediately before taking, and the market value of the remainder immediately after the taking on the ground that the question and the answer thereto informed the jury of the effect of their answers to the special issues submitted them by the court. Appellant also assigns error to the argument to the jury by counsel on behalf of the State which informed the jury of the effect of their answers to the special issues submitted to them by the court. We overrule these points.

In the first place, in both points stated above, the testimony complained of told the jury nothing which, if comprised of persons of ordinary intelligence, they could not have figured out for themselves. Thus, we have no error here. McGaddin v. Hebert, 118 Tex. 314, 15 S.W.2d 213 (1929); Ex Parte Fisher, 146 Tex. 328, 206 S.W.2d 1000 (1947); Fort Worth & D. C. Ry. Co. v. Kiel, 195 S.W.2d 405 (Tex.Civ.App.1946, writ ref’d n. r. e.)

In the next place, there was no objection to the jury argument complained of, and therefore any objection was waived. Cooper v. Argonaut Insurance Co., 430 S.W.2d 35 (Tex.Civ.App.1968, writ ref’d n. r. e.).

We also overrule appellant’s point complaining of the jury argument of counsel for the State to the effect that the money compensation they would be awarding would be their tax money, thereby appealing to the bias and prejudice of the jury. Again, appellant failed to object, thereby waiving any possible error. Cooper, cited above. In any event, if such argument was error under the record before us, it was harmless error under Rule 434, Texas Rules of Civil Procedure.

Finally, we overrule appellant’s points assigning the error of the trial court in granting the State’s motion to correct certain clerical defects in the judgment signed on June 26, 1974, after the amended motion for new trial had been overruled on June 18, 1974. Appellant contends that this judgment was not approved by her nor was it entered nunc pro tunc.

Because the judgment was not yet final, 30 days not having passed since the order overruling the motion for new trial was issued, the trial court had power to vacate, correct, amend or modify the judgment. Whisenant v. Fidelity & Casualty of New York, 354 S.W.2d 683 (Tex.Civ.App.1962, writ ref’d n. r. e.). This power to correct the judgment to show the true judgment rendered is inherent in the court and does not depend on any statute. Dubert v. Adkins, 475 S.W.2d 383 (Tex.Civ.App.1971, no writ); Payton v. Hurst Eye, Ear, Nose & Throat Hosp. & Clinic, 318 S.W.2d 726 (Tex.Civ.App.1958, writ ref’d n. r. e.). This is a plenary power and the court was not required to give notice to the parties. Liddell v. Blevins, 244 S.W.2d 335 (Tex.Civ.App.1951, writ ref’d n. r. e.); Gulf, C. & S. F. Ry. Co. v. Morrow, 66 S.W.2d 481 (Tex.Civ.App.1933, writ dism’d); Daniel v. Sharpe, 69 S.W.2d 508 (Tex.Civ.App.1934, no writ).

The judgment of the trial court is in all things affirmed.

Affirmed.

SHANNON, Justice

(concurring in part and dissenting in part).

In point of error seven appellant complains that in the argument to the jury the attorney for the State stated, “As you know, in handling anything for the State, I’m just not handling my property or your property, or anybody else’s property, I’m handling the property and the money of all the people.” Counsel for the State also said, “. . . and if you were handling it, which you are now, the people’s money, how it should be put.” No objection was made at the time of the argument and the court gave no instruction to disregard it.

In her brief appellant maintains that the quoted argument is to be condemned for the reason that it was a direct appeal to the self-interest and prejudice of the jury and that it was an invitation to the members of the jury to align themselves with a party in the case.

Counsel’s argument did invite the jurors to consider their own self-interest in returning the verdict. As such, the argument was plainly improper and should not have been made. Robards v. State, 285 S.W.2d 247 (Tex.Civ.App.1955, writ ref’d n. r. e.), West v. State, 150 S.W.2d 363 (Tex.Civ.App.1941, no writ), State v. Bryan, 518 S.W.2d 928 (Tex.Civ.App.1975 no writ), 33 A.L.R.2d 442, 19 A.L.R.3rd 694, 702.

The question raised by appellant’s point is whether a reversal should be ordered in the absence of a timely objection by appellant to counsel’s improper argument. The Supreme Court has stated the problem in Otis Elevator Company v. Wood, 436 S.W.2d 324 (Tex.1968):

“Improper jury arguments are usually referred to as one of two types: ‘curable’ or ‘incurable.’ A jury argument is ‘curable’ when the harmful effect of the argument can be eliminated by a trial judge’s instruction to the jury to disregard what they have just heard. The error is ‘cured’ and rendered harmless by the instruction. On the other hand, an argument may be so inflammatory that its harmfulness could not be eliminated by an instruction to the jury to disregard it. The prejudicial nature of the argument is so acute that it is ‘incurable.’
“If the argument is of a ‘curable’ nature, an objection to it must be promptly made and an instruction requested or the error is waived. But if the argument is ‘incurable,’ the failure to object does not result in a waiver. The reasoning is that ‘counsel making the argument is the offender so the law will not require opposing counsel to take a chance on prejudicing his cause with the jury by making the objection.’ Smerke v. Office Equipment Co., 138 Tex. 236, 158 S.W.2d 302 (Tex.Com.App.1941).”

I am of the opinion that appellee’s argument was of the “curable” variety. By not objecting to the argument, appellant waived her right to complain on appeal. Had timely objection been made and overruled, I would vote to reverse the judgment.

Upon confrontation with an improper jury argument, counsel has to make one of a trial lawyer’s immediate and difficult decisions, whether or not to object. In the case at bar appellant’s counsel must have chosen to try to answer the argument on rebuttal. He must have concluded that to object and ask for an instruction to disregard would have emphasized the argument in the minds of the members of the jury. See McNeil v. Current, 484 S.W.2d 394 (Tex.Civ.App.1972, writ ref’d n. r. e.).

An instruction to disregard of course, would not make the jury ignorant of the argument. No one pretends that it would. We must assume, however, that, having knowledge of the argument and the matters involved in it, the jury would have obeyed the court’s instruction and would not have permitted that knowledge to affect their verdict. The prejudice in counsel’s argument would then have been eliminated. When improper argument is of the “curable” variety the question of harm is not reached, if the proper steps are taken to remove its prejudicial effect (an objection and instruction to disregard) no prejudice remains to be harmful. And if no objection is made, thus calling forth remedial measures from offending counsel and the court, the complaining party is held to have waived his right to have the question of harm reviewed. Southern Pacific Company v. Hubbard, 156 Tex. 525, 297 S.W.2d 120, 131 (1956), (Dissenting Opinion of Justice Robert Calvert).

Appellant’s forth point of error complains of the trial court permitting appellee to introduce into evidence the inheritance tax return and the inventory of the estate of appellant’s deceased husband, Sam Sil-berstein. Counsel for appellee tendered that evidence pursuant to Tex.Rev.Civ.Stat.Ann. Art. 3726.

Art. 3726 permits the placing into evidence certain instruments which are permitted or required by law to be recorded by the county clerk without proof of execution. That article requires the party, offering such instrument in evidence, to file the same among the papers of the suit at least three days before the commencement of the trial, and to give notice of such filing to the opposite party or counsel. Ap-pellee did not comply with Art. 3726 by filing the inheritance tax return and the inventory of the estate or by giving notice to appellant.

Because appellee did not comply with Art. 3726, it was error for the court to admit appellee’s evidence. Hinton v. Uvalde Paving Co., 77 S.W.2d 733 (Tex.Civ.App.1934, writ ref’d), Johnson v. Stickney, 152 S.W.2d 921 (Tex.Civ.App.1941, no writ), Watson v. Toler, 153 S.W.2d 506 (Tex.Civ.App.1941, no writ), Mata v. Rangel 432 S.W.2d 146 (Tex.Civ.App.1968, writ ref’d n. r. e.).

The majority opinion treats the error of the court in the following fashion, “. . . under the record before us while this was error, it was harmless error. Rule 434, Texas Rules of Civil Procedure.” I cannot agree that the error was harmless.

In this case, as in most condemnation cases, opinion testimony as to valuation of the property was of great importance. One of the legitimate objects of opposing counsel is to undermine the credibility of the value witness in the view of the jury. In my judgment appellee’s counsel employed the valuation figures in the inventory and inheritance tax return in a telling and an effective manner calculated to discredit the testimony of George Reed. Reed had testified on direct that the value of the whole property before the taking was $368,489. Appellee’s counsel required Reed to read to the jury the value of the same property contained in the inventory and tax return and to “adjust” that figure to the date of the taking. The “adjusted” figure given by Reed was $145,622, a difference of $222,867 from the figure he gave on direct examination. The jury answered that the value of the whole tract before the taking was $208,235.20, a difference of $160,253.80 from the value assigned by Reed.

In argument appellee’s counsel naturally emphasized the apparent inconsistency of appellant’s placing one value on the property for inheritance tax purposes and another value for condemnation purposes. It doubtless seemed incongruous to the jury that there would be so much difference “. . . between the receiving end in damages, and the paying end in taxes .” Rayburn, Texas Law of Condemnation, § 144(1) (1960).

Had appellee complied with Art. 3726, appellant would have had notice that appel-lee intended to use the inventory and inheritance tax return. Appellant then would have had the opportunity to prepare to meet and explain away, if she could, the inconsistency between the tax figures and her position as to value in the condemnation suit.

The evidence admitted in violation of Art. 3726 was important and, in my opinion, convincing to the jury. It was not merely cumulative as in Hinton v. Uvalde Paving Co., supra. The error of the court was made in direct contravention of the statute, and should, under the circumstances of this case, require reversal.

      . See: Burton Lumber Corp. v. City of Houston, 45 Tex.Civ.App. 363, 101 S.W. 822, 827 (1907, writ ref’d); State v. Doom, 278 S.W. 255, 256 (Tex.Civ.App.1925, no writ); Aue v. State, 77 S.W.2d 606 (Tex.Civ.App.1934, writ ref’d); Dickens County v. Dobbins, 95 S.W.2d 153 (Tex.Civ.App.1936, no writ); Wise v. City of Abilene, 141 S.W.2d 400, 404 (Tex.Civ.App.1940, writ dism’d jdgmt cor.); Joyce v. Dallas County, 141 S.W.2d 745, 746 (Tex.Civ.App.1940, no writ); West v. State, 150 S.W.2d 363, 368 (Tex.Civ.App.1941, no writ); Abramson v. City of San Angelo, 210 S.W.2d 476, 478 (Tex.Civ.App.1948, writ dism’d); Medrano v. City of El Paso, 231 S.W.2d 514, 515 (Tex.Civ.App.1950, no writ); Camp v. Commissioners’ Court of El Paso County, 279 S.W.2d 927, 928 (Tex.Civ.App.1955, writ ref’d n. r. e.); Culver v. State, 324 S.W.2d 921 (Tex.Civ.App.1959, no writ); McFaddin v. State, 373 S.W.2d 259, 263 (Tex.Civ.App.1963, writ ref’d n. r. e.).

      . See Rule 329b, subdivisions 5 and 6(c), Texas Rules of Civil Procedure.


author: O’QUINN, Justice.

text:
    Guy G. MATHEWS, Administrator for the Estate of Delia I. Worcester, Deceased, Appellant, v. Lena Mae WARREN, Appellee.
    No. 12194.
    Court of Civil Appeals of Texas, Austin.
    April 16, 1975.
    Rehearing Denied May 14, 1975.
    Thomas S. Goggan, Delmar L. Cain, Goggan & Cain, Austin, for appellant.

      Bob Burleson, Bowmer, Courtney, Burle-son & Pemberton, Temple, for appellee.
   O’QUINN, Justice.

Guy G. Mathews, as administrator of the estate of his great-aunt, Delia I. Worcester, deceased, brought this lawsuit against Lena Mae Warren alleging conversion of a certificate of deposit account in a savings institution in the sum of $16,000, an account maintained “in the name of Delia I. Worcester and Lena Mae Warren.” The administrator also sought exemplary damages and attorney’s fees.

Defendant answered setting up several defenses, including the theories of survi-vorship and completed gift, and a third-party beneficiary theory. The cause was tried before the court without a jury, after which the trial court entered judgment that plaintiff take nothing.

The administrator has appealed and brings forty-seven points of error. Appel-lee replies by eleven points. We will affirm the judgment of the trial court.

The trial court made and filed extensive findings of fact and conclusions of law, and no additional findings and conclusions were requested. In addition to the findings and conclusions, the record on appeal includes a statement of facts, consisting of more than 170 pages of testimony from 13 witnesses and 31 exhibits introduced at the trial.

Appellate review of the record will be under the rule as stated by McDonald: “When specific findings of fact and conclusions of law are filed, or are stated in the judgment and no additional findings are requested, and a statement of facts is also brought forward, the findings will be sustained if there is any evidence to support them.” 4 McDonald, Texas Civil Practice, 16.10(b), p. 29 (1971).

If there is any evidence of a probative nature to support the findings of the trial court, the judgment based on the findings must be affirmed. Cavanaugh v. Davis, 149 Tex. 573, 235 S.W.2d 972, 977 (1951). The trial court had the right to consider all facts and circumstances in evidence and to indulge in reasonable inferences to be drawn therefrom in reaching the court’s ultimate finding. In examining the record to determine whether there is any evidence of probative value to support the trial court’s finding, an appellate court must view the evidence in the light most favorable to appellee and reject all evidence favorable to appellant against whom the judgment was rendered. Woodward v. Ortiz, 150 Tex. 75, 237 S.W.2d 286, 289 (1951).

Appellant went to trial on his first amended original petition in which he alleged solely a cause of action for wrongful conversion of the $16,000 which deceased had deposited in the Temple Savings Association in the name of both Delia I. Worcester, the deceased, and Lena Mae Warren, the appellee. Appellant alleged that appellee, “without the knowledge, consent or approval of Mrs. Worcester, who was confined in [a] Hospital, withdrew . . . [the funds] and appropriated the money to the use of . [appellee],” and that such actions “were willful and malicious, and were . . . with the intent to defraud Delia I. Worcester ...”

Appellant sought return of the $16,000, imposition of a constructive trust upon the funds, which had been deposited in another account by appellee, and also sought exemplary damages and attorney’s fees. Appellant did not plead, and offered no proof, that the account was a mere convenience account or solely for the benefit of Delia I. Worcester.

The record shows that Mrs. Worcester, the deceased, and Mrs. Warren, the appel-lee, maintained a close personal friendship which had its beginning about 1925, when the husbands of the two women were both working for the Santa Fe Railroad at Temple, and that the friendship between Mrs. Worcester and Mrs. Warren continued through the years until Mrs. Worcester’s death early in March of 1972. Mrs. Warren helped with the care and nursing of Mrs. Worcester’s husband in his last illness and until his death late in January of 1970.

It was in April of 1970 that Mrs. Worcester set up the disputed savings account in the amount of $16,000, transferring the funds from a joint account she and her husband had maintained during his lifetime, and caused the new account to be designated “WORCESTER, Delia I. &/or Lena Mae Warren.” Both Mrs. Worcester and Mrs. Warren were present when the account was created, and both women signed the customary signature card. The savings association official who supervised the opening of the account testified that Mrs. Worcester stated at the time that “She wanted it to where either party could withdraw the funds at any time with no questions asked.” The official testified that Mrs. Worcester was assured the account would be that type.

Between the period in which her husband became ill and died and the period of Mrs. Worcester’s last illness and death about two years later, Mrs. Worcester followed a pattern of disposing of much of the considerable estate she and her husband had accumulated. Several witnesses who knew Mrs. Worcester well, testified that she frequently expressed her desire to make gifts during her lifetime in preference to postponing the giving until after her death. Although she had executed a will at one time, Mrs. Worcester later, in consultation with her attorney, wrote and signed an instrument, found after her death in a lock box at the bank, in which she declared, “I hereby revoke all wills heretofore made by me.” The writing was dated in August of 1971. Her attorney, a banker, and the pastor of her church testified concerning the occasions during this period when they had dealings with Mrs. Worcester, and all agreed that despite her advanced years Mrs. Worcester remained alert, sensible of her business matters, and firm as to how she wanted her affairs handled.

Early in January of 1972 Mrs. Worcester suffered a fall at home, resulting in a broken hip. She had had a similar accident about five or six years earlier which she survived. Apparently as a result of her last fall, Mrs. Worcester died on March 2, 1972, nearly two months later. While in the hospital Mrs. Worcester continued to arrange her own affairs, including complete details for her funeral services and burial. On one occasion in this period she made a cash gift to an old friend of $1,000.

After setting up the $16,000 savings account jointly with Mrs. Warren in 1970, Mrs. Worcester in November of that year conveyed to Mrs. Warren the home in which Mrs. Worcester lived until her death, together with “all the household furnishings and personal belongings located in said above property.” Simultaneously with this deed, Mrs. Worcester by written instrument leased the home from Mrs. Warren for a nominal rental of one dollar per year. Both writings were acknowledged and recorded. In the latter part of the following February Mrs. Worcester made arrangements for Mrs. Warren to have authority to enter the bank lock box Mrs. Worcester maintained. Later that year, in October of 1971, Mrs. Worcester provided for Mrs. Warren to have authority to draw funds from Mrs. Worcester’s checking account, but without providing right of sur-vivorship.

In August of 1971, the same month in which Mrs. Worcester revoked all prior wills, she transferred $20,000 from a savings account and opened three savings accounts for friends, one account for $10,000 and each of two others for $5,000. In February of 1972, while Mrs. Worcester was confined in the hospital and only about two weeks before her death, she gave written instructions to a savings association that a note being collected in monthly installments from another couple was to “be paid in full” in event of her death. The balance of the note when Mrs. Worcester died was about $4,100. In 1971 Mrs. Worcester also set up two savings accounts, each for $20,000, in trust for two members of her family. Her attorney testified that Mrs. Worcester expressed to him her desire to make disposition of her estate during her lifetime so “that she could see the effect on the people to whom she was making the gifts . . . rather than to give it away by will after her death.”

Mrs. Warren testified that from the time Mrs. Worcester set up the $16,000 joint savings account in April of 1970 until Mrs. Warren cashed the certificate on January 17, 1972, Mrs. Warren had possession of the certificate. Mrs. Warren cashed the certificate and moved the funds into a separate savings account in her own name. Thereafter, some months after Mrs. Worcester’s death, Mrs. Warren moved the money from the savings association to a savings account in one of the Temple banks. Most of the dividend checks paid on the $16,000 savings account were not endorsed by any person, but one check was endorsed by Mrs. Warren during the lifetime of Mrs. Worcester and prior to the date appellant alleged the conversion took place. The trial court found that in opening the account Mrs. Worcester acted with donative intent toward Mrs. Warren, and that Mrs. Warren was in fact the person who exercised dominion and control over the account from the time it was opened.

The trial court, in the findings and conclusions, recognized a pattern established by Mrs. Worcester, extending over a number of months, of giving during her lifetime to friends whom she loved and trusted, based in part upon her desire to see the effects of her gifts and in part upon her lack of close relations with kinsmen, although she remembered at least two members of her family with substantial trusts.

The trial court concluded that appellant, having the burden of proof, “wholly failed to meet his burden of proof,” and that ap-pellee was “entitled to judgment that Appellant take nothing at the time that Appellant rested his case in chief.”

“Appellant failed to prove or even raise the issues,” the court stated, “of breach of trust, fraud, overreaching, wrongful appropriation, lack of knowledge or consent by Delia I. Worcester, or lack of approval by Delia I. Worcester. Appellant failed to prove or even raise an issue on whether or not the $16,000.00 account in question was intended as a mere convenience account for the benefit of Delia I. Worcester or whether there was some sort of trustee relationship between Appellee and Delia I. Worcester with respect to this account. Under these circumstances, after a full trial on the merits, the undersigned trial judge concluded that a take nothing judgment was proper based on Appellant’s total failure of proof, even disregarding all the compelling direct and circumstantial evidence thereafter offered by Appellee.”

The findings of the trial court are supported by abundant evidence of probative value, and the conclusions of law based on the findings are sound.

The judgment of the trial court is affirmed.

Affirmed.


author: KEITH, Justice.

text:
    PARK CITIES CORPORATION, Appellant, v. D. Harold BYRD et al., Appellees.
    No. 7685.
    Court of Civil Appeals of Texas, Beaumont.
    April 10, 1975.
    Rehearing Denied May 8, 1975.

      Jackson, Walker, Winstead, Cantwell & Miller, Dallas, for appellant.
    Turner, Rodgers, Sailers, Jordan & Cal-loway, Dallas, Martha E. Smiley, Austin, for appellees.
   KEITH, Justice.

Park Cities, a defendant below, appeals from a declaratory judgment entered after a non-jury trial in a suit brought by the executors of the estate of Mattie Caruth Byrd. Plaintiffs sought to determine the correct method of winding up a limited partnership between deceased, a general partner, and Park Cities, a limited partner, in Mattie Caruth Byrd, Ltd. We will refer to the executors as plaintiffs, the deceased as Mrs. Byrd, the defendant as PCC, and the limited partnership simply as “Limited.”

The trial court filed extensive findings of fact and conclusions of law; and, after a careful review of the evidence adduced upon the hearing, we are of the opinion that such findings have support in the record and our resume of the facts is taken largely therefrom.

Under the agreement, which was carefully tailored to comply with the provisions of Vernon’s Tex.Rev.Civ.Stat.Ann. art. 6132a (1970), PCC’s contribution to the capital of Limited was $100 and Mrs. Byrd was required to “contribute her financial resources, skill, efforts and abilities to the mutual benefit of the partnership” but no fixed sum was specified in the agreement. Early in the venture, Mrs. Byrd began making loans to Limited, each being evidenced by a promissory note with the proceeds being expended in the venture. At the time of her death (on February 12, 1972), the total face amount of the series of notes was $1,153,727.48, with accrued interest due amounting to $278,100.00. During 1964 and 1965, she made contributions to capital of Limited in the amount of $88,833.47.

The books of the partnership were audited each year by the national accounting firm now known as Coopers & Lybrand, and a “clean” certificate was given on all except the last statement covering the period January 1-February 15, 1972, after which the controversy now before us developed. The accountant’s reports showed that the loans were payable to Mrs. Byrd, and the amounts and accrued interest thereon were shown as liabilities of the partnership.

Each of these reports also showed very clearly that Mrs. Byrd had used the depreciation allowance upon the partnership properties as a credit upon her personal income tax obligations. The total depreciation taken during the life of the partnership amounted to $2,093,851. We quote the “net loss” provision of Art. V. of the agreement in the margin, along with the trial court’s finding of fact No. 13.

Extensive documentary evidence was offered by stipulation of the parties but only one witness, an accountant employed by PCC, gave oral testimony at the trial. The trial court’s judgment declared that the series of promissory notes were “bona fide loans” payable in favor of the plaintiffs (executors of Mrs. Byrd’s estate) upon the winding up of the affairs of the limited partnership. It also declared that, in winding up the affairs, market value of the capital assets, rather than book value (see footnote 6, infra), should be used in determining the distributable shares of the parties and that the face of the series of notes plus accrued interest should be paid to Mrs. Byrd’s estate before making distribution of the remainder, if any. If there was a net loss, it was declared that such was an obligation of Mrs. Byrd’s estate and no part thereof was an obligation of PCC. Thus, the declaration of the rights of the parties upon dissolution followed the provisions of the partnership agreement (Art. IX) and § 40(b) of Tex.Rev.Civ.Stat.Ann. art. 6132b (1970).

The judgment denied all relief sought by PCC which tendered the question of whether the notes were valid debts of the partnership or should be treated as contributions of capital required of Mrs. Byrd under the terms of the agreement.

PCC’s first two points tendered the fundamental issue which it has urged throughout the litigation: (1) the trial court erred in failing to conclude that the debit balance or deficit in the general partner’s capital account is an asset of the partnership; and (2) the court erred in failing to declare the liability of the general partner to the partnership for the ultimate debit balance or deficit in her capital account. We disagree and each of the points of error is overruled for the reasons now to be stated.

It stands undisputed in our record, and the court so found, that “[njone of the ‘capital deficit’ attributed to Mrs. Byrd’s ‘capital account’ results from any withdrawal by, or distribution to Mrs. Byrd.” Instead, it was brought about by the depreciation allowance taken in accordance with the terms of the agreement between the parties. Thus, the only Texas case cited by PCC, Conrad v. Judson, 465 S.W.2d 819 (Tex.Civ.App.—Dallas 1971, writ ref’d n. r. e.), is inapposite. Conrad did not involve depreciation; instead, the court noted that Conrad “withdrew sums largely in excess of his share of earnings and profits and caused these salary items to be credited to his account, without the semblance of any agreement on the part of appellees, or either of them, in order to convert the overdraft in his account to a credit balance.” (465 S.W.2d at 824) These unauthorized withdrawals were properly held to be in the nature of a debt and accountable in the dissolution.

The plaintiffs’ answer to the argument of PCC meets with our approval and is adopted:

“The fatal fallacy in the Appellant’s [PCC] attempted analogy between a capital ‘deficit’ resulting from cash withdrawals, and a capital ‘deficit’ resulting from depreciation is the Appellant’s failure to recognize that closing the non-cash depreciation from the profit and loss account to the capital account is not in fact a withdrawal. No ‘debt’ is created by depreciation. Recognition of this distinction distinguishes every one of the authorities cited by Appellant.”

In Guthrie v. Foster, 256 Ky. 753, 76 S.W.2d 927, 932 (1934) [cited in 68 C.J.S. Partnership § 437g, at p. 984 (1950)], the trial court, in arriving at the value of the partnership assets, eliminated the bookkeeping item of depreciation. In approving this action, the Kentucky court said:

“Inasmuch as the fixtures were on hand at the death of Foster, and the $36,332.-68 depreciation thereof was arrived at by mere bookkeeping solely for income tax purposes, it is scarcely debatable the court properly eliminated this item.”

The bookkeeping item reflecting the depreciation allowance upon the partnership property did not create a debt and the trial court did not err in so holding. Finding no merit in the first two points of error, each is overruled.

By point three, PCC contends that the trial court erred in finding that the sums advanced by Mrs. Byrd to the limited partnership were loans instead of capital contributions ; point four asserts that the court improperly awarded interest upon the loans.

The partnership agreement provided that the general partner “shall have the sole and exclusive control of the management of the business of the partnership and shall devote such part of her time, attention, talent, capital, credit and business capacity to the business of the partnership as is necessary for its successful operation.” The agreement did not require Mrs. Byrd to contribute a fixed or stated dollar amount of capital contribution; and, although granting her sole and exclusive control of the management, did not contain any provision prohibiting the borrowing of funds.

Upon a complete record, the trial court found as a fact that the loans so made by Mrs. Byrd were actual “bona fide loans made to the Limited Partnership by the General Partner, and are not capital contributions.” Whether an advance by a partner is a loan or an added contribution to the capital of the firm is a question of fact. Crane & Bromberg, Law of Partnership § 65(a) at 369-370 (1968).

The finding being supported by competent evidence is binding upon the reviewing court and will not be disturbed upon appeal. Hensley v. City Bank and Trust Company, 495 S.W.2d 282, 284 (Tex.Civ.App.—Tyler 1973, writ ref’d n. r. e.), and cases therein cited. See also, Nathan v. Hudson, 376 S.W.2d 856, 862 (Tex.Civ.App.—Dallas 1964, writ ref’d n. r. e.); Minchen v. Van Trease, 425 S.W.2d 435, 436 (Tex.Civ.App.—Houston [14th Dist.] 1968, writ ref’d n. r. e.).

It is neither illegal nor improper for a partner to make a loan to a partnership of which he is a member. As stated in 60 Am.Jur.2d, Partnership § 309 at 204 (1972):

“Under the Uniform Partnership Act [Tex.Rev.Civ.Stat.Ann. art. 6132b, § 40(b) II (1970)], the second rank in order of payment is for those liabilities owing to partners other than for capital and profits. This provision is in accord with the general rule that in the absence of an agreement which will determine rights as to advances, each partner is a creditor of the firm as to. money loaned it and has a right to repayment after the debts to other creditors have been met. The payment of interest on advances apparently also falls within the second rank in order of payment if there is an express or implied agreement to pay interest.”

See also, Johnson v. Braden, 286 S.W.2d 671, 672 (Tex.Civ.App.—San Antonio 1956, no writ), holding: “The assets of the partnership should have been liquidated and used to discharge debts, advances and charges, and the surplus, if any, should then have been divided.” (emphasis supplied)

In Moore v. Steele, 67 Tex. 435, 3 S.W. 448, 450 (1887), Judge Gaines held that a partner “who has advanced money to the firm beyond his share of the capital is entitled to retain the amount due him before the other partners are entitled to recover any of the assets.” See also, Annotation, 6 A.L.R. 160, 161 (1920).

In Crane & Bromberg, supra (§ 65 at 369), the authors state:

“Before profits are shared on dissolution, payments must be made to creditors, and partners must be repaid their advances and their capital contributions. Presumably the partner making advances is entitled to interest thereon until paid.” (emphasis supplied)

In a footnote, it is said:

“U.P.A. § 40(b) sets the priorities of distribution in this order. Section 18(a) reinforces the rights to receive them. The terminology of the two sections is not identical but presumably the significance is the same. Thus, ‘advances’ in § 18(a) are equivalent to ‘those owing to partners other than for capital and profits’ in § 40(b)(II).”

In our construction of the two sections we hold that “the significance is the same" and, in each event, the partner is entitled to be repaid the advances, with interest, before payments are made for those owing to partners in respect of capital or in respect of profits as provided in § 40(b) (III) and (IV).

In our research we have found but one Texas case approving the payment of interest upon an advance made to a partnership by one of its members, Reese v. Carey Bros., 286 S.W. 307, 314 (Tex.Civ.App.—Amarillo 1926, writ dism.), and none to the contrary. In Reese, the court adopted the general rule, saying:

“As a general rule, unless there is an agreement to allow interest, none is allowed in [on] contributions to the capital, because the partner must rely upon the proceeds of the business to compensate him for his investment; but, if the monies paid or advanced for the use of the firm are, in effect, loans, interest upon such advances is allowed, though there is no express agreement therefor.”

See, also, Annotation, 66 A.L.R. 3, 19, Interest — Allowance to Partner (1930), where a number of out-of-state cases are cited for the same holding.

Points three and four are overruled.

We quote PCC’s fifth and final point of error:

The court erred in holding that the limited partner was estopped to assert that the general partner’s so-called loans were in fact capital contributions.”

Conclusion of law No. 3, relating to the loans, began with these words: “For each of the following reasons, each of which by itself is alone sufficient, the loans made by Mrs. Mattie Caruth Byrd in the total aggregate principal amount of $1,153,727.48 are recognized as actual, valid bona fide loans repayable to the Limited [sic] Partner under the specific terms hereinafter set forth:

“[then follow three reasons, the latter two of which are quoted in the margin.]”

As noted above, PCC challenges only the second “reason,” making no mention of the third.

Assuming, arguendo, that all of the elements of an estoppel in pais [as set out in Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 932 (1952)] are not present in this case, it is well settled that a correct judgment based upon an erroneous conclusion of law will be affirmed. Payne v. Bracken, 131 Tex. 394, 115 S.W.2d 903, 905 (1938); Construction and General Labor Union v. Stephenson, 148 Tex. 434, 225 S.W.2d 958, 960 (1950). For additional authorities see 4 Texas Digest, Appeal & Error, at 224 et seq. (1967).

Remembering the trial court’s conclusion that PCC would be unjustly enriched if the notes and interest were held to be capital contributions, we pause to note that all PCC ever put into the venture was the nominal sum of $100. Had PCC been successful in having the loans and interest (aggregating a total of $1,431,827.-48) treated as a part of the capital, it would have received one-half thereof and would have shared equally in the enhanced market value of the apartment project.

This windfall upon its slight investment, with the general partner putting up all the money and taking all of the risks of the venture, was not one within the reasonable contemplation of the parties — and the trial court so held.

Moreover, plaintiffs specially pleaded ratification of the treatment of the loans in the annual reports. The trial court found, with an abundance of supporting evidence, that PCC and its executive officers had full access to and actual knowledge of the financial records and statements of Limited which showed the loans and, despite such knowledge, PCC never challenged “the correctness of the treatment” of such advances as loans rather than as additional capital contributions.

We have noted earlier that the partnership agreement was silent as to the power of Mrs. Byrd to borrow money; but, assuming for the purpose of argument, that she was without authority to execute the notes in question payable to herself, the silence of the limited partner, with full knowledge of such facts and without protest to such action, amounted in law to a ratification thereof.

The unauthorized acts of a partner may be ratified even if such acts result in the imposition of tortious liability. K & G Oil Tool & Service Co. v. G & G Fishing Tool Service, 158 Tex. 594, 314 S.W.2d 782, 793 (1958); Kelsey-Seybold Clinic v. Maclay, 466 S.W.2d 716, 719 (Tex.1971). In contract cases, such ratification may be inferred from silence on the part of one partner. Tom v. First Nat. Bank of Midland, 104 S.W.2d 130, 133 (Tex.Civ.App.—El Paso 1937, writ dism.); 68 C.J.S. Partnership § 173, at p. 626 (1950); 60 Am.Jur.2d, Partnership § 134 at 61 (1972).

We are of the opinion that the long and continued silence of PCC, with full knowledge of the manner in which the partnership affairs were being conducted, amounted, in law, to a ratification of the action of Mrs. Byrd in treating the advances as loans and not as contributions to the capital of the partnership. Point five is overruled.

After a careful review of the entire record, we are of the opinion that the judgment of the trial court was correct and it is therefore, affirmed.

      . “The parties further agree that for tax purposes they will share all net losses of the partnership according to actual losses suffered by each party, and it is further expressly agreed that Park Cities Corporation shall not be financially responsible for any of the losses of the partnership in excess of its capital contribution [$100] as herein elsewhere set forth.”

      . Finding of fact No. 13: “For Federal Income Tax purposes the Limited Partnership has consistently and continuously, since construction of the Apartment Project made the basis of this suit, computed depreciation upon buildings upon an accelerated basis known as the declining balance method, at a rate of 200% of the straight-line rate over the estimated useful lives of the assets [and such depreciation was reflected upon the tax returns in evidence].”

      . He testified that the principal executive officer of PCC had reviewed the reports of the accountants and that the executive fully understood the statements but never made any complaint or protest as to the accounting procedures being used to reflect the affairs of the partnership.

      . Although the parties have cited us to many texts upon accounting, tax eases from the United States Tax Court, etc., we will treat the questions presented on this appeal within the framework of substantive state law. It is unlikely that our excursion into the esoteric field of the federal law of taxation and the tax advantages or disadvantages of a general partner vis-a-vis a limited partner would be accepted or appreciated by the federal government or the Internal Revenue Service.

      . “Reasons” were said to be: “(2) The consistent treatment of said transactions as loans during the lifetime of Mrs. Byrd, without protest from the Limited Partner estops the Limited Partner from contending otherwise; and, (3) Treatment of said transactions as capital contributions rather than as loans would result in unjust enrichment to the Limited Partner under the circumstances of this case.”

      . In arriving at the value of the partnership assets, “book values are simply arbitrary values and cannot be used.” Cauble v. Handler, 503 S.W.2d 362, 364 (Tex.Civ.App.—Fort Worth 1973, writ ref’d n. r. e.). Indeed, as was said in Johnson v. Braden, supra (286 S.W.2d at 672), “[T]he market value of the firm assets should have been used in computing values.”

      . Paragraph VIII of plaintiffs’ answer to the counter-claim of PCC pleaded ratification in this language: “Plaintiffs will show that the Defendant [PCC] has ratified the treatment of the transactions made the basis of this suit as loans by knowingly accepting the benefits thereof and voicing no objection thereto during the lifetime of the general partner.”