author: EVANS, Justice.

text:
    COASTAL PLAINS DEVELOPMENT CORPORATION et al., Appellants, v. TECH-CON CORPORATION, Appellee.
    No. 16511.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Nov. 6, 1975.
    Rehearing Denied Dec. 4, 1975.

      Leland B. Kee, Angleton, for appellants.
    Jon Mercer, Houston, for appellee.
   EVANS, Justice.

Coastal Plains Development Corporation, the developer of a tract of land in Brazoria County, Texas, known as Cedar Lake Estates, entered into an agreement with Tech-Con Corporation dated September 4, 1970, under which Tech-Con was to construct certain roadways, a lake and other improvements on the land. By supplemental contract dated September 30, 1970 the parties agreed that immediately upon the funding of a pending loan transaction, Coastal Plains would pay the cash sum of $24,853.00 to Tech-Con for work completed to that date and would execute a six months note for $20,000.00, for the balance due for work completed, including extra work, to such date. This supplemental contract also provided that Tech-Con agreed to complete the shell surfacing of the roadways in accordance with the specifications of the original agreement and for this work it was to be paid from a “$10,000.00 balance of the available funds” upon submission of approved invoices as the work progressed. In connection with such future work Coastal Plains agreed to furnish materials and also make “other financial arrangements suitable to” Tech-Con for the value of the difference between said sum of $10,000.00 and the original contract price.

Pursuant to the supplemental contract, Coastal Plains delivered its promissory note to Tech-Con in the principal amount of $20,-000.00, which was secured by certain lots in Cedar Lake Estates, a subdivision in Brazo-ria County, Texas. An escrow account was established in the First State Bank of Bra-zoria for the fund which was to be used for future work payments, and it appears that this account was funded with the total sum of $9,180.36.

Subsequent to the execution of the supplemental contract dated September 30, 1970, Coastal Plains issued three checks to Tech-Con drawn on an account established in the First State Bank of Brazoria. The first of these checks is dated November 3, 1970, for the amount of $6,300.00; the second is dated November 19, 1970, for the amount of $3,000.00, and the third is dated December 9, 1970, for the amount of $2,800.00. The $3,000.00 check was returned marked “insufficient funds.” Both the $6,300.00 check and the $3,000.00 check bear notations making reference to: “Cedar Lakes Contract” but the $2,800.00 check does not bear such notation.

After execution of the September 80, 1970, supplemental contract, Tech-Con submitted only one invoice to Coastal Plains concerning the Cedar Lakes work. This invoice is dated November 24,1970, and sets forth the following typed statement:

“To invoice you for road work completed on the referenced project as follows:
“Shell base 7200 LF @ $2.80 per LF x 50% complete $10,080.00”

The basic contract between the parties provided that Tech-Con would be paid on the basis of $2.80 per lineal foot for roadways constructed with a sand-shell base. It also provided that Tech-Con would be paid within five days of receipt of each invoice, which invoices were to be submitted on the first and fifteenth days of each month for work completed to that date.

It is Tech-Con’s contention that the $6,300.00 check was properly applied by it to an outstanding invoice which had been owed by Coastal Plains since August, 1970, for an entirely different project in Waller County, Texas. Tech-Con asserts that the sum of $2,800.00 represented by the December 9, 1970, cheek, is the only proper payment credit to be applied against said invoice and that after the $2,800.00 payment, there was a balance due and owing by Coastal Plains in the amount of $7,280.00, which it failed to pay. It is the contention of Coastal Plains that Tech-Con was actually overpaid with respect to said invoice; that the $6,300.00 check should have been applied to the Cedar Lake Estates work and, additionally, that the invoice should have reflected credits of $1,352.00 for shell which it furnished to the Cedar Lake Estates work and of $6,268.30 for an invoice due Parker Brothers & Co., Inc., which it had guaranteed and ultimately paid.

The supplemental contract dated September 30,1970, provided that Tech-Con agreed “to no more than to continue work on the shell surfacing for so long as the payment schedule of the original agreement between the parties is met.” Tech-Con contends that since it was not paid the balance which it claims was due on the $10,080.00 invoice within the time specified in the contract, it had the right to withdraw from the work.

The trial court found that the $6,300.00 payment was for work performed by Tech-Con with respect to the Waller County project and that the language on the face of the check indicating that it was applicable to the Cedar Lake work was “of no force and effect.” It further found that the balance due Tech-Con from Coastal Plains for work completed on the Cedar Lake Estates project prior to December 15, 1970, was in the amount of $7,280.00 but that Coastal Plains was entitled to credits in the amount of $1,352.00 representing the value of the shell furnished to the project and in the amount of $6,268.00 for the payments made by Coastal Plains to Parker Brothers. The court awarded Tech-Con judgment against Coastal Plains in the amount of $29,581.00 representing the principal and interest due on the $20,000.00 note through October 31, 1974, together with attorney’s fees thereon, and also awarded judgment against Coastal Plains in the amount of $7,280.00 representing the balance due and owing to Tech-Con for work completed to December 15,1970. It awarded Coastal Plains judgment against Tech-Con in the amount of $1,352.00 and $6,268.31 for the credits for which it found Coastal Plains entitled. It denied Tech-Con’s claim for lost profits allegedly resulting from its inability to complete the work and also denied Coastal Plains recovery on its cross-action seeking damages for loss allegedly resulting from Tech-Con’s failure to complete the work. Both parties have appealed, Tech-Con’s appeal being limited to that part of the judgment refusing to award it recovery for alleged lost profits.

Under its first two points of error, Coastal Plains argues that the trial court erred in concluding that the notation “Cedar Lakes Contract — Coastal Plains Development” on the face of the $6,300.00 check was of “no force and effect” and in finding that such check represented payment for work performed on another project in Waller County, Texas.

The face of the check in question appears as follows:

Tech-Con accepted the $6,300.00 check as written; it endorsed the check and retained the proceeds. Having accepted the benefits of such payment, it is deemed to have agreed to any conditions which are clearly shown by the draft to have constituted part of the agreement between the parties. Tech-Con was not authorized, without Coastal Plains’ approval, to allocate such payment to any purpose other than that which may have been designated on the face of the draft. Stetson-Preston Co. v. H. S. Dodson & Co., 103 S.W. 685 (Tex.Civ.App., 1907, no writ). If the written terms of the draft expressly designated the purpose for which the payment was made, such designation, upon acceptance of the draft, became an integral part of the parties’ agreement. Peavy-Moore Lumber Co.,q Inc. v. First Nat. Bank of Beaumont, 133 Tex. 467, 128 S.W.2d 1158 (Tex.Com.App., 1939); 11 Am.Jur.2d, § 69, p. 93.

The trial court permitted Tech-Con to offer evidence tending to show that the $6,300.00 payment was made and accepted in payment of an outstanding invoice on another project in Waller County, Texas. Tech-Con’s president, Jack Hensley, testified that the check was given in payment of an invoice for work done by Tech-Con for D & S Development, Inc. in August, 1970, on the Waller County project. (D & S Development Company was a corporation in which Charles Ducroz and LeRoy Schmalz were principals; the “D” stood for Ducroz and the “S” stood for Schmalz. Ducroz was also president of Coastal Plains, and Schmalz was its treasurer. Schmalz han-died the accounting for the two entities.) Hensley further testified that in discussing with Schmalz the fact that payment on the Waller County invoice was overdue, Schmalz stated: “I have some money in another account and I think I can make you a payment.” Schmalz later advised Hensley that they were going to reimburse that account from proceeds of sales on the Waller project; that they would put the money back in that account. However, Hensley was subsequently told there was no money in that account. Ducroz testified that the $6,300.00 payment was for work done on the Cedar Lake project around November 3, 1970, and that it represented an “advance draw” against the November 24, 1970, invoice. He further testified he did not recall having received the $6,300.00 invoice on the Waller County project but assumed he had been invoiced at some time. He did not recall any payment having been made on that invoice. He said that at the time he signed the $6,300.00 check, he was not aware that there was an outstanding $6,300.00 invoice on the Waller County project. The $6,300.00 invoice on the Waller County project was stamped: “Paid November 6, 1970,” which was approximately the same time the $6,300.00 check was negotiated through the bank. There was also testimony indicating that a copy of the Waller County invoice marked “Paid” had been transmitted to Coastal Plains on November 19,1970, in response to a request of Ducroz. However, Ducroz testified he did not recall having received such transmittal.

Parol evidence is not admissible to show that the parties intended the payment of a check to be for .purposes other than that expressly designated by the face of the writing. Wyatt v. National Chemsearch Corp., 447 S.W.2d 715 (Tex.Civ.App.—Waco, 1969, no writ). If the draft for the $6,300.00 payment clearly showed that such payment was to be applied to the Cedar Lake Estates project, extrinsic evidence that the parties intended it to be applied to some other account, would be inadmissible, and even if admitted, would constitute no basis for the trial court’s judgment. Ross & Sensibaugh v. McLelland, 262 S.W.2d 205, 209 (Tex.Civ.App.—Fort Worth, 1953, writ ref. n. r. e.); Cottingham v. Harrison, 89 S.W.2d 255, 259 (Tex.Civ.App.—Eastland, 1935, writ dism.). However, if the notation evidencing the purpose of the payment is to be given conclusive effect, it must clearly appear that it was intended to constitute a part of the parties’ contract and that it was not merely a notation made for the purpose of convenience. 11 Am.Jur.2d 90, Bills and Notes, § 66. The notation must carry a “clear and certain message” that acceptance will discharge the specified obligation and the condition must be stated in such manner that the endorser is “bound to understand” the legal effect of his acceptance. Jenkins v. Henry C. Beck Co., 449 S.W.2d 454 (Tex.Sup.1969).

In our opinion the notation on the face of the $6,300.00 draft was not so clear and explicit that it was only susceptible of one interpretation. The notation on the draft making reference to the “Cedar Lakes Contract”, could have meant, under the circumstances existing at the time the check was issued, either that the check was intended as payment on the account or as merely designating the account from which the item had been paid. In other words, the notation could have been made solely for the purpose of bookkeeping between related companies, as a convenient method of indexing, so that appropriate reimbursement to the Cedar Lakes account would be made at a later date. Whether there was a meeting of the minds of the parties on this question was a factual determination which the trial court was required to make, and which it decided contrary to Coastal Plains’ position. Jenkins v. Henry C. Beck Co., supra.

In its third point, Coastal Plains asserts the trial court erred in finding that there was a balance due Tech-Con in the amount of $7,280.00 for work completed prior to December 15, 1970. It contends that the undisputed evidence shows the $10,080.00 invoice erroneously included the $1,352.00 item for shell which it furnished to the work and the $6,268.00 invoice of Parker Brothers which it had guaranteed and ultimately paid.

Tech-Con concedes these two items should have been properly offset in the final statement of accounts between the parties, but denies the $10,080.00 invoice was erroneous in not showing credit at that time. In our opinion the invoice should have reflected the $1,352.00 item as a credit inasmuch as the undisputed evidence shows that such material was previously furnished by Coastal Plains to the project and its value constituted an element of the total sum of $10,080.00. On the other hand, the $6,268.51 item was invoiced by Parker Brothers directly to Tech-Con and it was not until February, 1971, that Coastal Plains executed a note to Parker Brothers for such amount; nor was such obligation fully discharged by Coastal Plains until August, 1972. While Coastal Plains contends it had orally “guaranteed” payment to Parker Brothers, the evidence did not conclusively establish that Parker Brothers had agreed to look solely to Coastal Plains and not to Tech-Con prior to the time the invoice in question was submitted.

Applying the $1,352.00 credit and the $2,800.00 payment against the $10,080.00 invoice, there was a balance due on said invoice in the sum of $5,928.00. This is the identical amount sued for by Tech-Con in its first amended original petition as the balance due under the contract. The judgment of the trial court will be modified, as hereafter decreed, so as to reflect such credit of $1,352.00, as a reduction of the recovery awarded Tech-Con. The trial court also found that Coastal Plains made payment to Parker Brothers & Co., Inc., in the amount of $6,268.31 on August 7,1972, for shell sold and delivered to Tech-Con and spread on the roadways in the Cedar Lake project. It awarded Coastal Plains recovery against Tech-Con in said amount, together with legal interest on said amount from and after August 7, 1972, the date of payment. In view of the fact that neither party complains of the trial court’s judgment in effecting this manner of credit for such payment, its judgment in this respect will not be disturbed.

In view of our holding that the trial court did not err in finding a balance due under the contract for work completed prior to December 15, 1970, we find it unnecessary to consider Coastal Plains’ fourth and fifth points which urge error on the part of the trial court in failing to find that Tech-Con had breached the contract and in failing to award it damages on its cross-action for breach of contract. We do, however, consider Tech-Con’s cross-point that the trial court erred in failing to award it damages in the total sum of $76,976.00 representing its “lost profits” under the contract. Of this sum $5,524.00 represented its claim of lost profits in constructing the roadways and $70,652.00 its claim for lost profits in constructing the lake.

Viewing the contractual provisions of the supplemental contract in the light of the circumstances existing at the time such contract was made, the trial court could have concluded that the parties intended to terminate their respective obligations to complete all the work under the original contract if Coastal Plains should become financially unable to maintain payments for the work according to the payment schedule.

The trial court found:

“(10) By reason of the unavailability of sufficient funds, the parties agreed to extend the roadways surface as far as possible into the project with the materials and funds then available.
“(20) It was contemplated by the parties that the work would proceed only so long as the scheduled payments were made by Defendant to Plaintiff for the work consummated.”

Tech-Con has not contested the factual sufficiency of these findings and they are not inconsistent with the stipulations contained in the supplemental agreement. Although there is language in the supplemental contract indicating that the agreement was not intended to “reduce or replace the liability of” Coastal Plains to pay Tech-Con for the specified work to be performed by it under the original contract, the trial court evidently concluded that under the provisions of the supplemental contract, Tech-Con had the obligation to proceed with the work “only so long as the schedule payments were made ... for the work consummated,” and Coastal Plains had only the obligation to pay for the work which had been done. Whether or not the parties intended by the supplemental contract to alter their respective obligations under the original contract was for the trial court to determine from their situation at that time and from all attending facts and circumstances reflecting upon their intent. Alabama Oil & Pipeline Co. v. Sun Co., 99 Tex. 606, 92 S.W. 253 (1906); Garrett v. Danner, 146 S.W. 678 (Tex.Civ.App.—Amarillo, 1912, no writ); see also Ford Motor Co. v. Davis Brothers, Inc., 369 S.W.2d 664 (Tex.Civ.App.—Eastland, 1963, no writ).

The trial court’s judgment is reformed to the extent that the award in favor of Tech-Con Corporation against Coastal Plains Development Corporation for the balance due and owing Tech-Con for work completed prior to December 15,1970, is reduced from the amount of $7,280.00 to the total sum of $5,928.00, and in accordance with such reduction the award to Coastal Plains Development Corporation against Tech-Con Corporation in the amount of $1,352.00, representing the value of the shell furnished by Coastal Plains to the work, is ordered deleted from the judgment. In all other respects the judgment of the trial court is affirmed.

Affirmed as modified.


source: Caselaw Access Project

author: DUNAGAN, Chief Justice.

license: Public Domain

text:
    In the Matter of Donnell HARTSFIELD, a Delinquent Child
    No. 848.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 13, 1975.

      Martin Z. Sammons, Jr., Sammons, Clayton & Parker, Tyler, for appellant.
    A. D. Clark, III, Asst. Dist. Atty., Smith County, Tyler, for appellee.
   DUNAGAN, Chief Justice.

This is a juvenile delinquency case brought by the State in the Domestic Relations Court of Smith County, Texas, to modify a prior disposition of that court pursuant to Tex. Family Code Ann. Section 54.05. After a hearing, the court on October 22nd, 1974, revoked the probation of Donnell Hartsfield which it had heretofore granted on January 24, 1973, and ordered him committed to the Texas Youth Council (hereinafter referred to as the T.Y.C.). From this order Hartsfield has appealed to this court. We affirm the judgment of the trial court.

Appellant was adjudged a delinquent child on January 24,1973, for stealing property under the value of $50.00; he was placed under probation, a condition of which was that he not violate the laws of this state; and he was released to the custody of his parents. Subsequent to a hearing on the State of Texas’ amended petition, filed on January 15,1974, to modify disposition so as to commit Hartsfield to T.Y.C., the court by an order dated January 22, 1974, found Hartsfield had committed an offense of the grade of felony, recessed the disposition indefinitely and released him to the custody of his brother-in-law, William Allen. The State of Texas on September 18, 1974, again filed a petition to revoke Hartsfield’s probation and for order of commitment. This proceeding is based upon appellant’s alleged violation of Tex. Penal Code Ann. Section 38.03 (Resisting Arrest) by striking the arms of a policeman. The trial court found that appellant had violated this provision and, on October 22, 1974, ordered his commitment to the T.Y.C.

Appellant’s first point is that the Juvenile Court erred in committing him to the T.Y.C. under Section 54.05 without following the procedures set out in Section 54.-03(b). A disposition may be modified so as to commit a child to the T.Y.C. under either Subsection (f) or Subsection (g) of Section 54.05. While Subsection (g) requires compliance with Section 54.03, Subsection (f) does not. Appellant’s point turns on which Subsection applies to these facts.

Subsection (f) permits a disposition to be modified by commitment to the T.Y.C. if that disposition was based on a finding that the child engaged in “delinquent conduct.” Subsection (g) applies when the disposition to be modified was based on mere “conduct indicating a need for supervision.”

Since this child was the subject of two prior orders, one on January 24, 1973, and another on January 22, 1974, a threshold question is which disposition was modified by the order of October 22,1974, which is the order before this court for review. Both parties briefed this case on the assumption that the January 1974 order (the order recessing the disposition) was the relevant disposition. We disagree. The first order placed appellant under probation and set out the terms thereof. The effect of the January 22,1974 “recess” of the disposition was that the court neither denied nor granted the State’s petition for revocation of Hartsfield’s probation. We look, therefore, to the 1973 order to determine whether the commitment of appellant must proceed under Subsection (f) or (g) of Section 54.05.

That disposition was made prior to the effective date of the Family Code and the finding upon which it was based used the term “delinquent child” rather than “delinquent conduct” or “conduct indicating a need for supervision.” However, that disposition was modified under either Subsection (f) or (g) of Section 54.05. These Subsections apply in different circumstances distinguished by two types of conduct. Although current terminology was not used in the original order, we can determine whether the conduct upon which the 1973 order was based would constitute “delinquent conduct” or “conduct indicating a need for supervision” as defined under the Family Code.

The original misconduct was theft of property under the value of $50.00. This would constitute delinquent conduct if it violated a penal law of this State punishable by imprisonment or confinement in jail. Section 51.03(a)(1). Although we categorize conduct in current terms, the punishment for that conduct must be determined by the penal laws in effect at the time the offense was committed. In the Matter of C.E.H., 516 S.W.2d 25, 26 (Tex.Civ.App.—Texarkana 1974, no writ). Appellant’s original conduct, shoplifting, was a jailable misdemeanor. Tex. Penal Code Ann. Article 1436e, Section 4 (repealed, Acts 1973, 63rd Leg., ch. 399, Section 3). We conclude that the January 24, 1973, order was based on the equivalent of delinquent conduct and that disposition was properly modified under Section 54.05(f). Appellant’s first point is overruled.

Appellant’s second point is that a juvenile cannot violate a law of this State by resisting arrest because Section 52.01(b) provides that the taking of a child into custody is not an arrest. No cases have been cited nor have we found any construing the effect of this section of the Family Code. However, there are cases decided under the Family Code which state that a juvenile was arrested. See In the Matter of S.E.B., 514 S.W.2d 948, 950 (Tex.Civ.App.—El Paso 1974, no writ); In the Matter of F.G., 511 S.W.2d 370, 371 (Tex.Civ.App.—Amarillo 1974, no writ).

A purpose of Title 3, which includes Section 52.01, is to remove from children committing unlawful acts the taint of criminality. Section 51.01(3). The objective of Section 52.01(b) is to avoid the stigmatizing effect of an arrest upon a child. Dawson, Texas Family Code Symposium; Title 3, 5 Tex.Tech L.Rev. 509, 540 (1974). However, the Legislature did not intend by the enactment of Section 52.01(b), to permit a child to forcefully resist arrest.

“A person is arrested when he has been actually placed under restraint or taken into custody . . ..” (Emphasis added.) Tex.Code Crim.Proc.Ann. Art. 15.22. We hold that the term, “arrest”, as used in Tex. Penal Code Ann. Section 38.03, includes the taking into custody of a juvenile. Appellant’s second point is overruled.

The remaining points of error attack the legal and factual sufficiency of the evidence to support the finding that appellant used force to resist arrest. We look only to the favorable evidence in determining the legal sufficiency point and the entire record in passing upon the other points.

The arresting officer testified, without contradiction, that when appellant started swinging, the blows did not strike the officer’s face or body but were blocked by his arms. The only reason that the appellant did not strike the officer’s body was that the officer warded off the blows with his arms. Section 38.03 of the Texas Penal Code prohibits the use of force against a peace officer and is applicable to blows that fall upon the arms, as well as the face or body, of the officer. Appellant’s violation of this provision was shown beyond a reasonable doubt.

After a careful study of the record we find the evidence to be sufficient to support the Juvenile Court’s findings and judgment.

The judgment of the trial court is affirmed.

      . All references will be to the Texas Family Code Ann. unless otherwise specifically noted.

      . “(b) At the beginning of the adjudication hearing, the juvenile court judge shall explain to the child and his parent, guardian, or guardian ad litem:
      (1) the allegations made against the child;
      (2) the nature and possible consequences of the proceedings;
      (3) the child’s privilege against self-incrimination;
      (4) the child’s right to trial and to confrontation of witnesses;
      (5) the child’s right to representation by an attorney if he is not already represented; and
      (6) the child’s right to trial by jury.”


text:
    Annie Laurie CLABAUGH, Appellant, v. CITY OF TYLER, Texas, Appellee.
    No. 884.
    Court of Civil Appeals of Texas, Tyler.
    Nov. 13, 1975.
    Overruled with Written Opinion Dec. 11, 1975.

      Ben E. Jarvis, James R. Lewis, Tyler, for appellant.
    Jack Skeen, Jr., City Atty., Tyler, for appellee.
   DUNAGAN, Chief Justice.

This appeal is from a summary judgment of the 114th Judicial District Court of Smith County, Texas, granted on appellee’s motion for summary judgment.

The judgment was based upon appellant’s second amended original petition, her first supplemental petition; and appellee’s fourth amended original answer and its motion for summary judgment, together with defendant-appellee’s admissions of fact under Rule 169, T.R.C.P., and stipulations of the parties approved by the court; and together with appellant’s opposition to the motion for summary judgment. Appellant, plaintiff below, sought rescission of her deed of July 14, 1965, to the City of Tyler covering 30.559 acres of her land, sought by the City for use in connection with Lake Tyler East, then under construction or shortly thereafter construction began. As ground for such relief, she alleged facts in detail in support of her claims of (1) mutual mistake; or (2) constructive fraud; and (3) duress and coercion.

At the outset this court is confronted with the question of whether there is a final judgment in this cause from which an appeal will lie. On April 30, 1974, appellee filed its first motion for summary judgment alleging, among other things, that the appellant’s cause of action, if any, to annul and cancel the Deed of July 14, 1965, is barred as a matter of law because the cause of action, having not been filed until June 4, 1973, was not commenced within four years after the cause of action, if any, ac-cured. The appellant filed her opposition to said motion for summary judgment. Thereafter she also filed her second amended original petition and her first supplemental petition. By appellant’s latter pleadings she alleged generally that the appellant’s deed was obtained as a result of a misrepresentation by appellee’s agent. In response to appellant’s latter pleadings ap-pellee filed another motion for summary judgment on the ground that “plaintiff’s second amended original petition, plaintiff’s first supplemental petition and defendant’s fourth amended original answer and the facts as stipulated and attached hereto show as a matter of law that plaintiff has failed to state a cause of action based upon duress and misrepresentation of material facts.” Appellee’s second motion for summary judgment is not shown to have been filed in lieu of its first motion. Its first motion for summary judgment was not withdrawn. It is apparent that the second motion of appellee for summary judgment was in addition to its first motion for such judgment. The first motion raised the defense of “limitations.” The second motion was on the ground that appellant had not pleaded “a cause of action.” The parties in writing stipulated that:

“The parties herein agree that statutes of limitations have been raised by the pleadings and controverted and further agree that the court in granting the Defendant’s Motion for Summary Judgment has not done so on the basis of any statute of limitations question so raised and pleaded in that it is mutually agreed that there is a fact question not resolved should the question of limitations be reached.”

The court granted appellee a summary judgment on the finding “that as a matter of law the said Motion for Summary Judgment should be granted for the reason that as a matter of law, the Plaintiff herein has failed to state a cause of action based upon duress and misrepresentation of material facts and further, the Court in making this ruling has not considered the issues based upon the statutes of limitations as to either law or fact, which have been raised by the pleadings of the Defendant herein and controverted by Plaintiff, it having been mutually agreed by the parties and approved by the Court that a fact issue as to the statutes of limitations barring the cause of action, if any, has been raised by the Defendant’s pleadings and controverted by Plaintiff’s pleadings and Summary Judgment evidence.”

It is quite clear that the summary judgment did not dispose of all the issues. A summary judgment which does not dispose of all parties and all issues in a pending suit is not a final judgment. Such judgment is interlocutory and not appeala-ble unless severance of that phase of the case is ordered by the trial court. In absence of severance a party against whom such interlocutory summary judgment has been rendered will have his right of appeal when, but not before, the judgment is merged in final judgment disposing of the whole case. Kirkland v. Martin, 376 S.W.2d 819, 821 (Tex.Civ.App., Amarillo 1964, no writ); Kimmel v. Lytton, 371 S.W.2d 927 (Tex.Civ.App., Waco 1963, writ ref’d); Pierce v. Reynolds, 160 Tex. 198, 329 S.W.2d 76, 77 (1959); Sears v. Mund Boilers, Inc., 328 S.W.2d 199, 201 (Tex.Civ.App., Texarkana 1959, writ ref’d); Pan American Petroleum Corporation v. Texas Pacific Coal and Oil Co., 159 Tex. 550, 324 S.W.2d 200 (1959). We do not find in the record an order of the court severing the statute of limitations issues. The judgment was not final and was therefore interlocutory and not appealable.

Since the record discloses that there was no final or appealable judgment, this court is without jurisdiction and it is our duty to dismiss the appeal on our own motion. Kirkland v. Martin, supra.

For the above reasons the appeal is dismissed.

ON MOTION FOR REHEARING

Appellant in her motion for rehearing contends that as a matter of law, upon the filing of the second motion for summary judgment by appellee, the first motion for such judgment was superseded and abandoned. Therefore, she interprets the court’s original decision as constituting a holding that the summary judgment was based upon, and constituted a disposition of, both motions for summary judgment.

Appellant has misconstrued the court’s decision. Our original opinion, in this respect, was only a statement of the state of the record before us. We did not discuss what legal effect, if any, the filing of the second motion for summary judgment had on the first motion. We do not agree that this is the effect of our holding in the original opinion. We merely held that since the stipulations of the parties and the recitations of the court in its judgment clearly show that a fact issue on the statute of limitations was raised by the pleadings and summary judgment evidence, said fact issue was not disposed of. In determining the finality of a judgment we must look to the judgment itself. Gregory v. Lytton, 422 S.W.2d 586 (Tex.Civ.App., San Antonio 1967, writ ref’d n. r. e.). Therefore, in the absence of a severance of that issue, the judgment was interlocutory and not appeal-able. Insofar as determining our jurisdiction it is immaterial whether the second motion for summary judgment did or did not supersede the first motion for such judgment. For the fact remains that on the face of the record it is shown that all fact issues were not disposed of. The judgment shows that the statute of limitations issue was reserved. This means that if the appellee is not successful in sustaining this judgment in the appellate courts it then would return to the trial court and present its statute of limitations defense. Rule 166A, T.R.C.P., does not authorize a piecemeal trial of the issues involved in this case. Vol. 4 McDonald Texas Civil Practice, sec. 17.26.3 p. 138.

Appellant further says that the trial judge “seems to feel very strongly that he has no power to resume jurisdiction over this cause” and if his position remains unchanged, the result might be that the appellant could neither return to the trial court for a new trial nor have any relief in this court. We do not consider this argument to be a legal ground for granting the motion for rehearing. To so hold would be a dangerous precedent for this court to set. The duty and responsibility rest with this court to determine its jurisdiction. We adhere to our original decision and believe it to be correct in light of the reported decisions. See City of San Antonio v. Castillo, 285 S.W.2d 835 (Tex.Civ.App., San Antonio 1955, n. w. h.); Grodhaus v. Dimerling, 259 S.W.2d 350, 352 (Tex.Civ.App., Galveston 1953). In the latter case, the Court of Civil Appeals held the trial court’s judgment was not final because it did not dispose of the statute of limitations issue. However, the Court remanded the cause to the trial court. The Supreme Court approved the holding of the Court of Civil Appeals but, upon the mere application for writ of error, remanded the cause to said Court with instructions to change its judgment from remand to one dismissing the appeal. Dimerling v. Grodhaus, 152 Tex. 458, 261 S.W.2d 561 (1953). Appellant’s motion for rehearing is respectfully overruled.


author: PEDEN, Justice.

text:
    EMPLOYERS REINSURANCE CORPORATION, Appellant, v. Wallace C. RYNE et al., Appellees.
    No. 16559.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Nov. 20, 1975.

      C. E. Nadeau, J. M. Worsham, Houston, for appellant.
    Stevens F. Mafrige, George A. Sellnau, Houston, for appellees.
   PEDEN, Justice.

After a trial to the court, appellee Wallace C. Ryne was awarded workmen’s compensation for sixteen weeks’ total disability followed by permanent partial disability, hospital costs and a joint judgment with Dr. Miguel A. Soler for medical expenses. The trial court filed findings of fact and conclusions of law. We sustain the trial court’s findings that the claimant showed good cause for his failure to timely file his compensation claim and showed that he was partially incapacitated after March 31,1972, but we agree with appellant that the claimant did not show that appellant failed to timely furnish medical care.

Mr. Ryne’s claim is based on a back injury incurred while working for Shell Oil Co. as a pipefitter. He filed his claim with the Industrial Accident Board about five weeks more than six months after his injury, but the Board allowed it. Employers Reinsurance Corporation, Shell Oil Co.’s compensation carrier, filed this suit to set aside the Board’s award and Ryne filed a cross-action.

Employers’ first two points of error are that the trial court erred in finding that Ryne had good cause for failing to timely file his claim with the Board 1) because there is no evidence to support such finding and 2) because the evidence is insufficient to support it.

Art. 8307, § 4a, Vernon’s Texas Civil Statutes, provides in part:

“. . .no proceeding for compensation for injury under this law shall be maintained
“. . . unless a claim for compensation with respect to such injury shall have been made within six (6) months after the occurrence of the injury or the first distinct manifestation of an occupational disease; or, in case of death of the employee or in the event of his physical or mental incapacity, within six months after death or the removal of such physical or mental incapacity. For good cause the Board may, in meritorious cases, waive the strict compliance with the foregoing limitations as to notice, and the filing of the claim before the Board.”

Whether good cause exists for not timely filing a compensation claim is ordinarily a question of fact which the claimant must allege and prove. Williamson v. Texas Indemnity Insurance Co., 127 Tex. 71, 90 S.W.2d 1088 (1936).

“The term ‘good cause’ for not filing a claim for compensation is not defined in the statute, but it has been uniformly held by the courts of this state that the test for its existence is that of ordinary prudence, that is, whether the claimant prosecuted his claim with that degree of diligence that an ordinarily prudent person would have exercised under the same or similar circumstances. Consequently, whether he has used the degree of diligence required is ordinarily a question of fact to be determined by the jury or the trier of facts. It may be determined against the claimant as a matter of law only when the evidence, construed most favorably for the claimant, admits no other reasonable conclusion.” Hawkins v. Safety Casualty Co., 146 Tex. 381, 207 S.W.2d 370 (1948).

In deciding “no evidence” points this court considers only the evidence and the inferences tending to support the findings and disregards all evidence and inferences to the contrary. Commercial Standard Ins. Co. v. Allred, 413 S.W.2d 910 (Tex.1967). In passing on factual sufficiency points, we consider all the evidence. In Re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Ryne has two years of college credits. He was hurt on June 23,1971, and reported the injury to a company nurse the next day. He worked until July 8, when he told Mr. Davis, a senior analyst who handles compensation claims for Shell, that he was going to see his family doctor. Ryne had his doctor perform back surgery and called Davis on September 3, 1971, to ask why $49 per week was being withheld from his pay.

Ryne gave this testimony on direct examination:

“Q. All right. Now, Mr. Ryne, can you tell this Court why you did not file your claim earlier?
“A. Well, when I had the conversation with Mr. Davis, me wondering why they were taking that money out of my check, he said, ‘Well, this is an undecided claim, and since it is, wé will have to wait and decide whether they are going to pay you are not. I assume we will get on it when they do.’ He said, ‘You don’t have to do anything, Mr. Ryne; all your paperwork will be taken care of.’
“Q. Did he specifically tell you that he was going to take care of the paperwork that was necessary to process your claim?
“A. He certainly did.”
On cross-examination Ryne related:
“Q. And you have stated that you relied on Mr. Davis to do the paperwork, is that right?
“A. I stated that he told me he would do the paperwork and I certainly relied on it. I believe what the man said would be the truth.
“A. Did he ever tell you that I am going to file your claim for you?
“A. He said he would take care of all the necessary paperwork, this I naturally thought included the claim.”

Ryne related that later, as a result of receiving advice of friends from the union, he decided he needed to file his claim. He filed it on January 31, 1972.

Mr. Davis corroborated Ryne’s testimony as to the withholding of money because it was referred to as a disputed claim.

We overrule the appellant’s first point. There is some evidence of good cause for late filing in Ryne’s testimony that he relied on a statement by a representative of his employer that it would be taken care of. Allstate Insurance Co. v. Godwin, 426 S.W.2d 652 (Tex.Civ.App.1968, no writ); Gibbs v. T. E. I. A., 378 S.W.2d 349 (Tex.Civ.App.1964, writ ref. n. r. e.); Northwestern National Insurance Co. v. Kirchoff, 427 S.W.2d 638 (Tex.Civ.App.1968, no writ); Twin City Fire Insur. Co. v. King, 510 S.W.2d 370 (Tex.Civ.App.1974, writ ref. n. r. e.).

In considering the appellant’s second point we note that Davis testified that he did not represent to Ryne that he would file the claim for him, and there is other evidence in support of the appellant’s second point. Ryne didn’t ask Davis if a claim had been filed. Further, Ryne said he didn’t think Davis treated him fairly when he was in the hospital. And Ryne later asked an attorney to tell Davis to quit calling him, but there is no evidence that Ryne employed the attorney to represent him before the Board or discussed filing a claim.

We conclude that there was sufficient evidence to support the trial court’s finding of good cause.

Employers’ third and fourth points of error are that the trial court erred in finding that it failed and neglected to furnish within a reasonable time medical care reasonably required as a result of Ryne’s injury 8) because there is no evidence to support such finding and 4) because the evidence is insufficient to support it.

Art. 8306, Sec. 7, Y.T.C.S. (later amended), made these provisions for recovery of medical expenses:

“. . .If the association fails to so furnish reasonable medical aid, hospital services, nursing, chiropractic services and medicines as and when needed after notice of the injury to the association or subscriber, the injured employee may provide said medical aid . at the cost and expense of the association. The employee shall not be entitled to recover any amount, expended or incurred by him for said medical aid, . . ., nor shall any person who supplied the same be entitled to recover of the association therefor, unless the association or subscriber shall have had notice of the injury and shall have refused, failed or neglected to furnish it or them within a reasonable time . . . ”

The employee need only give notice of injury for the insurance carrier to be liable for medical services under this provision. He need not request the insurance carrier to furnish them. Texas Employer’s Insurance Association v. Steadman, 415 S.W.2d 211 (Tex.Civ.App.1967, writ ref. n. r. e.).

We review Ryne’s testimony. He injured himself on or about June 24, 1971, on a ladder but thought it was only a muscle pull in his right hip. He was still in pain the following day, so he reported the incident to Mrs. Heinz, a nurse at the company hospital. She told him to take a hot bath when he got home. He continued to work through July 7. A foreman must have seen him one time when his leg gave way but didn’t ask him how he got hurt or offer to send him to a doctor. On July 8 Ryne’s pain was worse, so he made an appointment with his family physician, Dr. Lee. He also talked to Davis by telephone. Davis offered to send a taxi for him and send him to Dr. Heinz, the company physician, but Ryne declined the offer, saying that he had already made an appointment with Dr. Lee but also because he didn’t like the way Dr. Heinz had examined him for a hernia. Ryne kept that appointment and was admitted to the hospital, where he was given several different treatments. He failed to respond to them, so Dr. Soler, an orthopedic surgeon and a defendant in this suit, was called in. He gave Ryne a physical examination and a myelogram, then decided to perform a laminectomy. On the day before the operation was scheduled, Davis asked Ryne by telephone to get a release and see Dr. Heinz. Ryne agreed to get one from Dr. Lee and to see Dr. Heinz, but Davis said Dr. Heinz would not examine him unless he checked out of the hospital and dismissed both of his doctors. Davis also said the myelogram would have to be repeated. Ryne was scheduled for the operation the following day after talking to Davis.

We sustain the appellant’s third point. There is no failure, neglect, or refusal to furnish medical treatment and services, within the meaning of the statute, unless there is notice of such need. Highlands Underwriters Insurance Co. v. Carabajal, 503 S.W.2d 336 (Tex.Civ.App.1973, no writ), citing Few v. Charter Oak Fire Insurance Co., 463 S.W.2d 424 (Tex.1971). Ryne’s testimony disproves the finding on this issue: after he told the nurse he had hurt his hip he continued to work, and when he next told a company representative that he was in pain, some two weeks later, the representative offered to send a taxi to take him to the company’s doctor. As a matter of law, under this evidence, the carrier did not refuse, fail or neglect to furnish medical aid within a reasonable time.

Employer’s fifth and sixth points of error are that the trial court erred in finding that Ryne had any partial incapacity after March 31,1972, resulting from the injury he allegedly sustained on June 23, 1971, 5) because there is no evidence to import such finding and 6) because the evidence is insufficient to support it.

Appellant points out that Ryne is earning more money after the operation than he did before it, that he is considered to be a very good pipefitter, has advanced to journeyman, and that the doctors attending him no longer restrict his work. Appellant contends that his incapacity was temporary and did not exist past March 31, 1972.

Appellee agrees it is true that Mr. Ryne makes more money now than before the accident but points out that the issue is wage earning capacity.

Dr. Soler testified that Ryne would suffer permanent disability after an operation of this type. There is evidence that a pipefit-ter’s job involves manual labor, a lot of lifting, and working on pipe while in awkward positions. Ryne testified that he cannot pick up the same weight load as before the injury. He experiences pain during work and is handicapped somewhat in performing it. Jerry Pratka testified that he generally works with Ryne as his teammate and has noticed that Ryne cannot lift or “tighten up” like he used to. It is undisputed, however, that Mr. Ryne is working overtime since his return to work.

There is no fixed rule of evidence by which a claimant is required to establish the fact that he has suffered disability. If his capacity and efficiency to work are not the same as before the injury he is entitled to compensation regardless of the fact that he was paid, after the injury, as much or more than he earned prior to or at the time of the injury. Texas Employer’s Insurance Association v. Evers, 242 S.W.2d 906 (Tex.Civ.App.1951, writ ref. n. r. e.).

The judgment of the trial court is reformed to deduct from it the recovery by Mr. Ryne of $2,583 for hospitalization costs and the joint recovery by Mr. Ryne and Dr. Soler of $500 for medical expenses, plus interest on such sums. As so reformed, the judgment is affirmed.


text:
    CUSTOM DRAPERY COMPANY, INC., Appellant, v. Perry W. HARDWICK et al., Appellees.
    No. 16567.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Nov. 20, 1975.
    Rehearing Denied Dec. 18, 1975.

      Ralph Balasco, Reginald Hirsch, Houston, for appellant.
    Jack R. Bailey, Houston, for appellees.
   EVANS, Justice.

This is an appeal from the trial court’s denial of temporary injunctive relief to appellant, Custom Drapery Company, Inc.

This suit was brought by Custom Drapery Company against appellees, Perry W. Hard-wick and Glenn E. Gaumer, and other defendants, seeking temporary and permanent injunction against their participation in a competing business and from using or disclosing confidential company information. The application alleged that Hard-wick had breached an employment agreement containing restrictive covenants-against competition and that Gaumer and Hardwick had conspired together to form, manage and operate a competing business and had solicited other employees of Custom Drapery Company to work for them in violation of noncompetition employment agreements. It also alleged actual damages in the amount of $100,000.00 and exemplary damages.

In two points of error, Custom Drapery Company asserts the trial court abused its discretion in refusing to grant injunctive relief against appellees Hardwick and Gau-mer. We have concluded the trial court’s order should be affirmed.

In its brief Custom Drapery Company asserts that although appellees did not present any evidence, “the case was fully developed as both appellees were called as adverse witnesses and their testimony did not vary in any material respect from the testimony of appellant’s witnesses.” It further contends that “there was no material dispute as to any of the evidence, and the relevant and material evidence should for all purposes be considered as undisputed and established.” It argues that the failure or refusal of the trial court to apply the law to undisputed facts constitutes an abuse of discretion, citing Professional Beauty Products, Inc. v. Schmid, 497 S.W.2d 597 (Tex.Civ.App.—El Paso, 1973, writ ref’d n.r.e.). Hardwick and Gaumer concur with appellant’s statement that the case was fully developed, that there was no material dispute in the evidence and that the evidence should be considered as undisputed and established. It is their position that the evidence supports the trial court’s denial of injunctive relief and that the legal principles applicable thereto should control the ultimate disposition of the issues between the parties. See Furr’s, Inc. v. United Specialty Advertising Company, 385 S.W.2d 456 (Tex.Civ.App.—El Paso, 1964, writ ref’d n.r.e.); Texaco, Inc. v. Parker, 373 S.W.2d 870 (Tex.Civ.App.—El Paso, 1963, writ ref’d n.r. e.).

Custom Drapery Company manufactures and sells commercial draperies. Hardwick had been employed as a salesman of the company since early 1969 and after its incorporation in 1972, he became a shareholder. In June 1973 he was elected to its board of directors and made a vice president. At that time he entered into a base salary agreement with the company which provided for a salary increase of $1,000.00 per month “as compensation for all work that Custom Drapery, Inc. may require of him other than personal sales.” This agreement was made subject to the approval of the board of directors but the board never expressly entered its approval. Three monthly payments in the amount of $1,000.00 each were made to Hardwick and thereafter the company refused to make further monthly payments. There was testimony to the effect that Hardwick voluntarily waived further payments, but there was nothing in the minutes of the board reflecting such an agreement on his part.

On April 11, 1974, Hardwick entered into an employment agreement with the company which recited that in consideration of his employment he agreed that during the term of his employment he would devote his time and efforts to the business of the company and would not without the company’s consent engage himself with any competitive business. This agreement also contained the following provisions:

“Employee further recognizes and acknowledges that his services are unique and extraordinary, and that the Company’s accounts, customers, locations, commission structure, and financial data as they may exist from time to time, hereinafter called Company information, are valuable special and unique assets of the Company’s business, and that he will not during, or within one year after the termination of this contract, disclose the Company information or any part thereof, to any person, firm, corporation, association, or other entity for any reason or purpose whatsoever, without the consent of the Company.
“For a period of one year following the termination of his employment, however caused, the Employee will not within the geographical limits of Harris County directly or indirectly for himself, or on behalf of, or as an employee of any other person, firm, association or corporation, engage in or be employed by any drapery business or business competitive with the Company.”

The agreement further provides that upon termination of his employment, Hard-wick would prepare and furnish to the company a complete list of all sales which he had made and on which there was an unpaid amount or commission and that upon verification of the list the company agreed to pay him 75% of the commissions due “if, as and when payment is received by Company . . .”

Hardwick was told by the president of the company that he had one week to sign the contract or he would be fired, and the president’s position in this respect was approved by the board of directors. Hard-wick testified that he had signed the contract under duress and at a time when the company owed him a backlog of commissions in excess of the amount of $27,000.00. (It was company policy with respect to most salesmen that they were not paid their backlog of commissions when they were terminated.) Hardwick also testified that he had signed the contract even though his attorney advised him that it was unfair.

Prior to the time Hardwick signed the contract, his compensation included a $200.00 per month draw, his commission rate averaged 8% on new construction projects and 10% on replacement orders. He had also been furnished an American Express credit card to be used for entertainment of customers and the company had provided full reimbursement for his gasoline, oil and car insurance. Approximately one month after he signed the contract, the company reduced his commission rates to 5% or less, his American Express card privileges were taken away and his gasoline allowance was cut to 75%. A few months later his gasoline allowance was further reduced to 60% and his draw against commissions was discontinued.

Hardwick testified that after execution of the contract, the company began charging back for bad debts and told its salesmen that they would be responsible for bad debts to the extent of their commissions. He said the first month the company deducted $1,859.00 from his monthly payroll check and during the first three months of 1975 it became a standard policy for 10% of the monthly payroll check to deducted as a “bad debt write off.” Hardwick further testified that the company also adopted the practice of deducting the cost of its materials from his commission and that this “100% charge back” irritated him the most.

During the late fall of 1974 Hardwick was approached by his father-in-law, Glenn E. Gaumer, about going to work for Gau-mer in the apartment drapery business. Hardwick at that time declined Gaumer’s offers and Gaumer proceeded to organize a business without him. Apartment Services, Inc. was incorporated in December 1974 with Gaumer as president and the company’s office was located in Angleton, Texas. Hardwick decided to terminate his employment in March or April 1975 and around April 1975, accepted a renewed offer by Gaumer to come to work for him. Hard-wick tendered his resignation to Custom Drapery Company on May 9,1975, effective May 23, 1975.

Covenants against competition are not favored by our courts because of the public policy against restraints of trade and the hardships resulting from interference with a person’s means of livelihood. Byers v. Trans-Pecos Abstract Co., 18 S.W.2d 1096 (Tex.Civ.App.—El Paso, 1929, writ dism.); Security Services, Inc. v. Priest, 507 S.W.2d 592, 594 (Tex.Civ.App.—Dallas, 1974, no writ). Such covenants are enforceable only to the extent reasonably necessary to protect the business and good will of the employer. Weatherford Oil Tool Company v. Campbell, 161 Tex. 310, 340 S.W.2d 950 (1960). The former employer has the burden of going beyond the terms of the contract and establishing by satisfactory evidence both the necessity for and the reasonableness of the covenant he seeks to enforce. Weber v. Hesse Envelope Co., 342 S.W.2d 652 (Tex.Civ.App.—Dallas, 1960, no writ); Denny v. Roth, 296 S.W.2d 944 (Tex.Civ.App. — Galveston, 1956, writ ref’d). Important factors to be considered in determining the reasonableness of the covenant are the period of time which the restraint is to last and the territory which is to be covered. Weatherford Oil Tool Company v. Campbell, supra.

. The covenant in Hardwick’s agreement extended to the geographical limits of Harris County and was operative for a period of one year following the termination of his employment. Covenants with similar time and area limitations have not been held unreasonable. Professional Beauty Products, Inc. v. Derington, 513 S.W.2d 236, 238 (Tex.Civ.App.—El Paso, 1974, writ ref’d n.r.e.) and authorities cited. There was testimony that Hardwick’s sales responsibility with appellant extended to the Houston area and that Gaumer had discussed with Hardwick plans to open up a Houston branch of his business.

The question of whether the contract was reasonable as to time and area was for the trial court’s determination upon the circumstances of the case. Vaughan v. Kizer, 400 S.W.2d 586, 589 (Tex.Civ.App.—Waco, 1966, writ ref’d n.r.e.). No specific argument has been made that the territorial and time limitations of the agreement in question are unreasonable but rather appel-lees assert that Custom Drapery Company failed to establish by satisfactory evidence that it had a “protectible interest” which justified injunctive relief. See Coiffure Continental, Inc. v. Allert, 518 S.W.2d 942, 946 (Tex.Civ.App.—Dallas, 1975, no writ).

It is also asserted that the contract was unenforceable in that it lacked mutuality. In our opinion, the agreement was not rendered unenforceable by reason of the fact that its terms did not obligate Custom Drapery Company to employ Hardwick for any specific length of time. Krueger, Hutchinson & Overton Clinic v. Lewis, 266 S.W.2d 885 [Tex.Civ.App.—Amarillo, aff’d 153 Tex. 363, 269 S.W.2d 798 (1954)]; Ofsowitz v. Askin Stores, 306 S.W.2d 923, 924 (Tex.Civ.App.—Eastland, 1957, writ ref’d). There was testimony indicating that Hard-wick’s continuation of employment was dependent upon his execution of the contract and this factor has been held sufficient consideration for such an agreement. Orkin Exterminating Co. v. Veal, 355 S.W.2d 831, 832 (Tex.Civ.App.—Fort Worth, writ ref’d n.r.e.); Chenault v. Otis Engineering Corp., 423 S.W.2d 377, 382 (Tex.Civ.App.—Corpus Christi, 1967, writ ref’d n.r.e.); McAnally v. Person, 57 S.W.2d 945, 948 (Tex.Civ.App.—Galveston, writ ref’d).

Although the testimony indicated that Custom Drapery Company had suffered a decrease in the volume of its sales as the result of the loss of Hardwick and its other salesmen who left to work for Gaumer, the trial court could have concluded from the evidence that this loss was merely a temporary result of the loss of effective sales personnel, and that the fact that they might engage themselves in competing business posed no imminent threat to the business of Custom Drapery Company. Additionally, while there was evidence that Custom Drapery Company considered certain information (i.e., customer lists, credit information, volumes purchased, material sources, prices paid, and formulae for computing prices) as confidential information and contended that such matters were “trade secrets” of the business, the trial court could have concluded from the evidence that such data was generally available to the industry and that the use or disclosure of such information by Hardwick would not result in material damage to Custom Drapery Company.

An essential element of the noncompetitive contract is that the covenant not to compete be reasonably incident to the contract of employment and essential to the protection of the employer’s business and good will. Coiffure Continental, Inc. v. Allert, supra; Toch v. Eric Schuster Corp., 490 S.W.2d 618 (Tex.Civ.App.—Dallas, 1972, writ ref’d n.r.e.).

The use of methods which are not shown to pose a threat to the former employer’s business does not afford a basis for injunc-tive enforcement of a covenant not to compete. Munzenrieder & Associates, Inc. d/b/a United Freight Sales v. Daigle et al., 525 S.W.2d 288, 292 (Tex.Civ.App.—Beaumont, 1975, no writ). In Kidde Sales & Service, Inc. v. Peairson, 493 S.W.2d 326 (Tex.Civ.App.—Houston [1st], 1973, no writ), this court, through Justice Peden, stated:

“Covenants in an employment contract, by which the employee agrees not to compete with the employer after employment has terminated, are in restraint of trade and are valid only if shown to be within exceptions to the general rule, such as where the good will of the employer’s customers had attached to the employee during the latter’s employment and the employee thus had acquired during his employment a special influence with the customer which gave him an advantage over the employer in competition for the customer’s business. Similar covenants have been upheld which restricted the former employee’s use of that sort of information imparted to him in confidence by the employer which is called trade secrets or business secrets and which concern formulae, methods and other facts used in the business. Grace v. Orkin Exterminating Co., 255 S.W.2d 279 (Tex.Civ.App.1953, writ ref., n.r.e.).
“It appears to us that the trial judge has carefully applied these principles of law. Appellant does not predicate its appeal on the training it gave Peairson, but on trade secrets he learned while in its employment.
“That a former employee was trained by the employer is not a ground for enforcing a restrictive covenant not to compete, even if the training was complex and extensive. Grace v. Orkin Exterminating Co., supra.
“Matters of general knowledge in an industry cannot be appropriated by one as his secret. Wissman v. Boucher, 150 Tex. 326, 240 S.W.2d 278 (1951).”

The trial court could also have concluded from the evidence that Custom Drapery Company failed to establish it was entitled to enforcement of the covenant against competition under the “clean hands” doctrine. Although there was testimony indicating that Hardwick had participated in the company’s decisions concerning reduction in compensation and had acquiesced in the company’s changes in its employee policies, the trial court could have decided from the evidence that the company’s conduct following the execution by Hardwick of the noncompetition agreement was inequitable and injurious to Hardwick and that the company was, therefore, not entitled to equitable relief. National Chemsearch Corp. v. Frazier, 488 S.W.2d 545, 548 (Tex.Civ.App.—Waco, no writ); Vaughan v. Kizer, supra. A former employer may be precluded from enforcement of a covenant against competition where he, and not the employee, has brought about the breach of their contractual relationship. Professional Beauty Products, Inc. v. Jay, 463 S.W.2d 288 (Tex.Civ.App.—Amarillo, 1970, no writ); Middagh v. Tiller-Smith Co., Inc., 518 S.W.2d 589 (Tex.Civ.App.—El Paso, 1975, no writ).

The theory upon which Custom Drapery Company sought to obtain injunctive relief against Gaumer is that he, together with his son-in-law, Hardwick, conspired to interfere with the contractual relationship between Custom Drapery Company and its employees and to wrongfully appropriate and use confidential business information appropriated by Hardwick.

An actionable wrong is committed if one induces another’s employee to breach his contract of employment for the purpose of obtaining the employee as his own or with the intent to injure the former employer. Yost v. Justin Belt Co., 488 S.W.2d 850, 857 (Tex.Civ.App.—Fort Worth, 1972, rev’d on other grounds, Tex., 502 S.W.2d 681); Raymond v. Yarrington, 96 Tex. 443, 73 S.W. 800 (1903). However, no wrong is committed where the employee acts upon his own initiative and the new employer is merely receptive to the employee’s suggestions. See Thomason v. Sparkman, 55 S.W .2d 871 (Tex.Civ.App.—El Paso, 1933, no writ).

Gaumer did in fact approach Hard-wick about coming to work for him prior to the termination of Hardwick’s contract with Custom Drapery Company. However, the testimony shows that this offer was rejected by Hardwick, who advised Gaumer that he had too much invested in Custom Drapery Company to make a change in his employment. The trial court could have concluded from the testimony that Hard-wick’s subsequent decision to terminate his employment with Custom Drapery Company was the result of his independent dissatisfaction with his relationship with that company and was independently made at a time prior to Gaumer’s second offer of employment in April 1975. The trial court could also have found from the evidence that neither Gaumer nor Hardwick enlisted other employees of Custom Drapery Company to come to work for Gaumer and that their decision to do so was also the result of their independent judgment. The fact that Gaumer had prior knowledge of the noncompetitive agreements between Custom Drapery Company and its employees would not, standing alone, conclusively establish a right to injunctive relief against Gaumer. The burden was upon Custom Drapery Company to show that Gaumer’s conduct was the proximate cause of the breach of contractual relationships between it and its former employees and of the claimed damages resulting therefrom. Moore v. Sussdorf, 421 S.W.2d 460, 467 (Tex.Civ.App.—Tyler, 1967, writ ref’d n.r.e.). The trial court could have concluded from the evidence that the former employees, including Hardwick, would have left Custom Drapery Company’s employ and engaged themselves in competitive employment independently of any inducement on the part of Gaumer. The trial court could also have concluded that there was no threat of irreparable injury to Custom Drapery Company as a result of Gaumer’s activities which necessitated the grant of injunctive relief.

We are further of the opinion that the trial court could have determined from the evidence that Gaumer and Hardwick had no intention of using or disclosing confidential business information obtained by Hardwick during his employment with Custom Drapery Company. Where there is no intention on the part of the former employee to do the thing sought to be enjoined injunctive relief is properly denied. Luccous v. J. C. Kinley Co., 376 S.W.2d 336, 341 (Tex.1964).

In view of further proceedings in the case, we have avoided a detailed discussion of the evidence adduced upon the tem-por ary injunction hearing. Notwithstanding the positions respectively taken by the parties in their briefs that the material facts were undisputed, we found substantial differences of opinion as to the facts presented and the conclusions to be drawn therefrom. Our ruling here is without prejudice to the resolution of these differences by the trier of facts upon final hearing.

We hold that the trial court did not abuse its discretion in denying equitable relief upon temporary injunction.

Affirmed.


author: ROBINSON, Justice.

text:
    RANCHERS AND FARMERS LIVESTOCK AUCTION COMPANY OF CLOVIS, NEW MEXICO, et al., Appellants, v. FIRST STATE BANK OF TULIA, Texas, et al., Appellees.
    No. 8536.
    Court of Civil Appeals of Texas, Amarillo.
    Nov. 24, 1975.
    Rehearing Denied Dec. 29, 1975.

      Stokes, Carnahan & Fields, Robert N. Carnahan, Amarillo, Rowley, Hammond, Murphy & Rowley, Clovis, N. M., for appellants.
    Morehead, Sharp & Tisdel, Charles G. White, Plainview, for appellees.
   ROBINSON, Justice.

The First State Bank of Tulia sought to garnish cattle and the proceeds held by the Tulia Livestock Auction, Inc. for J. E. Lit-tlefield. Littlefield and the Ranchers and Farmers Livestock Auction Company of Clovis, New Mexico, intervened, alleging that the Clovis auction company had a purchase money security interest in the proceeds and cattle under the Uniform Commercial Code portion of the Texas Business and Commerce Code. The trial court granted the bank’s motion for summary judgment and denied that of the intervenors. The intervenors appeal. Affirmed.

In addition to affidavits and depositions, the summary judgment proof included a stipulation of facts by the parties. A chronology of the relevant events follows.

NOVEMBER 21, 1973. J. E. Littlefield purchased the cattle from the Ranchers and Farmers Livestock Auction Company of Clovis, New Mexico. Both the president and the general manager of the Clovis auction company testified, without equivocation, in their depositions that sales through the auction were cash sales. The president of the Clovis auction testified that it was the custom in the business for title not to pass to the buyer until checks given in payment for the cattle cleared. Littlefield paid for the cattle by check on a Colorado bank. He had insufficient funds on deposit to cover the check at the time it was given and the check remained unpaid at the time of trial. He received a “Purchase Sheet” containing the language “This contract constitutes a Bill of Sale to the above described livestock, payment for which is hereby acknowledged.” Littlefield shipped the cattle to the Tulia Livestock Auction for resale.

NOVEMBER 23, 1973. A writ of garnishment seeking indebtedness to or effects of J. E. Littlefield was served on the Tulia Livestock Auction. At the time the garnishment was served, the Tulia auction had on hand $30,240.61 from the sale of part of the cattle and 40 head which had not been sold. By mistake, eight head were sold for $1,082.40 after the writ of garnishment was served. The parties on a later day agreed to the sale of the remaining cattle. Those cattle sold for $6,257.48. Subject to the contention by appellant that the Texas garnishment statute is unconstitutional, the stipulations show a valid garnishment for collection of a valid, unpaid judgment in excess of the amounts held by the Tulia auction.

AFTER NOVEMBER 25,1973, AND BEFORE NOVEMBER 29, 1973. After the garnishment, Littlefield told the Clovis auction company that his check to them would not clear, and executed for the Clovis auction company a security agreement and financing statement back-dated to November 21, 1973, and properly describing the cattle in question.

AFTER NOVEMBER 25, 1973, AND NOT MORE THAN 10 DAYS AFTER NOVEMBER 21, 1973. The financing statement (actually executed after November 25, 1973) was filed in the office of the County Clerk of Swisher County, Texas, on November 29, 1973. The exact date on which the statement was filed in the Office of the Secretary of State does not appear, but it is stipulated that the filing was within 10 days of November 21, 1973.

DECEMBER 3, 1973. On November 28, 1973, the Clovis auction company put in the mail, addressed to the Tulia auction company, an instrument entitled “DEMAND OF SELLER FOR GOODS RECEIVED BY BUYER ON CREDIT WHILE INSOLVENT ON NOVEMBER 21, 1973.” By the instrument the Clovis auction company claimed a right to return of the livestock under Section 2.702 of the Texas Uniform Commercial Code. This instrument was received by the Tulia Livestock Auction on December 3, 1973, more than 10 days after the November 21, 1973 date of the delivery of the cattle to Littlefield by the Clovis auction.

The applicable statutory law is contained in Chapter 2, Sales, and Chapter 9, Secured Transactions, of the Uniform Commercial Code, Title I, Business and Commerce Code, Vernon’s Ann.Civ.Stat.

The code section 2.511 provides that payment by check is conditional and is defeated as between the parties by dishonor of the check on due presentment. The Uniform Commercial Code Comment under Section 3.802, discussing the effect of conditional payment, states:

3. It is commonly said that a check or other negotiable instrument is “conditional payment.” By this it is normally meant that taking the instrument is a surrender of the right to sue on the obligation until the instrument is due, but if the instrument is not paid on due presentment the right to sue on the obligation is “revived.” Subsection (l)(b) states this result in terms of suspension of the obligation, which is intended to include suspension of the running of the statute of limitations. On dishonor of the instrument the holder is given his option to sue either on the instrument or on the underlying obligation.

Section 2.507 provides that where payment is due on delivery of goods, the buyer’s right as against the seller to retain or dispose of them is conditional upon his making the payment due. The Uniform Commercial Code Comment, with regard to the effect of delivery conditioned upon payment, states:

3. Subsection (2) deals with the effect of a conditional delivery by the seller and in such a situation makes the buyer’s “right as against the seller” conditional upon payment. These words are used as words of limitation to conform with the policy set forth in the bona fide purchase sections of this Article. Should the seller after making such a conditional delivery fail to follow up his rights, the condition is waived. The provision of this Article for a ten day limit within which the seller may reclaim goods delivered on credit to an insolvent buyer is also applicable here.

Section 2.702 provides that the right to reclaim goods delivered on credit to an insolvent buyer is waived unless the seller makes demand within 10 days, except in those cases where misrepresentation of solvency has been made to the particular seller in writing within three months before delivery.

The seller’s right to reclaim under Section 2.702 is not a security interest within the purview of Chapter 9 on secured transactions. In Re Mel Golde Shoes, Inc., 403 F.2d 658 (6th Cir. 1968). Acceptance of a check does not change a cash sale into a credit transaction. In Re Helms Veneer Corporation, 287 F.Supp. 840 (W.D.Va.1968). Construing sections of the Virginia Uniform Commercial Code, identical to the sections of the Texas Uniform Commercial Code, the court in Helms Veneer stated:

We interpret § 2-507 and § 2-511 of the Virginia U.C.C. as giving the seller a right to reclaim his goods from the buyer where a cash transaction has occurred, and a check, taken in payment by the seller, was dishonored. However, the right to reclaim is limited to a ten day period from the delivery of the goods as provided by § 2-507 by virtue of its cross reference to § 2-702. If the right to reclaim has not been exercised within that specified time period, the right is waived. The seller’s remedy is then on the instrument as well as for breach of contract.

Intervenors’ pleadings do not state a cause of action for reclamation. They claim a perfected purchase money security interest. It is their contention that the written security agreement which was prepared and signed subsequent to the time the writ of garnishment was served relates back to the time of the Clovis sale; that a security agreement attached at the time of that sale; and that it was perfected by filing within 10 days of the delivery of the cattle to Littlefield.

Intervenors rely on Subsection (b) of Code Section 9.301. Code Section 9.301 provides in part:

(a) Except as otherwise provided in Subsection (b), an unperfected security interest is subordinate to the rights of
(2) a person who becomes a lien creditor without knowledge of the security interests and before it is perfected; ******
(b) If the secured party files with respect to a purchase money security interest before or within ten days after the collateral comes into possession of the debtor, he takes priority over the rights of a transferee in bulk or of a lien creditor which arise between the time the security interest attaches and the time of filing.
(c) A “lien creditor” means a creditor who has acquired a lien on the property involved by attachment, levy or the like

Section 9.303 provides that a security interest is perfected when it has attached and when all the applicable steps required for perfection have been taken. Section 9.302 sets out the requirement for the filing of a financial statement in order to perfect the security interest. The time at which a security agreement attaches is determined by the following provisions of Section 9.204.

(a) A security interest cannot attach until there is an agreement (Subdivision (3) of Section 1.201) that it attach and value is given and the debtor has rights in the collateral. It attaches as soon as all of the events in the preceding sentence have taken place unless explicit agreement postpones the time of attaching.

Section 1.201(3) defines “agreement” to mean:

. . . (T)he bargain of the parties in fact as found in their language or by implication from other circumstances including course of dealing or usage of trade or course of performance as provided in this title.

Section 9.203 provides, subject to exceptions not relevant here, that a security interest in collateral in possession of the debt- or is not enforceable against the debtor or third parties unless the debtor has signed a security agreement which contains a description of the collateral.

Applying the foregoing provisions of the code regarding sales and secured transactions, we conclude that there was no security agreement between Littlefield and the Clovis auction, either oral or written, at the time the writ of garnishment was served on November 23, 1973. The security interest attached sometime after November 25, 1973, and before November 29,1973, when a security agreement was signed by Little-field. At that point the three-fold requirement for attachment of the security interest — (1) agreement, (2) value given, and (3) rights of the debtor in the collateral — was met.

We conclude that under Section 9.301 the security interest of the Clovis auction company is subordinate to the rights of the garnishing lien creditor, the First State Bank of Tulia.

Intervenors further contend that the garnishment by the Tulia bank is void as an unconstitutional taking of property under Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 82 L.Ed.2d 556, reh. den., 409 U.S. 902, 93 S.Ct. 177, 34 L.Ed.2d 165 (1972). In Southwestern Warehouse Corp. v. Wee Tote, Inc., 504 S.W.2d 592 (Tex.Civ.App.—Houston [14th Dist.] 1974, no writ), the court held the Texas prejudgment garnishment statute unconstitutional, but stated as follows:

Sniadach and Fuentes are clearly inapplicable to post judgment garnishment. Article 4084, which freezes property after the writ of garnishment is served, is thus the only statute or article here examined which is unconstitutional and only to the extent that it freezes property without notice and hearing before judgment on the original claim.

Article 4076, Vernon’s Ann.Civ.St. and the relevant rules of the Texas Rules of Civil Procedure are discussed in the court’s opinion with regard to the applicability of the standard of Fuentes. Following the reasoning in Wee Tote, Inc., we hold that the Texas post-judgment garnishment statute is not unconstitutional. See also, Mitchell v. W. T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974).

Appellant-intervenors did not plead a cause of action for reclamation or a cause of action by virtue of regulations issued pursuant to the Packers and Stockyards Act of 1921, as amended. In the hearing on the motions for summary judgment, the burden was on the First State Bank of Tulia to meet intervenors’ case as pleaded. Torres v. Western Casualty and Surety Company, 457 S.W.2d 50 (Tex.1970). The summary judgment evidence taken in the light most favorable to intervenors conclusively establishes the bank’s cause of action and establishes that the claim pleaded by intervenors is subordinate to plaintiff bank’s claim. In-tervenors’ points regarding a right to reclamation and rights under the Packers and Stockyards Act are asserted for the first time on appeal and are not properly before us. Leonard v. Abbott, 366 S.W.2d 925 (Tex.1963); Simmons and Simmons Construction Co. v. Rea, 155 Tex. 353, 286 S.W.2d 415, 417 (1955).

The judgment of the trial court is affirmed.

      . The Sections of the Uniform Commercial Code referred to are those in effect at the time of the transaction and before amendments which became effective January 1, 1974.


author: TUNKS, Chief Justice.

text:
    AIRLINE COMMERCE BANK, Appellant, v. COMMERCIAL CREDIT CORPORATION et al., Appellees.
    No. 1210.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    Nov. 26, 1975.
    Rehearing Denied Dec. 17, 1975.

      Jess Hall, Jr., Liddell, Sapp, Zivley & Brown, Houston, for appellant.
    J. H. Painter, III, Painter & Painter, R. Burton Ballanfant, Asst. U. S. Atty., Edward B. McDonough, Jr., U. S. Atty., William L. Bowers, Jr., James R. Gough, Asst. U. S. Attys., Houston, for appellees.
   TUNKS, Chief Justice.

This case involves priorities among liens on a parcel of real estate owned by Richard and Edith Bouchillon and William and Shirley Bouchillon. Appellee Commercial Credit Corporation (CCC) brought this suit to collect on a note and deed of trust given to it by the Bouchillons. Appellant Airline Commerce Bank was a named defendant, CCC claiming that Airline Bank had asserted a prior interest in and had foreclosed on the property involved. Airline Bank answered by a general denial and by a bill of interpleader in which it admitted the foreclosure, alleging that it was then holding $2371.49 representing excess from the foreclosure sale, and requested the court to determine the parties’ rights to the fund. Airline Bank also requested that the United States be joined as a defendant for the purpose of adjudicating its rights in the fund pursuant to its claims against the Bou-chillons under federal tax liens. The United States was joined and filed its answer, alleging that it had federal tax liens against the Bouchillons in the amount of $17,705.38, which liens were prior to the rights of the other parties to the action, including Airline Bank.

The property of which the proceeds from the foreclosure sale are involved here was conveyed in trust to Airline Bank as security on a promissory note in the amount of $15,115.51, which was executed by the Bou-chillons on August 31, 1970. The deed of trust was recorded on September 2, 1970. On September 11,1970, the Bouchillons executed a promissory note in favor of CCC and secured by a deed of trust covering the same property. That deed of trust was recorded on September 14, 1970. The claims of the United States are based on its assessments of taxes evidenced by tax liens filed on October 30,1970 and November 30, 1970. On August 3,1971 Airline Bank foreclosed under its deed of trust and conducted a trustee’s sale as provided in the instrument. The proceeds of the sale were $30,-500. On July 6, 1972, CCC obtained an interlocutory judgment against William and Shirley Bouchillon for $39,415.85 plus $3,000 attorney’s fees, which judgment ordered foreclosure and sale of the property already foreclosed and sold by Airline Bank. CCC instituted this suit against the Bouchillons and Airline Bank to recover $23,000 allegedly still due and owing under that judgment. CCC and the United States agreed that Airline Bank’s $15,115.51 note had priority over either of their claims. Airline Bank claimed, however, that in addition to the $15,115.51 value of its promissory note, it was also entitled to retain out of the proceeds of the trustee’s sale: (1) attorney’s fees for collection of the note; (2) payment on another note executed on September 9, 1970 by Red’s Coach Sales, a partnership, and R. H. and W. R. Bouchillon, as individuals, in the amount of $6,500; (3) attorney’s fees on the $6,500 note; and (4) a contractual trustee’s commission of 5% of the proceeds from the sale. CCC and the United States contested Airline Bank’s retention of all these amounts except for the face value of the $15,115.51 note and the interest and taxes thereon.

At trial in the district court, with the court as trier of fact, CCC and the United States agreed that each would take equal shares of any funds found to have been unjustifiably retained by Airline Bank. Pursuant to its findings of fact and conclusions of law, the court found that Airline Bank was entitled to retain only the principal, interest and delinquent ad valorem taxes on its $15,115.51 note and granted judgment to CCC and the United States in the amount of $11,600.83 plus $2,371.49 inter-pleaded by Airline Bank. The judgment has become final as to the Bouchillons, but Airline Bank has perfected this appeal.

Appellant first contends that the trial court erred in finding the United States had valid tax liens attached to the property, because the evidence of the tax liens and assessments was not properly admitted. The evidence offered by the United States consisted of copies of certificates of tax assessments kept by the Internal Revenue Service and certified copies of federal tax liens filed with the County Clerk of Harris County. As government records, their admissibility is governed by Tex.Rev. Civ.Stat.Ann. art. 3731a which provides,

Sec. 4. Such writings may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy. Except in the case of a copy of an official writing from a public office of this State or a subdivision thereof, the attestation shall be accompanied with a certificate that the attesting officer has the legal custody of such writing.

The copies of the notices of tax liens were so attested and certified by the deputy clerk of Harris County and were admissible under Article 3731a. Appellant contends, however, that the notices of tax liens were not admissible because of failure to comply with Article 3726, Tex.Rev.Civ.Stat.Ann., which allows instruments recorded with the county clerk to be admitted into evidence, in some circumstances, without proof of execution. It is a lengthy statute, and appellant has not indicated how it applies here or what part of the statute was violated in admitting this evidence. Since there was no specific objection under the statute, either here or in the trial court, we are unable to discover any failure to comply with Article 3726. Davis v. Grogan Mfg. Co., 177 S.W.2d 213 (Tex.Civ.App.—Texarkana 1943, no writ).

The certificates of tax assessments are federal records; therefore, in order for copies of them to have been properly admitted under Article 3731a, they would not only have to have been attested to by their legal custodian, but also accompanied by the certificate required in the statute. Moody v. Moody, 465 S.W.2d 836 (Tex.Civ.App.—Corpus Christi 1971, writ ref’d n.r.e.), cert. denied, 405 U.S. 990, 92 S.Ct. 1255, 31 L.Ed.2d 457 (1972). This requirement was not fulfilled. Although, as the United States argues, many official government records are “self-admissible” under the common law, we have neither found nor been cited any authority for the “self-admission” of copies of such records. The error of the trial court in admitting the copies of the certificates of assessment is not reversible error, however, because the notices of tax liens present sufficient evidence of their existence to support the trial court’s finding the United States has valid tax liens and assessments in the amounts reflected in those records. Whitener v. Traders and General Ins. Co., 155 Tex. 461, 289 S.W.2d 233, 236 (1956); Tex.R.Civ.P. 434.

Appellant contends the trial court erred in refusing to allow it to deduct the principal and interest on the $6,500 note executed by the Bouchillons on September 9, 1970 from the proceeds of the foreclosure sale. Appellant asserts that the deed of trust given it to secure the $15,115.51 note also covered the subsequent $6,500 note by virtue of a so-called “dragnet clause” in the deed which recited that the deed of trust would secure any existing or future indebtedness between the parties. In order for such a clause to operate to include another indebtedness, the second indebtedness must be found to have been “reasonably within the contemplation of the parties to the mortgage at the time it was made.” Moss v. Hipp, 387 S.W.2d 656 (Tex.Sup.1965). The trial court found the $6,500 note was not contemplated by all the parties to the deed of trust held by Airline Bank at the time the instrument was signed. In support of this finding were the court’s further findings that the $6,500 note was secured, as recited on the face of the note, by one or more security agreements, and that it was a partnership note of Red’s Coach Sales, individually guaranteed by Richard and William Bouchillon. There was testimony by an officer of Airline Bank that the $6,500 note was executed as a renewal of an unsecured note in the same amount executed by Red’s Coach Sales previous to the execution by the Bouchillons of the deed of trust in question here. The history of those two notes was evidenced by Airline Bank’s ledger card entitled “Red’s Coach Sales.” A separate ledger card entitled “W. R., R. H., Shirley Louise, Edith L. Bouchillon” was also introduced. That ledger card reflected Airline Bank’s records of the $15,115.51 note, but did not mention either of the $6,500 notes recorded on the “Red’s Coach Sales” card. Regardless of the capacity in which Richard and William Bouchillon signed the $6,500 note, we think the recitation of security agreements on the face of the note, coupled with Airline Bank’s separate records of the two indebtednesses, was sufficient evidence from which the trial court could conclude that the $6,500 note was not contemplated by the parties as included by the deed of trust at the time it was executed: the record does not show as a matter of law that the deed of trust was intended to secure the $6,500 note. Moss v. Hipp, 387 S.W.2d 656, 658 (Tex.Sup.1965).

Appellant also challenges the trial court’s finding that CCC had a valid lien against the Bouchillons’ property in the amount of $23,000. The interlocutory judgment for CCC against the Bouchillons is evidence that the Bouchillons were indebted to CCC in the amount of approximately $43,000, and that the property in question here was security for that debt. The testimony of Mr. J. H. Painter, CCC’s attorney, showed that CCC had turned that debt over to him for collection and that the debt had been reduced to $23,000. This testimony was an admission against the interest of CCC that it was entitled to less than the amount specified in the interlocutory judgment.

Appellant alleges further that it is entitled to retain, out of the proceeds of the trustee’s sale, its attorney’s fees for collection of the two notes. In view of our holding that the trial court was justified in finding the $6,500 note was not secured by the deed of trust, we need not consider whether attorney’s fees for collection of that indebtedness were properly withheld from the proceeds of the sale. The record reflects that appellant also withheld $2,420.62 contractual attorney’s fees for collection of $15,115.51 note which lien was superior both to CCC’s claim and to the tax liens. Appellant contends that under the Tax Lien Act, 26 U.S.C. § 6323, this priority extends to its attorney’s fees incurred in enforcing that lien. As the statute has been construed by the Fifth Circuit,

The relevant section of the Tax Lien Act provides that if the federal tax lien is not valid against a competing lien, then the priority of the competing lien is extended to include attorney’s fees incurred in collecting the obligation secured.

Citizens Co-op Gin v. United States, 427 F.2d 692, 699 (5th Cir. 1970). The opinion goes on to say that even when the competing lien is superior, that superiority extends to attorney’s fees “only if under Texas law a lienholder’s priority is extended to include attorney’s fees incurred in collecting the obligation,” and cites, as an example of such superiority, contractual provisions for attorney’s fees in mechanic’s liens. Citizens Co-op at 699. Here the contract provided for attorney’s fees. Texas law allows retention of attorney’s fees out of the proceeds of a trustee’s sale if it is shown that “the amount was reasonable and that the services of the attorney were necessary to enable the trustee to properly execute the power, and that he actually rendered service to the company in the matter.” American Nat. Ins. Co. v. Schenck, 85 S.W.2d 833, 839 (Tex.Civ.App.—Amarillo 1935, no writ). Other language in Schenck indicates that the withholding of attorney’s fees is to be allowed only where the debt is collected through judicial foreclosure. We think the better rule is stated in Daniel v. Henderson, 183 S.W.2d 242, 245 (Tex.Civ.App.—El Paso 1944), aff’d, 143 Tex. 321, 184 S.W.2d 467 (1945):

[T]he note in question had been declared due and placed in the hands of an attorney for collection prior to the institution of the suit. The attorney’s fees provided in the note are therefore part of the indebtedness due .

The evidence showed not only that the attorney’s fees were provided in the deed of trust, but also that the expenses of collection were actually incurred and were reasonable. Under the applicable federal and Texas law, appellant’s lien for its attorney’s fees incurred in collecting $15,115.51 note was superior to those of CCC and the United States, and Airline Bank was entitled to retain $2,420.62 paid as attorney’s fees.

Appellant also withheld a contractual trustee’s commission of 5% of the proceeds of the sale, as provided in the deed of trust. Appellees allege that the Tax Lien Act precludes Airline Bank from recovering the trustee’s fee because there is no evidence that the fee was an expense “actually incurred in collecting or enforcing the obligations secured . . .’’as required in that statute. The trustee’s fee, like the attorney’s fees, was part of the contract between the bank and the Bouchillons, and as such was part of the indebtedness secured by the deed of trust. The agreement between CCC and the United States that they would divide any funds recovered from Airline Bank did not operate to give the benefit of the federal statute to CCC. Moreover, by agreeing that it would not attempt to establish priority of its tax liens over CCC’s lien, the United States merged its claim with that of CCC, removing the bank’s claim for its contractual trustee’s fee from the requirements of the federal statute.

Finally, appellant alleges error of the trial court in concluding it was not entitled to attorney’s fees from the fund interpleaded in this action. It is clear that Airline Bank is not entitled to attorney’s fees from the part of the fund awarded to the United States as payment on the federal tax liens. Spinks v. Jones, 499 F.2d 339 (5th Cir. 1974); United States v. Ray Thomas Gravel Co., 380 S.W.2d 576 (Tex.Sup.1964).

Appellant contends, however, that it is entitled to its attorney’s fees out of the portion of the interpleaded fund awarded to CCC. “Texas follows the rule that . ‘a disinterested stakeholder . . . who in good faith interpleads the claimants, is entitled to an allowance for attorney’s fees.’ ” United States v. Ray Thomas Gravel Co., 380 S.W.2d at 580. The record in this case reflects that appellant interplead-ed the United States and CCC only after it was made a party defendant to this suit, and that appellant at all times contested the claims of the other parties. Under these circumstances the trial court did not abuse its discretion in refusing to grant attorney’s fees out of the interpleaded fund:

Appellants are not in the position of mere stakeholders . . .. They combated the contention that more than the amount tendered in their pleadings was due, and they in fact did not tender the true amount due as found by the court, nor indeed did they follow the tender made in their pleadings by an actual deposit of any sum into the registry of the court.

Texas Bldg. Co. v. Collins, 187 S.W. 404, 407 (Tex.Civ.App.—Fort Worth 1916, writ ref d n.r.e.).

The trial court awarded judgment in favor of Commercial Credit Corporation and the United States against Airline Bank for $11,600.83, the amount found to have been wrongfully withheld by the bank, plus the $2,371.49 interpleaded by the bank, making the total amount of the judgment $13,-972.32. In view of our holding that Airline Bank was entitled to retain its contractual attorney’s fees of $2,420.62 for collection of the $15,115.51 note and its contractual trustee’s commission of $1,525 on the foreclosure sale, the amount of the judgment is ordered reduced to $10,026.70. As so modified, the judgment of the trial court is affirmed.