author: HALL, Justice.

text:
    Mrs. Joe E. STEWART, Appellant, v. GROUP HEALTH & LIFE INSURANCE COMPANY, Appellee.
    No. 5730.
    Court of Civil Appeals of Texas, Waco.
    Aug. 25, 1977.

      Prank H. Pope, Jr., Law Offices of Yar-borough & Pope, Inc., Bedford, for appellant.
    Michael G. Mullen and Ace Pickens, Brown, Maroney, Rose, Baker & Barber, Austin, for appellee.
   HALL, Justice.

This suit was brought for benefits provided by a certificate of life insurance under a group policy, plus 12% penalty and attorneys’ fees under the provisions of V.A.T.S. Ins.Code, art. 3.62, on the theory that although the insurer had tendered the full amount of life benefits payable, the tender was conditioned (and remained so after demand for unconditional payment) upon waiver of disability benefits also claimed by plaintiff to be due under another certificate in the group policy. After a trial without a jury, the court determined that the tender was unconditional, awarded the plaintiff the full amount of life benefits payable, denied the claims for 12% penalty and attorneys’ fees, and taxed costs against the plaintiff. Plaintiff appeals. We affirm.

At the time of his death, Joe E. Stewart was an insured under two certificates numbered 3474623 and 3475937 in group insurance policy number 22361 issued by defendant, Group Health & Life Insurance Company. Certificate number 3474623 provided certain monthly disability benefits and certificate number 3475937 provided life insurance in the amount of $9,000. Plaintiff is the insured’s widow, and was the named beneficiary in the certificate of life insurance. After the insured’s death, defendant disputed plaintiff’s claim for survivor’s' benefits under the disability policy, but it did not dispute its obligation to pay plaintiff the face amount of the life insurance certificate. Appellant employed legal counsel and filed suit for the disability benefits she claimed. Soon thereafter, while the suit for disability benefits was pending, defendant sent plaintiff its check payable to her in the amount of $9,000. The back of the check contained this language:

RECEIPT AND ENDORSEMENT
Received of Group Life and Health Insurance Company of Dallas, Texas, the within amount in full settlement of all claims under policy no. 22361 and any contract issued supplemental thereto on the life of Joe E. Stewart.

The stub attached to the check contained this language:

IN PAYMENT FOR OR ACCOUNT OF
In full settlement of all claims and obligations, including any supplemental contracts under policy # 22361, certificate # 3475937 on the life of Joe E. Stewart.

Plaintiff did not cash the check.

After plaintiff received the check, her attorney mailed a letter to defendant which referred to “Life Insurance Policy No. 22361, Insured: Joe E. Stewart,” and contained only one sentence, reading, “Please treat this letter as our demand for unconditional payment of the benefits under the above-captioned policy.” Defendant did not respond to the letter, and, more than 30 days after it was received by defendant, plaintiff brought this suit.

The record contains both a statement of facts and findings of fact filed by the trial court. The language on the back of the defendant’s $9,000 check is not contained in the statement of facts either as an exhibit or in the form of oral testimony. It is before us only in the form of a finding of fact. Defendant argues that we cannot consider the statement because the finding is not supported by any evidence, but defendant did not raise this question by cross-point. In support of its argument, defendant cites the familiar rule that “findings of fact are binding on the appellate court only if supported by evidence of probative force.” This rule presumes the finding was properly questioned. Where a statement of facts is a party of the appellate record, findings of fact filed by the trial court may be challenged as being without sufficient legal or factual support in the evidence. However, this question must be raised by proper assignment of error, else it is waived. Curtis v. National Cash Register Co., 429 S.W.2d 909, 911 (Tex.Civ.App.—Amarillo 1968, writ ref’d n. r. e.); Kroger Company v. Warren, 420 S.W.2d 218, 221 (Tex.Civ.App.—Houston [1st Dist.] 1967, no writ). Because defendant’s complaint as to the finding in question is not supported by a proper assignment, it is waived.

Plaintiff contends that by reason of the language on the check and the check stub she “would have cut off her collateral claim for survivor’s benefits” if she had endorsed and negotiated the check, and that the tender of the $9,000 actually owed to her was therefore conditional. We disagree.

The evidence shows that the group policy number 22361 is the group number only for insureds who are employees of Texas Tech University; that the insured was employed at Texas Tech for many years prior to his death; that an insured under this group number can secure either life insurance or disability insurance, or both; that premiums are charged separately under a life insurance certificate and a disability insurance certificate; that such “certificates” are actually separate policies under the same group number; that plaintiff and the insured always considered the certificates as separate policies of insurance, one for life insurance and one for disability benefits; that the insured had received disability benefits under certificate number 3474628 for about four years prior to his death; that under the life insurance policy, supplemental benefits in the form of accidental death and dismemberment benefits are available to an insured if desired; that these are the supplemental contracts referred to in the release endorsement placed on the check and stub; that the language used in the release is “standard” and is placed on every life check when supplemental benefits are not due the payee; and that such supplemental benefits were not due to plaintiff in this case.

Neither the language on the check nor the language on the stub is controlling over the other. These instruments were executed at the same time, for the same purpose, and in the course of a single transaction. When issued by defendant and received by plaintiff they were in fact one instrument. They must be considered as though they are a single instrument. Pacific Mutual Life Ins. Co. v. Westglen Park, Inc., 160 Tex. 1, 325 S.W.2d 113, 116 (1959); Board of Ins. Com’rs v. Great Southern Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803, 809 (1951). When this is done, there is no ambiguity nor conflict in the language on the check and the stub. Together, and especially in the light of the circumstances between the parties under which they were issued, they show without question that plaintiff was called upon to receipt only for full settlement of all claims under certificate # 3475937 of the group policy, which dealt solely with life insurance for which plaintiff was receiving full payment. The statements on the instruments refer directly to the life insurance certificate by number, do not refer to the disability insurance certificate, and cannot reasonably be construed as including a release for disability benefits. If plaintiff had cashed the check defendant could not have successfully contended that she had by reason of the endorsement settled her claim for disability benefits.

Plaintiff asserts that because she was entitled to recover and did recover the $9,000 life insurance benefits, the court erred in assessing costs against her. This contention is overruled.

Rule 131, Vernon’s Tex.Rules Civ. Proe., provides, “The successful party to a suit shall recover of his adversary all costs incurred therein . . . ” The term “successful party” used in this rule means “one who obtains a judgment of a competent court vindicating a claim of right, civil in nature.” Siepert v. Brewer, 433 S.W.2d 773, 775 (Tex.Civ.App.—Texarkana 1968, writ ref’d n. r. e.).

Defendant has never disputed its obligation to pay plaintiff the $9,000 life benefits. That obligation was not in issue in this case. The questions were whether plaintiff was required to bring suit to compel an unconditional payment of the $9,000 after demand, and whether plaintiff was entitled to recover 12% penalty and attorneys’ fees. Plaintiff was not the successful party on either question. Defendant succeeded on both.

The judgment is affirmed.

      . Art. 3.62. Delay In Payment Of Losses; Penalty For. In all cases where a loss occurs and the life insurance company . . liable therefor shall fail to pay the same within thirty days after demand therefor, such company shall be liable to pay the holder of such policy, in addition to the amount of the loss, twelve (12%) per cent damages on the amount of such loss together with reasonable attorney fees for the prosecution and collection of such loss


source: Caselaw Access Project

author: CORNELIUS, Justice.

license: Public Domain

text:
    Hildegard Halley TEMPLETON, Appellant, v. NOCONA HILLS OWNERS ASSOCIATION, INC., Appellee.
    No. 8478.
    Court of Civil Appeals of Texas, Texarkana.
    Aug. 30, 1977.

      Jack Connell, Bowie, for appellant.
    Roger Williams, Nocona, for appellee.
   CORNELIUS, Justice.

Appellant Hildegard Halley Templeton instituted this action complaining that she had been wrongfully discharged from employment in violation of her written contract with appellee Nocona Hills Owners Association, Inc. She alleged that appel-lee’s president had signed the contract which agreed to employ her as club manager for a period of one year beginning July 1,1975. Appellee defended on grounds that the instrument upon which the suit was brought was not a valid contract because it did not contain a date when it would become effective, Nocona Hills Country Club was named as employer rather than Nocona Hills Owners Association, Inc., and because the president did not have authority to act for the corporation in that instance and the corporation had not accepted or ratified his act in doing so.

The case was tried to a jury. In response to special issues the jury found that (1) appellant and appellee entered into the employment contract; (2) the commencement date for the employment was July 1, 1975; (3) appellee discharged appellant without cause; and, (4) appellant was damaged in the sum of $7,450.00. The district court, however, sustained appellee’s motion for judgment non obstante veredicto and entered a take nothing judgment. Appellant has presented six points of error which contend generally that the court erred in rendering judgment non obstante veredicto because the instrument in question had all the necessary attributes of a valid contract and was binding upon the appellee Owners Association.

To sustain the action of the district court in granting judgment non obstante veredicto we must find there was no evidence of probative force upon which the jury could have made one or more of its findings. Burt v. Lochausen, 151 Tex. 289, 249 S.W.2d 194 (1952); Tex.R.Civ.P. 301. It therefore becomes necessary to review the evidence.

The Nocona Hills Owners Association, Inc. is a corporation whose shareholders are persons who have purchased lots or homes in a twenty-seven hundred acre tract of land known as Nocona Hills Subdivision. The corporation also maintains and operates a country club at the subdivision. The facilities were initially constructed and operated by the land developer who conducted business under the name of Lake Nocona Acres, Inc. The appellee Owners Association took ownership and control of the common facilities from the developer on July 1, 1975. In June, prior to the take over, elections were held for officers and directors of the Owners Association. Seven directors were elected to take office on July 1, 1975. One of them was Preston Jameson, who was also elected president of the board. Eugene Frank Jones was appointed by the board of directors to serve as General Manager. Appellant was serving as manager of the country club at the time of the change in ownership. In June, shortly prior to the effective date of the take over, President Jameson approached appellant about remaining in her position. She consented but stated that she wanted a contract. Jame-son replied that he would bring the matter before the board of directors. Subsequent conversation and negotiations occurred between Jameson and appellant. They had talked of a $1,000.00 per month salary, but after consulting the board of directors Jameson told appellant that the board would not agree to more than $850.00 per month. When appellant kept insisting upon a written contract, Jameson suggested that she “draw one up”. On June 20, 1975, appellant had a secretary type the following agreement, following a standard form which had been used by the country club for another employee:

‘Management Contract
THE STATE OF TEXAS
COUNTY OF MONTAGUE KNOW ALL MEN BY THESE PRESENTS:
THIS CONTRACT entered into this 1975, by and between NOCONA HILLS COUNTRY CLUB, hereinafter called Club, and HILDEGARD B. HALLEY, hereinafter call Manager,
WITNESSETH:
I.
Manager agrees to operate, maintain, and provide adequate management of the Nocona Hills Country Club.
“Management Contract — Continued
II.
Club agrees to compensate Manager on a monthly basis at $850.00, (Eight Hundred Fifty DOLLARS AND NO/100), for providing said management services, and an additional amount per month if private vehicle is used for business. Two (2) Weeks Paid vacation. One (1) Pay Raise 3 months from date of contract. One (1) Pay Raise 6 months from date of contract to be negotiated.
This Contract shall be for a term of one (1) year from date, and so long thereafter as parties hereto agree.
WITNESS OUT (sic) HANDS this the 1975.
NOCONA HILLS COUNTRY CLUB Preston Jameson
/s/ Leon Jones /s/ Preston Jameson_ President Board of Governors
/s/ Hildegard Halley_ Hildegard Halley 6-20-75”

At appellant’s request, Jameson signed the contract on June 20th and requested Mr. Leon Jones to witness it. The testimony conflicts from this point on. Jameson testified he agreed to sign the contract to indicate his consent but that he told appellant that the contract would not be binding unless and until it was authorized by the board of directors. Appellant denied that she was so advised. On June 22, 1975, Jameson submitted the contract to the board of directors but it refused to authorize or accept it, voting only to give appellant a vote of confidence and inform her that her job (which had been on a month to month basis) was secure at her present salary of $750.00. The appellant had continued to work as club manager during the negotiations and she continued to do so after the change in ownership. Jameson testified that he told appellant of the board’s refusal to agree to the contract. Appellant denied the fact. Nine days after the change over, appellant was discharged by the general manager for disloyalty. She was paid for her work from July 1 through July 9 at the rate of $750.00 per month. She brought suit to recover the amount she would have received had the written contract been honored.

The appellee denied under oath that the contract sued upon had been executed by its authority. See Tex.R.Civ.P. 93(h). Appellant therefore had the burden to establish the authority of the officer to make the contract on behalf of the corporation. In Re Westec Corporation, 434 F.2d 195 (5th Cir. 1970); Ennis Business Forms, Inc. v. Todd, 523 S.W.2d 83 (Tex.Civ.App. Waco 1975, no writ); Babicora Development Co. v. Edelman, 54 S.W.2d 552 (Tex.Civ.App. El Paso 1932, writ dism’d); Adkins-Polk Co. v. Pate, 11 S.W.2d 654 (Tex.Civ.App. Texarkana 1928, no writ); 14 Tex.Jur.2d, Corporations, Sec. 354, p. 458; Hamilton, Business Organizations, Texas Practice, Vol. 20, Sec. 585, p. 52.

The authority of an officer to contract for a corporation may be actual or apparent. In Texas, by statute, the board of directors of a corporation, not its president, is charged generally with the duty of managing the corporation’s affairs. Tex. Bus.Corp.Act Ann. art. 2.31. Consequently, actual authority of the president to contract on behalf of the corporation must be found either in specific statutes, in the organic law of the corporation, or in a delegation of authority from the board of directors formally expressed, or must be implied from the nature of his position or from custom or habit of doing business. Manufacturers’ Equipment Co. v. Cisco Clay & Coal Co., 118 Tex. 370, 15 S.W.2d 609 (1929); Ennis v. Todd, supra; Tex.Bus.Corp.Act Ann. art. 2.42; Hildebrand, Texas Corporations, Vol. 2, Sec. 640, p. 597; 14 Tex.Jur.2d, Corporations, Sec. 330, p. 429, et seq. As to express authority, there was no proof in this case of any of the provisions of the corporate charter or by-laws, and there was no attempt to prove that the board of directors or the shareholders had invested the president with any authority to make contracts on its behalf. See In Re Westec Corporation, supra. In fact, the only evidence concerning contracts on behalf of the corporation was Jameson’s testimony that only the board could authorize them, and that the board refused to approve the one in question here. As to implied authority, the settled rule in Texas is that a corporation president, merely by virtue of his office, has no inherent power to bind the corporation except as to routine matters arising in the ordinary course of business. Miles Realty Co. v. Dodson, 8 S.W.2d 516 (Tex.Civ.App. Amarillo 1928, writ dism’d); Leak v. Halaby Galleries, 49 S.W.2d 858 (Tex.Civ.App. Dallas 1932, writ ref’d); Nelms v. A & A Liquor Stores, Inc., 445 S.W.2d 256 (Tex.Civ.App. Eastland 1969, writ ref’d n. r. e.); 2 Model Bus.Corp.Act Ann., 2d, See. 50, p. 90; Hamilton, Business Organizations, Texas Practice, Vol. 20, Sec. 585, p. 52. The execution of an employment contract binding the corporation to employ a person in a managerial position for a period of one year could not be considered a matter in the ordinary and usual course of appellee’s business. Compare Leak v. Halaby Galleries, supra. Especially is this true since the power to hire and discharge employees for appellee was vested in a general manager rather than in the president. Indeed, Jameson had not even taken office as president on June 20 when the contract was executed. Under the record in this case, we are impelled to the conclusion that appellant failed in her burden to establish that Mr. Jameson was invested with actual authority to make the contract sued upon.

There was likewise a failure to produce any evidence that Jameson had apparent authority to make the contract. The doctrine of apparent authority is based on estoppel, and one seeking to charge a principal through the apparent authority of an agent must prove such conduct on the part of the principal as would lead a reasonably prudent person, using diligence and discretion, to suppose that the agent had the authority he purported to exercise. Chastain v. Cooper & Reed, 152 Tex. 322, 257 S.W.2d 422 (1953); Brown v. Grayson Enterprises, Inc., 401 S.W.2d 653 (Tex.Civ.App. Dallas 1966, writ ref’d n. r. e.); Almar-York Co. v. Fort Worth National Bank, 374 S.W.2d 940 (Tex.Civ.App. Fort Worth 1964, writ ref’d n. r. e.); Great American Casualty Co. v. Eichelberger, 37 S.W.2d 1050 (Tex.Civ.App. Waco 1931, writ ref’d); Hamilton, Business Organizations, Texas Evidence, Vol. 20, Sec. 585, p. 52. The declaration or actions of the agent are not sufficient. Great American Casualty Co. v. Eichelberger, supra. The record here contains no evidence of any act on the part of the corporation’s board of directors or other authorized person which would lead any reasonable person to believe that Mr. Jame-son was invested with the power to execute, without approval of the board of directors, a year’s employment contract.

Appellant contends, however, that if the contract was not binding upon the corporation because not executed by its authority, either actual or apparent, it should nevertheless be held to have become enforceable by reason of the parties’ partial performance thereof. Aside from the fact that such a ground of recovery was neither pleaded nor submitted to the jury, we cannot agree that partial performance will authorize a recovery for appellant. A partial performance is effective in some cases to establish ratification of an otherwise invalid contract, or to take a contract out of the operation of the statute of frauds, but the performance of work under a month to month employment arrangement will not bind an employer to an otherwise invalid contract for a specific term of employment unless circumstances amounting to ratification or estoppel are present. Such circumstances are not present here. Appellant was employed on a month to month basis. The evidence shows only that when her contract was refused by the board she continued her usual employment until discharged. She was paid for the number of days she actually worked in July. No claim has been made for the additional days in that month. Under the circumstances, no further recovery was authorized.

Concerning the date of the contract, we agree with appellant that parol evidence was admissible to supply the date when the employment was to begin, and that there was evidence from which the jury could find that such date was July 1, 1975. See 17 C.J.S. Contracts § 61, p. 731. However, because of the lack of proof as to the authority of Mr. Jameson to make the contract on behalf of the corporation, the trial court was correct in rendering judgment non obstante veredicto, and his judgment must be affirmed. Great American Casualty Co. v. Eichelberger, supra.

IT IS SO ORDERED.


author: BISSETT, Justice.

text:
    Robert Curtis BERRYMAN, Appellant, v. TEXAS DEPARTMENT OF PUBLIC SAFETY, Appellee.
    No. 1211.
    Court of Civil Appeals of Texas, Corpus Christi.
    Aug. 31, 1977.

      Thurman L. Mulhollan, Corpus Christi, for appellant.
    Andrew J. Lehrman, Asst. County Atty., Michael J. Westergren, County Atty., Corpus Christi, for appellee.
   OPINION

BISSETT, Justice.

This is a driver’s license suspension case. The Nueces County Court at Law No. 1, by judgment dated January 14, 1977, found:

“. . . there does exist a reasonable probability of judgment being rendered against Robert Curtis Berryman in the amount of $1,141.86 as a result of a motor vehicle accident on a public highway in the State of Texas on or about December 2, 1975.”

The judgment decreed:

“. . . that . . . Robert Curtis Berryman’s Operator License No. 2168964 and driving privileges be suspended as provided in Article 6701h, V.A.T.C.S., Section 5.”

Robert Curtis Berryman has duly perfected an appeal to this Court from that judgment.

On December 2, 1975, an automobile which was then being driven by Berryman, appellant, collided with an automobile which was then owned by and was being operated by Bennie Jiminez. The collision occurred on a street in Corpus Christi. On May 6, 1976, a hearing was held in the Municipal Court of Corpus Christi, and that court ordered Berryman’s license be suspended. Berryman appealed that order to the Nueces County Court. A trial de novo was held in the Nueces County Court at Law No. 1 on January 7, 1977, and the above-mentioned judgment was rendered on January 14, 1977.

Berryman, appellant, brings forward four points of error. In summary, he contends that the trial court erred in rendering judgment against him, because: while there is evidence showing damage to the other vehicle, there is no proof that the amount of money required in the judgment as security was necessary to repair the damages to the other car; there is no proof that such amount is reasonable; and, finally, the trial court erred in allowing Bennie Jiminez, over Berryman’s objection, to testify that she had received an estimate for the repairs of such damage in the amount of $1,141.86.

Under the provisions of Tex.Rev.Civ.Stat. Ann. Art. 6701h, § 5(b), (1977), an uninsured motorist involved in an accident may be subject to suspension of his license registration or privilege and may be required to deposit an amount in security for damages resulting from the accident. Provided the necessary procedural steps are taken, this determination may be reviewed in a hearing before the judge of the municipal court or the appropriate justice of the peace and if relief is not obtained, the uninsured motorist may appeal the findings to the county court of the county in which the hearing was held, and the appeal shall be by trial de novo. The issues to be determined at the hearing in the County Court at the trial de novo are: 1) whether or not there is a reasonable probability of a judgment being rendered against the appellant as a result of his accident; and 2) if so, the amount of security that will be sufficient to satisfy any judgment or judgments for damages resulting from the accident.

In the case at bar, the points of error relate solely to the amount of security to be posted and do not attack the lower court’s determination of whether or not there was a reasonable probability of a judgment being taken against the appellant. See generally, Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971).

Berryman testified that he had not obtained a judgment against Mrs. Jiminez; that Mrs. Jiminez had not released him from liability for the accident; there was no agreement between them for payment of damages to her car; and that he had not yet posted any amount of money as security which would be sufficient to satisfy any judgment for damages resulting from the collision. Mrs. Jiminez testified, as follows:

“Q. What side did he hit you on?
A. On the left side . . . Front and back”
******
“Q. Was damage done to your car?
A. Yes.”
******
“Q. In your opinion what was the damage done to your automobile?
A. In my opinion I said it was a total loss.
******
Q. Okay, how much did it cost you to repair your automobile?
A. Eleven forty-one and eighty-six.
Q. Okay, that’s Eleven Hundred Forty-one Dollars and eighty-five, no eighty-six cents, correct?
A. Yes, that’s what I paid. That was my part.”

Neither Mrs. Jiminez nor Berryman, the only two witnesses who testified at the trial, gave any testimony concerning the reasonableness of the cost of the repairs.

Mrs. Jiminez testified that her car was struck by Berryman’s car, that her car was damaged, damage was suffered, and that the damage occurred on the left side, front and back. Berryman's first point is overruled.

A determination of the amount of security is directly related to the damages suffered by the other parties resulting from the accident. Tex.Rev.Stat.Ann. Art. 6701h (1977). The principles generally applicable to proof of damage to personal property are an appropriate standard in fixing the amount of security in this instance. Gillaspie v. Department of Public Safety, 152 Tex. 459, 259 S.W.2d 177, 183-4 (1953), cert. denied, 347 U.S. 933, 74 S.Ct. 625, 98 L.Ed. 1084 (1954). The fundamental rule of damages is that the injured party is entitled to be fully compensated for the wrongful injury to or destruction of property. 22 Am. Jur.2d § 131 p. 189 (1965). When property, such as an automobile, is damaged but is repairable, the cost of repairs is the measure of recovery, provided the costs were reasonable and necessary. It was noted in Pasadena State Bank v. Isaac, 149 Tex. 47, 228 S.W.2d 127, 128 (1950):

“. . . In cases where the damaged personal property is susceptible of repairs the owner of the injured property may recover the reasonable costs of such replacements and repairs as are necessary to restore the damaged article to its condition immediately prior to the accident.

If recovery is sought for the cost of repairs to personal property, the owner must prove the reasonable cost of the repairs, and not merely the sum he paid others for doing the work. Allright, Inc. v. Lowe, 500 S.W.2d 190, 191-2 (Tex.Civ.App.—Houston [14th Dist.], no writ); Pinson v. Dreymala, 320 S.W.2d 152, 156-7 (Tex.Civ.App.—Houston 1958, writ dism’d); Tinney v. Williams, 144 S.W.2d 344, 346 (Tex.Civ.App.—Amarillo 1940, no writ); Galveston-Houston Electric Ry. Co. v. English, 178 S.W. 666, 667 (Tex.Civ.App.—Galveston 1915, no writ); 17 Tex.Jur.2d Damages § 94, § 230, p. 166, p. 291-2 (1960).

Texas, as distinguished from some other jurisdictions, does not presume reasonableness of repairs to an automobile from the mere fact of payment. See 25A C.J.S. Damages § 162(12) p. 123 (1966). Recovery in Texas is denied in the absence of evidence to that effect. Proof that an accident occurred and the amount paid for the repairs caused by that accident are not evidence that such charges are reasonable. See generally, Dallas Railway & Terminal Company v. Gossett, 156 Tex. 252, 294 S.W .2d 377, 382 (1956). In the present case, the only tenable theory for determining the amount of security necessary would be based on the premise that the damage suffered to the Jiminez car was repairable, and that the cost of these repairs was $1,141.86. The evidence pertaining to the cost of repairs merely shows that the car was damaged and that a specified amount was paid for its repair. There is no showing that such repairs were reasonable and if the reasonableness of the repairs may be inferred, there is additionally no showing nor inference to be drawn from the evidence that the repairs made were necessary. Accordingly, Berryman’s second and third points are sustained.

It is the opinion of this Court that although the no evidence points are sustained, the case should not be reversed and rendered, but should be remanded to the trial court for a new trial. It is undisputed that Berryman did not have proper insurance coverage at the time of the collision, and that he made no attempt to settle the matter of damages with Mrs. Jiminez. Furthermore, he admitted that he did not post any security with anyone which would have been sufficient to satisfy any judgment which might have been rendered against him for damages resulting from the collision. It appears from the record that the Jiminez ear was substantially damaged in the collision, and that there is a reasonable probability of a judgment for damages being rendered against Berryman as a result of the collision with the Jiminez car. There seems little doubt but that some amount of money should be required of Berryman as security against any judgment that might be rendered against him; but, the record before us in this appeal will not support a security in the amount of $1,141.86. We feel that this is a proper ease to apply the rule suggested by Justice Calvert, in 38 Tex.L.Rev. 361, 369 (1960), “No evidence” and “Insufficient Evidence” Points of Error, wherein he said:

“. . . once a ‘no evidence’ point is sustained, a Court of Civil Appeals has broad powers, and should exercise them, to remand for retrial rather than render judgment when the evidence has not been fully developed and it appears that a retrial will better serve the interests of justice.”

Since the evidence pertaining to the amount of security which should be required of Berryman was not fully developed at the hearing on January 7, 1977, it appears that the cause should be remanded for a retrial in order that the interests of justice will be better served. Moreover, a reversal and remand rather than a reversal and rendition would be in harmony with obvious legislative intent in enacting the Texas Motor Vehicle Safety Responsibility Law.

The judgment of the trial court is REVERSED and the cause is REMANDED to the trial court for retrial.


text:
    John PULCHNY, Jr., Appellant, v. John PULCHNY et ux., Appellees.
    No. 1203.
    Court of Civil Appeals of Texas, Corpus Christi.
    Aug. 31, 1977.

      Wm. DeWitt Alsup, Alsup & Alsup, Corpus Christi, for appellant.
    Menton Murray, Jr., Harlingen, for appel-lees.
   OPINION

BISSETT, Justice.

John Pulchny, Sr., and his wife, Agnes Pulchny, brought suit against John Pul-chny, Jr., their son, in the 197th District Court of Cameron County, Texas, to cancel a deed of conveyance. The case was tried to the court without the intervention of a jury. After hearing the evidence, the trial court rendered judgment which set aside and canceled the deed. John Pulchny, Jr., the defendant, has appealed.

Appellees, at the time of the transactions involved herein were in their 90’s, and had resided for many years in and around Santa Rosa, Cameron County, Texas. John Pul-chny, Sr., died while the appeal in this case was pending. During the month of July, 1975, appellant requested that appellees, who were in poor health, come to live with him at his home in Corpus Christi. John Pulchny, Sr., testified that after arriving at appellant’s home in Corpus Christi that appellant proposed an arrangement whereby appellant agreed to keep appellees in his home during the remainder of their lifetimes in return for a deed to a 20-aere tract of land, which was located in Cameron County, Texas. Appellant testified that following their arrival in Corpus Christi, that appellees insisted upon making arrangements for their own care, and that they voluntarily agreed to deed the real estate in question to him in exchange for his agreement to provide a place in his home for them to live for the remainder of their lives, and that he then did so promise.

Appellant further testified that all parties then went to an attorney’s office and advised the attorney of the nature of their agreement; whereupon, a deed, absolute in form and substance, was drafted. Appel-lees executed the deed in question to appellant and delivered it to him on that date.

The arrangement did not work out. The explanation given by the opposing parties for the failure is sharply disputed. John Pulchny, Sr., testified that in September 1975, after about a month in appellant’s home, appellant told Agnes Pulchny “Get out, the last day for you in my house”; that she was taken to a nursing home in Corpus Christi; that he then requested that he be taken to the nursing home to be with her; that appellees remained in the nursing home until January, 1976, whereupon he requested that appellant return him to their home in Santa Rosa; that appellant packed up appellees’ things and returned them to Santa Rosa; that at no time after September, 1975, did appellant request or invite them to his home or indicate that they were welcome there; and, finally that they did not thereafter reside with appellant. According to appellant, it became apparent that since Mrs. Agnes Pulchny would require constant medication and would need constant medical attention that she ought to be put in a nursing home, which was the proper place to see that these things were done, and, that upon the advice of a physician, appellant decided Mrs. Pulchny should be placed in the nursing home in Corpus Christi. He also stated that John Pulchny, Sr., even though in good health and comfortable in appellant’s home, voluntarily made the decision to live in the nursing home with his wife rather than to stay with appellant. Appellant further testified that subsequently, on or about October 28, 1975 and October 31, 1975, eye surgery was performed upon Mrs. Agnes Pulchny in Corpus Christi, Texas, and appellant and his wife were constantly at her side and assisted in every way possible in her recuperation.

Thereafter, appellees demanded that the property be conveyed back to them, and when this was not done, suit was instituted to cancel said deed. The trial court filed the following findings of fact:

“1. On the 26th day of August, 1975, Plaintiffs JOHN PULCHNY and wife AGNES PULCHNY conveyed the subject property to Defendant.
2. Prior to August 26, 1975, Defendant promised to take care of Plaintiffs in Defendant’s home for the rest of their natural lives in return for the conveyance by Plaintiffs to Defendant of the subject property.
3. On August 26, 1975, at the time of the conveyance of the subject property, Defendant had no present intention to perform his portion of the bargain to care for Plaintiffs in the Defendant’s home for the rest of their lives.”

The trial court concluded that appellant, at the time he promised to take care of appellees in his home, “had no present intention to perform the promise”; that his “present intent not to perform was actionable fraud,” and that he breached his contract with appellees. It was further concluded that “cancellation of the deed' is a proper remedy available to the plaintiff.”

Appellant, in ten points of error, attacks the findings of fact and conclusions of law. In summary, appellant contends that there is “no evidence” to support the findings; that the evidence is factually insufficient to support the findings; that the findings are so contrary to the great weight and preponderance of the evidence as to be clearly wrong and unjust; and that the trial court erred in concluding that appellees were entitled to a cancellation of the deed. None of the points have any merit.

This case involves the conveyance of real property by very elderly parents to their son in exchange for his promise to care for them for the remainder of their lives in his residence. The son did not care for them for the remainder of their lives nor did he offer to reconvey the property to them.

Appellant complains of the trial court’s finding that appellant had no present intention to perform his contract at the time of the conveyance. He does not contend that the other elements of fraud are lacking in the transaction. A promise to do an act in the future may form the basis for an action in fraud when it is made with the intention, design and purpose of deceiving, and with no intention of performing it. Turner v. Biscoe, 141 Tex. 197, 171 S.W.2d 118, 119 (Tex.Comm’n App.1943, opinion adopted).

While the failure to perform, standing alone, will not establish the issue of fraudulent intent at the time of the making of the promise, it is, nevertheless, a circumstance to be considered with other facts in determining the issue. Chicago, T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S.W. 472, 474 (1892); King v. Wise, 282 S.W. 570, 573 (Tex.Comm’n App.1926, judgment adopted). The intent to defraud is usually established by circumstantial evidence since in most instances it is not susceptible of direct proof. As noted in 37 Am.Jur.2d, Fraud and Deceit, § 477 (1968):

. Hidden purposes of the mind are ordinarily discoverable only by an investigation of circumstances surrounding the act involved. . . .”

The intent not to perform the promise at the time it is made may be shown by circumstantial evidence including the acts and declarations of the person in securing the contract, as well as his subsequent conduct with respect to refusing to carry out his promise. Chicago, T. & M. C. Ry. Co. v. Titterington (supra); Tatum v. Orange & N. W. Ry. Co., 245 S.W. 231, 232 (Tex.Comm’n App.1922, holding approved); Blanton v. Sherman Compress Co., 256 S.W.2d 884, 888 (Tex.Civ.App.—Dallas 1953, no writ). In order to decide whether a contract was procured by fraud, a court may properly consider the transaction as a whole, including the nature of the transaction, the extent of consideration, the relationship and interests of the parties, the respective ages of the parties, the extent of defendant’s efforts to perform, and all other relevant circumstances. 37 C.J.S. Fraud § 119 (1943).

There is testimony that Agnes Pul-chny was treated rudely during her stay with her son. There is testimony which negates any suggestion that appellees departed his residence voluntarily. There is evidence that appellees were coerced to leave the home of appellant. Both appel-lees testified that they were not invited back. The period of care extended to ap-pellees by appellant was approximately one month, during which and prior thereto, appellant received numerous additional benefits from his parents, such as payments for the medical care his parents were receiving, a gift of $3,000 from them, and a loan for the purchase of an automobile. There is abundant circumstantial evidence that appellant’s motive was inconsistent with an honest purpose. Intent is peculiarly a question for the trier of facts. Manziel v. Williams, 262 S.W.2d 437, 438 (Tex.Civ.App.—Texarkana 1953, no writ); Mack v. Bradford, 359 S.W.2d 941, 943 (Tex.Civ.App.—El Paso 1962, writ dism’d); Hancock v. Blumentritt, 269 S.W. 177, 179 (Tex.Civ.App.—Austin 1925, no writ); 26 Tex.Jur.2d, Fraud, § 144 (1961).

The evidence is sufficient to support the finding by the trial judge that at the time of the conveyance in question appellant did not intend to perform his part of the bargain, which was to care for the appellees in his home for the rest of their lives. The fact that appellant did not perform his promise, when taken in conjunction with the other circumstances presented by the record, constitutes sufficient proof of fraudulent intent to acquire the 20 acre tract of land.

Appellant further complains of the findings by the trial court that certain events transpired on August 26, 1975. We agree that there is no evidence in the record that anything pertinent to this lawsuit occurred on that particular day other than the deed in question was recorded on that date. The parties stipulated in open court that the deed was executed and acknowledged on August 18, 1975. The deed itself shows that its correct date is August 18, 1975. The recital in the findings of fact that the date of the deed in question was “August 26, 1975” was apparently made through inadvertence. Appellant did not file any objections to the findings made by the trial judge. The error which was made is not such an error that warrants a reversal of the trial court’s judgment. Newman v. Newman, 195 S.W.2d 393, 398 (Tex.Civ.App.—San Antonio, aff’d, 145 Tex. 433, 198 S.W.2d 91, 1946).

We hold that there is ample evidence to sustain all of the material findings of fact and conclusions of law made by the trial judge. The inadvertent use of the date “August 26, 1975” instead of “August 18, 1975” in the findings is insufficient to warrant a reversal in this case. Points 1 through 8 are overruled.

Appellant also contends in point 9 that the judgment of the trial court should be reversed and the cause remanded for the reason that cancellation of the deed is not the proper remedy which was available to appellees. We disagree. Cancellation of the deed is a proper remedy where the conveyance is induced by fraud. Whitcomb v. Moody, 49 S.W.2d 513, 514-5 (Tex.Civ.App.—Waco 1932, writ ref’d); Rumfield v. Rumfield, 324 S.W.2d 304, 306 (Tex.Civ.App.—Amarillo, 1959, writ ref’d n. r. e.). Point 9 is overruled.

Finally, appellant asserts in point 10 that there is no evidence that the deed in question was executed on July 24,1975 (sic), and the recitation in the judgment that the deed bears that date is such an error which requires “reversal and rendition of this cause.” We do not agree.

The judgment of the trial court reflects that the deed is dated July 24, 1976, while, as has been noted, the deed itself shows that its correct date is August 18, 1975. The date “July 24, 1976” has no significance.

The judgment recital of the date of the deed, which is different from that which appears on the face of the deed itself, without more, does not constitute reversible error. It was nothing more than a clerical error. The Court of Civil Appeals will enter the judgment which should have been entered by the trial court where the error is apparent upon the face of the record and the justice of the case requires it. King v. Tubb, 551 S.W.2d 436, 445 (Tex.Civ.App.— Corpus Christi 1977, no writ); Carter v. Barclay, 476 S.W.2d 909, 918 (Tex.Civ.App.—Amarillo 1972, no writ); Wofford v. Miller, 381 S.W.2d 640, 652 (Tex.Civ.App.—Corpus Christi 1964, writ ref’d n. r. e.). The error is apparent from the face of the record. The recital of an erroneous date of the deed in question in the judgment did not cause the rendition of an improper judgment. The error complained of was harmless error. Point 10 is overruled.

The trial court, in the judgment which was rendered, properly cancelled the deed. That portion of the judgment which recites that the deed in question is dated “July 24, 1976,” is deleted, and the correct date of the deed “August 18,1975” is substituted therefor.

The judgment of the trial court, as herein modified by the substitution of the date “August 18, 1975” for that of “July 24, 1976,” is affirmed.

MODIFIED, AND AFFIRMED AS MODIFIED.


author: NYE, Chief Justice.

text:
    FIRST NATIONAL BANK OF YORKTOWN et al., Appellants, v. W. M. PICKETT and Royce B. Springfield, Appellees.
    No. 1156.
    Court of Civil Appeals of Texas, Corpus Christi.
    Aug. 31, 1977.

      Larry J. Hysinger, Wyckoff, Eikenburg, Dunn & Frazier, Ragan, Russell & Rorschach, Houston, for appellants.
    W. S. Fly, Victoria, for appellees.
   OPINION

NYE, Chief Justice.

This is a venue case. Plaintiffs, W. M. Pickett and Royce B. Springfield, filed suit in DeWitt County against ten defendants: First National Bank of Yorktown; the bank’s president, M. W. Haun; the bank’s former president, Lou Gips; Robert B. Ey-horn; Harold N. Lane; and the five appellants in this cause, Paul Sharkey, A. S. Cutchin, Charles McCarver, Michael Walters and Dwight Nichols. Appellants Shar-key, Cutchin, McCarver and Walters each filed a plea of privilege to be sued in the county of their residence, Harris County. Appellant Nichols filed a plea of privilege to be sued in Stephens County. The plaintiffs controverted each of these pleas claiming venue under Subdivisions 4, 14 and 29a of Art. 1995, Tex.Rev.Civ.Stat.Ann. (1964). (subdivision 29a was later abandoned). The trial court overruled the pleas of privilege and sustained venue in DeWitt County. Appellants have timely perfected their appeal to this Court.

Plaintiffs’ alleged cause of action arose out of the sale of a 522 acre tract of land located in DeWitt County. By deed dated July 22, 1974, the appellants (all five of them), conveyed the land in question to the plaintiffs. The financing of the purchase was complicated. The First National Bank of Yorktown held a first lien on the property prior to the sale. Plaintiffs borrowed an additional $100,000 from the bank which retained its first lien on the property. Simultaneous with the execution of the $100,000 note in favor of the bank, the plaintiffs executed a second vendor’s lien note payable to defendant, Harold N. Lane, for $91,404.37. At the same time the plaintiffs also executed five third lien notes each in the principal sum of $32,926.59 payable to each of the five appellants. Several days after the closing of the real estate transaction, the plaintiffs were notified by the bank that there were two outstanding judgment liens against the land and therefore the property was subject to foreclosure. This action forced plaintiffs to purchase the outstanding judgment liens for $34,373.90 and refinanced the purchase through the Victoria Savings and Loan Association.

Plaintiffs brought suit on two counts. Plaintiffs’ first count was against the five appellants for breach of their warranty of good and marketable title warranted in the deed which transferred title to the property. Plaintiffs’ second count was against all ten defendants including the five appellants for willful and fraudulent actions. Although the plaintiffs’ petition fails to elaborate on the willful and fraudulent activities that the defendants engaged in, apparently their complaint is in failing to inform the plaintiffs of the outstanding liens for which the plaintiffs sought recovery.

Through various points of error all five appellants complain of the action of the trial court in denying their pleas of privilege under exceptions 4 and 14 to Art. 1995. There are certain rules which govern the Court’s action in considering a venue case. Venue must be established by affirmative evidence and not by implication. Burtis v. Butler Bros., 148 Tex. 543, 226 S.W.2d 825 (1950); Saigh v. Monteith, 177 Tex. 341, 215 S.W.2d 610 (1948). A defendant’s right to be sued in the county of his residence is a valuable right and should never be denied except upon clear and convincing proof that the alleged cause of action comes within an exception to Art. 1995. City of Mineral Wells v. McDonald, 141 Tex. 113, 170 S.W.2d 466 (1943); National Life Co. v. Rice, 140 Tex. 315, 167 S.W.2d 1021 (1943); Heldt Bros. Trucks v. Silva, 464 S.W.2d 931 (Tex.Civ.App.—Corpus Christi 1971, no writ); Neuhaus v. Daniels, 430 S.W.2d 906 (Tex.Civ.App.—Amarillo 1968, writ dism’d). Where an equal doubt between the defendant’s right to be sued in his home county and an exception to this right exists, the doubt must be resolved in favor of the defendant’s right. Goodrich v. Superior Oil Co., 150 Tex. 159, 237 S.W.2d 969 (1951); A. H. Belo Corporation v. Blanton, 133 Tex. 391, 129 S.W.2d 619 (1939). In order to defeat a defendant’s plea of privilege, the burden is on the plaintiffs to allege and prove by a preponderance of the evidence that the case comes within one of the exceptions to the venue statute. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91 (Comm’n of Appeals, opinion adopted 1935); Socony Mobil Company, Inc. v. Southwestern Bell Telephone Co., 518 S.W.2d 257 (Tex.Civ.App.—Corpus Christi 1974, no writ).

Subdivision 4 to Art. 1995 provides that if two or more defendants reside in different counties, suit may be brought in any county where one of the defendants resides. Under this Subdivision, where there are resident and non-resident defendants, it has long been the rule that in order to maintain venue in the county of the resident defendant, the plaintiff is required to: (1) plead and prove that one of the defendants is a resident of the county of suit; (2) plead and prove a cause of action against the resident defendant; and (3) allege a joint cause of action against the non-resident defendant or a cause of action against the resident defendant so intimately connected with his cause of action against the non-resident defendant as that they are properly joinable to prevent multiplicity of suits. The plaintiffs did not meet the requirements of this rule.

Plaintiffs’ only pleading against all the defendants is found in paragraph IV of their first amended original petition which reads as follows:

“Because of the willful and fraudulent action of the Defendant above named and each of them, these Plaintiffs have been damaged in the sum of Thirty-four Thousand Three Hundred Seventy-three and 90/100 Dollars ($34,373.90), and have further been damaged in the development of said 522 acre tract of land in an additional sum of Fifty Thousand Dollars ($50,-000.00).”

This pleading cannot, by even the most liberal of constructions, be construed as sufficient to allege a cause of action sounding in fraud. None of the requisite elements are plead save the final element of damages. Assuming, arguendo, that this pleading, absent an exception, was sufficient to apprise the resident and non-resident defendants of a cause of action that could be maintainable in DeWitt County, Texas as to all defendants, there was no evidence of such fraudulent action offered at the hearing. First the plaintiffs were required to allege and prove that this fraudulent wrong was committed by the resident and non-resident defendants in such a way that the cause of action was properly joinable. This they failed to do. Reviewing all of the evidence and reviewing the evidence in the light most favorable to the plaintiffs as we are required to do, the evidence shows only that Robert Eyhorn prepared the closing documents at the request of the bank and that he did not tell them about the two outstanding judgments against the property. This falls short of being sufficient to establish a cause of action for actionable fraud with all of its necessary essential elements. Plaintiff Pickett admitted in his testimony that the financing and closing arrangements involved were conducted independently of the five appellants.

It appears to us that the plaintiffs have two separate causes of action against two separate groups of defendants. The first is some type of action against the bank, its officers and attorney for fraud or negligence. The second, and totally separate from the first, is a cause of action for breach of warranty against the five grantors of the land. Therefore if the trial court overruled the appellants’ pleas of privilege under Subsection 4, it was in error.

Subdivision 14 to Article 1995 states that suits for the recovery of land, or for damages to land, or to remove encumbrances upon title to land, or to quiet the title to land, must be brought in the county where the land may lie. The venue facts which the plaintiffs must establish under this subdivision are: 1) that the suit is of the type specified under this subdivision and 2) that the land or a part thereof is located in DeWitt County. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428 (1954); Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69 (1945); Petroleum Processing, Inc. v. Roemer, 396 S.W.2d 528 (Tex.Civ.App.—Corpus Christi 1965, no writ).

In determining venue, it remains for this Court to determine the nature of the suit solely from the facts alleged in the plaintiffs’ petition, the rights asserted and the relief sought. Renwar Oil Corporation v. Lancaster, 154 Tex. 311, 276 S.W.2d 774 (1955); Edgar v. Bartek, 507 S.W.2d 831 (Tex.Civ.App.—Corpus Christi 1974, writ dism’d). The ultimate or dominant purpose of the suit determines whether or not a suit falls under Subdivision 14. Edgar v. Bartek, supra; Morgan v. Box, 449 S.W.2d 499 (Tex.Civ.App.—Dallas 1969, no writ); Texaco, Inc. v. Gideon, 366 S.W.2d 628 (Tex.Civ.App.—Austin 1963, no writ).

The pivotal question here is whether or not a suit to recover for breach of the warranty contained in the warranty deed comes within Subdivision 14. Does such a suit constitute a suit for the recovery of title to land, to remove an encumbrance to the land, to quiet title to the land or to prevent waste to the land? We think not. We hold that such a suit is not so intimately connected with the land itself so as to bring it within the mandatory provisions of Subdivision 14. The only case in which we could find that has discussed this question is Thomas v. Ellison, 110 S.W. 934 (Tex.Civ.App.—1908), mod. & aff’d, 102 Tex. 354, 116 S.W. 1141 (1909). A headnote in the first decision (110 S.W. 934) seems to indicate that venue for breach of a covenant of warranty is properly brought in the county where the land was located. However, a careful reading of the opinion reveals that the court was sustaining venue in the county where the land was located because of the plaintiff’s pleadings of fraud and deceit and the fact that the defendant had waived his privilege to be sued in the county of his residence. The court really does not discuss the breach of warranty allegation. The Supreme Court, in modifying and affirming the judgment of the Court of Civil Appeals, stated that venue was proper where the land was located because that was where the alleged fraud occurred. The Supreme Court does not even discuss recovery based on a breach of the warranty.

Due to the mandatory nature of Subdivision 14, courts have generally given this subdivision a strict construction and have refused to apply the exception unless the suit was clearly within one of the four delineated categories set out by the statute: See: Bennett v. Langdeau, 362 S.W.2d 952 (Tex.Sup.1962); Brown v. Gulf Television Company, 157 Tex. 607, 306 S.W.2d 706 (1957); Smith v. Hall, 147 Tex. 634, 219 S.W.2d 441 (1949); Harwood v. Hunt, 473 S.W.2d 287 (Tex.Civ.App.—Beaumont 1971, no writ); Weaver v. Acme Finance Company, 407 S.W.2d 227 (Tex.Civ.App.—Corpus Christi 1966, no writ); Petroleum Processing, Inc. v. Roemer, 396 S.W.2d 528 (Tex.Civ.App.—Corpus Christi 1965, no writ); Madeley v. Oualline, 449 S.W.2d 352 (Tex.Civ.App.—Beaumont 1969, no writ); Pickens v. Langford, 270 S.W.2d 285 (Tex.Civ.App.—San Antonio 1954, no writ). If the trial court overruled the appellants’ pleas of privilege under Subdivision 14, it was also in error.

Since Subdivisions 4 and 14 are the only exceptions under which the plaintiffs now claim that venue was maintainable in De-Witt County, the judgment of the trial court must be reversed and judgment here rendered transferring the cause as to appellants Sharkey, Cutchin, McCarver and Walters to Harris County and transferring the cause as to Nichols to Stephens County, Texas.

REVERSED AND RENDERED.


author: CADENA, Chief Justice.

text:
    Allen INGRUM, Independent Executor of the Estate of Addiebel Allen Ingrum, Deceased, Petitioner, v. Robert P. INGRUM, Jr., Individually and as Independent Executor of the Estate of Robert P. Ingrum, Sr., Deceased, Respondent.
    No. 15926.
    Court of Civil Appeals of Texas, San Antonio.
    Sept. 1, 1977.

      See also, Tex.Civ.App., 555 S.W.2d 553.
    Elwood Cluck, Cluck, Rutherford & Wol-verton, San Antonio, for appellant.
    John T. Anderson, Robert J. Hearon, Jr., Austin, William A. Kessler, Uvalde, Edward M. Johnson, San Antonio, for appellee.
   CADENA, Chief Justice.

Petitioner, Allen Ingrum, independent executor and trustee of the estate of Addie-bel Allen Ingrum, deceased, seeks writs of prohibition, mandamus and injunction designed to prevent further proceedings in certain causes now pending in the 38th Judicial District Court of Uvalde County, Texas.

Respondents are Hon. George M. Thurmond, Judge of the 63rd Judicial District Court, who has signed certain orders in connection with one of the pending suits; Hon. Jack Woodley, Judge of the 38th Judicial District Court; Robert P. Ingrum, Jr., individually and as independent executor of the estate of Robert P. Ingrum, Sr., deceased; and several attorneys allegedly representing Robert P. Ingrum, Jr. in the pending suits. It appears that, at the present time, only Edward M. Johnson, Esq., is actively representing Robert P. Ing-rum, Jr. in such litigation.

This proceeding is but another chapter in protracted litigation involving the efforts of petitioner to sell, as independent executor, certain lands in Uvalde County, known as the Addiebel Allen Ingrum Ranch, part of the estate of his testatrix, for the purpose of paying debts of the estate.

On March 1, 1974, the 38th Judicial District Court entered judgment against respondent, Ingrum, authorizing and empowering petitioner to sell the ranch in question. This judgment was affirmed by this Court and is now final. Ingrum v. Ingrum, 520 S.W.2d 535 (Tex.Civ.App.—San Antonio 1975, writ ref’d n. r. e.).

Ingrum remained in possession of the ranch under a lease which expired on August 31,1975. When, on termination of the lease, Ingrum refused to vacate the premises, petitioner filed suit in trespass to try title seeking recovery of title to and possession of the ranch. The trial court rendered judgment in favor of petitioner in this suit, and the judgment awarding petitioner title to and possession of the ranch was affirmed by this Court. Ingrum v. Ingrum, 552 S.W.2d 914 (Tex.Civ.App.—San Antonio 1977, no writ).

Petitioner has entered into a contract to convey the ranch to P. E. Butler. The closing date under this contract was August 19,1977. Petitioner obtained a writ of possession pursuant to the judgment in the trespass-to-try-title case. The writ of possession was issued and executed on August 17, 1977.

On August 18, 1977, respondent, Ingrum, filed a suit in the 38th District Court of Uvalde County, bearing docket number 11,-802, against petitioner and others seeking partition of the ranch. On the same date, Notice of Lis Pendens was filed.

On August 19, 1977, respondent, Ingrum, filed a petition in Cause No. 11,805 in the 38th Judicial District Court seeking a temporary restraining order and temporary injunction restraining petitioner, individually and as independent executor, from selling or attempting to sell the ranch. On that same date a temporary restraining order was issued by Hon. George Thurmond, Judge of the 63rd Judicial District Court, Yal Verde County, and the application for temporary injunction was set for August 25 in the 38th Judicial District Court of Uvalde County. On August 25, 1977, this Court granted petitioner leave to file his application for the issuance of remedial writs by this Court.

Our judgments decreeing that petitioner has the power and authority to sell the ranch in question and awarding petitioner title to and possession of the ranch effectively dispose of all of the issues which were litigated, or might have been litigated, in the causes in which such judgments were rendered. Those judgments conclusively bar the rights asserted by Robert P. Ing-rum, Jr. in the partition suit and the injunction suit. The mere filing of these suits, particularly when accompanied by the filing of the Lis Pendens Notice, constitutes an actual interference with enforcement of our prior final judgments and destroys the efficacy of such judgments. Under these circumstances, it is our duty to prohibit the prosecution of the partition and injunction suits. City of Dallas v. Dixon, 365 S.W.2d 919 (Tex.1963), rev’d on other grounds, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1964); Houston Oil Co. v. Village Mills Co., 123 Tex. 253, 71 S.W.2d 1087 (1934).

Respondents, Hon. George M. Thurmond, Judge of the 63rd Judicial District Court, and Hon. Jack Woodley, Judge of the 38th Judicial District Court, are prohibited from proceeding further in Cause No. 11,802, styled Robert P. Ingrum, Jr. v. Allen Ing-rum, individually and as independent executor of the estate of Addiebel Allen Ingrum, deceased; Ann Ingrum Fawcett; Raquet Ingrum Box, and John A. Ingrum, Jr.; and Cause No. 11,805, styled Robert P. Ingrum, Jr. v. Allen Ingrum, individually and as independent executor of the estate of Ad-diebel Allen Ingrum, deceased, both of which cases are now pending on the docket of the 38th Judicial District Court, Uvalde County, Texas.

Respondent, Robert P. Ingrum, Jr., is enjoined from taking any further action in connection with the prosecution of the two suits described in the preceding paragraph. Respondent, Robert P. Ingrum, Jr., is ordered to take such action as may be necessary in order to withdraw the Notice of Lis Pendens filed by him in connection with the filing of Cause No. 11,802.


author: MURRAY, Justice.

text:
    Allen INGRUM, Independent Executor of the Estate of Addiebel Allen Ingrum, Deceased, Petitioner, v. Robert P. INGRUM, Jr., Individually and as Independent Executor of the Estate of Robert P. Ingrum, Deceased, Respondent.
    No. 15934.
    Court of Civil Appeals of Texas, San Antonio.
    Sept. 9, 1977.

      Elwood Cluck, Cluck, Rutherford & Wol-verton, San Antonio, for appellant.
    Edward M. Johnson, San Antonio, for appellee.
   MURRAY, Justice.

Petitioner, Allen Ingrum, independent executor and trustee of the estate of Addie-bel Allen Ingrum, deceased, seeks to obtain enforcement by this Court of its judgment in Causes Nos. 15377 and 15389. Additionally, petitioner has moved this Court for an order of contempt against respondent, Robert P. Ingrum, Jr., and his attorney for disobedience of the opinion issued by this Court in Cause No. 15926, restraining respondent, Ingrum, and his attorney from interfering with and obstructing the enforcement of the aforesaid judgments of this Court.

This proceeding is still another chapter in protracted litigation. For a history of this litigation involving the efforts of petitioner to sell, as independent executor, certain lands in Uvalde County, known as the Ad-diebel Allen Ingrum Ranch, see our opinion delivered on September 1,1977 in Cause No. 15926, Allen Ingrum, Independent Executor of the Estate of Addiebel Allen Ingrum, Deceased v. Robert P. Ingrum, Jr., Individually and as Independent Executor of the Estate of Robert P. Ingrum, Sr., Deceased, 555 S.W.2d 551.

On the same day that this Court announced its judgments and decree in Cause No. 15926, enjoining and restraining respondent, Robert P. Ingrum, Jr., and his attorney from obstructing or otherwise interfering with the enforcement of the judgment and decree of this Court rendered in Causes Nos. 15377 and 15839, respectively, affirming Cause No. 10762 and Cause No. 11220A in the 38th Judicial District Court of Uvalde County, Texas, and prohibiting respondent, Ingrum, and his attorney from further prosecuting Causes Nos. 11802 and 11805 then pending in the 38th Judicial District Court of Uvalde County, Texas, and further requiring the dissolution of a Lis Pendens Notice filed by respondent, Ingrum, in conjunction with the last mentioned litigations, respondent, Robert P. Ingrum, Jr., filed a new lawsuit in the 38th Judicial District Court of Uvalde County, Texas, Cause No. 11814, against petitioner herein, alleging the ownership in said respondent of a one-third (Vs) undivided interest in the Addiebel Allen Ingrum Ranch, seeking the removal of petitioner as independent executor of the estate of Addiebel Allen Ingrum, deceased, and praying that any sale of the Addiebel Allen Ingrum Ranch theretofore made by petitioner be set aside. In addition to the foregoing, respondent, Ingrum, acting by and through his attorney, filed a Notice of Lis Pendens, based on the pendency of Cause No. 11814 in the 38th Judicial District Court, and published the Lis Pendens Notice by delivering same to Uvalde County Abstract and Title Company, thereby clouding the title to the Addiebel Allen Ingrum Ranch and frustrating the sale of the Addiebel Allen Ingrum Ranch to F. E. Butler, Trustee. On September 6,1977, this Court granted petitioner leave to file his application for the issuance of remedial writs by this Court.

Petitioner has admitted in oral arguments that his motion for direct contempt is without merit, and said motion is dismissed.

The power, authority and right of petitioner to sell the ranch in question has been established by final judgments of this Court and the mere filing of Lis Pendens Notice by respondent in Cause No. 11814 has the effect of destroying that right. Under these circumstances, it is our duty to require the withdrawal of the Lis Pendens filed in Cause No. 11814. By this we are not prohibiting respondent from proceeding further in Cause No. 11814. City of Dallas v. Dixon, 365 S.W.2d 919 (Tex.1963), rev’d on other grounds, 377 U.S. 408, 84 S.Ct. 1579, 12 L.Ed.2d 409 (1964); Houston Oil Co. v. Village Mills Co., 128 Tex. 253, 71 S.W.2d 1087 (1934).

Respondent, Robert P. Ingrum, Jr., is ordered to take such action as may be necessary in order to withdraw the Notice of Lis Pendens filed by him in connection with the filing of Cause No. 11814.

      . See Ingrum v. Ingrum, 520 S.W.2d 535 (Tex. Civ.App.—San Antonio 1975, writ ref’d n. r. e.); Ingrum v. Ingrum, 552 S.W.2d 914 (Tex.Civ.App.—San Antonio 1977, no writ).


author: SPURLOCK, Justice.

text:
    DELTA ENTERPRISES, a Joint Venture, Appellant, v. Coke L. GAGE, Appellee.
    No. 17800.
    Court of Civil Appeals of Texas, Fort Worth.
    Sept. 1, 1977.
    Rehearing Denied Sept. 29, 1977.

      Day & Day, and Marshall Day, Port Worth, for appellant.
    James S. Robertson, Jr., Dallas, for appel-lee.
   OPINION

SPURLOCK, Justice.

This case involves a question of usury. Delta Enterprises, a Joint Venture, instituted this suit against Coke L. Gage to recover the statutory penalties under art. 5069-1.06, for Gage’s alleged contracting, charging and receiving interest in excess of double the amount allowed by law. Delta sought judgment against Gage for (1) the amount of principal paid, (2) double the amount of interest paid, (3) cancellation of the balance of the indebtedness, (4) cancellation and release of the deed of trust liens, and (5) attorney’s fees. In response to special issues, the jury determined that certain sums of money totaling $17,336.59 and $26,-940.00 paid by Delta to Gage did not constitute “interest,” and it also found that Delta did not tender to Gage the sum of $211,-095.55 representing the balance due on two promissory notes. On these findings, the trial court rendered a take-nothing judgment against Delta from which Delta has perfected this appeal.

We affirm.

Delta is a joint venture engaged in the buying and selling of real estate. Gage is involved in the same business activity. On June 7, 1971, Delta and Gage entered into two written option contracts, whereby Gage granted Delta three-year options to purchase two tracts of land in Wise County, Texas. Delta paid $13,500 for the two options. It is the wording of these two options that has given rise to. the instant lawsuit. The paragraphs in dispute in the two option contracts read as follows:

“2. The cash price to be paid by Purchaser for said real estate in the event this option is exercised is One Hundred Fifty Thousand Dollars ($150,000.00), of which the sum of Ten Thousand Dollars ($10,000.00) is to be paid in cash upon the exercise of this option, and the balance of One Hundred Forty Thousand Dollars ($140,000.00) is to be paid in accordance with Purchaser’s one certain promissory note dated as of June 7, 1971, payable to the order of Seller at Decatur, Wise County, Texas, on or before ten (10) years after date, bearing interest from date at the rate of 7per cent per annum, providing for the payment of $1000.00 per year on principal plus interest commencing 1 year from closing date, with the entire balance of principal and interest due on or before 10 years from closing. Said note is to be secured by vendor’s lien and additionally secured by deed of trust with the usual provisions as to acceleration of maturity in event of default.” (Emphasis added.)
* # * ⅜ ⅜: *
“2. The cash price to be paid by Purchaser for said real estate in the event this option is exercised is One Hundred Twenty Thousand Dollars ($120,000.00), of which the sum of Ten Thousand Dollars ($10,000.00) is to be paid in cash upon the exercise of the option, and the balance of One Hundred Ten Thousand Dollars ($110,000.00) is to be paid in accordance with Purchaser’s one certain promissory note dated as of June 7, 1971, payable to the order of Seller at Decatur, Wise County, Texas, on or before ten (10) years after date, bearing interest from date at the rate of 1 per cent per annum, providing for the payment of $1000.00 per year on principal plus accrued interest commencing 1 year from date of closing, with the entire balance of principal and interest due on or before 10 years from date. Said note is to be secured by vendor’s lien and additionally secured by deed of trust with the usual provisions as to acceleration of maturity in event of default.” (Emphasis added.)

In June of 1973, Delta decided to exercise its option to purchase one of the tracts of land covered by one of the options. By letter on June 27, 1973, Gage’s attorney instructed the title insurance company (which prepared the closing statements) regarding the collection of “interest on the purchase price” from the June 7, 1971 date of the purchase of the option to June 30, 1973, the date set for closing the sale. In that letter, Gage’s attorney wrote:

“I believe the option agreement is clear and it was Coke’s intention that the interest on the purchase price was to commence as of the date of the option, being June 7, 1971. Accordingly, he will insist that upon closing you collect from Delta Enterprises interest at the rate of 7% per annum from June 7, 1971 to June 30, 1973, which sum will be in addition to the $10,000.00 in cash payment on principal provided in the option agreement.”

The sale of the first tract of land was completed on June 30, 1973. On that date, Delta (1) paid $10,000.00 in cash, supposedly as a down payment on the purchase price, (2) paid $17,336.59 which the parties called “interest,” and (3) gave Gage a promissory note in the amount of $110,000.00 dated January 1, 1973, bearing interest at seven per cent per annum payable in annual installments commencing June 7, 1974.

The sale of the other tract of land was closed on December 31,1973. At that time, Delta (1) paid $10,000.00, supposedly as a down payment on the purchase price, (2) paid $26,940.00 which the parties called “interest,” and gave Gage a promissory note in the amount of $140,000.00 dated December 31, 1973, bearing interest at seven per cent per annum payable in annual installments commencing December 31, 1974.

It is the sums of $17,336.59 and $26,940.00 that Delta paid to Gage at the time of exercising the respective options that form the basis of Delta’s claim for the penalties provided by the usury statute.

What do these sums of money represent?

Delta contends that these sums of money it paid to Gage constitute “interest.” As the original option contracts illustrate, these payments were denominated “interest” in the documents involved in the transactions.

Gage contends that the disputed sums did not constitute interest, regardless of how the relevant documents denominated the payments. At the trial, Gage called William A. Nobles to testify concerning the purpose of such payments. Nobles was Gage’s attorney in the real estate transactions. On direct examination, Nobles testified that such payments, while denominated “interest,” were in fact intended as payments of a variable component of the consideration for the options in question, or as part of an escalating purchase price at which the option could be exercised.

Delta asserts that the trial court erred in admitting into evidence in violation of the parol evidence rule the testimony of Nobles as to what the parties intended by the use of the word “interest” in the two options. The parol evidence rule is as follows: “As a general rule, in the absence of fraud, accident, or mistake, extrinsic evidence is inadmissible to vary, add to, or contradict the terms of a valid written instrument that on its face is complete and unambiguous.” 23 Tex.Jur.2d Evidence § 342 at 500 (1961); Guisinger v. Hughes, 363 S.W.2d 861, 865 (Tex.Civ.App.—Dallas 1962, writ ref’d n. r. e.); American Manufacturing Company of Texas v. Witter, 343 S.W.2d 943, 947 (Tex.Civ.App.—Fort Worth 1961, no writ). In the present case, the term “interest,” as it was used in the option contracts, is ambiguous, and therefore, it was necessary for the trial court to admit testimony that would enable the factfinder to resolve that ambiguity. Accordingly, we overrule appellant’s point of error concerning the parol evidence rule.

In response to special issues numbers 1 and 2, the jury found that the disputed payments made by Delta were not “interest.” From the jury’s answers to these special issues, it appears that the jury concluded from Noble’s testimony that the disputed payments constituted a variable payment for the options. Delta has not asserted that there is no evidence to support the jury’s answers to these two special issues, and neither has Delta argued that such answers are against the great weight and preponderance of the evidence.

Delta, however, does contend that the trial court committed error in denying its motion to disregard the answers of the jury to special issues numbers 1 and 2, and in not granting its motion for judgment non obstante veredicto for the reason that the disputed sums constitute interest as a matter of law. We overrule this point of error. The disputed sums do not constitute interest as a matter of law. It is not the labeling of payments which determines whether they constitute interest, but rather, it is the substance of the transaction which controls. Gonzales County Sav. & Loan Assoc. v. Freeman, 534 S.W.2d 903, 906 (Tex.1976). The Court in Gonzales wrote:

“. . . The court of civil appeals has improperly stressed the labels placed upon the charges by the savings and loan association as being controlling of their real nature. It has often been said that courts will look beyond the form of the transaction to its substance in determining the existence or nonexistence of usury. . . Such a rule is to be fairly applied to both borrowers and lenders alike. Labels put on particular charges are not controlling. . . . ” Id. (Emphasis added.)

The jury determined that the disputed payments were not “interest.” There is no jury finding, however, on what the payments actually represented. From a careful reading of the option contracts and the statement of facts in this case, we conclude that the disputed payments actually constituted a part of the purchase price for the properties. It is the exercisable price of the option that caused the dispute; i. e., upon exercise of the option, the purchase price was to vary, depending upon when the option was exercised. It appears to the Court that the seven per cent figure was merely a convenient yardstick which was used to express the changing price at which the option itself could be exercised. In this case, the term of each option was three years. The holder of the option had the absolute right for three years to purchase the property; however, the longer the holder of the option waited before exercising the option, the higher the exercisable price it would have to pay. We conclude that this was what the parties had in mind when the options were drafted; however, such a conclusion on our behalf is not necessitated. The jury in this case was not asked to find what the payments constituted. The jury found that the disputed payments did not constitute “interest,” which was the determination that the jury was asked to make in special issues number 1 and 2.

“Usury” has a very precise meaning in the law, as found in art. 5069-1.01(d). Likewise, “interest” has a very precise meaning. Art. 5069-1.01(a) provides:

“ ‘Interest’ is the compensation allowed by law for the use or forbearance or detention of money; provided however, this term shall not include any time price differential however denominated arising out of a credit sale.” (Emphasis added.)

In the present case, it is clear that the disputed payments were not compensation for the use or Forbearance or Detention of money. In fact, plaintiff in his “First Original Amended Petition,” in reference to the disputed amounts, stated:

“. . . It was interest charged and received by Defendant COKE L. GAGE for a period when Plaintiff was under no obligation to him and during a period that Plaintiff was not enjoying the use, forbearance or detention of the $110,-000.00 or any part thereof.” (Emphasis added.)

It is clear that even Plaintiff admitted in its pleadings that the disputed sum was not interest, since it was not for the use, forbearance, or detention of money. The statutory definition is very clear and precise, and if the payments in question do not fall within that definition, as the plaintiff’s pleadings admit, then they are not interest as a matter of law.

Two of Delta’s points of error constitute objections to the charge given by the trial court. Any objections that Delta had to the charge were waived, since the objections were dictated to the court reporter after the charge had been read to the jury. Rule 272 of the Texas Rules of Civil Procedure is controlling on this point. In reference to the charge, that rule provides:

“. . . It shall be submitted to the respective parties or their attorneys for their inspection, and a reasonable time given them in which to examine and present objections thereto, which objections shall in every instance be presented to the court in writing, or be dictated to the court reporter in the presence of the court and opposing counsel, before the charge is read to the jury. All objections not so presented shall be considered as waived. . . .” (Emphasis added.)

A similar waiver situation arose in Missouri Pacific Railroad Company v. Cross, 501 S.W.2d 868, 873 (Tex.1973). In that case, the Texas Supreme Court wrote, “Since all objections of both parties to the court’s charge were dictated after the charge was read to the jury, we consider them as waived.”

In its supplemental brief, Delta argues that the Texas Rules of Civil Procedure are to be given a liberal construction in order to accomplish their objective in obtaining a just, fair, equitable and impartial adjudication of the rights of litigants. The source of this argument is Rule 1 of the Texas Rules of Civil Procedure, but Delta’s argument has been answered by the case of Missouri Pacific, supra. In that case, the Texas Supreme Court recognized that generally the rules are to be given a liberal construction, “but they are not to be ignored by agreements of courts and counsel to operate contrary thereto and in violation thereof.” Id. at 872.

All of Delta’s points of error have been carefully considered by this Court, and all of them are overruled.

The judgment of the trial court is affirmed.

HUGHES, J., not participating.

      . All statutory references are to Tex.Rev.Civ. Stat.Ann.


author: CLAYTON, Justice.

text:
    STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Appellant, v. Mark CHRISTIAN, an infant seventeen years of age, who sues by and through his father and next friend, Drury William Christian, Jr., Appellee.
    Supreme Court of Kentucky.
    Aug. 19, 1977.
    John B. Anderson, Owensboro, for appellant.
    John D. Miller, Miller, Taylor & Burlew, Owensboro, for appellee.
   CLAYTON, Justice.

The appellant, State Farm Mutual Automobile Insurance Company, issued to Drury William Christian, Jr., two separate automobile policies, one declaring to insure a 1963 Ford and the other a 1966 Oldsmobile. The coverages afforded by the Oldsmobile policy included protection against damages caused by uninsured motorists to the extent of $10,000 and medical payments coverage to the extent of $1,000. The Ford policy similarly contained uninsured motorist coverage to the extent of $10,000 but lacked medical payments coverage. The uninsured motorist provisions of both policies excluded from coverage any bodily injury to an insured sustained while occupying or through being struck by a land motor vehicle owned by the named insured or any resident of the same household if such vehicle is not an “owned motor vehicle” (Ford policy) or an “insured automobile” (Oldsmobile policy). The Ford policy defined “owned motor vehicle” to mean the motor vehicle described in the policy’s declarations. “Insured automobile” was defined in the Oldsmobile policy to mean “(1) an owned automobile, providing the use thereof is by such first named insured or spouse or any other person to whom such first named insured or spouse has given permission to use such automobile, if the use is within the scope of such permission, or (2) an automobile not owned by the named insured or any resident of the same household, other than a temporary substitute automobile, while being operated by such first named insured or spouse.” Both policies defined "automobile” to mean a “four wheel land motor vehicle designed for use principally upon public roads.”

Mark Christian, the 17-year-old son of the named insured of these policies, lived in the household of the named insured and so, under the policies’ omnibus clauses, was a person insured by them. On August 12, 1973, he was operating his motorcycle on a city street in Owensboro and was struck by a car driven by an uninsured motorist. Consequential to this accident, the youth’s left leg was required to be amputated just below the knee. Suit was brought on his behalf by his father pursuant to Civil Rule 17.03, seeking to recover damages from the uninsured motorist and from the appellant under the uninsured motorist and medical payment provisions of the two policies. Among the defenses relied upon by the appellant in its answer was that the motorcycle involved in the accident was not an “insured automobile” or an “owned motor vehicle” as those terms are defined for purposes of the policies’ uninsured motorist coverage and so was excluded from such coverage. It was further alleged that since the motorcycle was not a vehicle described in the declarations of the Oldsmobile policy, the medical payments provision of that policy was not applicable. After establishing through a request for admissions that the motorcycle was a two-wheel, rather than a four-wheel, land motor vehicle; that the Christians had given no notice to the appellant of Mark’s acquiring the motorcycle pri- or to the accident; and that the motorcycle was not described in the declarations of either of the two insurance contracts, the appellant moved for a summary judgment. The appellee filed a written response to this motion, similarly moving for a summary judgment on his claim as to the issue of insurance coverage. The trial court ruled in the appellee’s favor, concluding as a matter of law that the motorcycle had been afforded insurance protection by the policies and ordering that should a judgment be granted against the uninsured motorist, the appellant would be liable on the two policies. The case proceeded to trial, resulting in a jury verdict in favor of the appellee, and the court ordered the appellant liable for $21,000 under the policies. Thus, this appeal, requiring that we determine whether the trial court’s determining the motorcycle covered by the policies as a matter of law was in error and, if so, whether the exclusion of the motorcycle from this coverage is consistent with Kentucky’s uninsured motorist statute, KRS 304.20-020.

As we view the first matter for consideration in this case, it is a purely contractual issue between the insurer and its insured which we cannot disturb under the guise of interpretation. The insurer under the policies in the present case promises to provide the enumerated coverages in reliance upon the statements in the declarations and subject to all the terms of . ” the policies. Turning to the declarations of the policies, we find there to be no mention of the motorcycle involved in this accident. The policies by their terms exclude from uninsured motorist coverage anything but four-wheel land motor vehicles designed for use principally upon public roads, thus eliminating from such coverage here the motorcycle admitted by the appel-lee to be a two-wheel vehicle. We thus have little difficulty in concluding the trial court’s ruling the motorcycle covered by the policies of insurance in this case as a matter of law was in error. Having reached this conclusion, we may now proceed to a consideration of whether the exclusion of the motorcycle from coverage is contrary to the intent of our uninsured motorist statute.

We have noted on several past occasions that in enacting KRS 304.20-020, the General Assembly did not presume to write an uninsured motorist policy, but merely gave a general outline of the coverage required, the legislature recognizing that the limits and terms of the statute’s general outline of required coverage would of necessity be specifically defined by reasonable “terms and conditions” in the various insurance contracts. Allen v. West American Ins. Co., Ky., 467 S.W.2d 123 (1971); Commercial Union Ins. Co. v. Delaney, Ky., 550 S.W.2d 499 (1977); see also Jett v. John Doe, Ky., 551 S.W.2d 221 (1977). Reasonable exclusions fall within the “terms and conditions” to which the statute’s application is subject. Preferred Risk Mut. Ins. Co. v. Oliver, Ky., 551 S.W.2d 574 (1977). Thus, the question becomes one of whether the exclusion of the motorcycle from coverage is reasonable, an issue we recently determined in Preferred Risk Mut. Ins. Co. v. Oliver, supra. In that case we said:

“It is common knowledge that motorcycle riders, as a class, are among the highest risk groups conceivable. Motorcycles offer no protection whatsoever from the front, back, sides or top, and leave the rider exposed to every peril of highway travel. The exclusion of such a class from coverage is clearly reasonable where, as here, the assured has the option of avoiding the excluded peril. An assured has no choice in selecting those uninsured motorists who may injure him, but he certainly does elect to ride a motorcycle. This volitional act triggers the exclusion and he accepts the consequences.”

The judgment is reversed with directions that a new one be entered absolving the insurer from liability.

All concur.


author: PER CURIAM.

text:
    DEPARTMENT OF REVENUE, Commonwealth of Kentucky, Appellant, v. KENTUCKY TEXTBOOKS, INC. and the Kentucky Board of Tax Appeals, Appellees.
    Supreme Court of Kentucky.
    Sept. 16, 1977.
    William S. Riley, Asst. Atty. Gen., William P. Sturm, Legal Staff, Dept, of Revenue, Frankfort, for appellant.
    Edward F. Prichard, Jr., William L. Graham, Frankfort, W. Rodes Clay, Lexington, for appellee Kentucky Textbooks, Inc.
   PER CURIAM.

This is an appeal by the Department of Revenue from a judgment of the Franklin Circuit Court affirming a decision of the Kentucky Board of Tax Appeals which held appellee Kentucky Textbooks, Inc. exempt from sales tax pursuant to KRS 156.450.

Section 170 of the Kentucky Constitution exempts from taxation “. . . institutions of education not used or employed for gain by any person or corporation, and the income of which is devoted solely to the cause of education, public libraries, their endowments, and the income of such property as is used exclusively for their maintenance . . . ” The Department of Revenue has interpreted § 170 to exempt local boards of education from sales and use taxes as well as property taxes. See also KRS 139.470.

KRS 156.450 allows each board of education to appoint one or more dealers to act as “official retail agents for the sale of books for use in the school district, or any school unit may purchase and distribute books to its own patrons . . . ” The statute also limits the amount an agent may charge for the books to 20% over the wholesale price.

Textbooks is in the wholesale business of selling school textbooks to local boards of education for use by students and teachers. It has no retail store and does not sell or do business with the general public. Within the framework of the statutory principal-agent relationship of KRS 156.450, a local school board contracts with Textbooks, as its “official retail agent,” to provide selected textbooks from the various school book publishers. Textbooks, acting as an agent for the school board, buys the books which are to be sold to the students and teachers. It employes two standard contracts in dealing with the local boards of education. Under the contract referred to in the evidence as Plan B, it orders the appropriate books, oversees their delivery to the various schools for sale to teachers and students, and takes charge of the unsold books after the local school personnel have sold and distributed the books to teachers and students. The markup on the books is 20% (the maximum under KRS 156.450) and the local school board receives 5% of the total sales. The Department of Revenue agrees with the corporation that under this purchase plan or contract Kentucky Textbooks is not subject to any sales tax.

Under the contract referred to in the evidence as Plan A, the procedure is exactly the same with one exception. Rather than leaving the books with the local schools and returning later to collect the unsold books, Textbooks sends some of its employees to the various schools to assist in the sale of the books to teachers and students. Under this arrangement the Department of Revenue contends Textbooks is liable for sales taxes. It is Revenue’s position that Textbooks is acting as an independent contractor or retailer, and inasmuch as teachers and students are not exempt from sales taxes, the sales made directly to the students by Textbooks are taxable sales.

Revenue contends that under Plan B no tax is due because Textbooks sells to the school board, which is exempt, and then in turn the exempt school board sells to the students, again rendering the sale exempt. However, when Textbooks participates in the sales to the students, Revenue sees this as a retail sale in which Textbooks and not the school board is the real owner and seller of the books.

On the other hand, Textbooks maintains that Plan A differs from Plan B only in the simple respect that in Plan A Textbooks supplies the additional service, at no extra charge, of a few employees, who work under the supervision of local school personnel to assist local school employees in the sale of the books. Under both plans Textbooks is designated by the school board as its “official retail agent” and under both plans is compensated in exactly the same manner. Appellee also points out that in purchasing the books the students make their checks payable to the local school board rather than to Textbooks.

We perceive no significant difference in the two plans insofar as sales tax liability is concerned. Under Plan A the agent provides additional services at no extra cost to the board or the students and with no additional compensation to the agent. The legal relationship of the parties remains the same.

The judgment is affirmed.

All concur.