text:
    MAYNARD HILL, INC., and Alenco, Appellants, v. Goodhue W. SMITH, Appellee.
    No. 5525.
    Court of Civil Appeals of Texas, Waco.
    March 4, 1976.

      Goode & Hoelseher, College Station, Thompson, Knight, Simmons & Bullion, George C. Chapman, Stephen F. Fink, Dallas, for appellants.
    Minor L. Helm, Waco, for appellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by defendants Maynard Hill, Inc., and Alenco, from order overruling their pleas of privilege.

Plaintiff Smith sued defendants Maynard Hill and Alenco, alleging plaintiff is building a home in Waco McLennan County; entered into an agreement with Harry Trip-pett to act as general contractor; that Trip-pett contracted with Maynard Hill to provide doors, windows and related fixtures for plaintiff’s home; that Maynard Hill contracted with Alenco to manufacture and supply the doors and windows to be shipped to Waco; that Alenco agreed such doors and windows would be delivered to the construction site in Waco on or before December 10,1973; that as of June 14,1974 many of the doors and windows have not been delivered; and nearly all of the items shipped were defective; to plaintiff’s damage of $15,000. Defendants, Maynard Hill and Alenco filed pleas of privilege to be sued in Brazos County, the county of their residence.

Plaintiff controverted Maynard Hill’s plea of privilege, asserting venue in McLen-nan County under Subdivisions 5 and 23, Article 1995 (VATS); and controverted Al-enco’s plea of privilege (asserting venue against Maynard Hill under Subdivisions 5 and 23), that Alenco was a necessary party, and venue maintainable in McLennan County under Subdivision 29a, Article 1995.

The trial court overruled both pleas of privilege.

Both defendants appeal contending:

1) Plaintiff failed to prove venue as to Maynard Hill in McLennan County under Subdivision 5, Article 1995.
2) Plaintiff failed to prove venue as to Maynard Hill in McLennan County under Subdivision 23, Article 1995.
3) Plaintiff failed to plead and prove the agency relationship between him and Trippett that would be a part of his cause of action to sustain venue under Subdivision 23, Article 1995.
Additionally Alenco contends:
4) Plaintiff failed to prove Alenco is a necessary party within the meaning of Subdivision 29a, Article 1995.

“The Contract reads:

“Mavnard Hill Inc.

“Representing Quality Building Products Post Office Box 3887, Bryan, Tex. 77801 “To: Mr. Harry Trippett Date: July 24,1973

3722 Chateau St. Project: Smith residence

Waco, Texas 76710 Location: Waco, Texas

* * * * * * * *

“We propose to furnish items as described, at prices stated; and, unless otherwise specified by us, under our regular conditions and terms of acceptance, which are given on the reverse side of this quotation. “Aluminum Windows and Aluminum Sliding Glass Doors.

“Total amount of materials only $7,613.00

* * * * *

“Confirmation: all contracts, amendments and proposals are subject to approval of and acceptance by our Home Office at Bryan, Texas.

“MAYNARD HILL, INC.,

By /s/ Charles Benbow

Sales Representative

“The above proposal is accepted subject to approval of shop drawings:

/s/ Harry Trippett 7-26-73

* * * * * *

“Deliveries: Promises of delivery are given as accurately as conditions will permit, but we do not guarantee to accomplish shipments on date or dates mentioned.

*******

The evidence shows the contract was accepted by Maynard Hill’s home office in Bryan.

' Contention 1 asserts plaintiff failed to establish venue as to. Maynard Hill in McLennan County under Subdivision 5, Article 1995.

Article 1995 (Subdivision 5) provides: “No person * * * shall be sued out of the county in which he has his domicile except * * *: If a person has contracted in writing to perform an obligation in a particular county, expressly naming such county, or a definite place therein, by such writing, suit upon or by reason of such obligation may be brought against him, * * * in such county * *

The contract executed by Maynard Hill does not expressly state that the windows and doors are to be delivered to Waco or McLennan County. It states that they are to be “furnished” * * *. The contract is addressed to Mr. Harry Trippett in Waco, and recites “Project: Smith Residence, Location: Waco, Texas”, but nowhere expressly agrees to deliver the building materials to such project or to Waco. The only way Maynard Hill can be said to have agreed in the contract to delivér the materials to Waco would be by implication, and venue under subdivision 5, cannot be fixed by implication, Bowden v. Murphy, Tex.Civ.App. (Waco) NWH, 448 S.W.2d 183; Saigh v. Monteith, 147 Tex. 341, 215 S.W.2d 610; Thomas v. Oil Belt Supply Co., Tex.Civ.App. (Eastland) NWH, 375 S.W.2d 527; Johnston v. Personius, Tex.Civ.App. (San Antonio) NWH, 242 S.W.2d 471; Williams v. James, Tex.Civ.App. (Ft. Worth) NWH, 308 S.W.2d 528; Harkness v. Employers National Ins. Co., S.Ct., 502 S.W.2d 670.

Contention 1 is sustained.

Contention 3 asserts plaintiff failed to plead and prove the agency relationship between him and Trippett that would be a part of his cause of action to sustain venue under Subdivision 23.

Plaintiff plead that he was building a home; had entered an agreement with Trippett to act as general contractor; that Trippett contracted with Maynard Hill to provide the windows and doors; which were delivered late and in defective condition; to plaintiff’s damage.

Smith testified he was building a home in Waco; that he contracted with Trippett to be contractor; that he (Smith) was to pay Trippett a fixed fee, and pay for all labor and material; that he (Smith) and Trippett went to Bryan to buy windows and doors; that Maynard Hill contracted with Trippett to furnish the windows and doors; that he (Smith) saw and approved the contract before it was executed; that Trippett signed the contract with Maynard Hill “for me” (Smith); that the materials were late in delivery, and almost all were defective.

A cost plus building contract does not make the contractor the owner’s agent to purchase material as a matter of law, but one may be both independent contractor and owner’s agent to purchase material, if the facts warrant such. Carruth v. Valley Ready-Mix Concrete Co., Tex.Civ.App. (Eastland) Er.Ref., 221 S.W.2d 584.

There was no exception filed to plaintiff’s pleading; and the evidence clearly establishes Trippett to be plaintiff’s agent for the purpose of contracting for the material with Maynard Hill.

Contention 3 is overruled.

Contention 2 asserts plaintiff failed to prove venue as to Maynard Hill under Subdivision 23.

Subdivision 23 permits a private corporation to be sued in any “county in which the cause of action or part thereof arose”. This means that either some part of the transaction creating the primary right or some part of the transaction relating to the breach of that right, must have occurred in the county where suit is brought. Stone Fort National Bank of Nacogdoches v. Forbess, 126 Tex. 568, 91 S.W.2d 674.

Maynard Hill contracted to furnish and deliver building materials. Plaintiff asserts a cause of action for breach thereof because of late delivery and delivery of defective materials. The evidence is that the materials were delivered late, in defective condition, and were delivered to the jobsite in Waco. Thus the contract was breached in Waco, and Subdivision 23 sustains venue in McLennan County. Contention 2 is overruled.

Contention 4 is that plaintiff failed to prove Alenco a necessary party within the meaning of Subdivision 29a.

Subdivision 29a provides that when there are 2 or more defendants in a suit, and such suit is lawfully maintainable in the county of suit against any of such defendants, then such suit may be maintained against all necessary parties.

There is no pleading or evidence of any contract between Alenco and plaintiff (or Trippett). In any event plaintiff can obtain full relief in his suit against Maynard Hill, and Alenco is thus not a necessary party within the meaning of Subdivision 29a, and is entitled to be sued in the county of its residence. Skeen v. Mouser, Tex.Civ.App. (Waco) NWH, 530 S.W.2d 918; Ladner v. Reliance Corp., 156 Tex. 158, 293 S.W.2d 758. B & C Construction Co. v. Grain Handling Corp., Tex.Civ.App. (Amarillo) NWH, 521 S.W.2d 98.

Contention 4 is sustained.

The judgment is affirmed as to Maynard Hill, and reversed and rendered as to Alen-co. Costs of appeal are taxed % each against plaintiff and Maynard Hill.

Affirmed in part.

Reversed and Rendered in part.


source: Caselaw Access Project

author: COLEMAN, Chief Justice.

license: Public Domain

text:
    Elizabeth HOWELL, Appellant, v. Bruce F. KELLY, Appellee.
    No. 16637.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    March 4, 1976.

      Carl L. Ray, Bryan D. Coleman, Houston, for appellant.
    Carl Douglas Haggard, Houston, for ap-pellee.
   COLEMAN, Chief Justice.

This is a suit by an attorney to recover in quantum meruit for the legal services rendered to the defendant. The services were rendered pursuant to a contingent fee agreement, which was terminated by the client. The trial court entered a judgment on a jury verdict for the attorney. We affirm.

No statement of facts was brought forward to this court. In answer to the special issues submitted, the jury found that the client terminated the services of the attorney without the attorney’s consent and that the attorney should recover the sum of $800.00 for the legal services rendered prior to the termination, as well as $250.00 as reasonable attorney’s fees in the present case. The jury failed to find that the client terminated the employment without just cause. It is the client’s position that the last mentioned finding of the jury, as a matter of law, requires a judgment that the attorney take nothing by his suit. The further contention is made that this negative finding is in conflict with the finding that the attorney should recover the sum of $800.00 for the legal services rendered.

The failure of the jury to find that the client discharged her attorney without just cause does not constitute a finding that the client discharged her attorney with just cause. The issue as submitted placed the burden of proof on the attorney to prove that he had been discharged without just cause, and he failed to carry the burden of proof. The issue facing this court, therefore, is whether it was necessary in this case that the attorney present evidence and secure a finding that his discharge was without just cause in order to sustain his cause of action, or whether the question of just cause is a defensive issue as to which the client has the burden of pleading and proof. The plaintiff alleged that he was discharged without just cause. The defendant filed an answer containing a general denial, but did not raise any affirmative defenses.

In a case where an attorney had been employed to recover certain land and was discharged by his client before the case was tried, the court upheld the right of the attorney to recover for services rendered prior to the termination of the contract by the client on the basis of quantum meruit. Thompson v. Smith, 248 S.W. 1070 (Comm, of App., Sec. B, 1928, judgment adopted). There the court said:

“. . . Smith had no right to discharge him or prevent the completion of those services without fault on Thompson’s part. He had rendered services to Smith on the faith of a contract. It was not intended by either party that those services should be gratuitous. The law implies a promise on Smith’s part to pay to Thompson the reasonable value of services already rendered by him when Smith discharged him and prevented him from further services under the written contract.”

In Mandell & Wright v. Thomas, 441 S.W .2d 841 (Tex.1969), the Supreme Court of Texas sustained a trial court’s summary judgment awarding attorneys a full recovery on their contingent fee contract with the “personal representative” asserting a cause of action under the Jones Act or the Death on the High Seas Act. The client testified by deposition that she discharged her lawyer because she wanted to be represented alone and not with a group. The Supreme Court stated:

“We reject respondent’s contention that Mandell & Wright’s recovery should be limited to one of quantum meruit for the value of the work performed between the date of employment and the date of discharge. Her refusal to cooperate in their prosecution of the claim made it impossible for them to proceed further. In Texas, when the client, without good cause, discharges an attorney before he has completed his work, the attorney may recover on the contract for the amount of his compensation . . .”

In some jurisdictions an attorney having a contingent fee contract with his client, who has been discharged for sufficient cause, is allowed to recover the reasonable value of the services he has rendered up to the time of discharge. Fracasse v. Brent, 6 Cal.3d 784, 100 Cal.Rptr. 385, 494 P.2d 9 (1972); Willis & Conner v. Turner, 25 S.W .2d 642 (Tex.Civ.App. — Waco, 1930, writ dism’d); Phelps v. Elgin, Joliet & Eastern Ry. Co., 70 Ill.App.2d 89, 217 N.E.2d 519 (1st Dist. 1966); Guilbeau v. Firemen’s Fund Ins. Co., 293 So.2d 216 (La.App., 3rd Cir., 1974). In other jurisdictions, however, an attorney who is discharged for cause has no right to recover a fee and may be forced to remit a retainer paid in advance. Coclin Tobacco Co. v. Griswell, 408 F.2d 1338 (1 Cir., 1969).

Since an attorney under a contingent fee contract is permitted to recover on the contract in Texas, the usual rules of contract law are applicable. A party who has been damaged by a breach of contract has an election to pursue any of three remedies. He may treat the contract as rescinded and may recover upon a quantum meruit so far as he has performed; or he may keep the contract alive, for the benefit of both parties, being at all times ready and able to perform; or, third, he may treat the repudiation as putting an end to the contract for all purposes of performance, and sue for the profits he would have received if he had not been prevented from performing. Restatement, Contracts, §§ 326, 327, 347; Restatement 2d Agency, §§ 453, 455; 11 Williston on Contracts, 3rd Ed. § 1358.

It is the burden of the plaintiff to establish the existence of the contract sued on; that he was ready and able to perform the contract; the happening of a condition on which liability is based, or that the condition would have happened if the promis-sor had abided by the terms of the contract; a breach of the contract; and the amount due him under the contract. The burden of proving the happening of a contingency which, by the terms of the contract, would discharge the party from liability, or any default or refusal to perform on the part of the plaintiff that would excuse the performance by the defendant, is on the party who seeks to avoid the contract or excuse a failure to perform it on that ground. 13 Tex.Jur.2d, Contracts, Sec. 390. As a general rule there must be specific pleading of excuses for nonperformance. 13 Tex. Jur.2d, Contracts, Sec. 385.

Once the plaintiff attorney has proven a contract to provide legal services to the defendant, and that the defendant has discharged him, he has established a prima facie case for the recovery of the resulting damage. Meade v. Rutledge, 11 Tex. 44 (1853); Hassell v. Nutt, 14 Tex. 260 (1855); Hearne v. Garrett, 49 Tex. 619 (1881); Beaumont v. J. H. Hamblen & Son, 190 Ark. 630, 81 S.W.2d 24 (1935).

The defendant failed to plead grounds justifying the discharge of the plaintiff, her attorney. There is no statement of facts. We must presume that the evidence supports the judgment of the trial court. While the jury failed to find that the employment contract was terminated without just cause, the answer made by the jury does not establish that the termination was with just cause. Since the burden of establishing just cause for the termination of the employment contract was on the defendant, the trial court properly entered a judgment for the plaintiff on the jury’s verdict. •

The judgment is affirmed.


author: O’QUINN, Justice.

text:
    Monte Gerald EDWARDS, Appellant, v. Emma Janice EDWARDS, Appellee.
    No. 12345.
    Court of Civil Appeals of Texas, Austin.
    March 10, 1976.

      Don Raven, Austin, for appellant.
    William S. Rose, Austin, for appellee.
   O’QUINN, Justice.

Emma Janice Edwards, the appellee, brought suit for divorce against Monte Gerald Edwards, the appellant, in August of 1973, and.by decree entered in February of 1975, divorce was granted appellee, together with custody of three minor children, and the court ordered division of the community property.

Monte Gerald Edwards has appealed and claims under his sole point of error that “The trial court abused it’s [sic] discretion in dividing the community property of the parties.” We overrule the point of error and will affirm judgment of the trial court.

The trial court filed findings of fact and conclusions of law. No statement of facts has been brought forward, although a brief “narrative statement of the case,” filed by the court and approved by the parties, is in the record.

In a cause on appeal in which findings of fact and conclusions of law have been filed, but no statement of facts brought forward, the findings of fact become binding on the parties and are accepted by the Court as justified by the evidence. Vanity Fair Properties v. Billingsley,' 469 S.W.2d 453 (Tex.Civ.App. San Antonio 1971, writ ref. n. r. e.); 4 McDonald, Texas Civil Practice, sec. 16.10(c), p. 29 (1971 rev.). The appellate court will review only the correctness of the legal conclusions from the facts found. Ives v. Watson, 521 S.W.2d 930, 932 (Tex.Civ.App. Beaumont 1975, writ ref. n. r. e.); McDonald, supra, p. 30.

The parties had three major items of community property to be divided. Two items were personalty, being the cash surrender value of four insurance policies on appellant’s life in the amount of $3,947.66 and the vested interest in a retirement plan at appellant’s place of employment worth $6,065.66. The third item was realty, a house and lot in Bedford, Texas, having an agreed equity value of $13,523. The court awarded the first two items, in the sum of $10,013.32, to appellant, and awarded the realty to appellee, with primary responsibility on appellee to discharge the unpaid balance of the debt against the property.

In addition, certain items of personalty in possession of the respective parties were awarded to the party having possession. The trial court also directed that if appel-lee, within one year, decided to sell the realty, appellant would have the right to buy the property at the price offered appel-lee, plus $500 above the prospective sale price.

Taking into account all of the community items divided by the court, and the adjustment made to effect payment of about $440 in community debts, the net awards amounted to about $14,273.00 for appellee and about $10,277.00 for appellant, a difference of $3,997.00.

Appellant contends on appeal that the trial court should have ordered the parties to sell the realty and then effect equal division of the proceeds between the parties, together with equal division of their interest in the retirement plan and the surrender value of the insurance policies. Assuming that the realty could have been sold at a price equal to the equity the parties had in the property, the division which appellant contends should have been made by the trial court would have increased appellant’s share of the community by about $1,998.

It is well settled that the trial court has wide discretion in disposing of community property in a divorce action, although the discretion is not unlimited and should be exercised with due regard to the rights of the parties. Hooper v. Hooper, 408 S.W.2d 215 (Tex.Civ.App. Amarillo 1966, writ dsm’d); Wilson v. Wilson, 225 S.W.2d 236 (Tex.Civ.App. Fort Worth 1949, no writ). The Texas Family Code provides that “In a decree of divorce . . . the court shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage.” (Sec. 3.63, Family Code).

The Supreme Court in an early case held that the trial court was empowered “ . to order a division of the estate of the parties to the divorce suit in such way as to the court seemed just and right, having due regard to the rights of each party and of the children . . . ” Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21, 22 (1923). The Court further held in Hedtke that in division of the property the trial court “ . is invested with wide discretion . and that its action, in the exercise of such discretion, should be corrected on appeal only where an abuse of discretion is shown in that the disposition made of some property is manifestly unjust and unfair.” (248 S.W. 23, col. 1)

The rule is well established that division of the community estate need not be equal. Williams v. Williams, 160 Tex. 99, 325 S.W.2d 682, 684 (1959);' Thomas v. Thomas, 525 S.W .2d 200 (Tex.Civ.App. Houston (1st) 1975, no writ). An unequal division is permissible if not so disproportionate as to be inequitable, and if the circumstances justify awarding more than one-half to one party. Bowling v. Bowling, 373 S.W.2d 829, 831 (Tex.Civ.App. Houston 1963, no writ); Keene v. Keene, 445 S.W.2d 624, 626 (Tex.Civ.App. Dallas 1969, writ dism’d).

Appellant insists “that there was no ‘reasonable basis’ for the unequal division of the community property” in this cause. In support of this position, appellant places special reliance on holdings in two cases in each of which the appellate court held that division of the community property was unjust and unfair to the husband.

In both cases the property held to be unfairly awarded was being used by the husband in making a living and constituted the most valuable income producing property owned by the parties. Wilson v. Wilson, 225 S.W .2d 236, 239 (Tex.Civ.App. Fort Worth 1949, no writ); Hooper v. Hooper, 403 S.W.2d 215, 217 (Tex.Civ.App. Amarillo 1966, writ dsm’d). In Wilson the husband, a professional man, was using a portion of the property, valued at $50,000 because it had become adaptable for business, and the court held that the judgment, depriving him of its use in pursuit of his profession, did not “manifest a due regard for the rights of the husband.” In Hooper the property held not fairly disposed of consisted of a sporting goods store, operated for several years by the husband and a partner, which constituted “the major source of the family income.”

The record in this case shows that the husband is employed in Austin, where he earns about $20,000 a year, and makes no use of the realty at Bedford in connection with his business. The wife is employed on a part-time basis and makes $350 per month while attending college to complete work on a master’s degree. The wife has custody of the three minor children, and by agreement of the parties, approved by the court, child support payments by the husband were set at $400 per month.

The action of the trial court in awarding the house to appellee and all of the cash value of insurance and retirement benefits to appellant avoided the necessity of ordering distress sale of the realty and liquidation of the insurance and retirement reserves. In doing so the court deprived the husband of less than $2,000, out of an estate worth $24,550, left intact appellant’s means of earning a livelihood, and protected the full value of the community against forced sale of realty and liquidation of reserve funds. Appellant has failed to meet his burden to show that the action taken by the trial court amounted to abuse of discretion in that the property division was manifestly unjust and unfair to appellant. We hold that the court did not abuse its discretion with respect to any portion of the property divided between the parties.

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

Affirmed.


author: JAMES, Justice. HALL, Justice

text:
    MARATHON METALLIC BUILDING COMPANY, Appellant, v. The TEXAS NATIONAL BANK OF WACO, Appellee.
    No. 5494.
    Court of Civil Appeals of Texas, Waco.
    March 11, 1976.
    Moody & Crow, Frank M. Fitzpatrick, Jr., Waco, for appellant.
    Ñaman, Howell, Smith & Chase, Paul H. Hubbard, Waco, for appellee.
   OPINION

JAMES, Justice.

This case involves the validity of a mate-rialman’s lien claimed by Appellant, Marathon Metallic Building Company. The trial court held the claimed materialman's lien to be invalid. We hold the lien to be valid and reverse and render a portion of the trial court’s judgment and affirm the balance thereof.

This case began on October 1, 1974, with an application for writ of garnishment by Appellee, The Texas National Bank of Waco, as garnishor, against O’Grady Containers, Inc., William D. O’Grady, and George W. Moore, as garnishees. Prior to the institution of the garnishment suit, Appellee Texas National had on September 13, 1974, obtained a judgment in a District Court of McLennan County, Texas, against R. J. Welch Construction Company and others in the amount of $59,154.83 and attorneys’ fees plus some additional amounts against particular defendants, the details of which are not material to the case at bar.

Based upon said judgment, as stated,Texas National filed the application for writ of garnishment against O’Grady Containers, Inc., William D. O’Grady and George W. Moore as garnishees. The garnishees answered to the effect that they owed R. J. Welch Construction Co. the sum of $3860.00, which amount represented a 10% retainage of the contract price of some improvements that had been made by R. J. Welch Construction Co. upon premises upon which the O’Grady Container’s, Inc., plant was located, but which property the undisputed proof showed was owned by William D. O’Grady and George W. Moore individually.

Garnishees thereafter filed a Bill of In-terpleader wherein they paid the $3860.00 funds in question into the registry of the trial court and impleaded and brought into the suit R. J. Welch Construction Co., R. J. Welch, Sr., R. J. Welch, Jr., Marathon Metallic Building Co., Inc. (Appellant herein), Allen Glass Co., Crawford Door Sales, Owens-Corning Fiber Glass Corp., and Centex Manufacturing Co. AH of these above-named parties so brought into the suit- by the Bill of Interpleader were disposed of by the trial court’s judgment, and none are of concern to this appeal except Appellant Marathon Metallic Building Co., Inc., and Centex Manufacturing Co.

Appellant Marathon was a material supplier on the construction project at the premises owned by garnishees Messrs. O’Grady and Moore, and in such capacity had made claim for a materialmen’s lien against garnishees because of non-payment of the account (in the asserted amount of $20,583.89) owed to Appellant Marathon by R. J. Welch Construction Co. As a result of said claim, Appellant Marthon was named in the Bill of Interpleader as a Defendant, was brought into the suit, and thereupon filed its answer to said Bill of Interpleader and its cross-action alleging its priority claim to the impleaded funds because of its asserted properly perfected Mechanic’s and Materialmen’s Lien under the provisions of the Hardeman Act, same being Articles 5452 et seq., Vernon’s Texas Civil Statutes. Marathon sought judgment for recovery of the amount owed it by R. J. Welch Construction Co. to the extent that it could be satisfied from the impleaded funds, and for foreclosure of its lien. Likewise Centex Manufacturing Co. sought similar relief for $220.50 allegedly owed it by R. J. Welch Construction Co. for materials supplied to this same job, and for foreclosure of its asserted lien.

Trial was had to the court without a jury, pursuant to which the trial court’s judgment made the following disposition of the $3860.00 impleaded funds on hand: (1) The court costs were ordered paid; then (2) attorney’s fees in the amount of $750.00 were awarded to Interpleaders O’Grady Containers, Inc., O’Grady and Moore; (3) $220.50 was awarded to Centex Manufacturing Co. in payment of its claim and in satisfaction of its lien, and (4) the balance of such funds was awarded to Appellee Texas National Bank of Waco. That is to say, Texas National was awarded the $3860.00 less $970.50 and costs of court. The trial court further adjudged that Appellant’s Marathon’s asserted materialman’s lien was invalid and that Appellant take nothing, from which judgment Marathon appeals. We reverse and render judgment in favor of Appellant Marthon for the funds which were awarded to Appellee Texas National in the trial court’s judgment, and hold that Appellee take nothing.

Appellant Marathon asserts that the trial court’s finding that Appellant’s material-man’s lien was invalid is error because (1) such finding is so against the great weight and preponderance of the evidence as to be manifestly wrong and unjust; and (2) for the further reason that Appellant had substantially complied with the statutory prerequisites for the perfecting of such materi-alman’s lien, under the provisions of Article 5452 et seq., Vernon’s Texas Civil Statutes. We sustain these contentions.

Appellant Marathon is the asserted holder of a materialman’s lien as a supplier to R. J. Welch Construction Co., and Appellee Texas National is a garnishment judgment creditor of R. J. Welch Construction Co. The controversy is between these two parties, and the solution thereof depends upon whether Marathon’s asserted lien is valid. If Marathon’s lien is valid, then the trial court’s judgment must be reversed and rendered, to the extent necessary to permit Marathon to recover the amount heretofore awarded to Texas National. If on the other hand Marathon’s lien is invalid, then the trial court’s judgment must be affirmed, because in such event Appellee Texas National would be entitled to the recovery awarded to Appellee by the trial court’s judgment.

In order to determine the validity of Marathon’s lien we are obliged to construe the language of a portion of Article 5455, V.A. T.S., insofar as it applies to the facts of our case, which language is as follows:

“Art. 5455. Form of claim.

“An affidavit claiming a lien filed for record by any one claiming the benefit of this Act shall be signed by the claimant or by some person on his behalf and shall contain in substance the following:

“b. The name of the owner or reputed ■ owner, if known.” (emphasis supplied).

In the case at bar, Marathon, a Houston-based firm, furnished materials to R. J. Welch Construction Co., a corporation headquartered at Waco, Texas, for the construction of a building located in Waco, which Welch had contracted to build. The contract for the construction of such building was dated February 25, 1974, and the parties signing same were R. J. Welch Construction Co. (signed by R. J. Welch, Jr.), W. G. (Don) Ballew, shown as general contractor, and O’Grady Containers, Inc. (signed by George W. Moore).

R. J. Welch Construction Co. sent a purchase order dated March 1, 1974, to Marathon wherein Welch ordered materials for the job in question; which showed: “Builder’s customer: O’Grady Containers, 200 La Salle St., Waco, Texas.”

After Marathon had furnished materials for this job in the amount of $20,583.89, and by August 1974 the account had become delinquent, Dennis McCarty, Assistant Regional Manager for Marathon, made a personal trip to Waco on or about August 20, 1974, to investigate the cause of Welch’s nonpayment of the account. He went out to 200 La Salle Street in Waco, Texas, and there found the manufacturing plant of O’Grady Containers, Inc., which was a plant manufacturing corrugated containers. He recognized Marathon’s materials in the newly constructed building which had the sign “O’Grady Containers, Inc.” displayed upon it. He talked to a receptionist but was unable to contact any officials of the company at the time because none were present. He later talked to R. J. Welch, Jr., an officer of R. J. Welch Construction Co., and to W. G. “Don” Ballew, the man whose name was signed to the above-described Welch-O’Grady Containers contract as “General Contractor”. (In this connection, although Mr. Ballew was signed as “general contractor”, in truth and in fact he was hired by William D. O’Grady and George W. Moore to secure people and firms to do parts of the construction job in question and to supervise the overall job, and additionally to construct an office inside the building). Don Ballew told McCarty that R. J. Welch Construction Co. had been paid all but about $4000.00 of their contract price to construct the building. Learning these things, Dennis McCarty returned to Houston and caused an attorney, a Mr. Phil Smith, to prepare (in several copies) the “Affidavit of Materialman’s Lien” as well as a letter addressed to “O’Grady Containers, Inc.”, as owner of the property, which letter was labelled, “Notice of Claim of Materialman’s Lien”, and a letter addressed to R. J. Welch Construction Co. labelled, “Notice of Claim of Materialman’s Lien.”

The Affidavit of Materialman’s Lien was shown to be for the purpose of fixing a lien pursuant to Article 5452 et seq., V.A.T.S. “upon the real estate hereinafter described” for the $20,583.89 worth of materials furnished by Marathon to R. J. Welch Construction Co. The affidavit recited that “O’Grady Containers, Inc., is the owner or reputed owner of the land described herein and the improvements constructed thereon.” Attorney Smith prepared all the papers in Houston except the property description, based upon the information furnished him by Dennis McCarty. Lawyer Smith secured the services of Honorable Ron Moody, a Waco, Texas, lawyer to secure the property description for the lien papers. Mr. Moody first went to the McLennan County Tax Assessor-Collector’s office and located the property on the tax maps of the City of Waco, then went out and inspected the property on the ground, and then went back to the tax office and copied the legal description from the tax office records. He secured a card from the county tax office which contained the property description of the property in question, which card showed the owner of the property to be “O’Grady Containers, Inc.”, which card had “1972” typewritten on it. Attorney Smith mailed the copies of the affidavit and notice letters to Attorney Moody, all of which Moody received in his office on September 13,1974. Moody attached the property descriptions in the proper places, and then mailed by certified mail (return receipt requested) copies of the affidavit and notice letters respectively to “O’Grady Containers, Inc.” as property owner, and to R. J. Welch Construction Co. A few days later Moody got a return receipt card back from “O’Grady Containers, Inc.!’ signed by George W. Moore. Likewise Moody got back a return receipt card from R. J. Welch Construction Co. Also on September 13, 1974, Moody filed the Affidavit of Material-man’s Lien for record in the County Clerk’s office of McLennan County.

The property in question was owned by O’Grady Containers, Inc. prior to August 17, 1972; however, on said last-named date O’Grady Containers, Inc., conveyed the property by warranty deed to William D. O’Grady and George W. Moore individually, which was filed for record on August 21, 1972, in the Deed Records of McLennan County, Texas. The title to the property stood in the names of William D. O’Grady and George W. Moore (individually) at all times material to this case. William D. O’Grady was president and a stockholder of O’Grady Containers, Inc., and lived in Tar-rant County. George W. Moore was vice president and a stockholder of said corporation as well as general manager of the O’Grady Containers, Inc., Waco plant, and had been so employed for some 13 to 14 years.

The specific question before us, then, is whether or not under this record, Marathon substantially complied with the above-quoted portion of Article 5455 in naming in their Affidavit of Lien and notices, O’Grady Containers, Inc., as “owner or reputed owner” of the property, when in truth and in fact the property was owned by William D. O’Grady and George W. Moore. We are of the opinion and hold that Marathon did substantially comply with the Mechanic’s and Materialman’s Law in this regard and that Marathon’s Materialman’s Lien is valid.

We have been cited to no Texas case dealing with this specific problem, and we have found none. Out-of-state cases are not harmonious which deal with this problem of naming the owner or reputed owner of property against which a mechanic’s and materialman’s lien is sought. Appellant Marathon cites in support of its position Campbell v. Graham (1960) 144 Colo. 532, 357 P.2d 366, Ellis-Mylroie Lumber Co. v. St. Luke’s Hospital (1922) 119 Wash. 142, 205 P. 398, Corbett v. Chambers (1895) 109 Cal. 178, 41 P. 873. Appellee Texas National cites in support of its position Toll-Barkan Co. v. Toll (1960) 193 Pa.Super. 221,164 A.2d 36, Fowler v. Roxboro Homes Inc. (1959) 98 Ga.App. 829, 107 S.E.2d 285, Hartford Acc. & Indemnity Co. v. A. B. C. Cleaning Contractors (1965) 121 U.S.App. D.C. 300, 350 F.2d 430, and Chamberlin Metal Weather Strip Co. v. Karrick (1931) 60 App.D.C. 316, 53 F.2d 928. Of course these out-of-state holdings must be viewed in the light of differently-worded statutory requirements.

It is well settled in Texas that the mechanic’s and materialman’s statutes of this State will be liberally construed for the purpose of protecting laborers and materialmen. First National Bank in Dallas v. Whirlpool Corp. (Tex.1974) 517 S.W.2d 262, Hayek v. Western Steel Co. (Tex.1972) 478 S.W.2d 786, Strang v. Pray (1896) 89 Tex. 525, 35 S.W. 1054. Our Supreme Court in Hayek further held that-in the event of ambiguity in the Mechanic’s and Material-man’s law, “the proper rule of construction would require that it be resolved in favor of the primary object of the statute, which is to afford security and protection to laborers and materialmen. It is a rule of long standing that the mechanic’s and material-man’s lien statutes of this State will be liberally construed for the purpose of protecting laborers and materialmen, (cites cases).

“One reason for the lien statutes and the liberal rule of construction is that labor and materials lose all further value to the laborer and materialman once they are furnished and put into the house or building, but they usually enhance the value of the property to the benefit of the owner and those who take under him.” (emphasis supplied)

Moreover, Texas is not a jurisdiction which applies a “strict compliance” rule before a lien exists, but rather follows a “substantial compliance” rule. Texcalco, Inc. r. McMillan (Eastland, Tex.Civ.App.1975) 524 S.W .2d 405, no writ. As stated in White-selle v. Texas Loan Agency (Tex.Civ.App.1894) 27 S.W. 309, writ refused:

“No material departure from the requirements of the statute can be indulged, without fatal results to the lien; but a substantial compliance with the terms of the statute is all that is necessary to put the lien in operation, and give it full force and validity. Pool v. Wedemeyer, 56 Tex. 287.”

In harmony with the substantial compliance doctrine is the rule stated in 48 ALR(3d) at page 214 under the general heading, “Mechanic’s Lien-Designation of Owner”:

“(b) Where statute provides for naming reputed owner.

“A statute providing that the claimant shall give the name of the owner or reputed owner, if known, implies that if the claimant in good faith gives the name of a reputed owner, he shall not lose his lien if he shall afterward ascertain that some other person is the owner. He is not required to ascertain at his peril the name of the true owner, and it is sufficient if he gives the name of the reputed owner.”

Under the record before us, we hold that Appellant Marathon substantially complied with Article 5455 in naming O’Grady Containers, Inc. as “owner or reputed owner” of the property in question in their Affidavit of Lien and in furnishing notice of lien by certified mail to O’Grady Containers, Inc. as owner or reputed owner. This being so, it necessarily follows that Marathon’s lien is a valid lien, and has preference over the garnishment claim of Appellee Texas National Bank as judgment creditor of R. J. Welch Construction Co.

Accordingly, we reverse and render that portion of the trial court’s judgment wherein Appellee Texas National Bank of Waco was awarded the $3860.00 impleaded funds less $970.50 and costs of the trial court, and hold that Appellee Texas National Bank take nothing. We further hold that Appellant Marathon is entitled to judgment for $3860.00 less $970.50 and costs of the trial court. No complaint is made of the trial court’s award to Centex. Costs of this appeal is taxed against Appellee Texas National Bank of Waco. In all other respects the trial court’s judgment is affirmed.

AFFIRMED IN PART AND REVERSED AND RENDERED IN PART.

HALL, Justice

(concurring).

The effect of this garnishment proceeding was to subrogate the garnishor Bank, the appellee here, to the rights of its debtor, Welch Construction, who, in turn, was the creditor of the garnishees, Moore and O’Grady. 26 Tex.Jur.2d 663, Garnishment, § 1. Moore and O’Grady properly implead-ed Marathon Metallic, the appellant here, a claimant to the garnished funds, in order to protect themselves against double liability. Thompson v. Fulton Bag & Cotton Mills, 155 Tex. 365, 286 S.W.2d 411, 414 (1956). As between these contesting parties, I agree with the majority that Marathon Metallics substantially complied with the mechanic and materialmen’s lien statutes and thereby trapped the amount of the funds it claims in the garnishees’ hands before the Bank’s writ of garnishment was served.

The material facts are without dispute. At all relevant times, Moore and O’Grady owned the land in question. They purchased the property on August 17, Í972 from O’Grady Containers, Inc. Moore is vice-president and a stockholder of O’Grady Containers, Inc., and is also general manager of its Waco plant. O’Grady is president and a stockholder of the company. He lives in Fort Worth. O’Grady Containers, Inc. is their tenant. On February 25,1974, a written contract in the name of O’Grady Containers, Inc., was made with Welch Construction for improvements to the land for the total price of $38,602.00. The contract was signed and “approved” by Moore. Marathon was Welch’s major materialman for the job, and supplied materials totaling $20,583.89 in price. Moore and O’Grady paid all draws on the contract by Welch. Complying with Article 5469, Vernon’s Ann. Tex.Civ.St., Moore and O’Grady withheld $3,860.00, being 10% of the contract price, from Welch Construction. These are the funds in issue. Seeking to comply with Articles 5452 et seq., and to thereby secure its lien as a materialman, Marathon treated O’Grady Containers, Inc., as the owner or reputed owner. The affidavit Marathon filed to comply with Article 5455, which calls for the name of “the owner or reputed owner, if known,” listed O’Grady Containers, Inc., as the owner or reputed owner; and the notices to the owner called for in para. 2b(l) of Article 5453 were sent by it to O’Grady Containers, Inc.

It is settled that a mechanic or material-man must substantially comply with the statutes in question in order to perfect the lien provided. But he need not literally comply. “Substantial compliance” therewith has been met if the object sought thereby — the protection of a right or the conferring of a benefit — has been as fully attained as though there had been literal compliance. “This compliance is especially sufficient where no one has been misled to his prejudice.” Hunt Developers, Inc. v. Western Steel Company (Tex.Civ.App.— Corpus Christi, 1966, no writ hist.) 409 S.W.2d 443, 449. Whether or not there has been substantial compliance must necessarily turn on a consideration of all the facts and circumstances of the particular case; and no hard and fast rules can be laid down for a resolution of the question. Accordingly, I am convinced the question is one of law for the court, and not one of fact as alternatively determined and found by the majority-

Here, Moore and O’Grady withheld funds from Welch under Article 5469. Within the context of our facts, this was done to protect Moore and O’Grady, the owners; Welch Construction, the original contractor; and Marathon, and the other subcontractors. Although Marathon listed O’Grady Containers, Inc., as the owner or reputed owner of the property in its affidavit and mailed the required notices to the corporation, the record shows that Moore and O’Grady received notice of Marathon’s claim, knew what it was for, and knew it was against their property; that Welch Construction knew full-well the validity of the claim; and that no one for whose benefit the statutes were enacted has been surprised or misled or harmed, whether or not Marathon’s attempt at compliance be less than literal compliance with some, all, or none of the relevant statutes. I am convinced there was sufficient compliance under the circumstances to perfect an enforceable materialman’s lien in favor of Marathon against Moore and O’Grady. This is especially so in the light of the rule that the primary object of these statutes is to secure and protect laborers and materialmen. See, First National Bank In Dallas v. Whirlpool Corp., 517 S.W.2d 262, 269 (Tex.Sup., 1974). Unlike the majority, I do not believe this question rests in this particular case on whether O’Grady Containers, Inc., was in fact a reputed owner of the property.

The appellant asserts that the failure of Marathon to attempt any compliance with Article 5454 was fatal to its lien. By its express terms,, Article 5454 is applicable only when the owner withholds funds pursuant to the provisions of Article 5463. In our case, Moore and O’Grady retained funds under the authority of Article 5469. Article 5454 has no application.

For these reasons, I concur in the modification of the judgment set forth in the majority opinion.


author: DUNAGAN, Chief Justice.

text:
    Walter H. MENGDEN, Sr., Appellant, v. PENINSULA PRODUCTION COMPANY et al., Appellees.
    No. 915.
    Court of Civil Appeals of Texas, Tyler.
    March 11, 1976.
    Rehearing Denied April 1,1976.

      Thomas H. Lee, Marilyn Aboussie Foreman, Dyess, Prewett, Rosenberg & Henderson, Houston, for appellant.
    Ralph J. Graham, Corpus Christi, for ap-pellees.
   DUNAGAN, Chief Justice.

This suit involves the pooling provisions of two mineral leases and the farmout agreements by which the leases were assigned. Walter H. Mengden, Sr., the as-signee, and Peninsula Production Co., et al., the successors in interest of the assignors, sought declaratory judgments to determine whether Peninsula’s reversionary interest under the farmout agreements had become effective. The trial court, without the aid of a jury and on undisputed facts, decreed that this reversion had occurred as to the only part of the leased premises from which production had been obtained. Mengden appealed from that judgment. We affirm that judgment.

The two leases (hereinafter individually referred to as the “A” or “B” lease) covered adjacent tracts of 1713.2 acres each. The lease agreements contained the usual and customary provisions, including a pooling provision. Part of the “A” lease and all of the “B” lease were assigned to Mengden in two farmout agreements by the predecessors in interest of Peninsula. The “Miltex” farmout covered 640 acres of the “A” lease and the “Baria” farmout covered the entire 1713.2 acre “B” lease.

The Miltex and Baria farmout agreements each provided that Mengden’s interest in Vi of the gas rights would terminate when he had recovered, after taxes on production accruing to the net working interests, certain enumerated costs and expenses. The Miltex farmout agreement provided that “ . . .if you complete any gas well or wells in the Escondido Sand under such lease premises then in lieu of the aforerecited recovery of costs incurred thereon you will be entitled to recover $70,-000.00 times the number of such wells on the production accruing to a 49/<s4ths of Vtths net working interest therein from such wells before such assignment terminates in part as aforeprovided for.”

The conditions which existed upon the Miltex and Baria farmouts at the time of this litigation can best be presented by the following plat:

Mengden drilled five wells on the premises covered by the two farmouts. Each well was located on one of five separate gas units of 320 acres and each well bore the same number as the number of the unit on which it was located. Units # 2, # 4 and '# 5 were composed of acreage exclusively from the Baria farmout while units # 1 and # 3 were composed of acreage contributed from both the Miltex and Baria farm-outs. Wells # 1 and # 3, located on the Miltex acreage of their respective units, were completed in the Escondido sand as good commercial gas producers. Wells # 2 and # 5 were dry holes and well # 4 was a meager gas producer which would never produce enough to pay for itself.

In determining whether the reversionary interests of Peninsula had become effective, the trial court found that Mengden had recovered $70,000 per well after taxes on the production accruing to the net working interest of the “A” lease. The trial court decreed that the reversion had occurred as to the Miltex farmout.

The sole issue on appeal is whether the production from units # 1 and # 3 should have been allocated to both the Miltex and Baria farmouts under the pooling provisions of the “A” and “B” leases. Mengden contends that the production should be apportioned on the basis of acreage contributed by each farmout to units # 1 and # 3. Peninsula responds that the stipulation in the Miltex farmout agreement of a cost of $70,000 for any gas well completed in the Escondido sand is controlling.

The pertinent portion of the pooling provision in the “A” and “B” leases is as follows: “ . . . production from any part of the pooled unit which includes all or a portion of the land covered by this lease . . . shall be considered as production . . . from land covered by this lease . . . .” Pooling of oil and gas leases is a standard practice in the industry and, in the absence of clear language to the contrary, pooling provisions should not be construed in a narrow or limited sense. Texaco, Inc. v. Lettermann, 343 S.W.2d 726, 732 (Tex.Civ.App. —Amarillo 1961, writ ref’d n. r. e.). The effect of pooling is sometimes adverse to reversionary interests. See Southland Royalty Co. v. Humble Oil & Refining Co., 151 Tex. 324, 249 S.W.2d 914 (1952). Nevertheless, reversionary owners may protect their estates from adverse effects of pooling by express stipulation. Southland Royalty Co. v. Humble Oil & Refining Co., supra, at 917. Clear provisions in an assignment of a lease have been given an effect contrary to a proposed alteration by unitization. See McLachlan v. Stroube, 324 S.W.2d 279, 289 (Tex.Civ.App. — Eastland 1959, writ ref’d n. r. e.) and cases therein cited.

Mengden contends that the pooling of Miltex and Baria acreage in units # 1 and # 3 resulted in the allocation of production from, and costs of, those wells between the Miltex and Baria acreage in those units. Mengden does not argue that 50% of the production should be applied against the dry hole expenses on units # 2 and # 5. His application of the pooling provision would allocate 50% of the actual cost to the Baria acreage while the Miltex acreage would be liable for 50% of the stipulated cost or $35,000. Mengden contends that Peninsula’s reversion becomes effective only when these costs have been recovered out of the production accruing to the net working interests under the “A” and “B” leases. We cannot agree with this interpretation of the agreement between the parties.

The farmout agreements provided for reversion when certain costs had been recovered. The provisions listed in detail the recoverable costs which might be incurred by Mengden in drilling, plugging, etc., any well, whether productive or dry, “on such lease premises.” Thus, the Miltex farmout limited the recoverable costs to those costs incurred in operations on the “A” lease. This agreement seems contrary to the proposed allocation of 50% of the actual costs to the “B” lease premises in units # 1 and # 3.

Moreover, the Miltex farmout agreement stipulated that any gas well completed in the Escondido Sand under the “A” lease premises would cost $70,000 and that reversion would occur when Mengden had recovered that cost. Mengden’s application of the pooling provision would permit recovery in excess of $70,000 from such wells before the reversion would occur. We hold that the above stipulation constituted an express agreement contrary to Mengden’s proposed application of the pooling provision.

The judgment of the trial court is affirmed.

      . The Miltex and Baria farmouts will each be treated, for the sake of simplicity, as contributing 50% of the acreage of units # 1 and # 3.

      . This reversion to Peninsula left Mengden with 3/4 of the gas rights accruing to the net working interest of the “A” lease. The trial court also decreed that the Baria farmout had terminated with the exception of (1) Mengden’s interest in unit # 4, and (2) Mengden’s interest in the portions of the farmout included in units # 1 and # 3.