author: PEDEN, Justice.

text:
    The KRUPP ORGANIZATION, a Division of Measured Marketing Services, Inc., Appellant, v. BELIN COMMUNITIES, INC., et al., Appellees.
    No. 17311.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    May 3, 1979.
    Rehearing Denied June 7, 1979.

      Butler, Binion, Rice, Cook & Knapp, Roger A. Rider, Houston, for appellant.
    Reynolds, Allen & Cook, James R. Leahy, Houston, for appellees.
    Before COLEMAN, C. J., and PEDEN and DOYLE, JJ.
   PEDEN, Justice.

The Krupp Organization appeals from a take-nothing judgment after the non-jury trial of this suit based on breach of contract. Krupp contends that the final contract between the parties provided that El-kins Lake would pay for 250,000 multipart brochures to be made up and mailed by Krupp. Elkins Lake contends that the parties’ agreement consisted of several writings and oral statements between their agents and required it to purchase only 50,000 brochures. Detailed findings of fact and conclusions of law were filed. Krupp alleges 1) that its second quotation (signed on January 21, 1974) became a valid contract, 2) that Elkins Lake breached it, 3) that Krupp is entitled to damages, and 4) that the trial court’s significant findings were based solely on erroneously admitted parol evidence. By cross-point, Elkins Lake maintains Krupp was overpaid and that El-kins Lake is entitled to recover the overpayment. We reverse and render.

Krupp is a California Company specializing in creating, printing and mailing advertising brochures. Elkins Lake is the assumed name of Lakewood Hills, a joint venture that was managed by Belin Communities, Inc.

In September of 1973, Cullum J. Heard, Vice President of Marketing for Elkins Lake, signed a “Quotation from the Krupp Organization” presented by Robert Fein-stock, a Krupp salesman, who initialed it. An additional signature space titled “Must Be Approved by a Krupp Organization Corporate Officer” was not signed. The quotation stated that 250,000 brochures would be printed and mailed at a cost of $250 per thousand, including postage. Designing of the brochures was begun.

A second “Quotation from the Krupp Organization” was signed on January 21,1974, by Heard for Elkins Lake and initialed by Feinstock on the line entitled “Submitted for the Krupp Organization,” but the line marked “Must Be Approved by a Krupp Organization Corporate Officer” was again left blank. Feinstock was not a corporate officer. The second quotation also provided for 250,000 brochures, but the cost was raised to $235 per thousand plus postage because Elkins Lake had added an extra item to the mailing. Along with the signed second quotation, Elkins Lake sent Krupp a check for $15,000 as initial payment, and Krupp began the printing and mailing of 50,000 brochures. Krupp sent an acknowl-edgement dated January 31, stating that 50,000 brochures would be sent out in the course of six mailings, and they would be completed on March 8. Feinstock testified that the decision to print and mail 50,000 pieces, at the rate of 10,000 per week, was made by Krupp, but he said it was made at Heard’s request. On cross examination, he related that the 50,000 figure was picked by Heard and was mutually agreed upon by Heard and himself.

By letter dated May 17, 1974, Heard can-celled further orders by authorizing Fein-stock to sell any unused materials ordered for the Elkins Lake brochures, and Krupp credited $9,614 to Elkins Lake’s account for the unused paper stock, ink, and mailing lists. Krupp alleges that Elkins Lake still owes $17,506.00 plus an additional $605.86 for certain items outside the January 21, 1974 quotation.

Over Krupp’s objections, the trial court admitted parol evidence concerning the agreements of the parties. Heard testified that Feinstock represented that neither of the quotations was intended to be a final agreement and that no quotation would be final and binding until approved by a corporate officer of Krupp. Further, that he and Feinstock agreed that a 50,000 unit sample mailing would be prepared and that if the resulting sales were satisfactory, the remaining 200,000 units would be printed and mailed out. He said Elkins Lake had had no prior business dealings with Krupp, so it was agreed that this sample mailing would allow Elkins Lake to see if Krupp’s direct mail program would be effective.

Appellant’s first ten points of error and its points twelve through sixteen each assert that there is no evidence to support certain of the trial judge’s findings of fact because such findings were based solely on parol evidence. We summarize the findings in question:

2) Feinstock (of Krupp) represented to Heard (of Elkins Lake) that the September 17, 1973, quotation (PX 3) would not be binding on Elkins Lake even if Heard signed it unless a Krupp corporate officer approved it;
3) Feinstock represented that he would not submit the quotation to a Krupp officer for approval until its terms had been finally agreed upon;
4) Heard signed the quotation (PX 3) in reliance on Feinstock’s representations;
8) Neither Feinstock nor Heard intended the quotation (PX 3) to be a binding, final agreement;
9) Negotiations continued and on January 21, 1974, Feinstock tendered a second quotation (PX 7) to Heard;
10) Feinstock represented that it would not be binding on Elkins Lake unless approved by a Krupp corporate officer;
11) Feinstock also represented that he would not submit the second quotation to a Krupp officer for approval until the parties had agreed on final terms;
12) Heard signed the second quotation in reliance on such representations from Feinstock;
16) Neither Feinstock nor Heard intended the second quotation to be the final terms of an agreement;
19) Feinstock agreed for Krupp, before January 21, 1974, that the number of brochures would be 50,000;
22) Elkins Lake agreed to pay $235 per 1000 for the 50,000 units to be produced plus an additional amount because of the reduction in quantity from the proposed 250,000 to the agreed 50,000;
23) The parties agreed that part of such additional cost would be billed to El-kins Lake following each of six mailings to be used;
24) The reduction in quantity from 250,-000 to 50,000 was confirmed in writing by Krupp in its “acknowledgement” dated January 31, 1974 (DX 2);
27) The parties agreed that Elkins Lake would order no more brochures unless the agreed 50,000 units produced satisfactory results.

Section 2.201(a) of the Texas Business and Commerce Code states that except as otherwise provided in that section, a contract for the sale of goods for the price of $500 or more is not enforceable unless there is some sufficient writing and signed by the party against whom enforcement is sought. The writing must indicate that a contract of sale has been made by the parties and must specify a quantity. “ ‘Signed’ includes any symbol executed or adopted by a party with a present intention to authenticate a writing.” Sec. 1.201(39). Further, a contract which does not satisfy these requirements but which is valid in other respects is enforceable if the goods are to be specially manufactured and the seller has made a substantial beginning of their manufacture before notice of repudiation is received. Sec. 2.201(c)(1).

Section 2.202 of the Code provides:

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented
(1) by course of dealing or usage of trade (Section 1.205) or by course of performance (Section 2.208); and
(2) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

The official commentary following this section of the Code states:

Purposes:
1. This section definitely rejects:
(a) Any assumption that because a writing has been worked out which is final on some matters, it is to be taken as including all the matters agreed upon;
(b) The premise that the language used has the meaning attributable to such language by rules of construction existing in the law rather than the meaning which arises out of the commercial context in which it was used; and
(c) The requirement that a condition precedent to the admissibility of the type of evidence specified in paragraph (a) is an original determination by the court that the language used is ambiguous.
2. Paragraph (a) makes admissible evidence of course of dealing, usage of trade and course of performance to explain or supplement the terms of any writing stating the agreement of the parties in order that the true understanding of the parties as to the agreement may be reached. Such writings are to be read on the assumption that the course of prior dealings between the parties and the usages of trade were taken for granted when the document was phrased. Unless carefully negated they have become an element of the meaning of the words used. Similarly, the course of actual performance by the parties is considered the best indication of what they intended the writing to mean.
3. Under paragraph (b) consistent additional terms, not reduced to writing, may be proved unless the court finds that the writing was intended by both parties as a complete and exclusive statement of all the terms. If the additional terms are such that, if agreed upon, they would certainly have been included in the document in the view of the court, then evidence of their alleged making must be kept from the trier of fact. met the basic requirements of Sec. 2.201(a); it was in writing and it was signed by Heard, an officer of Elkins Lake. There is, however, the signature space we have noticed labeled “Must Be Approved by a Krupp Organization Corporate Officer” that has not been signed or initialed. This omission gave the trial judge cause to question whether Krupp’s second quotation, plaintiff’s exhibit 7, was intended by the parties as a final expression of their agreement. The trial judge was entitled to consider the parties’ course of dealing and of performance in resolving that question.

In our case, Krupp’s second quotation, the one on which it seeks to recover,

The second quotation (PX 7) included these provisions:

“Quantity 250,000 “When furnished with transparencies
Krupp’s will provide, in addition to account management, the following services:
ART/COPY/CREATIVE
rough and finished layouts.
LISTS
. special interest groups on magnetic tape.
PRINTING/BINDERY
(here followed a description of the weights of the papers, the sizes of the cards and envelopes and the number of colors of ink to be used in the seven pieces listed — with a note that all sizes are approximate)
INVESTMENT. $235/M plus postage”

We have noted that Mr. Heard signed it for Elkins Lake on January 21. By letter dated the next day he forwarded to Krupp a check for $15,000 as “initial payment for direct mail program; printing, postage, etc.” and said “Sorry for all the delays, but everything is moving now and I look forward to an exciting year.”

When, some ten days later, on January 31, Krupp sent its “acknowledgement,” it appears that the parties had reached an agreement. The acknowledgement is identified as “1278F Revised,” “Continuation of Job 5765F,” and states “Est. Quan. 50,000.” It bears this message: “Thank you for your order. This is a copy of a work order which we have entered for you. Please read it carefully. . . .” The work description includes details of printing, lithographing, computer work, cutting, folding, inserting and mailing. The mail schedule lists six dates on which a total of 50,000 units were to be stamped and mailed. Prices were not mentioned.

The testimony of Feinstoek and Heard as to the number of units agreed upon is conflicting and the documentary evidence is not clear as to whether the parties had agreed to reduce the order to 50,000 units or had merely agreed to start performance of the contract by a first printing of 50,000 units. We think the trial judge was entitled to conclude from the documentary evidence that Krupp’s second quotation (PX 7) was not intended by the parties as a final expression of their agreement as to the number of mailings and to admit parol evidence to clarify the parties’ dealings. We have noted that Section 2.202 of the Texas Business and Commerce Code states that terms set forth in writing which are intended by the parties to be the final expression of the agreement may not be contradicted by evidence of a simultaneous oral agreement or by evidence of a prior agreement. However, the terms of the writing may be supplemented or explained if the court finds that the writing was not intended as a complete and exclusive statement of the terms of the agreement. “Term” is defined as “that portion of an agreement which relates to a particular matter.” Sec. 1.201(42) Tex.Bus. & Comm.Code (1968). Section 2.202 of the Code allows the admission of only three types of parol evidence: that of course of dealing or usage of trade, evidence of course of performance, and evidence of consistent additional terms. Section 2.208(a) of the Code concerning course of performance states that “[wjhere the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection shall be relevant to determine the meaning of the agreement.” This section recognizes that the parties know best what they mean and that their actions under their agreement are the best indication of its meaning. Sec. 2.208, Comment 1 (1968).

There was introduced into evidence a Krupp invoice for 47,240 brochures, the number actually printed and mailed. This invoice outlined the mailing schedule and was backed up by individual invoices for each of them. Heard testified that Fein-stock agreed to a sample mailing but cautioned Heard that a smaller printing run would cost more than the quoted price of $235 per thousand. According to Heard, the additional cost was $65 or $75 per thousand, and Feinstoek was to invoice Elkins Lake for the difference in price between mailing out 50,000 and 250,000 brochures. The invoices admitted into evidence reflect this additional cost of $66.52 per thousand. The third mailing consisted of 2000 at $66.52 additional charge per thousand and 7196 at $71.52 additional cost per thousand. The remaining invoices each reflected an additional charge of $71.52 per thousand. These additional charges amounted to $3,318.60 plus postage, etc., for a total of $6,210.17. This course of performance was capable of being taken to substantiate El-kins Lake’s contention that the only final agreement was for a sample mailing of 50,000 brochures.

Since parol evidence was admissible, the findings of the trial court that we have listed were supported by sufficient evidence.

The parties are in agreement that they contracted concerning cancellations: “Should customer cancel a work order, he will be liable for all costs (labor, material and lists, etc.) incurred to date of cancellation and for non-returnable supplies ordered for this job.” While Elkins Lake does not characterize its conduct as cancellation of a work order for the remaining 200,000 mailings, its letter dated May 17, 1974, authorized Krupp “to sell any stock ordered for Elkins Lake and related material held by your organization. . . . ”

Having held that the trial court did not err in admitting the parol evidence and in finding that the parties agreed to the 50,000 figure, we look to the testimony as to damages.

Under the trial court’s findings, Krupp was entitled to recover under the contract on the basis of 50,000 units but not for loss of anticipated profit based on 250,-000 units.

The parties stipulated in the trial court that “if the court finds a contract to be in existence, that attorney’s fees are recoverable pursuant to that contract. That a reasonable attorney’s fee is $3,500.” The trial court’s first conclusion of law is that a contract existed, but the evidence and the court’s findings fail to show that Elkins Lake was indebted to Krupp, so Krupp cannot recover an attorney’s fee.

The trial judge’s findings concerning Krupp’s expenses and payments by Elkins Lake were:

25) Elkins Lake has paid Krupp $21,-322.17;
31) When Krupp received notice that no more brochures would be ordered, its costs incurred to date were $10,-915.63.

The appellant’s eighteenth and nineteenth points of error complain that there is no evidence to support finding 31 and that it is against the great weight of the evidence.

On December 27, 1973, Krupp had billed Elkins Lake for work done to that point. Feinstock testified that it covered the acquisition of necessary materials and included overhead and profit. A description of the work done was set forth in the bill in detail, but the charges were not itemized.

Krupp’s figures were:

Charges billed to December 27 (principally materials) $ 42,120

Elkins Lake paid on January 21 - 15,000

$ 27,120

Credit for unused paper, inks, etc. - 9,614

Demanded by Krupp, June 4 $ 17,506

Due on a transaction not in the contract + 605.86

$ 18,111.86 Balance due

Feinstock explained that Elkins' Lake should pay under the contract for 250,000 units at a rate of $168 per thousand, a total of $42,120. The $168 figure was reached by excluding from the rate stated in the second quotation ($235 per thousand plus postage) the cost of those papers and inks that would not be needed in view of the reduction in quantity. Not excluded from the $168 figure was an item of $75 per thousand called by Krupp “account management.” Feinstock testified that such term covers “conceptualizing, copying, rewriting” plus overhead and profit.

Under the trial court’s findings that the parties contracted for 50,000 brochures at $235 per thousand and that Elkins Lake would also pay certain other agreed charges, we need not consider whether the evidence supports its finding as to Krupp’s costs to the date when it learned that no more brochures would be ordered. Under those contract findings and the evidence of damages, the only items chargeable to El-kins Lake were:

47,240 brochures at $235/thousand $ 11,101.40

Agreed additional charges 6,210.17

Unused brochures sent to Elkins Lake 462.00

McGraw Hill list sent to Elkins Lake 255.86

Obligations of Elkins Lake $ 18,029.43

It is uncontroverted that Elkins Lake paid Krupp $21,322.17, so under the trial court’s findings and conclusions, Elkins Lake is entitled to recover the difference, $3,292.72. We need not consider the value of the supplies used by Krupp or the value of the unused supplies that it sold.

The appellant contends that Section 2.708(b) of the Code, not Section 2.708(a) is applicable here. The two parts of that section provide:

§ 2.708. Seller’s Damages for Non-Acceptance or Repudiation
(a) Subject to Subsection (b) and to the provisions of this chapter with respect to proof of market price (Section 2.723), the measure of damages for nonacceptance or repudiation by the buyer is the difference between the market price at the time and place for tender and the unpaid contract price together with any incidental damages provided in this chapter (Section 2.710), but less expenses saved in consequence of the buyer’s breach.
(b) If the measure of damages provided in Subsection (a) is inadequate to put the seller in as good a position as performance would have done then the measure of damages is the profit (including reasonable overhead) which the seller would have made from full performance by the buyer, together with any incidental damages provided in this chapter (Section 2.710), due allowance for costs reasonably incurred and due credit for payment or proceeds of resale.

We overrule the appellant’s points of error 21 and 22, which are directed to the trial court’s conclusions of law that Elkins Lake performed its obligations under the contract and has not breached it, so it necessarily follows that neither part of Section 2.708 is applicable.

We have examined each of the appellant’s points of error and find that none of them presents reversible error.

We sustain the appellees’ cross point to the extent that it is to recover the overpayment of $3,292.74.

The judgment of the trial court is reversed, and judgment is rendered in favor of the appellees in the amount of $3,292.74.


source: Caselaw Access Project

author: COLEMAN, Chief Justice.

license: Public Domain

text:
    GENERAL MOTORS CORPORATION, Appellant, v. Harold L. BRYANT, Appellee.
    No. 17315.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    May 3, 1979.
    Rehearing Denied June 7, 1979.

      Vinson & Elkins, Gay C. Brinson, Jr., J. C. Nickens, Houston, for appellant.
    Schmidt & Matthews, W. Douglas Matthews, James H. Brannon, Smith & Connor, James Patrick Smith, Houston, for appellee.
    Before COLEMAN, C. J., and PEDEN and DOYLE, JJ.
   COLEMAN, Chief Justice.

This is a products liability case. General Motors Corporation appeals from a judgment based on a jury verdict awarding Harold L. Bryant the sum of $2,400,082.67. General Motors contends that the evidence is not in law or in fact sufficient to support findings by the jury: (1) that the right rear suspension system of Bryant’s 1962 Corvair was defectively designed and that such defect was a producing cause of the occurrence; (2) that the right rear suspension system was defectively manufactured in that a lock washer was not placed on a critical bolt during assembly and that such defect was a producing cause; and (3) that the interior of the automobile was defectively designed in two respects (failure to have a padded sun visor and failure to provide an adequate restraint system) and that such defects were producing causes of the injuries suffered by the plaintiff.

On March 5,1965, Mr. Bryant had attended a union meeting and was returning to his home in the Corvair automobile on Interstate Highway 10 near the Magnolia Bayou bridge. There is evidence that he passed an automobile driven by Wallace Ellis at approximately sixty-five miles per hour. Bryant proceeded in the outside lane for some distance and then moved into the inside lane. A short time later, Ellis observed Bryant’s car swerving and jerking to the left at which time the right rear corner of the car dropped down and the sparks were seen underneath the right rear corner of the automobile. Mr. Ellis stated that he saw the motor cover pop up and the car take a sharp right turn. While these events were occurring, it appeared to him that the right rear wheel was missing or that it was low on the ground. The car then went off the roadway and dropped to a grassy area below the bridge.

Ellis testified that he then stopped his vehicle and ran down the side of the road where he found the car resting on its roof. The front windshield was gone and he found Bryant in the car with a portion of his head and one arm protruding through the windshield area. He attempted to remove him from the car but was unable to do so. When a crowd began to gather, Ellis slipped away before the police arrived because he did not want to be a witness.

No other person purporting to be an eyewitness was produced at the trial. Mr. Bryant suffered brain stem damage in the accident, resulting in partial paralysis and loss of memory. He was unable to testify concerning the cause of the accident. Various expert witnesses produced by the plaintiff and the defendant examined the wrecked automobile and pictures taken of it, as well as the scene of the accident, and attempted to reconstruct the events leading up to the accident and to determine the cause thereof. The expert witnesses presented by General Motors concluded that the Corvair was driven off the highway and over the embankment at a high rate of speed due to driver error and that no mechanical or design defect was a cause of the accident and the injuries to the plaintiff.

Expert witnesses produced by the plaintiff testified that the right rear suspension of the automobile was defective in several particulars and that these defects were in design and could have been remedied at little or no additional cost in such a way as to have prevented the accident. The jury found that the right rear suspension system of the 1962 Corvair was defective as designed.

The jury also found that the right rear suspension system of the 1962 Corvair was defective as manufactured. The jury was instructed to consider only whether or not a lock washer was placed on the alleged missing bolt at the time the ear was assembled. The jury’s answer to this special issue was supported by the testimony of Mr. Marco-sky and Dr. Fowler.

Mr. Bryant’s Corvair received its most severe damage in its right rear suspension area. The Corvair automobile was designed with independent suspension systems for each wheel. The motor was located in the rear of the car. Mr- Marcosky reconstructed the accident in order to explain the damage to the right rear undercarriage. From an examination of the automobile, he found that the shock absorber failed when its lower attachment bolts were sheared. It was his theory that all of the right rear undercarriage failures occurred on the roadway and were caused by a missing bolt and a loosened adjacent bolt in the right lower control arm. Mr. Marcosky was of the opinion that the absence of the one bolt and the looseness of the other caused the right rear lower control arm to move slightly, which caused the right rear wheel to “jack up” and go beyond its full rebound position on the roadway. It was at this point, in Mr. Marcosky’s opinion, that the two lower attachment bolts for the shock absorber failed and that the failure of the shock absorber then caused a series of failures of various parts in the right rear undercarriage. Mr. Marcosky felt that the failure of the lower shock absorber attachment bolts caused the car to go out of control.

All of the experts agreed that the two lower attachment bolts for the shock absorber failed when the right rear wheel and half-axle went beyond full rebound, position. The critical dispute was whether this occurred on or off the roadway.

Mr. Marcosky testified that the lower control arm was attached by four bolts, two at each end. He stated circumstances that led him to believe that one of the bolts was completely missing prior to the accident and that the other- bolt at that end of the control arm was loose. With one bolt missing, a bracket holding the emergency brake cable was held in place by only one bolt which, as a result of vibration over a period of time, had become loose. The lower control arm then was held in place by two bolts at one end and only by one loose bolt at the other end. This permitted some motion in the lower control arm resulting in additional toe-in of the right rear wheel. This put some cornering force on the contact patch of the wheel which pushed it under and caused some positive camber.

Mr. Ellis had testified that when Mr. Bryant started his passing maneuver at about sixty-five miles an hour, his vehicle made a sharp turn to the left and it looked like it was going to go all the way over. Mr. Marcosky theorized that the car had started to slide sideways and tipped up on its side because of the cornering force developed from the extra toe. As this happens, the force on the wheel is very high and it rolls underneath the car. He testified that when the tuck under occurs, the car momentarily loses traction and goes into a full-over position when the shock absorber is fully extended. In his opinion, at this time the rear shock attachment bolts failed because they are just too little, and the shock is pulled through the lower control arm. There is then nothing to hold the lower control arm from going down underneath the car, and when it reaches a certain distance, the spring is no longer retained and it pops out. The lower control arm reaches a point where it binds, and the universal joint comes in contact with the retaining nut from the differential housing.

At that point, according to Mr. Marcosky, everything is locked. The loose bolt connecting the lower control arm to the cross-member is pulled out. The differential is pivoted up into the engine bay compartment breaking the right transmission lug mounts and the engine moves up into the engine bay compartment causing the carburetor to come in contact with the spare tire, pushing it against the right rear deck lid and popping it up.

Mr. Marcosky states that all of these things happened in a very short time and resulted in lost power and brakes and inability to control the ear.

Dr. Gary Fowler, a metallurgist, testified that he found failures which were consistent with the reconstruction of the accident as testified to by Mr. Marcosky. He testified that 1550 pounds of force would be required to pull out the lower shock attachment. This figure was obtained through use of the diameter of the bolts and the strength of the material. He used the “typical strength for that threaded fastener of that nature” in making his calculation. • He also testified that he did not know the material from which the bolt was made, and that he was estimating the shear strength to be 25,000 pounds per square inch. He also testified that there was a variable, but he did not think it could be twice 25,000 pounds per square inch in that he had not experienced that amount in a fastener. He calculated the lateral force that would be generated in a “jacked up” position by calculating the force required to overcome the coefficient of friction on the pavement. In answer to a question as to how much force would be generated by a normal passing maneuver at sixty-five miles an hour, he stated that he was not certain he could describe a normal passing maneuver. He testified that a force of approximately 1,298 pounds would be required to skid the wheel, but that considering the load on the car and the load caused by the spring tension, there was a total force of 1625 pounds on the shock absorber. He stated that these calculations were made on the basis of static loads and that there could be dynamic loads placed on the system that would add to the static loads. He reached the final conclusion that every time the Corvair exceeded the coefficient of friction while in the full rebound position and in a slightly jacked up position the shock absorber would fail.

To counter this testimony an expert witness employed by the defendant, Mr. Tom Bundorf, testified that the plans and specifications for the 1962 Corvair specified that the bolts which retained the lower end of the shock absorber into the control arm were made of GM-280-M steel. He testified that those steel specifications mean that they are made of high strength steel and that the minimum strength of those bolts would be 92,000 pounds per square inch. He calculated that the shear yield stress of the bolt would be normally 52,000 pounds per square inch and that the two bolts would carry a load of 5,495 pounds before shearing.

Appellant asserts that the accident could not have occurred in the manner plaintiff’s experts postulated because they assumed that the cornering force on the right rear tire was sufficient to shear the bolts that held the shock absorber to the lower control arm of the car’s frame. General Motors asserts that Fowler considered a fact contrary to the evidence in assuming that the upper shear limit of the shock absorber bolts was 25,000 pounds per square inch. This assertion rests on General Motors assumption that the shear strength of the bolts is established as being in excess of 50,000 pounds per square inch by Mr. Bun-dorf’s testimony and calculations. Dr. Fowler’s testimony is in some respects inconsistent with the mathematical calculations of Mr. Bundorf. Mr. Bundorf’s testimony as to his calculations does not establish them as being correct. The record does not reflect that Mr. Mareosky depended upon information as to the shear strength of the bolts given him by Dr. Fowler in reaching his conclusions.

The various expert witnesses explained their theories and findings in detail to the jury. Their findings were buttressed by various exhibits, pictures and mathematical calculations which were carefully explained to the jury. Mr. Mareosky⅛ testimony was consistent with the testimony given by Mr. Ellis, the eyewitness. This testimony was accepted by the jury and fully supports the answer made by the jury to special issue 1, and also supports the answer made to special issue 2.

As the court stated in Luttes v. State, 159 Tex. 500, 324 S.W.2d 167, 189 (1958) “[wjhile, in a limited sense, all testimony may involve opinions of the witnesses, the proof here was peculiarly of the ‘opinion’ or ‘expert’ type, and the occasion has to be at least highly exceptional when such testimony, even though not contradicted by an opposing expert, must be deemed true as a matter of law.”

The opinions of an expert as to deductions from facts is never binding on the trier of facts, even though not contradicted by an opposing expert. Gregory v. Texas Employers Insurance Association, 530 S.W.2d 105 (Tex.1975).

General Motors’ points of error numbers 1 through 18 will not be sustained since we are of the opinion that the evidence was sufficient to support the answers made by the jury to special issues 1 and 2. We do not reach General Motors’ points of error numbers 19 through 42, which attack findings of the jury relating to the doctrine of “crashworthiness” for the reason that the judgment of the court can be sustained based on the jury’s answers to special issues 1 and 2 and the damage issues.

General Motors’ points of error numbers 43, 44, 45 and 46, complain of the wording of special issue number 1. The issue inquired whether the right rear suspension system of the 1962 Corvair was defective as designed. In connection with this issue an instruction was given in these words:

“You are instructed that you shall consider only the following items in determining whether or not the right rear suspension system on the 1962 Corvair in question was defectively designed and none others: use of lock washers rather than castellated nuts with cotter pins or self-locking nuts on the attachment bolts located on the right rear lower control arm; the absence of a rebound strap; the use of the particular shock absorber attachment bolts and shock absorber on the car in question; the absence of a camber compensator; and the location and attachment of the bracket for the emergency brake cable to a bolt which also secured the right rear lower control arm to its supporting cross-member.”

General Motors contends that this instruction suggests that there was a missing bolt and a loose bolt because of the uncon-tradicted evidence that there would be no need for the various “fail-safe” devices like the rebound strap and the strengthened shock absorber unless one bolt was missing and the other was loose. Mr. Marcosky testified that the missing bolt acting together with the loose bolt set in force the chain of circumstances which resulted in the accident. He testified that had the shock absorber bolts been stronger or had the car been equipped with rebound straps the accident would not have occurred.

Numerous authorities have held that a jury issue which assumes a controverted fact constitutes an impermissible comment on the weight of the evidence. City of Houston v. Cash, 483 S.W.2d 513 (Tex.Civ.App.-Houston [1st Dist.] 1972, writ ref’d n. r. e.).

Rule 277, Tex.R.Civ.P., was amended effective September 1,1973, to read in part as follows: “The court shall not in its charge comment directly on the weight of the evidence or advise the jury of the effect of their answers, but the court’s charge shall not be objectionable on the ground that it incidentally constitutes a comment on the weight of the evidence or advises the jury of the effect of their answers where it is properly a part of an explanatory instruction or definition.”

It was necessary that the judge confine the jury to matters raised both by the pleadings and the evidence in its determination of the ultimate issue submitted by special issue number 1, that is, whether the right rear suspension system was defective as designed. The instruction given accomplished this objective.

There was a conflict in the expert testimony as to whether a bolt was missing and the adjoining bolt was loose prior to the accident. General Motors asserts that this fact question should have been submitted to the jury and that special issue number 1, should have been predicated on an affirmative answer to that issue.

Rule 277, supra, permits the trial court, at its discretion, to submit broad general issues to the jury. State v. Norris, 550 S.W.2d 386 (Tex.Civ.App.-Corpus Christi 1977, writ ref’d n. r. e.). Evidentiary issues should not be submitted to the jury. The ultimate issue was whether the right rear suspension system was defective as designed. Whether there was a missing bolt and a loose bolt was merely evidentiary. Lambert v. H. Molsen & Co., Inc., 551 S.W.2d 151 (Tex.Civ.App.-Waco 1977, writ ref’d n. r. e.).

It appears that the instruction was included in the charge by the trial court in an attempt to comply with the requirements laid down by the Supreme Court of Texas in Scott v. Atchison, T. & S. F. R. Co., 572 S.W.2d 273 (Tex.1978). There the Supreme Court said:

“ . .if the listing of the relevant acts or omissions in the broad ultimate fact issue should be cumbersome, complicating, or otherwise undesirable, the requirement may be met by a complimentary instruction along the following lines: ‘In your determination of the above question you shall consider only whether the railroad company was negligent in failing to have the necessary culverts or sluices at or near Bridge 46.3, or [here listing any other acts or omissions raised by the pleadings and the evidence upon the new trial]’.”

Rule 277, supra, was amended in 1973 for the specific purpose of permitting simpler and broader submissions of controlling issues. The giving of the limiting instruction in this case was within the discretion of the trial court. The comment on the evidence produced thereby, if any, was not direct but incidental only and was a proper part of an explanatory instruction.

In his voir dire the attorney for the plaintiff stated:

“There is another reconstruction expert that was hired by General Motors, a Mr. Frank Weaver, who is an engineer locally who had examined this automobile and scene and ended up with a different reconstruction theory about this case.” Apparently General Motors objected to this statement during an unreported discussion at the bench on the ground that it violated a motion in limine. The motion in limine and the court’s ruling thereon do not appear in the record. The trial court sustained the objection and instructed the jury not to consider that remark. It appears to be uncontroverted that Mr. Weaver examined the automobile at the request of General Motors and made numerous photographs of the automobile and various parts thereof. Many of these pictures were admitted into evidence and identified as pictures taken by Mr. Weaver. At various times during the trial he was identified as a General Motors expert without objection.

While it has been held that an attorney may comment in his argument on the failure of the opposite party to call a witness employed by him, it has also been held that the attorney may not undertake to tell the jury what testimony that witness would give. Tex-Jersey Oil Corporation v. Beck, 157 Tex. 541, 305 S.W.2d 162 (1957). The remark by plaintiff’s attorney that Mr. Weaver ended up with a different reconstruction theory was clearly improper. Since the trial court instructed the jury not to consider that remark, harmful error is not shown.

General Motors introduced evidence that the plaintiff had been drinking shortly before the accident, that beer and liquor were found in his car after that accident, and that several persons smelled alcohol on his breath. The plaintiff introduced evidence that he had consumed about two bottles of beer and was in full control of his faculties prior to the accident. Dr. Samuel Feducia treated the plaintiff when he reached the hospital after the accident. Hospital records prepared by him indicated “suspect patient inebriated”. This portion of the hospital record was excluded by the trial court. The defendant offered testimony on a bill of exception that the doctor stated in a deposition that he had information from an unnamed friend of the patient that the plaintiff had been drinking heavily and the car overturned. The doctor testified that he did not remember who the friend was. The doctor also testified on the bill of exception that he could smell the odor of alcohol on the plaintiff’s breath and it smelled to him like beer. There was also testimony that a Dr. Sharkey had examined the plaintiff and had detected the odor of alcohol on his breath.

The testimony is undisputed that the plaintiff had been drinking beer prior to the accident. Dr. Feducia testified that all he knew was that he smelled beer on the plaintiff’s breath. No blood alcohol test was given to Mr. Bryant and Mr. Bryant was not able to walk or talk.

Article 3737e, Tex.Rev.Civ.Stat. authorizes the admission into evidence of business records once a proper foundation has been laid. It is necessary that it be established that it was the regular course of that business for an employee or representative of such business, with personal knowledge of the act, event or condition to make the record or to transmit information to be included in the record. This provision requires the exclusion of a statement in a hospital record from an outside source as to bow an accident happened. The opinion of a qualified expert in the field of his qualification recorded in a hospital record is admissible in those instances where it can be said that the diagnosis records a condition resting in reasonable medical certainty. Loper v. Andrews, 404 S.W.2d 300 (Tex.1966); Skillern & Sons, Inc. v. Rosen, 359 S.W.2d 298 (Tex.1962).

The medical opinion of a doctor recorded in hospital records by the doctor or someone to whom he has conveyed the opinion that a patient was drunk would ordinarily be admissible into evidence. However, in view of Dr. Fedueia’s testimony that his diagnosis was made on the basis of an unnamed witness’ statement and the fact that the plaintiff smelled of beer, the trial court properly refused to admit the statement into evidence. In any event the refusal to admit this bit of testimony would not constitute a reversible error. It is unlikely that a jury would credit a doctor’s opinion that a patient was drunk if it were known that this opinion was based solely on the fact that the doctor could smell beer on the patient’s breath. The notation made in the hospital records by Dr. Feducia: “suspect patient inebriated”, does not amount to a medical opinion. Since it was merely a comment and was speculative in nature, the fact that the comment was recorded in the hospital records would not render the comment competent evidence.

In points of error No. 50, 51, and 52, General Motors complains about certain remarks made by plaintiff’s counsel in his final argument. Plaintiff’s counsel argued in effect that since the court had not submitted anything in its charge concerning drinking or concerning negligence on the part of the plaintiff, the fact that plaintiff might have been drinking was not significant. The statement was made: “if there was sufficient evidence to base that issue, you would be asked the question . that’s just like what happened on the drinking. There wasn’t any evidence, so the court didn’t submit an issue to you.” In effect, the argument was that since no issue on contributory negligence was submitted to the jury, the conduct of the plaintiff had no bearing on the issues submitted.

The argument or a similar one was made on three occasions. The first two occasions provoked no objection on the part of counsel for General Motors.

“The general rule with respect to improper argument is well settled: a party must object to it at the time it is made and his objection must be overruled; it is only when the probable harm or the resulting prejudice cannot be eliminated or cured by retraction or instruction that a new trial will be awarded in the absence of a timely objection.” Brown v. Friedman, 451 S.W.2d 588 (Tex.Civ.App.-Houston [1st Dist.] 1970, no writ).

The last time the argument was made the plaintiff’s counsel was attempting to equate the argument with one made by defendant’s counsel concerning punitive damages. Plaintiff’s counsel argued that “there wasn’t any evidence so the court didn’t submit an issue to you.” At this time an objection was made which was sustained by the trial court and the jury was instructed not to consider the remarks. The prejudice, if any, resulting from this argument was cured by the admonition of the trial judge. Younger Brothers, Inc. v. Myers, 159 Tex. 585, 324 S.W.2d 546 (1959).

Another argument to which objection was made and sustained by the court related to a written statement made by the witness Ellis to the attorneys for the plaintiff. This written statement was not made available to counsel for General Motors. While Mr. Ellis was on the stand he was asked whether or not he thought it would be fair and equitable to give the ladies and gentlemen of the jury an opportunity to see the statement and he replied that it would “probably be fair to them but it would not be fair to me”. He also stated in answer to a question “it might be different, but if it is different, the only one that is going to look bad is me.” Counsel for plaintiff then stated before the jury that he would offer the statement in evidence if counsel for General Motors would stipulate that it was admissible. An objection was made and sustained by the court.

In argument to the jury, counsel for General Motors repeated the statements and argued: “folks, when you come down to the court house, you don’t need to leave your common sense at home. Now, I don’t know why it wouldn’t be fair to Mr. Ellis and I don’t know why it would look bad to him, but as I say, you, ladies and gentlemen, nor have we had an opportunity to see what he made in a statement a year after this accident did occur.” In answer to this argument plaintiff argued that “they did not want it in evidence” and that “they refused to have this statement in evidence but they want to beat us over the head with it as if he had told something different. He’s told you exactly what he said, exactly — .” We consider that this argument was invited, the trial court sustained the defendant’s objection, but no instruction to disregard the argument was asked or given to the jury. Reversible error is not presented. Texas Employers’ Ins. Ass’n v. Haywood, 153 Tex. 242, 266 S.W.2d 856 (1954); Tennison v. Letto, 469 S.W.2d 287 (Tex.Civ.App.-Austin 1971, writ ref’d n. r. e.).

Plaintiff’s counsel also made the following argument:

“Mr. Brinson made a big point of the fact the damage issue is not predicated, is not based on any of the other issues, you answer it separately. I will just say this. If you don’t answer a defect in issue number 1, 2, or 3, and the “producing cause” for that defect, then school is out for Mr. Bryant.” This argument informed the jurors of the effect of their answers and appealed for an answer favorable to the plaintiff. The argument was clearly erroneous. Houston, E. & W. T. Ry. Co. v. Sherman, 42 S.W.2d 241 (Tex.Comm.App.1931, holding app’d); Magic Chef, Inc. v. Sibley, 546 S.W.2d 851 (Tex.Civ.App.-San Antonio 1977, writ ref’d n. r. e.).

This was a lengthy trial lasting some three weeks, and the issues were rather clearly drawn. From the arguments made, the jury could hardly have failed to ascertain the manner in which the attorneys for the plaintiff and the defendant desired them to answer the issues. The argument was not so harmful as that it probably caused the rendition of an improper judgment. Magic Chef, Inc. v. Sibley, supra.

We are not in sympathy with efforts of counsel to deliberately violate the rules of proper jury argument for the purpose of gaining an advantage and then argue that the case should not be reversed because no prejudice to the opposing party resulted therefrom. However, the Supreme Court of Texas has interpreted Rule 434, Tex.R. Civ.P., as requiring this court to determine before reversing a case that the error be such that it “was reasonably calculated to cause and probably did cause the rendition of an improper judgment.” In interpreting this test the Supreme Court stated:

“The true test is the degree of prejudice flowing from the argument — whether the argument, considered in [the] proper setting, was reasonably calculated to cause such prejudice to the opposing litigant that a withdrawal by counsel or an instruction by the court, or both, could not eliminate the probability that it resulted in an improper verdict.” Texas Employers’ Ins. Ass’n v. Haywood, 153 Tex. 242, 266 S.W.2d 856 (1954).

After considering all of the asserted instances of improper argument in light of the record in this case we are unable to conclude that the argument was so harmful that it was reasonably calculated to cause and probably did cause the rendition of an improper judgment.

The judgment is affirmed.


author: CLAYTON, Justice.

text:
    ALLSTATE INSURANCE COMPANY, Appellant, v. Helen CHANCE, Appellees.
    No. 8242.
    Court of Civil Appeals of Texas, Beaumont.
    May 3, 1979.
    Rehearing Denied May 24, 1979.

      Gordon R. Pate, Beaumont, for appellant.
    George M. Jamail, Beaumont, for appel-lees.
   CLAYTON, Justice.

Plaintiff below, Helen Chance, filed this suit against defendant, Allstate Insurance Company, upon a fire insurance policy seeking damages for the total loss of a dwelling and household goods located therein. Based upon favorable jury findings, judgment was entered for plaintiff in the sum of $20,000 for damages to the dwelling and $6,000 for damages to the household goods, from which judgment defendant appeals.

Defendant has brought forward twenty-four points of error. Defendant has presented only one “argument and authorities” for all twenty-four points. This “lumping together” one argument for twenty-four points of error is a flagrant violation of the provisions of Tex.R.Civ.P. 418. Nevertheless, in view of the clarity of the points presented, we will consider the same.

Defendant’s first three points complain of error of the trial court in awarding the sum of $6,000 as damages for the loss of personal property upon grounds of no evidence, insufficient evidence, and against the great weight and preponderance of the evidence.

The jury found that the actual cash value of the personal property destroyed by the fire was $6,000.

The only evidence presented by plaintiff in an attempt to prove such cash value was a list, prepared by plaintiff and her daughter, setting forth the particular item, the approximate cost, “age” of item, and where the same was purchased. We agree with defendant that the mere approximate cost of an item of personal property — some of which was listed as having been purchased as long as eight years prior to the loss — is not proper or competent evidence to prove the actual cash value of such items at the time of the loss. Defendant strongly urges that the testimony of its witness properly determined the actual cash value of the personal property destroyed by the fire to be in the sum of $3,963.41. We agree with defendant and further agree with defendant’s argument that there is no contradictory evidence of this point. This value of $3,963.41 was clearly proven by competent testimony. Based upon the un-contradicted testimony, the actual loss sustained by plaintiff for her personal property lost in the fire was $3,963.41, and the judgment entered for plaintiff in the sum of $6,000 is reformed so as to award her judgment in the amount of $3,963.41 for such damages.

Defendant’s fourth point complains of the entry of judgment awarding plaintiff $20,000 for the total loss of the dwelling “for the reason that the jury found . that Helen Chance was not the sole owner of the premises.” This point of error, under the one argument as to all twenty-four points, is merely restated, without any argument or citation of any authorities. Such a failure to brief and argue a point of error constitutes a waiver thereof, and such a point will not be considered on appeal. Roper v. Jeoffroy Mfg., Inc., 535 S.W.2d 706 (Tex.Civ.App.—Amarillo 1976, writ ref’d n. r. e.); Phagan v. State, 510 S.W.2d 655, 659 (Tex.Civ.App.—Fort Worth 1974, writ ref’d n. r. e.); Frazier v. Wynn, 492 S.W.2d 54 (Tex.Civ.App.—Amarillo 1973, writ ref’d n. r. e.).

Defendant’s fifth through thirteenth points urge no evidence, insufficient evidence, and against the great weight and preponderance of the evidence as to the jury’s findings in response to Special Issues Nos. 5, 6, and 7. The jury found that at the time plaintiff made application for the fire insurance policy, she “misrepresented to or concealed from the agent that she had not had any prior fire loss.” In response to Issue No. 5 inquiring as follows: “Do you find . . . that such misrepresentation was willful?” The jury answered, “We do not.” In response to Issue No. 6 inquiring, “Do you find . . . the misrepresentation was material?” The jury answered, “We do not.” Issue No. 7 inquired, “Do you find . . . the defendant . .relied upon her misrepresentation or concealment in issuing the policy,” to which the jury answered, “We do not”.

The defendant, having the burden of proof upon the above quoted issues, obtained a negative finding by the jury. Therefore, this court cannot consider the no evidence and insufficient points, but can consider only the point urged as being against the great weight and preponderance of the evidence. Traylor v. Goulding, 497 S.W.2d 944 (Tex.1973); Parrish v. Hunt, 160 Tex. 378, 331 S.W.2d 304 (Tex.1960).

At the time of making the application for the fire policy, plaintiff, upon being asked if she had any prior fire losses, stated that she had not. Plaintiff testified that she and her husband had a fire loss approximately ten years prior to this particular loss. She knew nothing about it except that they had a fire loss. She said she “didn’t think it was necessary to bring up a thing way back that far.” This application for a fire policy was the first she had ever made. She had never before recovered, for herself, any proceeds from a fire insurance policy for fire loss. Defendant’s witness testified that the question in the application as to any prior fire, wind, hail, etc., meant any recovery for monetary loss for herself. Plaintiff denied ever receiving any funds for such monetary loss. After a careful review of all the testimony in the record before us, we find nothing to indicate that such a misrepresentation was willfully made.

In Allen v. American National Insurance Co., 380 S.W.2d 604 (Tex.1964), quoting with approval Clark v. National Life & Accident Insurance Company, 145 Tex. 575, 200 S.W.2d 820 (1947), it is stated: “ ‘It is the [well] settled rule that, in order to avoid a policy, false statements must have been made willfully and with design to deceive or defraud.’ ” It is also a settled rule of law that to avoid a policy of insurance because of a misrepresentation, the burden is upon the insurance company to plead and prove, not only that the answers made by the insured were false, but that the insured knew they were false, and that he made them willfully and with the intention of inducing the insured to issue him a policy. Empire Life & Hospital Insurance Co. v. Shannon, 415 S.W.2d 532 (Tex.Civ.App.—Amarillo 1967, no writ); Clark v. National Life & Accident Insurance Co., supra; Golden State Mutual Life Insurance Co. v. White, 374 S.W.2d 901 (Tex.Civ.App.—Dallas 1964, writ ref’d n. r. e.).

It was the burden of defendant to bring forward the evidence and to procure favorable findings to support its position on the question of willfulness. Schwab v. Ranger Insurance Co., 438 S.W.2d 121 (Tex.Civ.App.—Beaumont 1969, no writ). This defendant failed to do. The jury’s answer that it did not find such misrepresentation to be willful is not against the great weight and preponderance of the evidence.

The insurance policy issued to plaintiff by defendant specifically provides: “This entire policy shall be void if, whether before or after a loss, the insured has willfully concealed or misrepresented any material fact or circumstance concerning this insurance, or the subject thereof, or the interest of the insured therein. . Under this specific clause, any act of misrepresentation must be willful before such policy would be void. The misrepresentation not having been willful, as we have so held, then the issues as to same being material and being relied upon by defendant presents no valid defense. If such defense was presented, the negative answers given by the jury are not against the great weight and preponderance of the evidence. These points are overruled.

Defendant’s points fourteen through twenty-two urge no evidence, insufficient evidence, and against the great weight and preponderance of the evidence of the jury’s findings in response to Special Issues Nos. 10, 11, and 12. The jury found that plaintiff, in the application for the fire policy, “misrepresented or concealed from the Defendant the true status of the ownership of the insured premises.” In response to the Issue No. 10, “Do you find . . . that such misrepresentation or concealment was willful?” The jury answered, “We do not.” The jury further found the negative answer, “We do not” to the issues inquiring if such misrepresentation was material and if defendant actually relied upon same.

Plaintiff testified that in making the application for the policy of insurance, she stated to the agent that she was the sole owner of the premises. The record reflects, according to plaintiff’s testimony, that several years prior to this fire loss, she and her husband had been divorced and the premises had been set aside for the use and benefit of plaintiff and her minor child until the child had reached the age of eighteen. The application shows on its face that plaintiff was the owner as distinguished from a renter. The mere statement that she was the sole owner does not in and of itself prove willfulness or that the statement was made for the purpose of inducing the insurance company to issue the policy. Empire Life & Hospital Insurance Co. v. Shannon, supra. The insurance company has not met its burden as required by the authorities cited in our disposition of defendant’s points five through thirteen. After a careful review of all the evidence, we hold the jury’s answer that it did not find the misrepresentation as to ownership to be willful is not against the great weight and preponderance of the evidence. Such misrepresentations not being willful, the other points as to materiality and reliance thereon are overruled for the same reasons stated as to defendant’s points five through thirteen. Defendant’s points fourteen through twenty-two are overruled.

Defendant’s twenty-third and twenty-fourth points complain of the admission of testimony as to attorney fees incurred by plaintiff. After admitting testimony relating to attorney fees, the trial court refused to submit issues to the jury as to such an element of recovery. Defendant contends that such evidence relating to attorney fees prejudiced the jury and probably influenced the jury’s finding which awarded plaintiff $6,000 for the loss of her personal property. In view of our disposition of the $6,000 award, assuming the admission of such testimony into the record was erroneous, such was harmless error. These points are overruled.

By cross-point plaintiff complains of error by the trial court in not submitting her “requested Special Issues concerning attorney fees.” Plaintiff contends she was entitled to recover attorney fees pursuant to the provisions of Tex.Ins. Code Ann. art. 3.62 (Vernon 1972). This court, in Continental Mutual Fire Insurance Co. v. Walles, 20 S.W.2d 405 (Tex.Civ.App.-Beaumont 1929, no writ), held that Tex. Rev.Civ.Stat.Ann. art. 4736 (Vernon 1925) which is now Tex.Ins.Code Ann. art. 3.62 (Vernon 1951), Insurance Code, does not apply to fire insurance companies and attorney fees could not be recovered upon a fire policy. The general rule of law in this state is that, unless provided for by statute or by contract between the parties, attorney fees incurred by a party to litigation are not recoverable against his adversary in tort or by suit upon a contract. Turner v. Turner, 385 S.W.2d 230 (Tex.1964); Heard v. City of Houston, 529 S.W.2d 560 (Tex.Civ.App.—Houston [1st Dist.] 1975, no writ). Plaintiff has not cited any authority, and we have found none that would authorize the recovery for attorney fees in a suit upon a fire insurance policy. This cross-point is overruled.

The judgment of the trial court allowing plaintiff recovery in the amount of $6,000 for loss of her personal property is reformed so as to allow her a recovery for $3,963.41, with interest thereon at nine percent (9%) per annum from the date of the original judgment; i. e., August 3, 1978. The remaining portion of the judgment is affirmed in all things.

AFFIRMED in part; REFORMED in part and, as so reformed, is AFFIRMED.


author: CORNELIUS, Chief Justice.

text:
    MUTUAL SAVINGS AND LOAN ASSOCIATION OF GREENVILLE, Texas, Appellant, v. John W. EARNEST and wife, Marjorie Earnest, Appellees.
    No. 8660.
    Court of Civil Appeals of Texas, Texarkana.
    May 8, 1979.
    Harold F. Curtis, Jr., Curtis & Fugitt, Greenville, for appellant.

      Ralph J. Blagg, Texarkana, for appellees.
   CORNELIUS, Chief Justice.

This is a venue case. The plaintiffs, ap-pellees here, filed suit against the Mutual Savings and Loan Association of Greenville, Texas, defendant and appellant here, seeking damages for the Association’s alleged failure to honor a loan commitment. The suit was filed in Bowie County. The defendant filed a plea of privilege asserting its right to be sued in Hunt County, where its office is located. Plaintiffs controverted the plea of privilege on the ground that the suit was based on a written contract performable in Rockwall County, and requested that the plea of privilege be overruled and the cause be transferred there.

A hearing was held on the plea of privilege but no evidence was adduced. The court heard argument from counsel for both parties, and then overruled the plea and ordered the case transferred to Rockwall County.

When a plea of privilege is filed as provided by Tex.R.Civ.P. 86, it constitutes prima facie proof of the defendant’s right to have the suit transferred to the county of his residence. It then becomes the plaintiff’s burden to plead and prove by competent evidence the applicability of the particular subdivision of Tex.Rev.Civ.Stat.Ann. art. 1995 relied upon, as an exception to the general venue rule, to maintain the suit in the county where it is filed. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91 (Tex.Com.App.1935, opinion adopted). Unless the plaintiff successfully asserts and proves such an exception, the trial court should order the cause transferred to the county of the defendant’s residence. It is not proper to transfer the case to a third county, even if venue would be properly maintainable there had the suit been filed there original ly. 1 McDonald’s, Texas Civil Practice, Sec. 4.57, p. 617; Tunstill v. Scott, 138 Tex. 425, 160 S.W.2d 65 (Tex.Com.App.1942, opinion adopted); Wyche v. R. C. Semple, Inc., 472 S.W.2d 284 (Tex.Civ.App. El Paso 1971, no writ). The selection of the forum for bringing the original suit is the plaintiff’s decision. Having selected Bowie County, and the defendant having filed its plea of privilege to be sued in Hunt County, the trial court had no authority to transfer the proceedings to Rockwall County. Wyche v. R. C. Semple, Inc., supra.

The judgment of the trial court is reversed and judgment is here rendered transferring the cause of action to the District Court of Hunt County, Texas.


text:
    Linda MITCHELL, Appellant, v. Ronnie G. MITCHELL, Appellee.
    No. 8673.
    Court of Civil Appeals of Texas, Texarkana.
    May 8, 1979.

      Joe R. Green, Mobley, Green, Harrison & Gardner, Longview, for appellant.
    Clifton L. Holmes, Kilgore, for appellee.
   CORNELIUS, Chief Justice.

Appellee, Ronnie Mitchell, filed in this proceeding a motion to modify a previous order concerning the custody of his two children. The previous judgment had appointed appellant, Linda Sue Mitchell, the managing conservator of the children. Ap-pellee sought to modify the judgment so that he would be designated managing conservator. A hearing was held on the motion in February of 1978. Both parties and their attorneys were present and the greater part of the evidence relevant to the issue was heard at that time. The trial judge recessed the proceeding in order to secure a Department of Human Resources investigation into the homes of the respective parties, and set the final hearing to consider the report of such investigation for June 21, 1978. On the day prior to the June 21 hearing appellant discharged her attorney. She did not seek a continuance or attempt to secure new counsel, but proceeded to attend and participate in the hearing on June 21. Appellee was present and was represented by counsel. The court considered the report of the investigation and entered its order changing the managing conservator of the children from appellant to appellee. Appellant did not appeal the order on the merits, but through her newly obtained counsel filed a motion for new trial based upon the fact that the court reporter did not attend and make a record of the June 21 proceedings. A record had been made of the first hearing. The trial court held a full hearing on the motion for new trial at which testimony was given by both parties, one of the attorneys, and the court reporter. The trial judge also made several comments concerning his recollection of what transpired at the June 21 hearing with reference to the waiver of a record. At the close of the hearing the motion for new trial was overruled.

It is undisputed that the court reporter did not report the proceedings at the June 21 hearing. Appellee’s position is that the making of a record was waived. The order entered after that hearing recites that “the making of a record of testimony was waived by the parties with the consent of the court.”

Texas Family Code Ann. § 11.14(d) provides that in all proceedings under the Code “A record shall be made as in civil cases generally unless waived by the parties with the consent of the court.” When a party is unable to obtain a statement of facts, and unless the making of a record is waived or its unavailability is otherwise due to the fault or lack of diligence of the complaining party, the case must be reversed and a new trial ordered where the party’s right to have the case reviewed on appeal can be preserved in no other way. See Rogers v. Rogers, 561 S.W.2d 172 (Tex.1978), and authorities there cited. The appellant here did not appeal directly from the order entered on June 21, but moved in the trial court for a new trial on the ground of the unavailability of a record, and her only point of error in this Court is that the trial court erred in denying that motion. Her right to a new trial as prayed for in the motion necessarily depended upon whether the making of a record of the June 21 hearing was waived by the parties with the consent of the court. To determine that issue, the trial court held a full hearing on the motion. At that hearing more than ample evidence was introduced to establish that both parties had in fact waived the making of a record, and that the court had consented to such waiver. There was direct and positive testimony of such a waiver, and there is no evidence appearing in the record or otherwise presented which indicates the contrary. Indeed, appellant did not specifically deny the fact, but only testified that she could not remember making any waiver. The evidence produced on a motion for new trial is sufficient to support the trial court’s implied finding that the parties waived the making of a record at the June 21 hearing. In such circumstances, the court did not abuse its discretion in overruling the motion for new trial.

The judgment of the trial court is affirmed.


text:
    Gay RETTER, Appellant, v. Richard STILL, Appellee.
    No. 8699.
    Court of Civil Appeals of Texas, Texarkana.
    May 8, 1979.
    Stephen W. Johnson, Dalton, Moore, Forde, Joiner & Stollenwerck, Dallas, for appellant.
    E. Ben Franks, Lesher & Franks, Texar-kana, for appellee.
   CORNELIUS, Chief Justice.

Richard Still filed suit against Gay Retter for damages resulting from an automobile collision allegedly caused by Retter’s negligence. Ms. Retter filed a plea of privilege to have the cause transferred to Dallas County where she resided, but the plea was not verified as required by Tex.R.Civ.P. 86. Contained in the same instrument as the plea of privilege, but following it, was a general denial. Mr. Still did not file a controverting affidavit to the plea of privilege, but instead filed a motion to strike the plea, alleging that it was a nullity because not verified, and consequently amounted only to a general appearance. Before the motion to strike was acted upon, Ms. Retter filed an amended plea of privilege which was properly verified. The trial judge, however, concluded that the plea had been waived and overruled it, from which action Ms. Retter has appealed.

This case is governed by the principles applied in Staley v. Western Steel Wire & Pipe Company, 355 S.W.2d 565 (Tex.Civ.App. Dallas 1962, writ ref’d n. r. e.), and Cabrera v. Texas Consumer Finance Corporation, 494 S.W.2d 581 (Tex.Civ.App. Fort Worth 1973, no writ). An unverified plea of privilege is not a nullity. Although in its unverified state it is fatally defective, yet it may be amended, and if it is amended to comply with the rule before the court acts on it, it is sufficient to raise the venue issue. Staley v. Western Steel Wire & Pipe Company, supra; Cabrera v. Texas Consumer Finance Corporation, supra; 1 McDonald’s, Texas Civil Practice, Sec. 4.44, pp. 582, 583. If so amended, the plea relates back to the time of the filing of the original plea and supersedes it. Cabrera v. Texas Consumer Finance Corporation, supra; Staley v. Western Steel Wire & Pipe Company, supra; Everts v. Garlington, 117 S.W.2d 820 (Tex.Civ.App. El Paso 1938, no writ); 1 McDonald’s, Texas Civil Practice, Sec. 4.44, p. 582.

A plea of privilege may be filed either as a separate instrument or as the first plea in the answer. Pelton v. Allen Investment Co., 78 S.W.2d 272 (Tex.Civ.App. El Paso 1935, no writ); Geary, Hamilton, Brice & Lewis v. Coastal Transport Co., 399 S.W.2d 878 (Tex.Civ.App. Dallas 1966, no writ); 1 McDonald’s, Texas Civil Practice, Sec. 4.40, p. 571. A general denial or special answer following a plea of privilege does not constitute a waiver of the plea so long as the party claiming the privilege does nothing to invoke the court’s general jurisdiction by action which negates a continuing intent to insist on the plea. H. Molsen & Co. v. Williamson, 510 S.W.2d 366 (Tex.Civ.App. Dallas 1974, no writ); Edgar v. Bartek, 507 S.W.2d 831 (Tex.Civ.App. Corpus Christi 1974, writ dism’d); Pit Construction Co. v. West Texas Equipment Co., 494 S.W.2d 642 (Tex.Civ.App. Amarillo 1973, writ dism’d); 1 McDonald’s, Texas Civil Practice, Sec. 4.40, p. 572. And it is not necessary for an answer or denial following a plea of privilege to state that it is subject to the plea. H. Molsen & Co. v. Williamson, supra; Durrett v. Artie Air, Inc., 319 S.W.2d 937 (Tex.Civ.App. Houston 1959, no writ); Palmer v. Cheyne, 261 S.W.2d 373 (Tex.Civ.App. Texarkana 1953, writ dism’d); 1 McDonald’s, Texas Civil Practice, Sec. 4.40, p. 571.

The authorities relied upon by Mr. Still are inapposite. In all those cases the defendant either did not amend his defective plea before the court acted upon it, or filed one or more separate answers on the merits prior to filing the plea of privilege. The pleas were properly overruled because they were not amended, or were waived because not filed in due order as required by Tex.R.Civ.P. 84.

Ms. Retter’s amended plea of privilege properly raised the issue of venue. The plea constituted prima facie proof of her right to have the cause moved to Dallas County. Tex.R.Civ.P. 86. As Mr. Still did not controvert the plea as required by the rule, the trial court should have sustained it and transferred the case to Dallas County.

The judgment of the trial court is reversed and judgment is here rendered that the cause of action be transferred to Dallas County, Texas.


author: O’QUINN, Justice.

text:
    Jon Kenneth FERGUSON et al., Appellants, v. W. E. McCARRELL et al., Appellees.
    No. 12896.
    Court of Civil Appeals of Texas, Austin.
    May 9, 1979.
    Rehearing Denied June 6, 1979.
    T. Turner Pope, III, Kamp & Pope, Houston, for appellants.
    Fred Clark, New Braunfels, for appellees.
   O’QUINN, Justice.

This appeal is from judgment in district court in three lawsuits, consolidated for trial, brought in 1976 by appellees alleging that appellants endorsed and guaranteed payment of three promissory notes aggregating $80,850, made originally by Associated Equities, Inc., payable to W. E. McCar-rell in the amount of $45,850 and to Vince Narcisso in the sum of $35,000.

Under seven points of error the appellants, Jon Kenneth Ferguson and Johnny B. Ferguson, appeal from a judgment below for appellees in the sum of $117,555.58, including interest and attorney’s fees.

This case went to trial April 4, 1978, at which time appellees, over objection by appellants, were permitted by the court to file a supplemental petition alleging that Associated Equities, Inc., maker of the notes sued on, “. . .is presently and notoriously insolvent. Such defendant has filed, under Chapter 10, Title 11, U.S.C.A. a petition for corporate reorganization and accordingly has stated that the corporation is insolvent or unable to pay its debts as they mature.”

The record shows that on the day prior to the beginning of trial the court, over appellants’ objection, granted appellees’ motion for severance and separate trials as to Associated Equities, and ordered the causes of action asserted against . Associated Equities, Inc. . . . severed from the causes of action alleged against John [sic] B. Furgeson [sic] and John [sic] Kenneth Furgeson [sic ] in each of the . causes and -a separate trial ... ordered as to such corporate Defendant . . ”

Trial proceeded thereafter to verdict and judgment without Associated Equities, Inc., as a party, and no judgment was taken against the corporation as maker of the note. Upon affirmative answers by the jury to three special issues inquiring whether the three promissory notes, which appellants had endorsed and guaranteed, were due and owing in each instance to the alleged holders of the notes, the trial court entered judgment against the endorsers and guarantors for principal, accrued interest, and attorney’s fees in the aggregate sum of $117,555.58.

Appellants bring seven points of error under which their main contention is that it was improper to sever the corporate maker of the notes, and proceed to judgment against the parties conditionally liable, without pleading and proof that the corporation was “actually or notoriously insolvent” within the terms of Articles 1986 and 2088, V.A.C.S.

Under provisions of Article 1986, “The acceptor of a bill of exchange, or a principal obligor in a contract, may be sued either alone or jointly with any other party who may be liable thereon; but no judgment shall be rendered against a party not primarily liable on such bill or other contract, unless judgment be also rendered against such acceptor or other principal obligor, except where the plaintiff may discontinue his suit against such principal obligor as hereinafter provided” [in Article 2088]. (Emphasis added).

Article 2088, covering instances where discontinuance of suit is as to the principal obligor, provides:

“Where a suit is discontinued as to the principal obligor, no judgment can be rendered therein against an indorser, guarantor, surety or drawer of an accepted bill who is jointly sued, unless it is alleged and proved that such principal obligor resides beyond the limits of the State, or in such part of the same that he cannot be reached by the ordinary process of law, or that his residence is unknown and cannot be ascertained by the use of reasonable diligence, or that he is dead or actually or notoriously insolvent." (Emphasis added).

Appellees did not file a brief and failed to make appearance and oral argument before this Court. The record clearly shows, however, that appellees tried the case on the theory that Associated Equities, Inc., had been shown to be insolvent, and that appel-lees as plaintiffs below were entitled under Article 2088 to proceed against the appellants as guarantors of the obligation without rendition of judgment, in addition, against Associated Equities, Inc., as the principal obligor. Appellees alleged in their supplemental petition, filed the day trial started, that Associated Equities was “presently and notoriously insolvent.”

The defendants below, including the guarantors who are now appellants, filed their plea in abatement immediately prior to the trial date due to “the automatic stay of all proceedings against Associated Equities, Inc.,” by reason of its voluntary petition filed a month earlier in federal bankruptcy court under Chapter 10. The purpose of the bankruptcy proceedings is to enable the corporation to reorganize and sell its subdivision lots “at a value vastly exceeding the amount owing to both secured and unsecured creditors and obtain a profit for the corporation and its owners.”

The record contains notice of initial meeting of creditors of Associated Equities and reveals that assets ($1,900,000.00) of the corporation exceed its liabilities ($1,619,-089.22) by $280,910.78. The corporation conceded at the time of filing its voluntary petition that the petitioner was “unable to pay its debts as they mature.”

Appellants contend that appellees failed to show that Associated Equities, Inc., was insolvent, as required by Article 2088 if judgment is taken against the guarantors and not against the principal obligor, and that the trial court erred in not following the holding of the Supreme Court of Texas in Smith v. Ojerholm, 93 Tex. 35, 53 S.W. 341 (1899), construing the statutory rule in effect at that time which was substantially in the same language found in the present law. Appellants also argue that a court of civil appeals in 1976 applied the rule stated in Ojerholm under facts dealing with a principal obligor, as in the present case, having a petition in bankruptcy pending in the bankruptcy court showing its assets greater than its liabilities. Cook v. Citizens National Bank, 538 S.W.2d 460, 466 (Tex.Civ.App. Beaumont 1976, no writ).

The Supreme Court, in Ojerholm, stated the reason behind enactment of the law, which in substantially the same language has been a part of the written laws of Texas nearly 140 years, in this fashion: “The reason for relieving the indorsee from the necessity of suing the principal debtor in the excepted cases was either that a suit against him was not practicable, or that it would result in no good. Hence we think that it cannot be said that a principal is insolvent, within the meaning of that statute, when any part of the debt can be made by execution against him.” (Emphasis added). (53 S.W. 341).

“When a trader is unable,” the Supreme Court continued, “to meet his obligations in the regular course of business, he is technically said to be insolvent. Should we apply that meaning to our statute, the indorsee would, in some cases, be excused from suing the maker of the note, although he might have ample property to satisfy an execution against him. ... It cannot be said that a debtor is insolvent, within the meaning of our law, as to his creditor, when he holds property against which the creditor may enforce a lien for the payment of the debt.” (53 S.W. 341-342).

We have carefully reviewed the terms of the written contracts in this case in the light of recent decisions of the Supreme Court of Texas and conclude that appellants, by their agreement to “endorse and guarantee the payment of this note,” became primary obligors, permitting the holders of the notes to enforce payment against appellants without the necessity of proceeding against Associated Equities. Universal Metals and Machinery, Inc. v. Bohart, 539 S.W.2d 874 (Tex.Sup.1976); Reece v. First State Bank of Denton, 566 S.W.2d 296 (Tex.Sup.1978); Hopkins v. First National Bank at Brownsville, 546 S.W.2d 84 (Tex.Civ.App. Corpus Christi), writ ref’d n. r. e. per curiam, 551 S.W.2d 343 (Tex.1977).

In Bohart the Supreme Court reviewed the effect on contracts of guaranty by the terms of Section 3.416(a), Texas Business and Commerce Code (1968). That section provides: “ ‘Payment guaranteed’ or equivalent words added to a signature mean that the signer engages that if the instrument is not paid when due he will pay it according to its tenor without resort by the holder to any other party.”

In Hopkins the Court described the note and a guaranty of payment as separate undertakings in the sense that the guarantor may be sued apart from the maker because a guarantor of payment becomes primarily liable and waives requirement that the holder of the note take action against the maker as a condition precedent to the guarantor’s liability. (551 S.W.2d 345).

In Reece the Court pointed out that in Bohart, because there “was an absolute and unconditional guaranty of payment, this Court held that the guarantor was not freed from liability because of the forged signature of the maker. The reasoning behind this,” the Court added, “is that a guarantor of payment is akin to a co-maker in that both are primary obligors, and the holder of the note can enforce it against either party.” (566 S.W.2d 297).

In the present case the three notes at the outset provide “For value received, I, we, or either of us, the undersigned, promise to pay . . . ” The body of the notes specify amounts, interest rates, dates for payment, place of payment, acceleration at option of holder in event of failure to pay interest or principal installment, and attorney’s fees. The notes are signed and attested properly for the corporation, Associated Equities, Inc., followed by the statement, “I, we, or any of us, individually and collectively endorse and guarantee the payment of this note,” (emphasis added), to which is appended the signatures of the several guarantors.

We hold that this contract, as found in the three notes, falls within the doctrine of Bohart, Hopkins, and Reece which makes the guarantors primary obligors, subject to suit for collection by the holders without necessity of joinder of, or judgment against, the corporate maker.

Appellants’ points of error one through five, under which they contend the trial court erred in severing from this suit, Associated Equities, maker of the notes, and in rendering judgment against appellants without also holding the corporate maker of the notes, are overruled.

Under points six and seven appellants claim error in submitting a special issue on the McCarrell note, in the amount of $10,-850, and in rendering judgment on the note against appellants.

Appellants argue that since the original note was not offered or received in evidence and there was no evidence that McCarrell was holder of the note, the special issue was erroneously submitted and it was error to render judgment on the jury finding that the note for $10,850 signed by appellants was due and owing to W. E. McCarrell.

That McCarrell was holder of the note and had not transferred it to any other person was established at the trial by the testimony of McCarrell on two occasions. When asked, “On this note for the $10,850, do you presently own that note, sir?” McCarrell replied, “Yes, sir.” McCarrell also testified that no part of the note had been paid and that he had made demand for payment.

In response to requests for admissions, the record shows, appellants admitted that the note for $10,850 had been executed by Associated Equities on June 21, 1974, “payable to W. E. McCarrell”; that a “true and correct copy of the promissory note . is attached to Plaintiff’s Original Petition on file in this cause”; that the note “was delivered to the Plaintiff, his agent, servant, or employee, by one or more of the Defendants”; and that McCarrell had “made demand upon Defendants to pay the promissory note . . . ”

By statutory authority, reproductions of written instruments, by photostatic or other processes, which accurately reproduce originals of the written instruments, may be used in trials where the party using the copy offers the original “or reasonably accounts for its absence, or where there is no bona fide dispute as to its being an accurate reproduction of the original.” (Emphasis added). Article 3731c, V.A.C.S.; Acts 1959, 56th Leg., p. 867, ch. 393, sec. 1.

McCarrell testified that he had the original at his home in Tulsa, Oklahoma, and offered to produce it later. By responses to request for admissions, appellants agreed that the photographic type of copy attached to McCarrell’s petition was a “true and correct copy of the promissory note.” With the copy in hand, McCarrell testified to its essential contents, as well as to the consideration forming the basis for the note, and testified that appellants signed the note pursuant to McCarrell’s insistence, prior to the making of the note, that appellants individually guarantee payment. As observed earlier, McCarrell also testified that he was. at the time of trial owner of the note for $10,850, which had not been paid after demand for payment.

It appears there can be no bona fide dispute that the reproduction attached to McCarrell’s petition was an accurate reproduction of the original. The requests and responses as to all three notes were introduced without objection at the trial. Appellants are bound by their admissions.

We conclude that McCarrell proved his cause of action in the suit for collection of the note for $10,850, and appellants’ points of error under which they make a contrary contention are overruled. Rule 169, Texas Rules of Civil Procedure, authorizes the “request for the admission ... of the genuineness of any relevant documents,” the primary purpose of the Rule, as pointed out by the Supreme Court, being “to simplify trials by eliminating matters about which there is no real controversy.” Fireman's Fund Ins. Co. v. Commercial Standard Ins. Co., 490 S.W.2d 818, 825 (Tex.Sup.1972).

The judgment of the trial court is affirmed.

Affirmed.


author: ROBERTSON, Justice.

text:
    Don M. SMART, Appellant, v. TOWER LAND AND INVESTMENT CO., Appellee.
    No. 19895.
    Court of Civil Appeals of Texas, Dallas.
    May 10, 1979.

      Timothy E. Kelley, Dallas, for appellant.
    H. Dee Johnson, Johnson & Cravens, Dallas, for appellee.
    Before AKIN, ROBERTSON and CARVER, JJ.
   ROBERTSON, Justice.

Appellee, Tower Land and Investment Company, sued appellant, Don Smart, for reimbursement for its payment of ad valo-rem taxes incurred during the time appellant owned certain real estate. The trial court granted judgment for appellee. Appellant argues that the trial court erred in denying his counterclaim for usury, in allowing reimbursement, and in failing to submit a fact question to the jury. We overrule these points and accordingly affirm.

In 1968 appellant purchased approximately thirty five acres of land from appellee, paying part of the purchase price in cash and securing the remainder by a promissory note and a deed of trust. Under the terms of the note, appellant prepaid the first three years of interest at six percent per annum. The note was extended in 1974 when the parties agreed to an extension of the lien. Appellant defaulted on the note in December of 1975, and appellee repurchased the property at the trustee’s sale on March 2, 1976. Appellee then discovered that appellant had failed to pay the ad valorem taxes on this property from January 1, 1975, to February 28, 1976. In order to prevent foreclosure by the taxing authorities, appellee paid $18,736.35 in back taxes and then brought this suit for reimbursement.

Appellant raises three points on appeal. First, he argues that the promissory note is a contract for usury since it allows appellee on default to accelerate and mature the balance of the note and to keep all interest payments collected, without any obligation to apply unearned interest as a credit to unpaid principal. Second, appellant contends that he is not personally liable for the payment of taxes under the terms of the deed of trust, the promissory note and the extension of the lien. Finally, he argues that sufficient evidence exists to raise a question for the jury as to the intent of the parties regarding appellant’s personal liability for the payment of taxes.

Regarding usury, appellant argues that had he defaulted within the first twenty-two months of the loan, appellee could retain the prepaid interest. If this prepayment was credited only as interest, he contends that the note is usurious since the amount of interest paid as opposed to interest actually earned, would be greater than ten percent per annum. We cannot agree that this makes the note usurious. In interpreting an alleged usurious contract, when the contract by its terms, construed as a whole, is doubtful, or even susceptible of more than one reasonable construction, the court will adopt the construction which comports with legality. Home Savings Association of Dallas County v. Crow, 514 S.W.2d 160, 165 (Tex.Civ.App.—Dallas 1974), affirmed 522 S.W.2d 457 (Tex.1975). Generally, Texas courts have refused to find a lending contract usurious unless the contract by its express terms shows that the party intended to contract for interest in excess of the statutory ceiling. Walker v. Temple Trust Co., 124 Tex. 575, 80 S.W.2d 935 (1935); American Century Mortgage Investors v. Regional Center, Ltd., 529 S.W.2d 578 (Tex.Civ.App.—Dallas 1975, writ ref’d n. r. e.). The note itsélf is silent as to how any unearned interest is to be treated, but the contract does not contain any expressions of intent to charge usury. Therefore, we construe this note as allowing any unearned interest to be credited to unpaid principle in the event of default, thus making the contract legal. See Home Savings Association of Dallas County v. Crow, 514 S.W.2d 160 (Tex.Civ.App.—Dallas 1974), affirmed 522 S.W.2d 457 (Tex.1975); Stacks v. East Dallas Clinic, 409 S.W.2d 842 (Tex.1966).

Tanner Development Co. v. Ferguson, 561 S.W.2d 777 (Tex.1977) is determinative of the usury question in this case. Tanner concerned a promissory note given as partial consideration for the conveyance of land. Under the terms of the note, the interest rate was 9½ percent per annum, and the first year’s interest was to be paid in advance. Interest thereafter was to be paid quarterly in advance on the 20th day of January, April, July, and October of each calendar year from January 20,1974 to July 20, 1977, with payments on principal deferred during this period. Upon default, the mortgagee accelerated the balance and foreclosed on the property. In holding that the interest must be spread over the entire term of the loan to determine whether a contract was usurious, the court stated:

When, in 1967, the Legislature extended the usury penalties to interest “contracted” for during the entire term of the note (article 5069-1.06), it seems only reasonable that it intended for the contract to be tested for usury on the basis of the compensation charged for the entire term during which the borrower had use, detention or forbearance of the principal debt. Since the contract in question provided Ferguson, the payor, with the full use of the consideration represented by the actual face amount of the note (the ten acres of land) for the entire term of the contract and since usury penalties are now applied to the entire contract, we are compelled to hold that the advanced interest payable under the present note should be spread over the entire term of the contract. ... In our opinion it would be beyond the obvious intent of the Legislature in the enactment of article 5069-1.06 to impose its severe penalties solely upon proof that one year’s interest payments exceeded the statutory limit where over the effective period of the contract interest payments were not in the aggregate in excess of amount authorized by law. 561 S.W.2d at 786-787.

Appellant argues that Tanner is distinguishable from the case at bar because the note in Tanner contained a savings clause. Since the contract on its face shows no intent to charge usury, and since we have construed the note as allowing any unearned interest to be credited to unpaid principle, the absence of a savings clause does not render Tanner inapplicable. Applying the Tanner principles, we hold that the contract is not usurious since the interest spread over the entire term of the loan does not exceed the statutory amount of ten percent per annum. Thus, an intent to charge usury is lacking. See American Century Mortgage Investors v. Regional Center, Ltd., 529 S.W.2d 578 (Tex.Civ.App.—Dallas 1975, writ ref’d n. r. e.).

Appellant’s second contention is that he is not personally liable for the payment of taxes under the terms of the various instruments composing the contract, and he argues that appellee’s only recourse was foreclosure. He contends that both the note and the extension of lien contain language absolving him from all personal liability, including the payment of taxes. We disagree. The note states:

It is agreed and stipulated that the parties of the first part herein shall and will at their own proper cost and expense keep the property and premises herein described and upon which a lien is hereby given and created in good repair and condition and to pay and discharge as they are or may become payable all and every taxes and assessments that are or may become payable thereon under any law . and in case of default made by the parties of the first in performance of any of the foregoing stipulations the same may be performed by the holder of said indebtedness for account and at the expense of the parties of the first part and any and all expenses incurred and paid in so doing shall be payable by the parties of the first part to the party of the third part with interest at the rate of ten percent per annum from the date that the same was so incurred or paid and shall stand secure and payable by and under this deed in like manner with the other indebtedness herein mentioned. . [Emphasis added].

Under this provision appellant is clearly obligated to pay taxes. The liability for the payment of taxes is generally personal, falling on the true owner of the property. Tex.Rev.Civ.Stat.Ann. art. 7151 (Vernon Supp.1979); Cranfill Bros. Oil Co. v. State, 54 S.W.2d 813 (Tex.Civ.App.—El Paso 1932, writ ref’d); C. B. Carswell & Co. v. Habberzettle, 39 Tex.Civ.App. 493, 87 S.W. 911 (1905, no writ). Although the extension of lien and promissory note released appellant from personal liability on the note itself, it did not relieve him from the covenant to pay taxes. To hold that appellant’s only recourse against appellee was foreclosure on the property, as appellee contends, would be an empty remedy since any buyer would be forced to pay these taxes or risk foreclosure by the taxing authority.

In Henry S. Miller Co. v. Wood, Docket No. 8643 (Tex.Civ.App.—Texarkana, April 24, 1979) (not yet reported), the court denied on facts similar to ours plaintiff’s claim for reimbursement for back taxes paid. The court construed the contract in that case as making any taxes which became due before foreclosure a part of the secured debt and also found that the defendant was not personally liable because of certain provisions limiting liability. Wood is distinguishable, however, from the case at bar. In Wood, if the defendant failed to pay the taxes, the legal holder of the note could pay them and “sums so expended shall become part of the debt hereby secured . . . .” Here, should appellant default and appellee pay the taxes, then “any and all expenses incurred and paid . shall be payable by the parties of the first part (appellant-mortgagor) to the party of the third part (appellee-mortgagee) . ” This covenant does not provide that the payment of taxes by one other than the owner of the property is to become merged with the secured debt as did the covenant in Wood. Rather, it creates a separate right of action for reimbursement. Neither is appellee in the position of voluntarily paying the debt of another without his consent as the parties were in Stone v. Tilley, 100 Tex. 487,101 S.W. 201 (1907) and The Praetorians v. State, 53 S.W.2d 334 (Tex.Civ.App.—Waco 1932, writ ref’d). The contract in this case gives appellee the right to pay any unpaid taxes and to be reimbursed. Thus, we conclude that the trial court properly allowed appellee’s claim for reimbursement. Ferguson v. Dickinson, 138 S.W. 221 (Tex.Civ.App.—Fort Worth 1911, no writ); see Cassidy v. Scottish-American Mortg. Co., 27 Tex.Civ.App. 211, 64 S.W. 1023 (1901); Littlefield v. Scott, 244 S.W. 824 (Tex.Civ.App.—Beaumont 1922, writ ref’d).

Finally, appellant argues that the trial court erred in finding that no fact issues existed. He contends that a fact issue was raised regarding the intent of the parties on whether appellant was to be personally liable for the payment of taxes. No ambiguity was pleaded or asserted at trial, and both parties admitted that their entire agreement was embodied in the various documents making up the contract. The contract is clear and unambiguous, no fact issue exists, and the only issue raised is one of law concerning construction of the documents. Since the trial court’s construction of these documents was correct, we affirm.