text:
    Madelyn COKER, Appellant, v. TRAVELERS INSURANCE COMPANY, Appellee.
    No. 18701.
    Court of Civil Appeals of Texas, Dallas.
    Jan. 22, 1976.
    Paul J. Chitwood, Chitwood, Riley & Snyder, Inc., Dallas, for appellant.
    Stephen S. Livingston, Thompson, Knight, Simmons & Bullion, Dallas, for ap-pellee.
   AKIN, Justice.

Madelyn Coker sued the Travelers Insurance Company on a group health insurance policy for medical expenses incurred as a result of a total hip displacement. The question presented is whether the term “Medicare” as defined in the master policy is limited to persons over sixty-five years of age or also includes disabled persons regardless of age.

The policy in question was a group policy between the defendant insurance company and a national railway union for the benefit of its employees, their dependents, and their survivors. The policy provided four basic types of coverage designated as Plans A, B, C and D, each of which provided different benefits and different premiums. Plaintiff, widow of a deceased union member, enrolled in Plan C of the policy in 1970 and paid monthly premiums of $27. Plans A, B and C were available only to persons under sixty-five years of age whereas Plan D was designated specifically for persons sixty-five years of age or older. Plan D provides for a premium of $7.50 per month and substantially reduced benefits. Only Plans C and D are relevant here because plaintiff filed a claim for benefits payable under Plan C. The claim was denied by defendant which asserted that plaintiff was eligible only for Plan D benefits.

Plaintiff, who at all relevant times was under sixty-five years of age, entered the hospital on July 10, 1973, after becoming eligible for Social Security health benefits for the disabled on July 1, 1973. Prior to October 30, 1972, Medicare benefits were limited to persons sixty-five years of age or older; however, Congress amended the Social Security Act effective on October 30 to include persons who were totally disabled for a period of twenty-four months regardless of age. 42 U.S.C.A. §§ 1395c and 1395j (1972). Defendant contends that plaintiff was entitled only to Plan D benefits because under the October 30 Act she was eligible for Social Security health benefits for the disabled, on July 1, 1973 — ten days before her operation. This is true, defendant argues, because the master policy was amended on February 12, 1973, to limit persons “eligible under Medicare” to Plan D benefits, thus excluding these persons from coverage under Plan C. No other change was made in the master policy and plaintiff received no notice of this amendment.

Plaintiff contends that she is covered under Plan C because the definition in the master policy limits the term “Medicare” to benefits for persons over sixty-five years of age. The trial court construed the policy to include plaintiff as a “person eligible under Medicare,” and was, therefore, limited to the benefits under Plan D. Accordingly, the court rendered judgment for defendant and plaintiff appeals. We reverse and render as to liability because we hold that the term “Medicare” in the policy is ambiguous and must be construed in favor of plaintiff.

A contract is ambiguous when application of rules of construction leaves it uncertain which of the two meanings is proper. Wynnewood State Bank v. Embrey, 451 S.W.2d 930 (Tex.Civ.App.—Dallas 1970, writ ref’d n. r. e.). Ambiguity is a question of law rather than of fact. Brown v. Payne, 142 Tex. 102, 176 S.W.2d 306 (1943). The rules of construction applied to insurance contracts are set forth in Kelley v. American Insurance Co., 316 S.W.2d 452 (Tex.Civ.App.—Texarkana 1958), affirmed, 160 Tex. 71, 325 S.W.2d 370 (1959) as follows:

(1) An insurance policy will be construed strictly against the insurer; (2) when the terms of an insurance contract are capable of two or more constructions and under one a recovery is allowable and under the other it is denied, the construction which permits recovery will be given the policy; (3) forfeitures of insurance coverage are not favored; and (4) if a fair and reasonable construction of an insurance contract will permit, a meaning will be given to its language that effectuates a contract of insurance rather than defeats it.

Southwestern Fire and Casualty Co. v. Atkins, 346 S.W.2d 892 (Tex.Civ.App.—Houston 1961, no writ); see also Trahan v. Southland Life Insurance Co., 155 Tex. 548, 289 S.W.2d 753, 755 (Tex.1956).

We conclude that the policy is ambiguous. Article I, paragraph 7 of the master policy defines Medicare as:

The term ‘Medicare’ as used herein means the Health Insurance For The Aged program under Title XVIII of the Social Security Act as such Act was amended by the Social Security Amendments of 1965 (Public Law 89-97) and 1967 (Public Law 90-248), as such program is currently constituted and as it may be later amended. [Emphasis added.]

Since this definition contains the phrase “as it may later be amended” and, since Congress did amend Title XVIII of the Social Security Act, effective October 30, 1972, to include disabled persons under sixty-five years of age, “persons eligible under Medicare,” under this policy, may be construed to include disabled persons under sixty-five years of age. Elsewhere, however, the policy indicates that the term “persons eligible under Medicare” is limited to persons over sixty-five years of age. For instance, Article II, Section B states:

l.(c) A Retired Employee shall be insured hereunder only for the insurance described below and for which he is a Contributing Employee.
(i) As to each Retired Employee, and each Retired Employee’s Dependent, who is a Person Eligible Under Medicare (the first day of the month in which he attains age 65; if an individual’s birthday is on the first of the month he is considered to reach 65 in the previous month), the insurance as set forth in Article V (Plan D), and as to each other Retired Employee and each other Dependent of a Retired Employee, the Plan A, Plan B or Plan C insurance available to and elected by the Retired Employee at the time he becomes a Contributing Employee.
From and after the date an individual becomes a Person Eligible Under Medicare (the first day of the month in which he attains age 65; if an individual’s birthday is on the first of the month he is considered to reach 65 in the previous month), such individual may be covered only for the benefits applicable to Persons Eligible Under Medicare and all other insurance with respect to such individual under this policy shall terminate as of the day immediately preceding such date. [Emphasis added.]

When the master policy itself was amended on February 13, 1973, it retained all of the language set forth above but did not refer to the Congressional amendment of October 30,1972. Indeed, the definition of Medicare in the policy carefully refers to amendments of the Social Security Act in 1965 and 1967, but does not refer to the significant amendment of October 30, 1972, which extended Medicare Social Security benefits to the disabled regardless of age. This the company could have done in the February 1973 amendment to the policy by specifically changing the definition of Medicare.

The reasonableness of this second construction of the policy is shown by defendant’s apparent adoption of this construction in the booklet which defendant sent out in May 1973, after the change in the Social Security Act in October 1972, and after the amendment of February 1973. This booklet sets forth in layman’s terms persons eligible under Plans A, B, C and D, and includes the following:

After detailing the benefits under Plans A, B and C, the booklet then states:

Defendant argues, however, that since the definition of Medicare in the policy referred to the current Social Security Act and contained the language “as it may later be amended,” the definition encompassed the October 30, 1972 Act, and, therefore, included persons such as plaintiff. We cannot agree. Since the policy amendment of February 1973 was executed after the passage of the Act and since the language defining Medicare was not changed by the policy amendment, we conclude that this argument is without merit. This is especially true here because the definition in paragraph 7 specifically refers to the amendments in the Act passed in 1965 and 1967.

Defendant argues further that the amendment of February 12, 1973, “suggests” that there was a change made as to the date on which an individual may be covered only under Plan D and could not be eligible for Plan C coverage. We cannot agree with defendant’s conclusion. If defendant insurance company intended this meaning it could have specifically amended the definition of “Medicare” in the master policy to include the disabled, but it failed to do so. Indeed, insurance companies should write policies in clear language, understandable by persons without legal expertise, so that policyholders may fully know the extent of their coverage.

Defendant also argues that Article IV which sets forth the benefits available under Plan C states that no payment shall be made under any part of Article IV of this policy for any expense incurred by any individual from and after the date he becomes a person eligible under Medicare. This argument assumes that the term “persons eligible under Medicare,” as defined in the policy, includes categories of persons other than those sixty-five years or over; however, that term, as we read it, is not clearly so defined. We conclude, therefore, that this argument is also without merit.

Since the language in this insurance policy is capable of two constructions, one of which permits recovery and the other denies recovery, we must construe the policy to provide coverage. Kelley v. American Insurance Co., supra at 455. We hold, therefore, that this language as well as the language defining “Medicare” should be construed to provide plaintiff Plan C benefits.

Consequently, we reverse and modify the judgment of the trial court as follows: Judgment is hereby rendered for plaintiff in the sum of $3,362.60 (the difference between Plan D benefits paid and benefits recoverable under Plan C) with interest thereon at six percent per annum from March 17, 1975, plus an additional twelve percent of this total sum as penalty for delay in payment pursuant to Article 3.62 of the Texas Insurance Code (Vernon 1963). Since Article 3.62 also provides for reasonable attorney’s fees for plaintiff’s attorneys and since this amount was not established, we must sever our judgment above and remand this cause to the trial court solely for a determination of the amount of reasonable attorney’s fees to be awarded plaintiff’s attorneys. Tex.R.Civ.P. 320, 434.

Reversed and modified in part and remanded in part.


source: Caselaw Access Project

author: KEITH, Justice.

license: Public Domain

text:
    TEXAS STATE BANK et al., Appellants, v. Billy G. ELLIOTT, Appellee.
    No. 7766.
    Court of Civil Appeals of Texas, Beaumont.
    Jan. 22, 1976.
    Rehearing Denied Feb. 19, 1976.

      Ivan D. Hafley, Austin, for appellants.
    Marcus A. Pitre, Port Neches, for appel-lee.
   KEITH, Justice.

Texas State Bank, defendant below, appeals from an order overruling its plea of privilege to be sued in Travis County and we will designate the parties as they appeared in the trial court.

Plaintiff purchased an automobile while he was living in Austin and the seller assigned the chattel mortgage to defendant. At all times material to this suit, the plaintiff was in default upon his payments due under the contract and defendant had the right to repossess such automobile under the terms of the agreement. Plaintiff testified that on June 1, 1973, he and his fiancee went swimming (at which time he placed a diamond ring which he usually wore in the glove compartment of his car), and then went to Port Arthur. He left his car locked in a garage in Warren, Tyler County, when he left for Port Arthur.

When he returned the next day, his car and its contents, including the ring, divers items of supplies, hand tools, etc. were gone. He also found a note on or near the garage asking him to contact one J. M. Curb and an Austin telephone number was included in the note. He called this number, spoke to a man who identified himself as Curb, and demanded the return of his personal belongings in the car at the time it was taken. Accordingly to plaintiff, Curb admitted having taken the car but denied knowledge of the items of personal property mentioned. Then, according to plaintiff, a man identified as Larry Weaver called immediately about the incident. Although this testimony was received without objection, the note from Curb was not admitted into evidence.

Subsequently, plaintiff went to Austin where he recovered several items of personal property from defendant, but claimed that several items were not returned, including the diamond ring.

Plaintiff’s suit, for conversion of personal property, trespass, and negligence, named the bank and Curb as defendants; but, insofar as we can determine from our record, no service was had upon Curb nor has he yet made an appearance.

Defendant’s plea of privilege was duly controverted with plaintiff relying upon Subdivisions 9, 9a, and 23 of Art. 1995, Tex.Rev.Civ.Stat.Ann. (1964). Upon the hearing plaintiff’s testimony was not contradicted directly; instead, defendant brought one of its employees (not the one in charge of the repossession of plaintiff’s car) who testified from records and as to the customary practices of the bank. At the conclusion of the hearing, the plea of privilege was overruled and defendant has duly perfected its appeal. No findings of fact or conclusions of law were filed.

Defendant has appropriate points of error challenging the judgment below upon the grounds that there was no evidence to support the trial court’s implied findings as to the several subdivisions of the-venue statute invoked by plaintiff. In passing upon these points of error, we will follow the rule laid down for our guidance in Garza v. Alviar, 395 S.W.2d 821 (Tex.1965).

In our review we are bound to follow the rule announced in James v. Drye, 159 Tex. 321, 320 S.W.2d 319, 323 (1959):

“On appeal from an order overruling a plea of privilege every reasonable intendment must be resolved in favor of the trial court’s judgment.”

The several attacks upon the judgment of the trial court have a common base: plaintiff has failed to establish as a fact that his automobile and the property stored therein was taken from his garage by an agent of the corporate defendant, the bank, acting within the course and scope of his authority with the defendant. Admittedly, the testimony is not strong and defendant attacks the whole record as being one in which only inferences are piled upon presumptions in an effort to establish such vital and necessary fact.

Plaintiff argues that under Tex.Bus. & Comm.Code Ann. § 9.503 (1968), only the bank, as the secured party, had the right to repossess the automobile; that the bank admittedly obtained and had the automobile in its possession (along with a few of his articles of personal property) by virtue of a repossession without court proceedings.

It has long been the law in Texas that “[e]very person who is found performing the work of another is presumed to be in the employment of the person whose work is being done.” Taylor, B. & H. Ry. Co. v. Warner, 88 Tex. 642, 32 S.W. 868, 870 (1895). Plaintiff contends that when he established the fact that defendant somehow, through some agent, had “repossessed” his car along with the items of personal property, he made out a prima facie cause under Warner, supra. We agree.

In the venue hearing, plaintiff was only required to make out a prima facie case of liability. Flowers v. Dempsey-Tegeler & Co., 472 S.W.2d 112, 116 (Tex.1971). Very recently, in Coward v. Gateway Nat. Bank of Beaumont, 525 S.W.2d 857, 859 (Tex.1975), the Court said: “The term [pri-ma facie evidence] is also used to mean that the proponent has produced sufficient evidence to go to the trier of fact on the issue.”

Defendant does not seriously dispute these rules but contends that only a rebut-table presumption was created under the rationale of Warner, supra, and that it discharged its burden of rebutting such presumption by the evidence which it offered. Assuming, arguendo, that defendant’s evidence was properly received (i. e. it was not in support of an affirmative defense available only upon a trial of the merits), defendant failed to sustain the burden imposed upon him by the authoritative case of Empire Gas & Fuel Co. v. Muegge, 135 Tex. 520, 528, 143 S.W.2d 763, 768 (1940).

Defendant did not offer the testimony of its own bank official familiar with the details of the transaction, he no longer being in its employ; it did not offer what it describes as the independent contractor (Weaver) whom it claims it retained to repossess the automobile; nor, did it offer J. M. Curb, whom plaintiff claims actually repossessed the vehicle. We are unwilling to set aside the trial court’s implied finding upon such a record. The testimony is not “clear, positive and undisputed,” as required in Muegge, supra.

Under our meager record, and the posture in which we are required to review it, we are of the opinion that plaintiff successfully established his right to maintain venue under Subdivisions 9, 9a, and 23, Art. 1995. Ford Motor Credit Company v. Cole, 503 S.W.2d 853 (Tex.Civ.App., Fort Worth 1973, writ dism’d).

There being some evidence to support the trial court’s finding, we are not authorized to substitute our judgment for that of the trial court. Space City Oil Company v. McGilvray, 519 S.W.2d 257 (Tex.Civ.App., Beaumont 1975, no writ).

Finding no error, each of defendant’s points of error is overruled and the judgment of the trial court is affirmed.

      . Plaintiff has abandoned the “agency or representative” facet of Subdivision 23 although he still contends that he proved a cause of action against defendant.

      . Cf. General Motors Acceptance Corporation v. Howard, 487 S.W.2d 708, 710-711 (Tex.1972).


author: STEPHENSON, Justice.

text:
    Beatrice HENDERSON et al., Appellants, v. TRAVELERS INSURANCE COMPANY, Appellee.
    No. 7789.
    Court of Civil Appeals of Texas, Beaumont.
    Jan. 22, 1976.
    Rehearing Denied Feb. 12, 1976.
    James Mehaffy, Jr., Beaumont, for appellants.
    John G. Bissell, Beaumont, for appellee.
   STEPHENSON, Justice.

This is a suit for death benefits under the workmen’s compensation law. The trial court instructed a verdict for defendant at the close of plaintiff’s evidence. The parties will be referred to here as they were in the trial court.

It was stipulated that Owen Henderson died at the Texaco Port Arthur Refinery on the premises, after having worked his regular shift. The evidence shows Henderson came to work at 7:30 in the morning to begin that shift. An autopsy was performed by a doctor who testified that the probable cause of Henderson’s death was cardiac arrhythmia which is irregularity in the action of the heart, producing inadequate flow of blood to the heart itself. In answer to a hypothetical question, a second doctor testified that, based upon the history given to him and the autopsy protocol, in his opinion in reasonable medical probability Henderson’s work activities on the day in question could be a producing cause of his death. The hypothetical question asked the doctor to assume that Henderson had been involved in his regular work for eight hours before his death, which work involved some physical activity in operating an air hoist and greasing some bolts. The question further assumed that operating the air hoist and greasing the bolts were things which did not involve great physical stress, but did involve a moderate amount of physical movement. Two witnesses testified that Henderson’s job was running an air hoist or an air tugger, and as to the mechanics of that operation.

Plaintiff’s points of error are to the effect that the trial court erred in granting defendant’s motion for an instructed verdict, because the evidence raised fact issues. We proceed to follow the long established rules laid down for us by our Supreme Court in passing upon “instructed verdict” cases. Our task is to determine whether there is evidence of probative force to raise fact issues on the material questions presented. We consider the evidence in the most favorable light in support of the plaintiff’s case. Anderson v. Moore, 448 S.W.2d 105 (Tex.1969).

The case before us is controlled by the most recent Supreme Court case dealing with a death claim under the workmen’s compensation law, resulting from a heart attack, Baird v. Texas Employers’ Insurance Association, 495 S.W.2d 207 (Tex. 1973); and Whitaker v. General Insurance Company of America, 461 S.W.2d 148 (Tex.Civ.App., Dallas 1970, writ ref’d n. r. e.).

In the Whitaker Case, supra, these statements are made at 151 and 152:

“However, it is equally well settled that the compensation law does not provide for health insurance but is designed purposefully to compensate an employee for incapacity flowing from an accidental personal injury while engaged in the performance of his employment. The mere fact that an employee dies while on the premises of his employer, and during working hours, is not sufficient. It is incumbent upon one seeking to recover death benefits under the law to prove that the deceased sustained an injury which caused or contributed to cause the death.
“It is also true that a strain or exertion may be accidental injury within the meaning of the workmen’s compensation law. [Cases cited.] However, again it must be noted that it is incumbent upon the one seeking recovery to establish by probative evidence that the employee did actually sustain a strain or exertion which would amount to a compensable injury within the meaning of the statute.”

In the Baird Case, supra, the burden imposed upon a plaintiff in a “heart-attack” case is clearly stated. The record must present issues of fact with respect to whether the deceased suffered strain or exertion while at work, and if he did, its adverse effect. We have carefully searched the record before us and find no evidence, either direct or circumstantial that raised an issue as to Henderson suffering any strain or exertion while at work. In fact, to paraphrase a statement made in Whitaker, supra, there is no evidence that Henderson performed any kind of work on the date of his death. See also Houston Fire & Casualty Ins. Co. v. Biber, 146 S.W.2d 442 (Tex.Civ.App., San Antonio 1940, writ dism’d judgmt. cor.). In addition, we have serious doubts that the medical evidence as set out above, raises a fact issue as to whether in reasonable medical probability, Henderson’s heart attack and death resulted from an injury.

Judgment affirmed.


author: CHADICK, Chief Justice.

text:
    Ila Mae FRANCIS, Appellant, v. INTERNATIONAL SERVICE INSURANCE COMPANY, Appellee.
    No. 8327.
    Court of Civil Appeals of Texas, Texarkana.
    Jan. 27, 1976.
    Rehearing Denied Feb. 24, 1976.

      C. V. Flanary, Paris, for appellant.
    Byron L. Falk, Vial, Hamilton, Koch, Tubb, Knox & Stradley, Dallas, for appel-lee.
   CHADICK, Chief Justice.

This case originated as a suit to recover damages for bodily injury under the “uninsured automobile” coverage of an automobile insurance policy. International Service Insurance Company’s motion for summary judgment was granted in the trial court and a take nothing judgment entered. Ila Mae Francis has perfected an appeal. Judgment of the trial court is affirmed.

On September 13, 1968, Ila Mae Francis was a passenger in an automobile when it was struck by a fire truck operated by the City of Grand Prairie, Texas. Miss Francis was seriously injured in the collision. The fire truck was not insured against liability arising out of the ownership, maintenance or use of a motor vehicle. The term “uninsured automobile” is defined in the appellee insurance company’s Family Automobile Policy issued to the owner of the automobile in which Miss Francis was a passenger. The definition has the sanction of the State Board of Insurance. It is as follows:

“(a) an automobile or trailer with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury liability bond or insurance policy applicable at the time of the accident but the company writing the same denies coverage thereunder, . but the term ‘uninsured automobile’ shall not include:
(3) an automobile or trailer owned by the United States of America, Canada, a state, a political subdivision of any such government or an agency of any of the foregoing.
* * *>>

Miss Francis’ suit against the International Service Insurance Company was terminated as initially indicated after severance from her action of another party defendant named therein.

The issue in this appeal is whether the insurance policy’s definition of an uninsured automobile is in derogation of or violates Tex.Ins.Code Ann. art. 5.06-1 by excluding from such classification motor vehicles operated by governmental agencies. The provisions of the mentioned statute pertinent to the issue are as follows:

“(1) No automobile liability insurance (including insurance issued pursuant to an Assigned Risk Plan established under authority of Section 35 of the Texas Motor Vehicle Safety-Responsibility Act), covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state unless coverage is provided therein or supplemental thereto, in the limits described in the Texas Motor Vehicle Safety-Responsibility Act, under provisions prescribed by the Board, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom.
* * * * * **
“(2) For the purpose of this coverage, the term ‘uninsured motor vehicle’ shall, subject to the terms and conditions of such coverage, be deemed to include an insured motor vehicle where the liability insurer thereof is unable to make payment with respect to the legal liability of its insured within the limits specified therein because of insolvency. The State Board of Insurance is hereby authorized to promulgate the forms of the uninsured motorist coverage. The Board may also, in such forms, define ‘uninsured motor vehicle’ to exclude certain motor vehicles whose operators are in fact uninsured.
sfs * *

The legislative direction in Art. 5.06-1 to the State Board of Insurance to promulgate insurance policy forms for uninsured motorist coverage and define uninsured motor vehicles has been held constitutionally valid. Hamaker v. American States Insurance Company of Texas, 493 S.W.2d 893 (Tex.Civ.App. Houston 1st Dist. 1973, writ ref’d, n. r. e.). On the subject generally see Board of Ins. Com’rs v. Carter, 228 S.W.2d 335 (Tex.Civ.App. Austin 1950, writ ref’d n. r. e.); 32 Tex.Jur.2d, Insurance, Sec. 15; 43 Am.Jur.2d, Insurance, Sec. 58. The constitutionality of this direction to the Board is settled.

Language in the statute that is unambiguous, clear, and obvious in its meaning must be given effect, as there is no reason to construe it. It is only when the meaning of a statute is doubtful that a necessity for construction exists. 53 Tex. Jur.2d, Statutes, Sec. 123. The statute in plain language authorizes the Board to define uninsured motor vehicle so as to exclude “certain vehicles whose operators are in fact uninsured.” There is nothing in the statutory language to make its meaning ambiguous or doubtful. The State Board of Insurance approved definition excluding vehicles operated by governmental agencies from the definition of uninsured vehicles, though they are in fact uninsured, is patently authorized by Article 5.06-1. The definition in the insurance contract transgresses no boundary set by the act or the Board.

The uninsured motorist law is remedial in nature and designed to benefit the victim of the negligence of financially irresponsible motorists. The statute should be interpreted liberally to give effect to the public policy declared therein. Fidelity & Casualty Company of New York v. Gatlin, 470 S.W.2d 924 (Tex.Civ.App. Dallas 1971, no writ); Hamaker v. American States Insurance Company of Texas, supra; 24 A.L. R.3rd, 1370, Anno: Uninsured Motorist-Compensation. Appellant contends that exclusion of uninsured vehicles operated by governmental agencies from the uninsured automobile definition in the insurance contract violates the purpose of the act and is contrary to its intent and therefore void.

It is a primary rule of statutory construction that all language of a statute and every part thereof is to be given effect, if reasonably possible. Simmons v. Arnim, 110 Tex. 309, 220 S.W. 66 (1920). The rule is well stated in 53 Tex.Jur.2d, Statutes, Sec. 159, to-wit: “ * * * meaning should be given to each and every sentence, clause, phrase, and word of the act, as'nearly as this can be done consistently with the object and purpose of the legislature. On the other hand, a construction should not be adopted, if it can be avoided, that will render any part of the act inoperative, nugatory, or superfluous. Every word of an enactment is presumed to have been used for a purpose, and should be given some effect other than that which result from its omission. * * The statute plainly authorizes the State Board of Insurance to formulate a definition of an uninsured automobile for insurance purposes and specifically empowers the Board to exclude from the definition vehicles that are in fact uninsured. The possible remedial reach and scope of the statute is lessened in some degree by the directions given the State Board of Insurance, but not thwarted. The public policy declared by the statute was intended to be consonant with the exercise of the powers granted to the State Board of Insurance.

Contention that the insurance contract’s definition of an uninsured automobile was in derogation of public policy declared by Art. 5.06—1 and void was considered in Villarreal v. Texas Farmers Insurance Company, 510 S.W.2d 633 (Tex.Civ.App. Corpus Christi 1974, writ ref’d n. r. e.) and Kemp v. Fidelity & Casualty Company of New York, 504 S.W.2d 633 (Tex.Civ.App. Eastland 1973, writ ref’d n. r. e.). The element of the definition said to be in conflict with public policy in those cases was not the same as here. Though different, much the same argument and authority was marshalled in support of the proposition advanced in those cases as is urged in this. The definition was held valid in both cases. Here, because the enabling language of the statute is clear and the definition does not go beyond any limit set by statute, this court is compelled to recognize the definition as a valid provision of the insurance contract. The judgment of the trial court is affirmed.


author: O’QUINN, Justice.

text:
    Taylor GLASS et al., Appellants, v. CITY OF AUSTIN, a Municipal Corporation, Appellee.
    No. 12339.
    Court of Civil Appeals of Texas, Austin.
    Jan. 28, 1976.

      Robert C. (Lou) McCreary, Austin, for appellants.
    Don R. Butler, City Atty., Jack Bishop, Asst. City Atty., Austin, for appellee.
   O’QUINN, Justice.

Taylor Glass, joined by other taxpayers, brought this suit in November of 1974 as a class action to enjoin the mayor and members of the city council of the City of Austin from paying to themselves and their aides salaries authorized by ordinance of the council passed after the annual budget for the City had been finally approved. Plaintiffs alleged that increase in salaries of the mayor and members of the council and initiation of salaries for council aides after adoption of the annual budget constituted violation of Article 689a-15, V.A.C.S. (Acts 1931, 42nd Leg., p. 339, ch. 206, sec. 16).

Article 689a-15 provides that after adoption of the annual budget, no expenditure of funds of the city may be made except in strict compliance with the adopted budget. The only exception to this prohibition under the statute is in case of grave public necessity, when emergency expenditures may be authorized by amendment to the budget “to meet unusual and unforeseen conditions, which could not, by reasonable diligent thought and attention, have been included in the original budget.” Plaintiffs alleged that increased salaries for the governing body and salaries for aides were not valid expenditures to meet grave public necessity, and that by reasonable diligent thought and foresight such expenditures could have been included in the original budget when adopted.

Trial was before the court sitting without a jury, and on motions by both parties for summary judgment, the trial court entered judgment that plaintiffs take nothing by their suit. Plaintiffs have appealed and bring three points of error.

The City on appeal moves to dismiss on the ground that the issues raised by plaintiffs’ suit have become moot and may not be considered by an appellate court.

We will sustain appellee’s motion, on a finding that the issues are moot, and reverse judgment of the trial court and dismiss the cause.

It is undisputed that expenditures under the annual budget of the City of Austin for 1974-75 have been completed. All warrants issued in payment of the salaries and expenses in dispute for that period have been presented and cashed. No funds remain to be paid out from that portion of the annual budget.

Since the contested disbursements have been completed, plaintiffs’ action to restrain illegal expenditure of tax money has become moot, and right of action to recover tax money already spent belongs exclusively to the municipality, not to the taxpayer. Hoffman v. Davis, 128 Tex. 503, 100 S.W.2d 94 (Tex.Comm’n App. 1937, opinion adopted); Scott v. Graham, 156 Tex. 97, 292 S.W.2d 324 (1956); Rawson v. Brownsboro Independent School District, 263 S.W.2d 578 (Tex.Civ.App. Dallas 1953, writ ref. n. r. e.); Hill v. Calvert, 307 S.W.2d 618 (Tex.Civ.App. Austin 1957, writ ref. n. r. e.); Hill v. James, 307 S.W.2d 619 (Tex.Civ.App. Austin 1957, no writ); Fausett v. King, 470 S.W.2d 770 (Tex.Civ.App. El Paso 1971, no writ).

The controversy between appellants and the City of Austin has terminated, and in the absence of actual controversy, this Court is without jurisdiction to consider the appeal. City of W. University Place v. Martin, 132 Tex. 354, 123 S.W.2d 638 (1939); State v. Society for Friendless Children, 130 Tex. 533, 111 S.W.2d 1075 (1938). When an appeal has become moot, the judgment of the trial court will be set aside and the cause dismissed. Freeman v. Burrows, 141 Tex. 318, 171 S.W.2d 863 (1943); Texas Foundries, Inc. v. International Moulders and Foundry Workers’ Union, 151 Tex. 239, 248 S.W.2d 460 (1952); Poole v. Giles, 151 Tex. 224, 248 S.W.2d 464 (1952).

The judgment of the trial court is reversed, and the cause is ordered dismissed.


author: PEDEN, Justice.

text:
    GORBETT BROS. STEEL COMPANY, INC., Appellant, v. ANDERSON, CLAYTON & COMPANY, Appellee.
    No. 16542.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Jan. 29, 1976.

      Locke, Purnell, Boren, Laney & Neely, Larry M. Lesh, Dallas, Liddell, Sapp, Zivley & Brown, Jess H. Hall, Jr., Houston, for appellant.
    Fulbright & Jaworski, Blake Tartt, Richard N. Carrell, Houston, for appellee.
   PEDEN, Justice.

Defendant, Gorbett Bros., appeals from a judgment awarding $101,080.83 to Anderson, Clayton & Co. (ACCO), as damages resulting from the collapse of a soybean tank fabricated and erected by Gorbett Bros. The tank was built in Osceola, Arkansas, pursuant to a purchase order contract, and ACCO paid Gorbett Bros. $34,590 for it. Several years earlier, Gorbett had submitted detailed blueprints for the fabrication and erection of similar surge tanks which it later built for ACCO under a 1966 agreement at Vicksburg, Mississippi. Then, when ACCO decided to build the tank in question at Osceola, it enclosed with its invitations to bid an autopositive print of one of the drawings Gorbett had made for the Vicksburg job. ACCO labeled it ACCO SK111-M1626.

After a non-jury trial, the judge made findings of fact (which we have condensed) concerning liability: 1) Gorbett Bros, entered in a contract with ACCO whereby Gorbett Bros, sold, designed, fabricated and erected one 40 foot by 54 foot, 6-inch soybean holding surge tank with cone bottom (hereinafter referred to as the “tank”) at ACCO’s facility near Osceola, Arkansas; 2) Gorbett Bros, is a wholly owned subsidiary of Trinity Industries, Inc.; 3) ACCO paid Gorbett Bros, the full contract price for the design, fabrication and erection of the tank; 4) the tank collapsed upon its initial use April 8,1972, through no fault of ACCO; 5) Gorbett Bros, was, at all pertinent times, engaged in the business of designing, selling, fabricating and erecting tanks such as the tank which collapsed; 6) Gorbett Bros., at all pertinent times, represented themselves to ACCO to be engineers, designers, fabricators and erectors of tanks such as the one contracted for by ACCO; 7) ACCO reasonably relied upon the representations of Gorbett Bros, in entering into the contract and in accepting and paying for the tank; 8) Gorbett Bros, knew that the tank was to be used to hold large quantities of soybeans at all pertinent times; 8A) the tank furnished by Gorbett Bros, to ACCO failed to satisfy the purpose for which Gor-bett Bros, knew it to be intended; 8B) the tank furnished ACCO by Gorbett Bros, was defective at the time it was released to ACCO by Gorbett Bros.; 9) the defects in the tank at that time were such as to render the tank unreasonably dangerous; 10) such defects were a producing cause of the damages suffered by ACCO; 11) Gorbett Bros, was negligent in the design of the tank; 11 A) such negligence was a proximate cause of the damages suffered by ACCO; 12) Gorbett Bros, was negligent in the erection of the tank; 12A) such negligence was a proximate cause of the damages suffered by ACCO; 13) Gorbett Bros, was negligent in the fabrication of the tank; 13A) such negligence was a proximate cause of the damages suffered by ACCO; 14) Gorbett Bros, was on notice of the defects in the tank; 15) Gorbett Bros, was negligent in failing to notify ACCO of the defects; 15A) such negligence was a proximate cause of the damages suffered by ACCO; 16) Gorbett Bros, knew that ACCO was relying upon the skill and judgment of Gorbett Bros, as a seller, designer, fabricator and erector of tanks, engaged in the business of selling, designing, fabricating and erecting tanks; 17) Gorbett Bros, impliedly warranted the fitness of the tank for the purpose for which it was to be used; 17A) Gorbett Bros, breached its implied warranty of fitness for a particular purpose; 17B) such breach was a proximate cause of the damages suffered by ACCO; 18) Gorbett Bros, impliedly warranted the merchantability of the tank; 18A) Gorbett Bros, breached that implied warranty; 18B) such breach was a proximate cause of the damages suffered by ACCO.

After considering the request of defendant Gorbett Bros, for additional findings, the trial judge made this response:

1. The agreement between Gorbett Bros., Inc., and ACCO relating to the tank at Osceola, was in the form of ACCO Purchase Order ID13731 dated April 5, 1971, providing, in language prepared by ACCO for the purchase of one:

“SOYBEAN HOLDING SURGE TANK 40'-0" dia. X 54'-6" shell, 27½ Degree conical roof, and 31 degree cone bottom, with two 24" manholes, fabricated in strict accordance with attached Drawing SK111-M1626. . . .”

Said agreement provided further:

“None of the terms and provisions contained in this Purchase Order may be added to, modified, superseded or otherwise altered except by a written instrument signed by an authorized representative of Buyer and delivered by Buyer to Seller, and each shipment received by Buyer from Seller shall be deemed to be only upon the terms and conditions contained in this Purchase Order except as they may be thus added to, modified, superseded or otherwise altered, and notwithstanding any terms and conditions that may be contained in any acknowledgment, invoice, or other form of Seller and notwithstanding Buyer’s act of accepting or paying for any shipment or similar act of Buyer.”

2. Drawing SK111-M1626 attached to and made a part of ACCO Purchase Order ID13731 was an autopositive of a Gorbett Bros, design used by ACCO to indicate the desired dimensions of the tank for bidding purposes only. ACCO did not adopt the drawing as to sufficiency or fitness of design.

3. In the course of performing its obligations to design, fabricate and erect the tank under the agreement, Gorbett Bros, prepared and submitted to ACCO the requisite number of sets of manufacturer’s drawings of the tank. In accordance with the terms of said agreement, said manufacturer’s drawings incorporated the dimensions contained in Drawing SK111-M1626.

4 & 5. Defendant’s Requests 4 and 5 are rejected. The Court finds that ACCO relied upon Gorbett Bros, as to the sufficiency of design and Gorbett knew or should have known, based on past dealings, usage and custom in the industry and the circumstances surrounding the purchase of the tank, that ACCO was relying upon Gorbett in this regard.

6. ACCO had its own Engineering Department, staffed by at least two Registered Professional Engineers who were involved in the preparation of the autoposi-tive of the Gorbett design labeled Drawing SK111-M1626 and ACCO Purchase Order ID13731; however, ACCO did not undertake to design the tank nor in any way relieve Gorbett of such responsibility.

7. Gorbett Bros.’ request for finding no. 7 is rejected as being in direct conflict with findings already made by the Court in accordance with the evidence.

8. Gorbett Bros.’ request for finding of fact no. 8 is rejected as being in direct conflict with findings already made by the Court in accordance with the evidence.

9. In September of 1971, Gorbett Bros. Steel Company, Inc., completed the fabrication of the said soybean holding surge tank in Osceola and released the tank to ACCO, which paid for the same.

10. Gorbett Bros.’ request for finding no. 10 is rejected as being in direct conflict with findings already made by the Court under the evidence.

Gorbett’s first point of error is that the trial court erred in awarding judgment to ACCO because the undisputed evidence showed that ACCO’s acts caused the vessel to collapse. Gorbett’s second point of error is that the trial court erred in using evidence of the 1966 agreement concerning the Vicksburg vessel to add inconsistent and contradictory terms to the 1971 agreement concerning the Osceola vessel.

In its next 54 points of error Gorbett challenges the findings of fact bearing the following numbers by no evidence and insufficient evidence points: 1, 3, 4, 7, 11, 11A, 12, 12 A, 13, 13A, 14, 15, 15A, 16, 17, 17A, 17B, 18,18A, 18B, and additional findings 2, 4 and 5, and 6. Gorbett also contends in these points that findings 5, 6, 7, 8, and 9 are irrelevant and immaterial.

In reviewing “no evidence” points we examine the evidence in its most favorable light, considering only the evidence and inferences which support the findings and rejecting the evidence and inferences contrary to them. In reviewing factual sufficiency points, we consider all the evidence.

Gorbett says that on the Vicksburg job in 1966, it was requested to and did submit to ACCO drawings of a tank with the cone resting on the foundation, and they were approved with a notation that the bottom of the cone be raised five feet, six inches above the foundation by raising the skirt that much. That on the Osceola job, ACCO selected the design of the vessels constructed in Vicksburg, placed ACCO’s name and identification number, SK111 — M1626, on the drawing and distributed it to various contractors to bid on a tank fabricated “in strict accordance with Drawing SK111-M1626.” Gorbett alleges that the contract price of $34,590.00 paid by ACCO to Gorbett was strictly for fabricating and did not include payment for design of the vessel. Gorbett argues that the collapse of the vessel in Osceola “resulted from insufficiencies attributable to Anderson, Clayton Drawing No. SK111-M1626 (the insufficient thickness of the skirt and insufficient design of the cone connection to the skirt) and/or modifications thereof made by (cutting the conveyor opening without any reinforcement whatsoever) or at the instruction of (raising the door) Anderson, Clayton.”

As to the drawing sent to Gorbett, ACCO says it was merely to indicate the overall dimensions they required for the tank, the drawing was not sufficient to be used to make and erect a tank, and Gorbett Bros, designed, fabricated, and erected the tank at Osceola. There is sufficient evidence to support ACCO’s position. Mr. Robert W. Greaser, chief engineer for ACCO, testified that in the last 25 years ACCO had done several million dollars worth of business with Gorbett, and ACCO had never sent a designed tank to Gorbett for construction. Rather, the practice was for ACCO to send an “inquiry” to describe the need as to function and physical dimensions. Mr. Cleon Gorbett, a former owner of Gorbett Bros, and presently an advisor, testified about the tank that his company designed and erected at Vicksburg. Gorbett Bros, engages in the business of designing and/or erecting tanks. People would give Gorbett sketches or drawings and show the dimensions they wanted and site location. “We put it in engineering, and it came out of there designed for erection.” Mr. Gorbett testified that when he dealt with ACCO on the Vicksburg tanks he did not expect ACCO to run load tests and have an engineer for the drawings submitted for their approval, because the drawings were supposed to, and had been, engineered by Gor-bett and the vessel would hold the load that it was supposed to. He was sure Gorbett Bros, made the drawing used in the Osceola job.

Mr. Bond, an ACCO engineer, testified that in requesting bids, ACCO gave the contractors only a general outline of its requirements, not any details of the tank, relying on whoever bid the job to prepare any detailed specifications. He said he felt that the Osceola job had already been designed, apparently referring to Gorbett Bros.’ work.

Mr. John Davis, who was for 15 years a sales estimator for Gorbett, handled the Vicksburg and Osceola sales. He testified that Gorbett bid the Osceola job according to Drawing SK111-M1626 as requested by ACCO and that that one sheet was sufficient to erect the tank. However, he also said tank fabricators usually do the design work. He testified that the drawing furnished by ACCO was used by Gorbett for bidding. It did not contain any information concerning types of welds to be used, and Gorbett made its own drawings.

There is evidence that negligence in the design, fabrication, and erection of the tank proximately caused it to collapse. Mr. James Earthman, a consulting mechanical engineer, was qualified as an expert and gave his analysis and opinion of the causes. He stated that three areas in the tank were so excessively stressed that its failure could have taken place in any one of them: First, where the bottom cone connects to the shell, at the compression ring, there was a combination of fabrication and design problems. The area was overstressed; the girder itself was heavy enough, but attachment of it to the shell left the shell in such a condition that serious bending could take place there. Further, the drawings called for continuous welds, as they should have, but the bottom one was an intermittent or tack weld.

Second, the skirt itself was too thin. This was a design problem. The skirt was so thin that its buckling stresses were beyond ordinary design limits.

Third, the door opening was not reinforced properly. There was a serious problem of construction of the two-foot six by four-foot door in the bottom. The reinforcing steel wasn’t run all the way to the bottom, so the load was not effectively carried into the base. In that second respect the tank as erected didn’t agree with the drawings. The welds for the reinforcing beam according to the drawings were to be run to the bottom of the tank. The tank did, in fact, lean and fall over in the general direction of the door opening. The door problem, he said, could be classified as one of either fabrication or design.

Mr. Earthman concluded that the failure of this tank was, in all reasonable probability, caused by overstressing in any one of the three areas he described or in a combination of the three. He could not pinpoint which problem area caused the collapse, because all three failed. He did not see the tank collapse and could not point to the cause of the initial failure.

A Dr. Michael Wilkinson, a faculty member at the School of Engineering at Louisiana Tech University and holder of a Ph.D. degree in mechanical engineering, testified for Gorbett. He testified that when materials were removed from the skirt its load-carrying capacity was reduced. The cutting out of the door is an example. To overcome this loss, reinforcement should have been placed around the door, but in this case errors were made in the manner in which it was done. He says an opening was cut for a conveyor and there is no clear evidence that any reinforcement was placed around that opening. (There is other testimony that ACCO cut the conveyor opening). He concludes that the cause of buckling was a combination of these two effects.

In the drawing originally prepared by Gorbett for Vicksburg, the cone was resting on the foundation, and if the one at Osceola had been built in that manner, there would have been no problem. He conceded, however, that the cone on the tank at Vicksburg did not rest on the ground but was up in the air like the one at Osceola. Mr. Wilkinson expressed the opinion that the use of the tack weld was a fabrication error and was a contributing factor in the collapse, but he minimized its effect. He would have designed the tank with a bigger margin of safety. Normally, heavier metal would be required for a shirt that holds the tank up, and a tank fabricator would probably know that. Considering the volume of the material stored in it, the vessel was tissue-paper thin.

Evidence on the issue of failure to warn of the defect comes from the testimony of Tommie E. Hood, who had been a boilermaker, welder, and field foreman for Gor-bett Bros, on the Osceola job. After inspecting the drawings he was of the opinion that the vessel would collapse because the shell was too weak, so he called Gorbett Bros, in Ft. Worth and gave this information to Bill Goodfellow, the field superintendent. Goodfellow responded that Gor-bett Bros, is not in the engineering field and it was not for them to worry about; their job was just to erect the tank.

We find no merit in appellant’s second point of error. Both parties offered evidence of the course of dealings between the parties and the circumstances surrounding the execution of the 1971 (Osceola) purchase order contract, including the customs and usages in the tank construction design, fabrication, and erection business and the sufficiency of the autopositive print for use in designing the Osceola vessel. This evidence was not in violation of the parol evidence rule. Even though the 1971 purchase order agreement was not ambiguous, the court was entitled to consider the surrounding facts and circumstances, not to vary or add to the contract, but to learn the intention with which the words were used. Spence & Howe Construction Co. v. Gulf Oil Corp., 365 S.W.2d 631 (Tex.1963).

We hold that the evidence supports the trial court’s findings, under the doctrines of negligence, of defective design, defective manufacture, and failure to warn of known dangerous characteristics. We have examined all of the evidence but have not discussed it all.

The appellant complains that the trial court erred in its findings on implied warranty, challenging the finding that it knew ACCO was relying on its skill. Appellant also denied that it impliedly warranted that the vessel was fit for a particular purpose, that such warranty was breached or that the breach was a proximate cause of the damages.

We hold that the provisions of Section 2.315 of the Texas Business and Commerce Code are applicable under the evidence in this case. They state that an implied warranty for a particular purpose exists (unless modified or excluded under Sec. 2.315):

“Where the seller at the time of contracting has reason to know any particular purpose for which the goods are required and that the buyer is relying on the seller’s skill or judgment to select or furnish suitable goods, . . .”

At the time of contracting Gorbett Bros., through its agents, knew the tank was to hold a full load of soybeans. There is testimony by ACCO’s engineers Bond and Greaser that ACCO relied on Gorbett’s skill and judgment in the design, erection and fabrication of steel tanks. The evidence supports the findings that Gorbett breached its implied warranty of fitness for a particular purpose.

Gorbett Bros, challenges the finding that ACCO did not adopt the drawings of the Vicksburg tanks as to the sufficiency of design. This finding has sufficient evidence in the record to support it.

In points of error 57 through 63 the appellant complains that the trial court erred in failing to make additional findings of fact and conclusions of law that it requested. We overrule these points.

“. . .Of course, the party requesting additional findings cannot compel the trial court to find in a particular way, but where particular named findings are requested, the trial court should respond to such request by finding as he may deem the record to justify.” Wagner v. Riske, 142 Tex. 337, 178 S.W.2d 117 (1944).

In its last point of error the appellant complains that the trial court used an incorrect measure of damages in awarding ACCO $101,080.83; that the damages should have been based on 1) the difference in value of the vessel as built and as it should have been built under the contract or on 2) the difference in value of ACCO’s premises in Osceola before and after the collapse.

We do not agree that ACCO’s recovery must be so limited. ACCO has established its cause of action under theories of negligence, strict liability, and of breach of contract. Under negligence, one who is complaining of a wrongful injury can recover for such damages as are proximately caused by the injury complained of. It must appear that the wrongdoer could or should reasonably have foreseen that the injury complained of, or one of the same general character, would probably result from his wrongful conduct. Commonwealth of Mass. v. Davis, 140 Tex. 398, 168 S.W.2d 216 (1942).

The trial court was entitled to conclude that the consequences that would result if the tank collapsed were within the contemplation of the parties when they were negotiating. Gorbett Bros, was undoubtedly aware of the manpower, the cranes and other equipment that would be needed to move a steel structure of this tank’s size and shape, to remove the debris, and to restore order to the grounds. Also, that Gorbett Bros, should have reasonably foreseen that if the tank collapsed soybeans stored in it would be lost or damaged.

“The primary principle to be applied in awarding damages for negligent injuries to property is that the owner shall have actual pecuniary compensation for the loss sustained . . . ; where it has neither a market value nor a real value, but it is shown what it would cost to replace or reproduce the article, then such cost is the measure of recovery . . . ” International-Great Northern R. Co. v. Casey, 46 S.W.2d 669 (Tex.Com.App.1932, opinion approved).

Under the trial court’s findings, ACCO’s damages fall into these categories:

1. Cost of replacement vessel designed, fabricated and erected by Webco $53,333.00
• 2. Total loss of 5,000 bushels of soybeans at $8 per bushel 40,000.00
3. Damage to 67,000 bushels of other soybeans 20,120.00
4. Labor, equipment and material used to clear away debris and prepare site 31.635.09
Total $145,088.09

The trial court, however, limited ACCO’s recovery to the amount it had prayed for, $101,080.83. If we consider the entire $43,-807.26 reduction in ACCO’s recovery to have been deducted from the first item, cost of the replacement vessel, then ACCO recovered only $9,526 for it. We hold that under the well-supported holdings of the trial court based on the theories of negligence and strict liability, the proper measure of damages included the reasonable cost of replacing the collapsed vessel. The contract price agreed upon by ACCO and Gor-bett Bros, for the vessel that later collapsed was $34,590; it appears to us that a recovery of $9,526 for its replacement is reasonable.

Affirmed.


author: MOORE, Justice.

text:
    LOOMIS LAND & CATTLE COMPANY et al., Appellants, v. DIVERSIFIED MORTGAGE INVESTORS, Appellee.
    No. 864.
    Court of Civil Appeals of Texas, Tyler.
    Jan. 29, 1976.
    Rehearing Denied Feb. 26, 1976.

      William Andress, Jr., Andress, Woodgate & Lodewick, Dallas, for appellants.

      Peter A. Franklin, III, Stanley E. Neely, Locke, Purnell, Boren, Laney & Neely, Dallas, for appellee.
   MOORE, Justice.

This is an appeal from a summary judgment. The litigation commenced when appellant, Loomis Land and Cattle Company (Loomis Company), filed suit in the 162nd District Court of Dallas County to enjoin the sale of a shopping center by the substitute trustee, acting under the terms of a note and a deed of trust executed by Loom-is Company and Richard F. Loomis as guarantor to appellee, Diversified Mortgage Investors (Diversified). The right to have the sale enjoined was based upon the grounds that (1) appellee, Diversified, being a Massachusetts trust was not a recognizable entity under the laws of this state and was therefore without standing in court to pursue any of the remedies arising under the contract, (2) that Diversified’s appointment of a substitute trustee was invalid and (3) that the interest on the note was usurious. On Friday, December 28, 1973, the trial court granted Loomis Company’s application for a temporary restraining order at approximately 2:30 p. m. and set the matter for hearing on January 4, 1974. Within about two hours after the restraining order was issued, the substitute trustee along with Diversified’s attorney, together with the attorneys for Loomis Company, appeared before the court, at which time the attorneys for Diversified orally requested the court to either set an immediate hearing to dissolve the restraining order or to increase the amount of the bond and appoint a receiver. The trial court made no ruling but set a hearing on Diversified’s request for 9:00 a. m., January 2, 1974. In the meantime, the attorneys for the parties engaged in negotiations and discussion regarding the appointment of a receiver. Diversified’s attorney proposed that if Loomis Company would pay Diversified on January 2nd an amount equal to the January rentals, Diversified would postpone its motion for appointment of a receiver until about January 25th. Having heard nothing from the proposal, counsel for Diversified appeared in court on January 2nd at about 8:35 a. m. and filed Diversified’s original answer and motion for the appointment of a receiver. Thereafter, informal discussions took place between the trial judge and the attorneys for both parties regarding the appointment of a receiver; then at about 10:15 a. m. the District Clerk of the 162nd District Court delivered the trial judge a motion for a non-suit, together with an order granting Loomis Company a nonsuit which order had been signed by Judge Snodgrass of the 193rd District Court acting for the judge of the 162nd District. The motion for nonsuit was surreptitiously filed by Loomis Company’s attorney at 6:23 a. m. on January 2nd and the order of nonsuit was entered by the judge of the 193rd District Court without notice to either Diversified’s counsel or the judge of the 162nd District Court at 8:15 a. m. Subsequently, upon motion made by Diversified, the trial court set aside the order of nonsuit and appointed a receiver to collect the rents from the shopping center. On February 5,1974, the temporary restraining order restraining the sale having expired, the substitute trustee proceeded to sell the shopping center at public auction for the sum of $2,250,000.00. Within approximately thirty minutes after the trustee’s sale Loomis Company filed a trespass to try title suit seeking to establish title to the property on the ground that the trustee’s sale was invalid. The suit was assigned to the 101st District Court of Dallas County. Thereafter, upon Diversified’s motion to transfer and consolidate, the suit was transferred to the 162nd District Court and consolidated with the original suit, being numbered 73-9632 — 1. After the transfer and consolidation, Diversified proceeded to amend its pleading asserting a counterclaim for a deficiency judgment against Loomis Company. Diversified also filed a cross-claim seeking a deficiency judgment against Richard F. Loomis, individually, as guarantor of the note.

The cause came on for hearing before the trial court on Diversified’s motion for summary judgment pursuant to Rule 166-A, Texas Rules of Civil Procedure. After a hearing the trial court rendered a summary judgment against Loomis Company and Richard F. Loomis, jointly and severally, for $214,093.52 representing the deficiency on the note, plus interest thereon at the rate of 15% per annum from February 5, 1974, together with all costs. Loomis Company and Richard F. Loomis, Jr., perfected this appeal. The parties will hereafter sometimes be referred to as “appellants” and “appel-lee.”

Appellants seek a reversal by three points of error. For convenience, we will first consider appellants’ third point contending that the trial court erred in granting Diversified’s motion for summary judgment. In connection with this point, appellants assert six basic reasons why the summary judgment should be reversed.

First, they contend they were entitled to take a nonsuit as a matter of right. Based on this premise, they argue that the trial court had no authority to set aside the nonsuit. Consequently, they contend the trial court lost jurisdiction over the parties and the subject matter and therefore had no power to reinstate the original suit and likewise had no power to consolidate their subsequent action of trespass to try title into the original suit.

Rule 164, Texas Rules of Civil Procedure, grants a plaintiff a right to take a nonsuit, but such right is not without limitations. Renfroe v. Johnson, 142 Tex. 251, 177 S.W.2d 600 (1944). The question here is whether the filing of a motion for nonsuit and the entry of an order of dismissal by another court of concurrent jurisdiction without notice to opposing counsel or the trial judge of the court where the cause is pending, will defeat the adverse party’s right to file an answer seeking affirmative relief. A similar situation was presented in the case of Cape Oil Company v. Williams, 427 S.W.2d 122 (Tex.Civ.App.—Tyler 1968, no writ). In that case, this court held that the plaintiff’s right to a nonsuit did not become absolute until after the motion was filed and brought to the attention of the court and opposing counsel. In the instant case, the undisputed proof shows that neither the appellant’s motion for nonsuit nor the order of dismissal was brought to the attention of the trial judge until after ap-pellee had filed its answer and claim for affirmative relief. Consequently, we hold that appellee’s answer and claim for affirmative relief was timely filed and that the court retained jurisdiction over both the parties and the subject matter of the litigation. It follows that the trial court did not err in setting aside the nonsuit and reinstating the cause, nor did the court err in consolidating appellants’ subsequent action in trespass to try title with the original suit pending in the 162nd District Court. J. A. Walsh & Co. v. R. B. Butler, Inc., 260 S.W.2d 889 (Tex.Civ.App.—Waco 1953), writ dism’d, 152 Tex. 601, 262 S.W.2d 952 (1953).

Second, appellants contend that the court erred in granting a summary judgment because a fact question exists as to the amount of damages appellants sustained by the alleged wrongful appointment of a receiver. Appellants argue that the receiver was wrongfully appointed because the court failed to require and appellee failed to post an applicant’s bond in connection with the appointment of a receiver. We overrule the contention. No appeal from the order was taken within the 20-day period required by Rule 385, Texas Rules of Civil Procedure, and as a result the order became final. The order having become final appellants are not permitted to collaterally attack the same on appeal. Any irregularity involved in the appointment, including the failure to post an applicant’s bond, was waived. King Land & Cattle Corp. v. Fikes, 414 S.W.2d 521 (Tex.Civ.App.—Fort Worth 1967, writ ref’d n. r. e.); Archer v. Ross, 262 S.W.2d 213, 216 (Tex.Civ.App.—Fort Worth 1953, no writ).

Third, appellants contend that the trial court erred in granting appellee a summary judgment on their cross action in trespass to try title. In this connection appellants contend they had a right to title and possession of the premises in that the trustee’s sale conducted by Franklin, the substitute trustee, was void because Diversified induced the original trustee, Layton, to resign without requesting him to sell the property. As we view the record the contention is without merit in that there is no summary judgment proof to support such contention. The proof shows that Diversified requested the original trustee, Layton, to sell the property but he refused on the ground that he was too busy with other matters. In his written resignation he stated that Diversified had “requested” him to “make the sale of the property” and that he declined to act as trustee and thereby resigned. The resignation was filed in the deed records of Dallas County. There is no evidence to the contrary. Since the summary judgment proof shows as a matter of law that appellee did not induce the original trustee to resign without requesting him to sell the property, the summary judgment proof establishes as a matter of law that there was no genuine issue of material fact upon appellants’ theory of recovery in this regard.

Appellants further contend that the foreclosure sale by the substitute trustee, Franklin, was void because Franklin did not himself post the notices of sale. This contention is likewise without merit. The proof shows that the notices were properly posted by substitute trustee, Smith, who subsequently resigned due to an injury. It is now settled that a substitute trustee need not repost notices of sale when such notices have been therefore properly posted by a former trustee. Tarrant Savings Association v. Lucky Homes, Inc., 390 S.W.2d 473, 475 (Tex.1965). Consequently, the summary judgment proof shows as a matter of law that there is no genuine issue of fact upon appellants’ theory of recovery in this regard.

Moreover, we think the summary judgment must be affirmed on the additional ground that appellants failed, both before and after the foreclosure, to pay or tender the amount of the indebtedness due on the note. Under the facts and circumstances of this case such a tender was necessary. Breitkreutz v. Cook, 135 Tex. 574, 144 S.W.2d 534 (Tex.Comm.App.1940, opinion adopted); Whalen v. Etheridge, 428 S.W.2d 824 (Tex.Civ.App.—San Antonio 1968, writ ref’d n. r. e.) citing cases. The Commission of Appeals in Jasper State Bank v. Braswell, 130 Tex. 549, 111 S.W.2d 1079 (opinion adopted), 115 A.L.R. 329 (1938) said: “It is settled in this state that a mortgagee who has purchased the land at foreclosure sale, irregular or void as to the mortgagor (or as to one having title under the mortgagor), and who has taken possession under and in reliance upon such foreclosure and purchase, may retain possession against the suit of the mortgagor, or one holding under him, until his debt is paid.” Under the facts and circumstances here, the summary judgment proof establishes as a matter of law that appellants were not entitled to recover title and possession upon their cross action in trespass to try title.

Fourth, appellants seek a reversal on the ground that a fact question existed as to whether the loan was usurious. Appellants argue first that the true borrower was Richard F. Loomis, rather than Loomis Company. The only summary judgment proof in support of this contention is Richard F. Loomis’ statement in his affidavit that:

“Diversified Mortgage Investors was unwilling to make this loan to Loomis Land and Cattle Co., Inc., without my personal guaranty and would not make it to me except through Loomis Land and Cattle Co., Inc., because of my personal financial responsibility and the fact that if the loan was made directly to me they could not charge me more than 10% per annum interest, at which amount they were unwilling to make the loan.”

As we view the record, the loan was made to Loomis Company rather than to Richard Loomis in his individual capacity. In his deposition, Loomis testified (1) that Loomis Company was not a sham corporation, (2) that the company had been doing business for almost 2 years before the application for the loan was made, (3) that the company had a net worth of several million dollars, and (4) that the company borrowed the funds from Diversified in order to continue to operate and expand the operation of the shopping center owned by it. Further, that the loan documents were signed as a corporation by Braxton Freeman as agent for Loomis as President of Loomis Company. While the corporate entity may in some instances be disregarded where it is utilized as a cloak for fraud or illegality, such is not the situation here. There is no summary judgment proof suggesting fraud or illegality. The mere fact that Diversified refused to make the loan to Loomis Company unless Richard F. Loomis, Jr., agreed to act as guarantor does not render the loan transaction void or illegal. Skeen v. Glenn Justice Mortgage Company, Inc., 526 S.W.2d 252, 256 (Tex.Civ.App.—Dallas 1975, no writ). As we view the record the loan was made to Loomis Company and not to Richard F. Loomis, individually.

Appellants argue that in any event the loan is usurious as to Richard F. Loomis as guarantor because the rate of interest exceeds 10% per annum. They contend that the maximum rate of interest which Loomis individually can be charged is governed by Article 5069-1.02, Tex.Rev.Civ. Stat.Ann., which provides: “Except as otherwise fixed by law, the maximum rate of interest shall be ten percent per annum. A greater rate of interest than ten percent per annum unless otherwise authorized by law shall be deemed usurious.” Appellants’ reliance on article 5069-1.02 is misplaced. Clearly the loan transaction in this case is governed by Article 1302-2.09, Tex.Rev.Civ. Stat.Ann., which provides as follows:

“Authority of certain corporations to borrow money.
Notwithstanding any other provision of law, corporations, domestic or foreign, may agree to and stipulate for any rate of interest as such corporation may determine, not to exceed one and one-half percent (1V2%) per month on any bond, note, debt, contract or other obligation of such corporation under which the original principal amount is Five Thousand Dollars ($5,000) or more, . . . and in such instances, the claim or defense of usury by such corporation, its successors, guarantors, assigns or anyone on its behalf is prohibited . . (Emphasis added.)

The statute provides, in effect, that neither the corporate borrower nor a guarantor may assert the defense of usury upon the class of loans contemplated by the statute. The record conclusively shows that the interest rate agreed upon fell within that allowed by the statute. Thus, appellant Loomis is prohibited from asserting the defense of usury since he signed the corporate loan as a guarantor, rather than as an individual maker.

Appellant, Richard F. Loomis, Jr., further contends that the language in Article 1302-2.09 denying the defense of usury to guarantors of corporate loans is unconstitutional because individual guarantors are not specifically referred to in caption of the statute as required by Article III, sec. 35 of the Texas Constitution. He argues that the caption fails to show that the statute was intended as an amendment to the Texas usury statutes authorizing individuals to be charged interest in excess of 10% per an-num. We do not agree.

The title of the Act reads as follows:

“An Act amending the Texas Miscellaneous Corporation Laws Act, enacted by Section 1, Chapter 205, Acts of the 57th Legislature, Regular Session, 1961, by adding a new Article 2.09, relating to the authority of certain corporations to borrow money and setting maximum interest rates thereon; prohibiting the plea or defense of usury in certain instances; providing exemptions; and declaring an emergency.”

Neither the statute nor its caption has anything to do with the rate of interest that may be charged an individual borrower. The statute merely prohibits the defense of usury to the corporate borrower and its guarantors. The caption clearly states that the statute prohibits the defense of usury in certain instances. The caption of an act is to be liberally construed in favor of constitutionality. Robinson v. Hill, 507 S.W.2d 521, 525 (Tex.1974). In our view, the caption of the statute is not defective. It follows that appellant Richard F. Loomis, as guarantor, was not entitled to assert the defense of usury.

Fifth, appellants contend that a fact question existed upon the amount of the deficiency due and owing appellee at the time of the foreclosure. We fail to find any merit in this contention.

Appellee, Diversified, presented the affidavit of Donald Sutton, the custodian of its financial records. The affidavit contains a detailed account of the method by which he calculated the deficiency and interest due in the amount of $214,093.52. The testimony and calculations set by Sutton are clear, direct and positive; there being no circumstances in the evidence tending to discredit or impeach such testimony and calculations, we are permitted to consider them. Great American Reserve Ins. Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.1965). Appellants offered no summary judgment proof to the contrary. Upon a close study of Sutton’s affidavit we are convinced that Diversified met its burden of showing conclusively the amount of the deficiency due and owing it.

Sixth, appellants would urge that the summary judgment was improperly granted because Diversified, being a Massachusetts Trust, has no standing to sue in Texas courts. While Massachusetts Business Trusts are not recognized in this state it has been held that they are to be treated as a partnership or an unincorporated joint stock company. Thompson v. Schmitt, 115 Tex. 53, 274 S.W. 554 (1925); Means v. Limpia Royalties, 88 S.W.2d 1080 (Tex.Civ.App.—El Paso 1935, writ dism’d). Being a joint stock company, Diversified is entitled to the benefits of Article 6133, Tex.Rev.Civ. Stat.Ann., providing that:

“Any unincorporated joint stock company or association, whether foreign or domestic, doing business in this State, may sue or be sued in any court of this State having jurisdiction of the subject matter in its company or distinguishing name; . . . ”

Appellants assert by their First point “The trial court erred in instructing the Clerk to back-date to 28 December 1973, the filing of the Diversified answer and motion for appointment of a receiver, from its actual reduction to writing and physical filing on 2 January 1974.” An examination of the record indicates that although the trial judge made some comment with reference to back-dating the instruments, the judge never instructed the clerk to do so. The record shows that the instruments referred to were actually filed on January 2, 1974. Appellants’ contention is without foundation and the point is therefore overruled.

By their Second point of error, appellants complain of the action of the trial court in refusing to require Diversified to answer Loomis Company’s Interrogatory No. 1 requesting the names, post office addresses and names and addresses of agents for service located in Texas, of every member or owner of any beneficial interest in Diversified Mortgage Investors. We find no error in the trial court’s ruling. Appellants admit in their brief that their only purpose in seeking such information was to name each of the shareholders of Diversified as party defendants. In the loan agreement, however, appellants specifically agreed that they would look only to the property of Diversified for any claims against Diversified and that the individual shareholders would not be liable. Such clauses exempting the individual shareholders are valid and not against public policy. Shelton v. Mantoya Oil & Gas Co., 292 S.W. 165, 167 (Tex.Comm.App.1927, jdgmt. adopted). The point is overruled.

The judgment of the trial court is affirmed.

      . The note and loan agreement provided that the contracted rate of interest was fixed at 4⅞% in excess of the prime rate of the Chemical Bank of New York, New York, but never to be less than 10% per annum nor more than 12% per annum.


author: McKAY, Justice.

text:
    Jack Arthur STEHLING, Appellant, v. Jane WILKINSON et al., Appellees.
    No. 907.
    Court of Civil Appeals of Texas, Tyler.
    Jan. 29, 1976.

      R. Emmett Cater, San Antonio, for appellant.
    Patricia E. Grant, Ray Harris Adams, San Antonio, for appellees.
   McKAY, Justice.

This suit, called “Motion to Reduce Unpaid Child Support to Judgment”, was filed in the District Court in Bexar County on December 5, 1974, by Jane Wilkinson against Jack Arthur Stehling. The trial court’s judgment awarded $9,120.00 to Jane Wilkinson and also awarded $2,500.00 to her attorney. Stehling brings this appeal.

The parties had formerly been husband and wife. They were divorced by a decree of the District Court of Gillespie County on November 13, 1967. The divorce decree approved and confirmed an agreement concerning the division of their community property and that the mother would have custody of their four minor children. Without reference to or recitation of any agreement the court ordered Stehling, the father, to pay $80.00 per month per child to the mother until each child reached 18 years of age, but the judgment did not specify any agency through which such payments were to be made.

On September 11, 1969, the Domestic Relations Court of Harris County issued an order under the Uniform Reciprocal Enforcement of Support Act for $80.00 per month per child with all payments to go through the Chief Probation Officer, Wood-bury, New Jersey, beginning September 29, 1969.

On December 10, 1969, appellant petitioned the District Court of Gillespie County to reduce the support payments to $50.00 per month per child, and the court so ordered the reduction and also ordered the payments to be made to the District Clerk of Gillespie County.

On March 9,1970, appellee filed a motion for contempt in the District Court of Gillespie County for nonpayment of child support, but there is no disposition of that motion in the record.

As indicated, appellee’s “Motion to Reduce Unpaid Child Support to Judgment” was filed December 5, 1974, and recited that it was brought “to collect past due child support.” It was further alleged that “this Court has continuing jurisdiction of this suit,” and “In an order of this Court entered November 13, 1967, Jack Arthur Stehling was ordered to pay . . . ” and that he “has not paid as ordered . . . ” (Emphasis added.)

By several points appellant challenges the jurisdiction of the trial court to render judgment in this cause. Appellant contends by his second point that the only court having jurisdiction of this suit is the district court which decreed the order sought to be enforced, and he maintains in his fourth point that the Family Code precludes jurisdiction in the Bexar County District Court. We sustain these points.

Section 11.05(a) of the Family Code provides that

“ . . . when a court acquires jurisdiction of a suit affecting the parent-child relationship, that court retains continuing jurisdiction of all matters provided for under this subtitle in connection with the child, and no other court has jurisdiction of a suit affecting the parent-child relationship with regard to that child except on transfer as provided in Section 11.06 of this code.” (Emphasis added.)

Section 11.01(4) provides “ ‘Parent-child relationship’ means the rights, privileges, duties and powers existing between a parent and child as provided by Section 12.04 of this code.”

Section 11.01(5) reads:

“ ‘Suit affecting the parent-child relationship’ means a suit brought under this subtitle in which the appointment of a managing conservator or a possessory conservator, access to or support of a child, or establishment or termination of the parent-child relationship is sought.” (Emphasis added.)

Section 12.04(3) provides that a parent of a child has the duty to support the child by providing clothing, food, shelter, medical' care and education.

Appellee’s pleading, being in the form of a motion, apparently assumed that the Be-xar County court was the court originally acquiring jurisdiction of the parent-child relationship. The trial court found as a conclusion of law that no other court had continuing jurisdiction. However, the record reveals that the District Court of Gillespie County first acquired jurisdiction of a suit affecting the parent-child relationship involved here, and there has been no transfer of that jurisdiction to Bexar County. There is nothing in the record to show that the Bexar County District Court had acquired jurisdiction by being informed by the State Department of Public Welfare that the children had not been the subject of a suit affecting the parent-child relationship as required by Section 11.05(c), nor did the pleading state that no other court had continuing jurisdiction over the children as provided by such section.

The trial court concluded as a matter of law that this was a suit for debt and that it had jurisdiction of this cause of action. Contrary to appellant’s contention, an action may now be brought in a court which has acquired jurisdiction of a suit affecting the parent-child relationship to enforce an order of child support, and a judgment against a defaulting party may be rendered for any unpaid support, and such judgment may be enforced as a judgment for debt. Section 14.09(c). It has been held that Section 14.09(c) is constitutional and that child support payments which had accrued prior to the effective date of the Family Code (January 1, 1974) may be included in a judgment against a defaulting party under this section since it was a remedial or procedural statute. Harrisan v. Cox, 524 S.W.2d 387 (Tex.Civ.App.—Fort Worth, 1975, writ ref’d, n. r. e.). Article 4639a was repealed by the Family Code.

Appellee maintains this is a suit on a contract and not a suit affecting parent-child relationship; and, therefore, it is not subject to the provisions of the Family Code. We disagree.

The judgment of the District Court of Gillespie County decreeing a divorce and awarding custody and ordering support makes no reference to an agreement on the child support so ordered. There was no contract involving support in the record.

Parent-child relationship is defined in Section 11.01 as the rights, privileges, duties and powers existing between a parent and child as provided in Section 12.04. Among the rights, privileges, duties and powers of a parent listed in Section 12.04 is found in subsection (3) the duty to support the child which includes providing the child with clothing, food, shelter, medical care and education. We hold that this is a suit affecting the parent-child relationship and that it is subject to the provisions of the Family Code.

By virtue of the provisions of Section 11.05 the court acquiring jurisdiction of a suit affecting the parent-child relationship retains continuing jurisdiction unless (1) there has been a transfer of the cause to another court as provided by Section 11.06, or (2) there has been a final decree of adoption of the child involved, or (3) the State Department of Public Welfare has informed another court that the child or children has or have not been the subject of a suit affecting the parent-child relationship, and the petition states that no other court has continuing jurisdiction. None of these exceptions appear in the record of this case.

We hold that this suit is one affecting the parent-child relationship, and under the record before us the District Court of Bexar County did not have jurisdiction to entertain and render judgment on the “Motion to Reduce Unpaid Child Support to Judgment”. As provided by the Family Code the jurisdiction of such an action was in the District Court of Gillespie County, and the record does not reveal that jurisdiction had been acquired by any other court.

Judgment of the trial court is reversed, and the cause is dismissed.

      . “MOTION TO REDUCE UNPAID CHILD SUPPORT TO JUDGMENT
      “This suit is brought by JANE WILKINSON, Movant, to collect past due child support. Petitioner resides at 711 Sterling Road, Woodbury, New Jersey, and Respondent is JACK ARTHUR STEHLING, who resides at 3803 Barrington, North 16A, San Antonio, Bexar County, Texas.
      “1. This Court has continuing jurisdiction of this suit.
      “2. The names of the children are as follows:
      JOHN MICHAEL STEHLING
      GEORGE RIDGE STEHLING
      PHILIP GREGORY STEHLING
      TARA JANE STEHLING
      “3. In an order of this Court entered November 13, 1967, JACK ARTHUR STEHL-ING was ordered to pay to Movant $320.00 per month for the support of the children. On December 10, 1969, the payments were reduced to $200.00 per month. Respondent has not paid as ordered, and at this time $10,140.00 is unpaid and owing.
      “4. To protect Movant’s rights and those of the children with whom this action is concerned, Movant found it necessary to obtain the services of PATRICIA E. GRANT, a licensed attorney. Movant asks that a reasonable attorney’s fee of at least $3,000.00 and judgment be rendered against JACK ARTHUR STEHLING, Respondent, in favor of this attorney.
      PRAYER
      “Movant prays that Respondent be cited to appear and answer this Motion 10 days from receipt of this notice.
      “Movant prays that judgment be granted against Respondent for child support unpaid and owing and for attorney’s fees.
      “Movant prays for general relief.”

      .Section references are to Family Code unless otherwise noted.

        . Conclusions of Law
      1. This cause of action is a suit on a debt, and this Court has jurisdiction.
      2. No other court had continuing jurisdiction.
      3. Defects in movant’s pleadings, if any, were waived because they were not timely objected to in writing. (T.R.C.P., 90)
      4. That this District Court has jurisdiction and authority to award a money judgment for previously unpaid child support.
      5. That a money judgment in the amount of $9,120.00 shall issue against the Respondent, Jack Stehling.
      6. That $2,500.00 is a reasonable fee for services performed by the movant’s attorney and a judgment shall issue against the Respondent, Jack Stehling, for $2,500.00.


author: YOUNG, Justice.

text:
    WHITE STORES, INC., Appellant, v Eva Jean FIELDING, Appellee.
    No. 1046.
    Court of Civil Appeals of Texas, Corpus Christi.
    Jan. 30, 1976.

      Thomas P. Sartwelle, Fulbright & Jawor-ski, Houston, for appellant.
    Paul F. Jensen, Morgan, Dudsensing & Tullís, Houston, for appellee.
   OPINION

YOUNG, Justice.

White Stores, Inc. has appealed from an order overruling its plea of privilege. Suit was filed in Harris County by Eva Jean Fielding for personal injuries resulting from an incident in which a chair, manufactured by Falcon Manufacturing Company and sold by White Stores, Inc., collapsed under her weight. White filed a plea of privilege but Falcon did not.

The chair was purchased by Fielding as part of a dining room suite from the appellant’s store in Harris County. Approximately three years after purchase, the ap-pellee sat in the chair and it came apart causing her to fall. White Stores, Inc., a domestic corporation licensed and doing business in Texas, asserted in its plea of privilege that at the time the action was instituted, and at all times material, its county of residence was Wichita County, Texas. The record does not reflect that the trial court filed findings of fact and conclusions of law. Thus, it is our duty to affirm the order of the trial court if it can be sustained upon any reasonable theory supported by the evidence and authorized by law. James v. Drye, 320 S.W.2d 319 (Tex.Sup.1959); Pearson v. Stevens, 446 S.W.2d 381 (Tex.Civ.App.—Houston [1st Dist.] 1969, no writ); Connor v. City of University Park, 142 S.W.2d 706 (Tex.Civ.App.—Dallas 1940, writ ref’d).

It is a basic right of a defendant to be sued in the county of his domicile unless the plaintiff proves by a preponderance of the evidence that the case comes within one of the statutory exceptions in Article 1995, Tex.Rev.Civ.Stat.Ann. Banks v. Collins, 152 Tex. 265, 257 S.W.2d 97 (Tex.Sup.1953). The appellee alleged in her controverting affidavit that venue was maintainable in Harris, County, Texas pursuant to Subdivisions 9a, 23, 27, 29a and 31 of Article 1995. In twelve points of error, White contends that there is no evidence or insufficient evidence to sustain the court’s order on these sections of Article 1995.

Venue is not maintainable in Harris County under Subdivision 9a. The plaintiff’s petition is couched in terms of strict liability, breach of implied warranty and negligence. There was offered, however, no proof of negligence nor proof of a negligent act in Harris County. Proof of negligence is a prerequisite of Subdivision 9a.

Plaintiff has failed to establish venue in Harris County under Subdivision 23. That exception provides in part:

“Suits against a private corporation may be brought in the county in which the cause of action or part thereof arose; or in the county in which the plaintiff resided at the time the cause of action or part thereof arose, provided such corporation, association or company has an agency or representative in such county; . .

To come within Subdivision 23, it is necessary to prove that a cause of action in fact exists. The plaintiff has the burden, as in a trial on the merits, to prove the elements of that cause of action. Victoria Bank & Trust Co. v. Monteith, 138 Tex. 216, 158 S.W.2d 63 (Tex.Comm’n App.1941, opinion adopted); Socony Mobil Company, Inc. v. Southwestern Bell Telephone Co., 518 S.W.2d 257 (Tex.Civ.App.—Corpus Christi 1974, no writ).

As noted above, the plaintiff offered no proof of negligence. Whether the record contains proof of a cause of action under a theory of strict liability or implied warranty requires closer consideration. Under a theory of strict liability or implied warranty the plaintiff must prove that the defective condition existed at the time the product left the hands of the particular defendant seller. Pittsburg Coca-Cola Bottling Works of Pittsburg v. Ponder, 443 S.W.2d 546 (Tex.Sup.1969); Jack Roach-Bissonnet, Inc. v. Puskar, 417 S.W.2d 262, 278 (Tex.Sup.1967). Also in Ponder, it is made clear that, although it is not necessary to negative every remote possibility of mishandling, the plaintiff must at least offer testimony that would support a reasonable inference that the product was not mishandled or damaged after delivery. In the present case, there is insufficient evidence that the defect was present in the chair when it left the custody and control of the seller. Fielding’s testimony on this point was simply, “I bought some furniture from White Stores and it was faulty, gave way with me and I was injured.” This may be some evidence that the defect was present at time of delivery. It is not, however, sufficient to meet the tracing requirement of Ponder.

Further, we find no evidence to bring this case within the exception of Subdivision 27. Under this subdivision, the plaintiff must prove that the defendant is in fact a foreign corporation. Vines v. Harry Newton, Inc., 445 S.W.2d 260, 262 (Tex. Civ.App.—Houston [1st Dist.] 1969, writ dism’d). This she has failed to do.

About Subdivision 29a, the plaintiff must establish that White is a necessary party to the action and that venue is maintainable in Harris County as to Falcon. The plaintiff has failed to offer any evidence of joint responsibility; consequently, this exception fails for her. Loop Cold Storage Company v. South Texas Packers, Inc., 491 S.W.2d 106 (Tex.Sup.1973); Zurich Insurance Company v. Wiegers, 527 S.W.2d 511 (Tex.Civ.App.—Austin 1975, no writ).

The plaintiff has offered no evidence that White Stores, Inc. is a manufacturer; thus, the exception of Subdivision 31 may not be invoked by her either. The terms of the exceptions to venue must be strictly construed and the plaintiff must clearly establish the exception before a defendant may be deprived of his right to be sued in a county of his domicile. McClanahan v. Cook, 401 S.W.2d 352 (Tex.Civ.App.—Amarillo 1966, no writ). All of White’s points are sustained.

The judgment of the trial court is reversed, and judgment is here rendered that White’s plea of privilege is sustained. It is further ordered that the action against White be severed, and that the suit against White be transferred to a District Court of Wichita County, Texas.