author: REYNOLDS, Chief Justice.

text:
    A. W. CRISP, Jr., and Crisp Equipment Company, Appellants, v. SOUTHWEST BANCSHARES LEASING COMPANY, Appellee.
    No. 9027.
    Court of Civil Appeals of Texas, Amarillo.
    Aug. 10, 1979.
    Rehearing Denied Sept. 26, 1979.

      Wilbur T. Knape, Hurst, for appellants.
    Daniel K. Hedges, Russell H. McMains, Rufus Wallingford, Fulbright & Jaworski, Houston, for appellee.
   REYNOLDS, Chief Justice.

Adjudged aiders and abettors in a fraudulent scheme, defendants seek relief from a monetary judgment on the central conception that the defrauded plaintiff is bound by the knowledge and acts of its agent, who participated in the scheme. Neither that conception nor any other ground asserted for reversal is sustainable under the circumstances of this cause. Affirmed.

Southwest Bancshares Leasing Company began this litigation against Bentwood Corporation, James W. McPherson, A. W. Crisp, Jr., Crisp Equipment Company and other defendants. Southwest’s stated cause of action was for the recovery of monetary damages resulting from a fraud perpetrated against it by Bentwood and its president, McPherson, who were knowingly aided and abetted by Crisp Equipment, Crisp (the president of Crisp Equipment), and other defendants.

Southwest pleaded that it was in the business of leasing equipment for use in commercial enterprises, usually purchasing the equipment at the behest of the prospective lessee and then leasing it to the lessee. Bentwood, acting through its president, McPherson, made application to Southwest for a lease of items of construction equipment. Southwest alleged that it issued and delivered to McPherson two checks payable to Crisp Equipment in the sums of $35,000 and $27,500 for the purchase of a front-end loader and a grader, respectively, after the company had issued sworn bills of sale, which were formally notarized by Crisp, indicating that for and in receipt of $35,000 and $27,500 Crisp Equipment had sold the equipment to Southwest. However, a clandestine deal between McPherson and Crisp Equipment had been arranged, and the true purchase price of the equipment totaled only $14,750. Crisp Equipment apparently endorsed the two checks aggregating $62,-500 and returned them to McPherson, and Crisp Equipment was paid $14,750 by a Bentwood check.

Theorizing that it was entitled to rescind the sale for fraud, Southwest tendered the equipment to Crisp Equipment in return for the $62,500 it had paid. Alternatively and because of the fraud, Southwest sought both actual damages of at least $47,750, the difference between the market value of the equipment and the price Southwest paid, and exemplary damages.

• Defensively, the live trial pleadings of Crisp Equipment and Crisp averred that the fraud, if any, perpetrated against Southwest was by its president, E. L. Epperson, whose prior fraudulent transactions with McPherson put Southwest on notice; Ep-person’s acts were ratified by and bound Southwest, which accepted the benefits of the acts and is thereby estopped to recover damages; and that the bills of sale were fraudulently procured by Southwest and are invalid. Furthermore, Crisp Equipment and Crisp pleaded that the transactions were at arm’s length and Southwest’s failure to exercise ordinary care to protect its own interests was the sole cause of any damages. Still further, Crisp Equipment and Crisp pleaded that Southwest had elected to recover under a bond protecting it from losses incurred from the fraud and dishonesty of Epperson and is barred from prosecuting this suit.

Bentwood and McPherson failed to appear for the jury trial. The trial evidence adduced which bears on the appellate matters may be summarized.

Southwest was victimized in a series of fraudulent schemes involving purchase and lease transactions. To generate cash for Bentwood, McPherson, who actually owned all of the stock of and operated Bentwood, participated in the purchases of construction equipment at prices less than the purchase prices which are shown on the instruments conveying title to Southwest. Southwest, acting by president Epperson and another, leased the equipment to Bentwood, acting by McPherson. Checks issued on Southwest in the amounts of the cost of the equipment shown on the instruments of title were delivered to McPherson, who paid the sellers of the equipment the actual cost of the equipment and retained the balance. Southwest’s president, Epperson, who according to McPherson received some of the proceeds from the checks, admittedly was complicitous in the schemes.

One transaction concerned the sale of two pieces of construction equipment by Crisp Equipment to Southwest and then leased by Southwest to Bentwood. McPherson negotiated with Crisp for the sale of the equipment to Southwest for a total amount of |14,500, but made it clear to Crisp that the equipment would not be bought unless Crisp filled out the bills of sale in favor of Southwest for certain amounts of money. Crisp directed an employee, Charles White, to execute, at the request of McPherson, two bills of sale, one showing a grader sold to Southwest for $27,500, and the other showing a loader sold to Southwest for $35,-000. Crisp, a notary public, admitted to formally notarizing the bills of sale. Ep-person then issued Southwest’s checks, one for $27,500 and the other for $35,000, payable to Crisp Equipment and hand delivered them to McPherson. The checks were endorsed “Crisp Equipment Co.” Crisp and employee White testified that neither endorsed the checks. McPherson testified that he, in the presence of Max Shaw, a banker, personally observed White endorse the two checks; and Shaw, who accompanied McPherson to Crisp Equipment for the purpose of having the checks endorsed, testified that a person in Crisp Equipment’s office endorsed the two checks. The two endorsed checks were returned to McPherson. Crisp was paid $14,500 for the two pieces of equipment by a Bentwood check.

Following the : introduction of evidence, some named defendants were dismissed upon the motion of Southwest, leaving Crisp Equipment, Crisp and one other defendant. The jury exonerated the third defendant, but the jury found, in response to special issues submitted, that:

No. 5: McPherson and others participated in a scheme to defraud Southwest with respect to the purchase of construction equipment from Crisp and Crisp Equipment.
No. 6: Crisp and Crisp Equipment knowingly aided and abetted in such scheme.
No. 6A: Such aiding and abetting was a proximate cause of any damage to Southwest.

Accepting the verdict and rendering judgment, the trial court decreed, inter alia, that Southwest recover of and from Bentwood, McPherson, Crisp Equipment and Crisp, jointly and severally, the sum of $47,-750, with pre-judgment and post-judgment interest. Crisp and Crisp Equipment have appealed, seeking a reversal of that portion of the judgment rendered against them and a rendition of judgment in their favor or, alternatively, a remand of the cause.

Crisp and Crisp Equipment, collectively styled Crisp unless otherwise named, have designated nine points of error. At the outset, Southwest challenges all nine points, contending that each one is flagrantly multifarious in violation of Tex.R.Civ.P. 418, and unworthy of consideration on the authority of Flock v. Kelso, 366 S.W.2d 698 (Tex.Civ.App.—Amarillo 1963, no writ), and International Security Life Ins. Co. v. Short, 443 S.W.2d 949 (Tex.Civ.App.—Amarillo 1969, writ dism’d). Rule 418 governs the contents of an appellant’s brief and, as amended effective 1 January 1978, provides that the brief should contain, among other matters:

(d) Points of Error. A statement of the points upon which the appeal is predicated shall be stated in short form without argument and be separately numbered. In parentheses after each point, reference shall be made to the page of the record where the matter complained of is to be found. Such points will be sufficient if they direct the attention of the court to the error relied upon.

With notice of Southwest’s challenge to the sufficiency of the points, Crisp requested and was granted, during submission of this cause, leave to file a supplemental brief; however, the original statements of points are sedulously echoed in the supplemental brief. Six and one-half pages are required to merely state the nine points. Each point either embraces more than one specific ground of error or attacks several distinct alleged errors. Obviously, the points are penned in patent violation of both the letter and the spirit of the rule; yet, by force of the rule, we are committed to pass on the merits of each point if we can ascertain, in the light of the statement and argument thereunder the complaint to which attention is directed. Accord, O’Neil v. Mack Trucks, Inc., 542 S.W.2d 112, 114 (Tex.1976).

After a comprehensive study of Crisp’s briefs, we discern that Crisp has directed attention to the complaints which are recorded and discussed under the ensuing numerical headings. Any lack of certainty of discernment stems from the composition of Crisp’s briefs. The briefs do not, contrary to the direction of Rule 418(e) that they should, “include (i) a fair, condensed statement of the facts pertinent to such points, with reference to the pages in the record where the same may be found . .” Because Crisp’s statement of facts is not referenced to pages in the record, this court has no duty to independently search the 522 pages of the statement of facts in an attempt to determine if the complaints have merit, Saldana v. Garcia, 155 Tex. 242, 285 S.W.2d 197, 200-01 (1955), but we have made the effort to do so.

1.

Intertwined among Crisp’s presentation of several points of error are complaints that there is no evidence to support either the submission of or the jury’s answers to special issues nos. 5, 6 and 6A. The no evidence complaints invoke the principles that an issue must be submitted to the jury when it is raised by any evidence of a probative nature, Air Conditioning v. Harrison-Wilson-Pearson, 151 Tex. 635, 253 S.W.2d 422, 425 (1952), and the answers of the jury must stand if, viewing the evidence favorable to the findings and discarding all evidence and inferences contrary thereto, there is some evidence of probative force to support the findings. Biggers v. Continental Bus System, 157 Tex. 351, 303 S.W.2d 359, 363 (1957). In this light, the evidence, a summary of which has been stated, constitutes some evidence of probative force to compel the submission of the issues and to support the jury’s answers to those issues. Consequently, the no evidence complaints are unavailing.

2.

Crisp’s no evidence complaints are but the antecedent for the central conception that Epperson’s corruption is imputed to Southwest, thereby estopping Southwest from repudiating it and profiting by its own acts, and entitling Crisp to judgment as a matter of law. In view of the fact that the jury’s answers establish Crisp’s culpability in a fraudulent scheme which damaged Southwest, we must uphold the verdict unless Southwest is, as a matter of law, chargeable with Epperson’s fraudulent acts.

We are cognizant of the general rule, which Crisp so vigorously urges should be applicable here, that where the agent acts both for himself and his principal, the agent’s knowledge is imputed to the principal, who cannot achieve an advantage secured by the fraud of the agent. See, e. g., Vogel v. Zipp, 90 S.W.2d 668, 672 (Tex.Civ.App.— Austin 1936, writ dism’d). The rule is for the protection of innocent third parties and does not protect those who collude with the agent to defraud the principal. So, that rule loses its applicability when the agent is acting fraudulently toward his principal. In that situation, the agent’s knowledge is not binding on the principal and one who avails himself of the fraudulent services of the agent cannot claim that the agent’s acts or knowledge bind the defrauded principal. Centennial Mut. Life Ass’n v. Parham, 80 Tex. 518, 16 S.W. 316, 319 (1891). The principle enunciated in Parham is also recognized by the federal court as one consistently followed by the Texas courts. Southern Farm Bureau Casualty Insurance Co. v. Allen, 388 F.2d 126, 131 (5th Cir. 1967). It follows that Southwest is not, as a matter of law, chargeable with Epperson’s fraudulent acts.

3.

Crisp also claims entitlement to judgment on the strength of statements that the bills of sale did not constitute a representation of material fact or induce the execution of the lease agreement, and there is no evidence that Crisp either had any knowledge of the disposition of the two Southwest checks involved in the scheme or benefited from the fraud perpetrated. Crisp has neither favored us with an argument demonstrating how these statements, if true, would displace the jury verdict of Crisp’s culpability in the scheme to defraud nor cited authorities supporting the efficacy of the statements.

Be that as it may, the evidence is that Mr. Crisp had the bills of sale prepared and he notarized them. The instruments show sale prices he knew were far in excess of the price for which he agreed to sell the equipment and the price Crisp received. The bills of sale were the only foundation for the issuance of Southwest’s checks, the sole evidence of Southwest’s purchase and right to lease the equipment and, therefore, instruments essential to perpetrate the fraudulent scheme. The jury found that Crisp knowingly aided and abetted in a fraudulent scheme which damaged Southwest, and the findings have withstood the attacks Crisp has made upon them.

Each party to a fraudulent transaction is responsible for the acts of the others done in furtherance of the fraudulent scheme. Foix v. Moeller, 159 S.W. 1048, 1052 (Tex.Civ.App.—El Paso 1913, writ ref’d). And all who participate are liable for the fraud, Jernigan v. Wainer, 12 Tex. 189, 194 (1854), irrespective of proof that they shared in the profits, for the gravamen of the action is injury to plaintiff and not benefit to defendant. King v. Shawver, 30 S.W.2d 930, 932 (Tex.Civ.App.—Fort Worth, 1930, no writ). See Wheeler v. American National Bank of Beaumont, 162 Tex. 502, 347 S.W.2d 918, 926 (1961). Accordingly, the statements upon which Crisp relies do not conclusively establish that Crisp is entitled to judgment.

4.

An attempt is made to charge the trial court with error in overruling Crisp’s objections to the court’s jury charge. Crisp utilizes one point to merely refer to, without specifying, all objections shown in the transcript to have been made to the charge. The point does not constitute a sufficient compliance with Rule 418 to require, or even to justify, a consideration of the point. Wagner v. Foster, 161 Tex. 333, 341 S.W.2d 887, 890-91 (1960). The rule imposes upon counsel the duty of directing attention to, and not upon the court to discover if it can, the particular error relied upon. Missouri-Kansas-Texas Railroad Co. v. McFerrin, 156 Tex. 69, 291 S.W.2d 931, 941 (1956).

Notwithstanding, we observe in passing that the point, and the statement made thereunder, inject objections additional to those written objections made to the trial court. Because these objections were not voiced to the trial court, they are waived and are not before us for review. Rules 272 and 274; Taylor v. Lewis, 553 S.W.2d 153, 161 (Tex.Civ.App.—Amarillo 1977, writ ref’d n.r.e.). Moreover, the only argument which applies to the subject matter of objections is confined to this authoritative statement: a special issue propounding two questions, one of which could be answered no and the other answered yes, is multifarious and duplicitous and is therefore an improper issue to be submitted to the jury. Special issue no. 5 is the only issue objected to in the trial court as being duplicitous. The vice condemned by the authoritative statement is not present in that issue.

5.

Crisp tendered for ‘submission, and the trial court refused to submit, an instruction and a group of seven special issues. On appeal, Crisp contends the court, by refusing the en masse submission, reversibly erred in depriving Crisp of its factual theory of defense.

The seven requested special issues tendered for an en masse submission represent five separate and distinct subjects. Four of the subjects are within the ambit of special issues nos. 5 and 6 which were submitted. Three of the issues are evidentiary only. Two of the issues involve pure questions of law predicated on undisputed facts. To this extent, the issues were not proper ones for submission on controlling issues. Where requested issues are tendered for an en masse submission and one or more of the issues should not be given, the court is justified in refusing to give any of them, for the court is not required to search through the group in an attempt to discover any issues which are proper. Edwards v. Gifford, 137 Tex. 559, 155 S.W.2d 786, 788 (1941). Hence, we are not able to say the trial court reversibly erred in refusing the en masse submission.

6.

Crisp avers that the court also reversibly erred in excluding the evidence Crisp offered to show that Southwest filed a lawsuit against and effected settlement with insurers under a banker’s blanket bond covering Epperson’s fraud and dishonesty. The evidence was offered in the trial court to show there had been an election of remedies by Southwest and the corrupt practices of Epperson are imputed to Southwest.

Crisp’s appellate argument is that the testimony was admissible to show that Southwest’s recovery under the bond includes losses for which recovery is sought against Crisp, and that satisfaction of judgment against one or more joint tort-feasors releases all other tort-feasors, including Crisp. The fallacy of the argument is that the evidence tendered negates, rather than shows, that recovery under the bond includes the recovery sought against Crisp, and Crisp does not even suggest how the insurers could be joint tort-feasors with Crisp. We perceive no error on the court’s part.

7.

Mentioned by Crisp are other facets and variations of the main complaints we have addressed. All aspects raised have been considered and, in view of what we have written and in the interest of brevity, it suffices to state that no reversible error is presented. All points of error are overruled.

The judgment of the trial court is affirmed.

COUNTISS, J., not participating.

      . All references to rules are to the Texas Rules of Civil Procedure.

      . Parenthetically, it is noted that we have not overlooked Crisp’s statement in one point that the jury’s answers are contrary to and against the overwhelming weight and preponderance of the evidence. The statement is undeveloped, either by argument or citation of authority. Were the complaint properly presented, it would have validity only if, when all of the evidence is considered and weighed, the evidence supporting the findings is so weak or the evidence to the contrary is so overwhelming that the findings should be set aside. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). We further note that in considering the appeal we have reviewed and weighed all of the evidence. Giving due deference to the jury’s prerogative to judge the credibility of the witnesses and the weight to be given their testimony in resolving the conflicts and inconsistencies in the testimony and arriving at the findings the jury concludes are. the most reasohable under the evidence, we cannot say that the jury’s answers to the issues are so against the great weight and preponderance of the evidence as to be manifestly wrong and unjust.


source: Caselaw Access Project

author: McDONALD, Chief Justice.

license: Public Domain

text:
    Charles L. HENKE, et ux., Appellants, v. FIRST SOUTHERN PROPERTIES, INC., Appellee. FIRST SOUTHERN PROPERTIES, INC., Appellant, v. Charles L. HENKE, et ux., Appellees.
    No. 6016.
    Court of Civil Appeals of Texas, Waco.
    Aug. 16, 1979.
    Rehearing Denied Sept. 20, 1979.
    C. Charles Dippel, Sears & Burns, Houston, for appellants/appellees.
    Frank N. Ban, Parks & Moss, Houston, for appellee/appellant.
   OPINION

McDONALD, Chief Justice.

Plaintiffs Charles L. Henke and wife sued defendants First Southern Properties, Inc., Gibraltar Savings Association, Continental Bank of Texas, Harold E. Bro, Brian E. Bro, and P. Blake Hedblom, for title and possession of a lot [and residence house] in Houston.

Plaintiffs alleged: Charles L. Henke bought the property in 1971 assuming a preexisting first lien note in original amount of $44,000 payable to Gibraltar, and secured by a deed of trust; that Henke and his family moved onto the property, which is their homestead and have lived there since; that in September 1973 Henke executed a note for $28,828.12 to Continental Bank for a preexisting debt unrelated to the property, and in August 1974 executed a note for $2,131.81 to the Bank for accrued interest on the $28,828.12 note; that both notes were purportedly secured by a void second lien on plaintiffs’ homestead; that during September 1974 (while Henke was in arrears on the first lien note) Gibraltar posted notice the property would be sold at public foreclosure sale on October 1, 1974; that on September 26 and again on September 30, 1974, Gibraltar agreed with Henke that if $2,156 (past due installments, late charges and attorneys’ fees) was paid to Gibraltar by cashier’s check prior to foreclosure that the loan would be reinstated and no foreclosure would occur; that the money was paid by the specified time (September 30, 1974) and accepted with the advice that Henke’s loan- had been reinstated; that even though the loan had been reinstated, sometime after such on September 30, or October 1, 1974, Gibraltar assigned the first lien note assumed by Henke, to the Continental Bank; that such assignment was void; that Continental Bank on the same day assigned the first lien note, and the $28,828.12 and $2,131.81 notes it held, to Harold E. Bro; that Harold E. Bro purporting to act through his son agent and attorney Brian E. Bro caused P. Blake Hedblom to act as substitute trustee and foreclose upon the first lien note; that Hedblom purported to sell the property at Trustee’s sale on October 1, 1974 to First Southern Properties for $76,000 in cashier’s checks, and executed a substitute trustee’s deed to First Southern Properties evidencing title to the property; that proceeds of the sale were used by Bro to pay Continental Bank for its sale to Harold E. Bro of the first and second lien notes.

Plaintiffs alleged the entire transaction was a sham, that the foreclosure sale was void, that the substitute trustee’s deed was void; that the first lien note had been reinstated; that plaintiffs were not in default and no power of sale could be exercised to foreclose their interest in the property.

Plaintiffs sought title and possession of the property; removal of the substitute trustee’s deed as a cloud upon their property; and actual and punitive damages based on a conspiracy among all defendants to deprive them of their property.

Defendant First Southern answered counterclaiming for title and possession of the property, for rental thereof, and alleged it had purchased the property at the substitute trustee’s sale for $76,000 without notice of any defects, was a bona fide purchaser for value, and entitled to protection as same; and alternatively, if the foreclosure be held invalid, it should be reimbursed the $76,000 paid the substitute trustee.

Prior to voir dire of the jury panel, plaintiffs nonsuited as to their conspiracy claim for actual and punitive damages, and when plaintiffs’ case rested, all defendants except First Southern filed a disclaimer of title to the property, the notes and the indebtedness in controversy, and were advised by the court they would be dismissed without adjudicating costs against them in the final judgment, which was done.

The five disclaimers left only plaintiff and First Southern in litigation.

Trial was to a jury which found:

Issue 1. Gibraltar Savings Association agreed with Mr. Henke to reinstate his loan as an installment loan if he would pay $2,156 to it on or before September 30, 1974.
Issue 6. First Southern Properties was a good faith purchaser of the property without notice.

Plaintiffs filed motion the trial court: 1) disregard Issue 6, asserting the concept of good faith purchaser has no application to a purchase at a foreclosure sale; and 2) render judgment for plaintiffs for title and possession of the property.

First Southern filed motion to render judgment on the verdict that plaintiffs take nothing and that First Southern be decreed title and possession of the property.

The trial court rendered judgment concluding: 1) That Issue 6 should be disregarded; 2) First Southern’s motion for judgment should be denied; 3) Plaintiffs are entitled to judgment for title and possession of the property; 4) First Southern by purchasing at the void foreclosure sale became subrogated to the rights of the holder of the first lien note; that in accordance with the jury’s answer to Issue 1 the first lien note was reinstated; that plaintiffs are obligated to First Southern as mortgagors under such reinstated first lien note; 5) That after applying plaintiffs’ check of $2,156, plus escrow funds, the balance due on the first lien note was $38,-961.38; 6) That amortizing such balance due at 9% interest and by a monthly payment of $395.89 (as provided by such note) shall occur as provided by an attached schedule; 7) The interest of each installment payment occurring pendente lite is not awarded to First Southern because it never demanded payment, and because plaintiffs tendered payments but First Southern’s subrogors refused such tenders; 8) Plaintiffs should pay First Southern the principal of each installment pendente lite, plus such sums as First Southern has expended since November 13, 1975 for insurance on the property in controversy less the amount of taxable costs paid by plaintiffs in this case.

The judgment then decreed: 1) Plaintiffs recover title and possession of the property from all six original defendants; 2) The five defendants filing disclaimers be dismissed as defendants; 3) First Southern Properties take nothing against plaintiffs; 4) The substitute trustee’s deed be cancelled and set aside and removed as a cloud on plaintiffs’ title to the property; 5) Plaintiffs pay First Southern the total principal of each installment occurring pendente lite November 1, 1974 until date of judgment; plus $1,285.87 insurance premiums paid by First Southern on the property from November 14, 1975 to date of judgment; crediting taxable costs paid by plaintiffs in this case; 6) Plaintiffs pay $395.89 per month on the balance due on the first lien note to First Southern until such indebtedness is paid in full; 7) First Southern pay court costs.

Both plaintiffs Henke and defendant First Southern appeal from the judgment.

The evidence reflects plaintiff Charles L. Henke purchased the property here involved in 1971 assuming a preexisting first lien note in original amount of $44,000 owed to Gibraltar Savings and secured by deed of trust; that Henke and his family moved onto the property and it is plaintiffs’ homestead; that in September 1973 and August 1974 Henke executed notes for $28,828.12 and $2,131.81 to Continental Bank unrelated to the property but purportedly secured by a second lien on the property which is void; that in September 1974 Henke was in arrears on the first lien note and Gibraltar posted notice the property would be foreclosed on October 1, 1974; that Gibraltar agreed with Henke they would not foreclose if he paid them $2,156 by cashier’s check (representing past due installments, late charges and attorney’s fees by September 30, 1974); that Henke paid the money by the time required; that Gibraltar accepted the money with the advice Henke’s loan had been reinstated; [and the jury in Issue 1 found that Henke and Gibraltar made such agreement]; that on October 1,1974 Gibraltar assigned the first lien note to Continental Bank which on the same day assigned it together with its two Henke notes to Harold E. Bro; that Harold E. Bro acting through his son Brian E. Bro caused P. Blake Hedblom to act as substitute trustee and foreclose the first lien note; that Hed-blom purported to sell the property at trustee’s sale on October 1,1974 to First Southern for $76,000; executed a substitute trustee's deed to First Southern for the property; turned over the $76,000 to Brian E. Bro who used it to pay Continental Bank for the first lien note and the two notes owed by Henke to Continental. There is evidence that First Southern is a good faith purchaser for value of the property without notice, and the jury so found.

First Southern Properties Appeal

Defendant First Southern appeals from the judgment on 4 points asserting the trial court erred in disregarding Issue 6 finding it to be a good faith purchaser for value without notice; and erred in overruling First Southern’s motion for judgment on the verdict.

Assuming the evidence supports the finding that First Southern was a bona fide purchaser without notice at the substitute trustee’s sale, the trial court correctly disregarded the finding and correctly overruled First Southern’s motion for judgment on the verdict because the doctrine of good faith purchaser for value without notice does not apply to a purchaser at a void foreclosure sale. One who bids upon property at a foreclosure sale does so at his peril. If the trustee conducting the sale has no power or authority to offer the property for sale, or if there is other defect or irregularity which would render the foreclosure sale void, then the purchaser cannot acquire title to the property.

First Southern Properties, Inc. v. Vallone, Tex., 533 S.W.2d 339 holds “that a purchaser under a power at a foreclosure sale obtains only such title as the trustee had authority to convey. Slaughter v. Qualls, 139 Tex. 340, 162 S.W.2d 671 (1942); Ford v. Emerich, 343 S.W.2d 527 (Tex.Civ.App. 1961, writ ref’d n. r. e.); Bowman v. Oakley, 212 S.W. 549 (Tex.Civ.App.1919, writ ref’d)”.

Slaughter, supra, holds that where a mortgagor was not in default in his payments of principal or interest on notes secured by deed of trust, the substitute trustee’s deed is void and that the mortgagor could prove the invalidity of the sale in a straight suit to recover the land.

Ford, supra, holds a trustee under a deed of trust created to secure a debt has no power to sell trust property, except as such power is found in the deed of trust; and that a purchaser under a power purchases at his peril, and if there is no subsisting power or authority to sell, no title is acquired by the purchaser.

Bowman, supra, holds: the rule which protects the bona fide purchaser of the legal title, for value, without notice of the equitable title of another, applies only to cases of purchaser from a holder of the legal title who has power to convey. Therefore if the deed is void for want of legal capacity in the vendor to convey, want of notice in a purchaser is no defense, and no title is acquired by the purchaser.

Substitute trustee Hedblom in the case at bar had no power to convey because the note was not in default; the substitute trustee’s deed was void; First Southern acquired no title to the property, and the trial court correctly rendered judgment for plaintiffs for the property. All First Southern’s points are overruled.

Plaintiffs Henkes Appeal

Plaintiffs Henkes appeal contending the trial court erred in granting First Southern: 1) Recovery of installment payments upon the first lien note as though First Southern were holder of the note because there are no pleadings or a prayer for affirmative relief by First Southern claiming to be sub-rogated to such first lien note; 2) Recovery of insurance payments supposedly made for insurance on the property in the absence of pleading or prayer for such affirmative relief or of evidence of payment of such insurance premiums.

As noted the trial court concluded that First Southern by purchasing at the void foreclosure sale became subrogated to the rights of the holder of the first lien note and decreed that plaintiffs pay the balance due on such note, and further pay the sum of $1,285.87 insurance premiums paid by First Southern on the property.

First Southern responded to plaintiffs’ pleadings with a plea of “not guilty”; plead that it was a bona fide purchaser for value without notice at the substitute trustee’s sale; alternatively plead that “in the event the foreclosure is held to be invalid for any reason, Defendant should be reimbursed the $76,000 it paid defendant P. Blake Hedblom plus all accrued interest thereon at the legal rate of interest since October 1, 1974, the date of the foreclosure sale”. Defendant further filed cross action against plaintiffs for title and possession of the property; and in its prayer prayed plaintiffs take nothing; that First Southern have judgment for title and possession of the property; plus rent at $1500 per month for the time plaintiffs lived in the property after October 1, 1974; “and for such other and further relief as [First Southern] may justly show itself entitled, either at law or in equity”.

A party may not sustain a favorable judgment on an unpleaded cause of action in the absence of trial by consent. Oil Field Haulers Assn. v. Railroad Commission of Texas, Tex., 381 S.W.2d 183.

One who discharges the vendor’s lien upon lands,—even the homestead—, either by paying as surety, or at the request of the debtor, or at a judicial sale, which, for irregularity in the process, fails to convey the title, is entitled to be subrogated to the lien of the creditor to the extent of the payment made. Faries v. Cockrill, Tex., 31 S.W. 190; Diversified Mortg. v. Lloyd D. Blaylock, Tex., 576 S.W.2d 794; Johnson v. Frierson, Tex.Civ.App. (Waco) Er.Dis. Jdmt.Cor. 133 S.W.2d 594.

Thus, First Southern had a cause of action for subrogation of the first lien note on the property. But First Southern did not plead such cause of action. Was such cause of action tried by consent?

In paragraph 21 of plaintiffs’ trial pleading plaintiffs recite that they tendered monthly payments on such first lien note to Gibraltar, the Bank and the Bros, and that such tenders were refused on advice such defendants did not own the note. Plaintiffs then plead:

“Plaintiffs are ready, willing and able to perform all other obligations and to do complete equity as between plaintiffs and the lawful holders of the note. * * * In the event this Honorable Court determines that any further sum is due or is to become due the holder under such note and deed of trust and by virtue thereof, plaintiffs stand ready, willing and able and here now offer to deposit such further sums for payment to the holder as law and equity may require, in accordance with the judgment of this Honorable Court”.

We hold that by such pleading plaintiffs consented to trial of First Southern’s cause of action for subrogation of rights under the first lien note, and overrule plaintiffs’ point 1, supra.

The trial court further decreed plaintiffs pay $1,285.87 insurance premiums paid by First Southern on the property. There is no evidence in the record of the payment of such insurance premiums. Point 2 is sustained.

First Southern’s Cross Points

First Southern by cross points assert the trial court erred in denying it recovery of interest installments under the first lien note occurring during litigation. Such points are without merit and are overruled.

The judgment of the trial court is reformed to delete recovery by First Southern of the $1,285.87 insurance premium item, and as reformed is affirmed.

Costs of appeal are taxed ⅜ against First Southern and ⅛ against plaintiffs.

REFORMED & AFFIRMED.

      . The cashier’s check plaintiffs had given to Gibraltar.


author: HALL, Justice.

text:
    Adolfo V. CARREON, et ux., Appellants, v. SAN ANTONIO CITY EMPLOYEES FEDERAL CREDIT UNION, Appellee.
    No. 5970.
    Court of Civil Appeals of Texas, Waco.
    Aug. 16, 1979.
    Darby Riley, San Antonio, for appellants. Robert P. Sims, Sims & Sims, Inc., San Antonio, Joe B. Harrison, Jess C. Rickman, III, Wynne & Jaffe, Dallas, for appellee.
    Walton P. Bondies, Jr., Dallas, Texas Credit Union League, for amicus curiae.
   HALL, Justice.

Plaintiffs Adolfo V. Carreon and wife Mary Carreon brought this suit against defendant San Antonio City Employees Federal Credit Union alleging that Mr. Carreon is a member of defendant federal credit union; that during the period from July 30, 1974, to May 6, 1977, he was the maker of seven promissory notes payable to defendant under which he borrowed money; that during the same term he was also comaker of the notes of several of his fellow city employees; that at least four times since 1975, he has been charged for the default of his fellow employees on their notes; that in each of the transactions listed above defendant violated the provisions of Chapter four of the Texas Consumer Credit and Consumer Protection Act (Tex.Civ.St. 5069 —4.01 through 5069 — 4.04) in ten particulars by failing to make certain enumerated disclosures required under Article 5069 — 4.-03, by contracting for default charges in excess of those allowed under Article 5069 —4.01(5), by failing to credit the accounts upon renewal with unearned interest as required by Article 5069 — 4.01(6) and unearned insurance as required by Article 5069 — 4.02(6), and by making charges not authorized by Article 5069 — 4.01(7) in determining the amount of the cash advance. Plaintiffs sought the penalties prescribed in Article 5069 — 8.01 for the alleged violations.

Defendant moved for judgment on the pleadings asserting that as a matter of law defendant was not subject to the provisions of Chapter four of the Texas Credit Code, and that, accordingly, plaintiffs had not stated a cause of action against defendant. The trial court sustained defendant’s motion and rendered judgment, in effect, that plaintiffs take nothing. Plaintiffs appeal. We affirm the judgment.

By Acts 1967, 60th Leg., p. 608, ch. 274, Title 79 of the Texas Civil Statutes was substantially revised with the enactment of a new Title 79, containing several chapters, dealing with the subjects of consumer credit, interest rates, and consumer protection. In Art. 1.02 of Chapter one of the Act, the maximum rate of interest permitted in Texas was set at ten percent per annum “unless otherwise authorized by law.” In subsequent chapters, including Chapter four in question in this case, interest and charges in excess of ten percent per annum were authorized provided that certain disclosures and other duties set forth were met by the creditor. Chapter four, codified in Vernon’s Tex.Civ.St. as Articles 5069 — 4.01 through 5069 — 4.04, provides in pertinent parts as follows:

“Art. 5069 — 4.01. Installment loans authorized.
“(1) Any bank, savings and loan association or credit union doing business under the laws of this State or of the United States, and any person licensed to do business under the provisions of Chapter 3 of this Subtitle relating to regulated loans may contract for and receive on any loan made under the authority of this Chapter repayable in consecutive monthly installments, substantially equal in amount, an add-on interest charge of Eight Dollars per One Hundred Dollars per annum for the full term of the loan contract.
(2) Interest authorized in Section (1) of this Article shall be computed on the cash advance at the time the loan is made for the full term of the loan contract notwithstanding the requirement of the loan contract for payment in substantially equal regular installments and shall be computed on the basis of a full month for any fractional period in excess of fifteen days. Interest authorized by Section (1) of this Article shall be added to the cash advance and said sum shall be the amount of the loan.
(3) Notwithstanding the foregoing, a lender may make loans which require repayment in irregular or unequal installments and may compute, contract for, charge or receive interest charges under any method or formula different from that prescribed in Section (1) of this Article, provided the total interest charge as scheduled shall not produce an interest yield in excess of that permitted under Section (1) of this Article for the time the loan is scheduled to be outstanding.
(4)Notwithstanding any other provision of this Chapter, a borrower and a lender may enter into a written agreement pursuant to which one or more loans or advances to or for the account of the borrower may be made from time to time. The agreement shall contain the date of the agreement; the name and address of each borrower and of the lender; the nature of the security, if any, the charges in addition to interest contracted for as authorized by this Chapter; and the interest for default and deferment authorized by this Chapter and shall be signed by the parties. A copy of the agreement shall be delivered to the borrower . . . ”

Article 5069 — 4.03 sets forth a list of disclosures and other duties to be met by the lender “When a loan is made under the authority of this Chapter.” (Emphasis added).

Article 5069 — 4.01 purports to authorize defendant federal credit union to make an add-on interest charge of 16% per annum, in paragraphs (1) and (2) thereof. However, under the terms of 12 U.S.C.A. § 1757(5)(A)(vi) the rate of interest charged by federal credit unions must not exceed “1 per centum per month on the unpaid balance inclusive of all service charges.” It is clear, therefore, that regardless of the fact that “credit unions” are named in the opening sentence of Article 5069 — 4.01, federal credit unions may not charge the 16% interest rate authorized therein. Plaintiffs agree. They argue that the Legislature did not intend by the enactment of the statute to authorize federal credit unions to charge interest “in excess of 1 percent per month,” but that “the intent was to impose the conditions and duties of Chapter 4 on federal credit unions even though their authorized interest rate was set by federal law.” We cannqt agree with that argument.

The other loans authorized in 5069 — 4.01 in which interest rates of more than 10% but not more than 16% are permitted are “balloon” payment loans authorized in paragraph (3) and “open end” loans authorized in paragraph (4). Conceivably, using either approach, a federal credit union could make an interest-bearing loan of not more than 1 percent per month. However, the loan would not be made under authority of Article 5069 — 4.01. It would be made under authority of 12 U.S.C.A. § 1757(5)(A)(vi), which has been held to override state usury laws and render them unenforcible against federal credit unions. Christian v. Atlanta Army Depot Federal Credit Union (1976) 140 Ga.App. 277, 231 S.E.2d 7; McAnally v. Ideal Federal Credit Union, (Okl.1967) 428 P.2d 322. Accordingly, federal credit unions do not fall within the provisions of Chapter four of Title 79. Rather, in the field in question, they are regulated under the Truth in Lending Act, 15 U.S.C.A. § 1601 et seq. as implemented in Regulation Z (12 C.F.R. 226.1 et seq., following 15 U.S.C.A. § 1700).

The judgment is affirmed.


author: MOORE, Justice.

text:
    Alan BALDWIN, d/b/a Alan Baldwin, Builder, Appellant, v. Roland D. SMITH, Appellee.
    No. 1259.
    Court of Civil Appeals of Texas, Tyler.
    Aug. 16, 1979.
    Rehearing Denied Sept. 20, 1979.

      James R. Meyers, Robinson, Felts, Meyers, Starnes & Latting, C. Robert Dorsett, Austin, for appellant.
    Kirk Kuykendall, Lockhart, Kuykendall & Jones, Austin, for appellee.
   MOORE, Justice.

The principal question involved in this case is whether the Texas Deceptive Trade Practices-Consumer Protection Act applies to a building and construction contract which has been substantially performed.

On September 9, 1976, appellant, Alan Baldwin, d/b/a Alan Baldwin, Builder, entered into a written contract with appellee, Roland D. Smith, to construct a house on land owned by Smith. Under the terms of the contract Baldwin was to construct the house in a good and workmanlike manner according to plans and specifications supplied by the Veterans Administration for and in consideration of the sum of $31,300. This suit arose when Baldwin, the builder, instituted suit against Smith for, among other things, damages resulting from additional costs for “extras” in the construction of the house and for interfering with the completion of the house. Smith answered with a general denial and a counterclaim for damages alleging that Baldwin failed to construct the house in a good and workmanlike manner in accordance with the plans and specifications, and that Baldwin also breached the contract by failing to pay interim interest in the amount of $2,900. Smith further alleged that the conduct of Baldwin in failing to construct the house in a good and workmanlike manner and in accordance with the plans and specifications within the 180-day period as agreed under the terms of the contract, constituted a deceptive trade practice as defined by Section 17.46 of the Act. His prayer was for actual damages in an amount necessary to complete the house, for $2,900 interim interest paid by him, and for attorney’s fees. Further, he prayed that his actual damages be trebled under the provisions of Article 17.50 of the Act.

After a trial before the court, sitting without a jury, the trial court rendered a take-nothing judgment against the builder, Baldwin. After having concluded that the builder had substantially performed the contract, the court entered judgment in favor of Smith on his counterclaim for the sum of $1,500 to cover the cost in remedying several defects and also rendered judgment in favor of Smith for the sum of $2,900 for interim interest paid by him. After finding that the total sum of $4,400 represented Smith’s actual damages, the court found that the failure to remedy the defects and the failure to pay the interim interest were in violation of the Texas Deceptive Trade Practices Act. Accordingly, the court rendered judgment in favor of Smith for treble damages for the total sum of $13,200. In addition, the court entered judgment in favor of Smith for attorney’s fees in the amount of $10,000, together with additional attorney’s fees in the event the judgment was appealed. Appellant, Alan Baldwin, perfected this appeal.

We reverse and render in part; we reform in part; and as reformed, affirm.

The facts, for the most part, do not appear to be in dispute. On September 9, 1976, the parties entered into a Builder’s and Mechanic’s Lien Contract in which Baldwin agreed to construct a house for Smith according to the plans and specifications within 180 days for and in consideration of the sum of $31,300. Under the terms of the contract, Baldwin, the builder, agreed to build the house in a good and workmanlike manner according to the plans and specifications supplied by the Veterans Administration. Baldwin further agreed to pay and save Smith harmless from all interim interest. On the same date, Smith executed a promissory note to Baldwin in the amount of $31,300 payable within 180 days. Baldwin assigned the note to Mutual Savings Institution, with recourse, in order to obtain interim financing with which to build the house. The house was to be constructed on or before March 9, 1977. Baldwin commenced construction and by January 29, 1977, Mutual Savings Institution estimated that the house was 98% complete. On that date Baldwin allowed Smith to move his furniture into the house. On March 12,1977, three days after the expiration of the 180-day period, Smith and his mother began physical occupancy of the house. On March 28, 1977, some sixteen days after the expiration of the 180-day period for completion, Smith ordered Baldwin to leave the premises. Baldwin left on that date.

At the request of appellant Baldwin, the trial court filed extensive findings of fact and conclusions of law. Among the findings of fact the trial court found: (a) Baldwin, the builder, substantially performed the contract; (b) Baldwin failed to build the house in accordance with the plans and specifications in certain respects; (c) Baldwin failed to construct the house in a good and workmanlike manner in certain respects; (d) Smith’s cost of remedying the defects and completing the house in accordance with the plans and specifications was $1,500; (e) Smith did not accept the defects and deviations from the plans and specifications when he moved into the house on March 12, 1977, except the fireplace-size deviation; (f) Baldwin represented that the work to be done by him would be done in a good and workmanlike manner, which it was not, and Baldwin represented his work would be of a particular standing (V.A. approved) which it was not; (g) under the terms of the contract Baldwin agreed to hold Smith harmless from any obligation to pay interim interest; (h) Smith paid interim interest accruing on the note after the 180-day period expired in the amount of $2,900; (i) that the sum of $10,000 would be a reasonable and necessary attorney’s fee for the prosecution of Smith’s claim under the Deceptive Trade Practices Act; (j) that the sum of $2,500 would be a reasonable attorney’s fee to prosecute the case through the Court of Civil Appeals, $1,000 if application for writ of error is filed, and $500 if the writ is granted.

Under the conclusions of law, the trial court concluded, among other things, that: (a) the damages of $1,500 as costs of remedying defects and $2,900 in interim interest paid by Smith to Mutual were the only proved actual damages sustained by Smith; and (b) that these damages should be trebled under the Act.

Other findings of fact and conclusions of law made by the court will be set forth in our discussion of the various points of error briefed by the parties.

Appellant attacks the judgment by seven points of error. No effort will be made in this opinion to discuss appellant’s points in the order of their appearance in the brief.

Under the third point of error appellant urges that the trial court erred in awarding appellee damages in the amount of $1,500 for repairing the defects in the house. He contends that the evidence establishes that he fully performed his contract and repaired the defects complained of by Smith.

The question as to whether the contract was fully performed or was only substantially performed is one of fact to be determined by the trier of fact. 13 Am.Jur.2d Building and Construction, sec. 129 (1964). Appellant testified that he had corrected all of the defects and that the contract had been fully performed. In rebuttal, appellee called two witnesses who testified with regard to the condition of the house. According to the testimony of Gaylon Schulle, the structure was practically complete. He estimated the cost of correcting the defects would amount to $1,500. Another witness, Rhea Merritt, testified that the cost of repairing the defects would amount to $29,-000. Thus it can be seen that there was a sharp conflict in the testimony. The trial court obviously relied on the testimony of the witness Schulle, and disregarded the testimony of appellant and the witness Merritt. At most, the testimony as to whether the contract had been fully performed was conflicting. The trial court found that the contract had been substantially performed and therefore ruled that Baldwin failed to carry his burden of establishing full performance.

In cases where specific findings of fact have been filed and a statement of facts is also brought forward, the findings made by the trial court will be sustained if there is any evidence to support them. 4 McDonald, Texas Civil Practice, 16.10(b), p. 29 (1971); Arnold v. Caprielian, 437 S.W.2d 620, 625 (Tex.Civ.App.—Tyler 1969, writ ref’d n. r. e.). There is ample evidence in the record to sustain the trial court’s finding that the contract was only substantially performed, rather than fully performed. Consequently, we cannot agree with appellant’s contention that the evidence establishes, as a matter of law, that all defects had been corrected and that the contract had been fully performed.

Appellant complains by his fourth point of the action of the trial court in awarding the appellee treble damages for the $1,500 found to be necessary to remedy defects in the house. It is appellant’s position that since the court found that he substantially performed the contract and actually did what he represented he would do, there is no evidence to support the trial court’s finding that his conduct constituted a deceptive trade practice subjecting him to the provisions of the Act.

Section 17.46(a) of the Act provides: “False, misleading, or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” Subsection (b), sometimes referred to as the “laundry list,” enumerates twenty separate acts as constituting false, misleading or deceptive acts or practices neither of which seem to relate to building and construction contracts.

The question presented appears to be one of first impression and as usual is not free of difficulty; however, in view of the unchallenged finding that appellant substantially performed the contract, we have concluded that the evidence fails to establish any false, misleading or deceptive act bringing appellant’s conduct within the ambit of the practices declared to be unlawful.

In 10 Tex.Jur.2d, Building and Construction Contracts, sec. 21, the text reads:

“Substantial performance is regarded as full performance, insofar as the rule that performance is a condition precedent to the right to recover on the contract is concerned; a contractor who has in good faith substantially performed may sue under the contract.
“Although substantial performance does not mean an exact performance in every slight or unimportant detail, it means a performance of all important particulars and permits only such omissions or deviations from the contract as are inadvertent and unintentional, are not due to bad faith, do not impair the structure as a whole, and are remediable without doing material damage to other parts of the building in tearing down and reconstructing; when the necessary elements are not present the doctrine is not applicable even though the work is as good or as valuable to the owner as that agreed to be done.”

It has been stated that there are three reasons for permitting recovery for substantial performance of a building contract: the owner of the land will necessarily receive the benefits of the contractor’s labor and materials; it is next to impossible for a builder to comply literally with all the minute specifications in a building contract; and that the parties are presumed to have impliedly agreed to do what is reasonable under all the circumstances with reference to the subject of performance. 13 Am. Jur.2d, Building and Construction Contracts, sec. 41 (1964).

The above cited work states that while substantial performance is a relative term and the extent of the nonperformance must be viewed in relation to the full performance promised, it may be stated generally that, “there is substantial performance of such a (building) contract where all the essentials necessary to the full accomplishment of the purposes for which the thing contracted for has been constructed are performed with such an approximation to complete performance that the owner obtains substantially what is called for by the contract.” It is further stated that “imperfections in the matters of detail which do not constitute a deviation from the general plan contemplated for the work, do not enter into the substance of the contract, and may be compensated in damages, do not prevent the performance from being regarded as substantial performance.” 13 Am.Jur.2d, supra, sec. 43; Linch v. Paris Lumber & Grain Elevator Co., 80 Tex. 23, 15 S.W. 208, 213 (1891); Atkinson v. Jackson Bros., 270 S.W. 848, 850 (Tex.Com.App.1925, holding approved); South Texas Building Co. v. Ideal Engineering, Inc., 402 S.W.2d 292 (Tex.Civ.App.—Houston 1966, writ ref’d n. r. e.), overruled on other grounds, Tenneco Oil Co. v. Padre Drilling Co., 453 S.W.2d 814, 821 (Tex.1970); Perryman v. Sims, 506 S.W.2d 753 (Tex.Civ.App.—Tyler 1974, writ ref’d n. r. e.).

Appellant was not required to show undeviating conformity with every detailed specification in order to recover. Linch v. Paris Lumber & Grain Elevator Co., 80 Tex. 23, 15 S.W. 208, 213 (1891). In Linch the Texas Supreme Court said, “Such precision cannot, we think, be demanded in the performance of contracts, or any other affairs of life.”

Upon applying the foregoing rules of law to the facts in the present case, we think the evidence compels the conclusion that appellant’s representation that he would perform the contract in a good and workmanlike manner and in accordance with the plans and specifications excludes any notion that such representations were false and misleading when made, or that the appellant did not intend to comply with such representations. In law, the unchallenged finding that appellant substantially performed the contract simply means that appellant, in good faith, reasonably complied with the representations he made. In the absence of any proof establishing that a named defendant engaged in some type of false, misleading or deceptive trade practice, the Act simply has no application. In our view, the record is devoid of any proof showing that the appellant engaged in any false, misleading or deceptive act declared to be unlawful under either Section 17.46(a) or (b) of the Act.

Appellee maintains, however, that even if Section 17.46 is inapplicable, the judgment for treble damages for remedying the defects may be sustained on the basis of Article 17.50 of the Act which provides:

“(a) A consumer may maintain an action if he has been adversely affected by any of the following:
(2) A failure by any person to comply with an express or implied warranty;”

A “warranty” is an agreement that though it refers to the subject matter of a contract is collateral to the contract’s main purpose. It is not an essential part of the contract either by the agreement of the parties or by the nature of the case. 13 Tex.Jur.2d Contracts sec. 159 (1960). A breach of warranty does not end the contract or relieve the buyer from his obligation thereunder, but merely gives the buyer a right of action for damages resulting from the breach. El Paso & S.W.R. Co. v. Eichel & Weikel, 130 S.W. 922 (Tex.Civ.App.1910, writ ref’d). Building contracts are often made up of various statements and promises on both sides as differing in character and importance. The parties may regard some of these as vital, others as subsidiary or collateral. It is our view that in contracts of building and construction, the promise to build the structure in a good and workmanlike manner is not a mere collateral undertaking. It is a vital condition and goes to the very heart of the contract. It therefore amounts to a condition precedent. In the absence of a showing of substantial performance of such condition, the builder cannot recover on the contract. The owner is not bound to accept the work but may treat the contractor’s failure to build the structure in a good and workmanlike manner as a breach of contract and the builder cannot recover on the contract unless he establishes that he substantially performed the condition. But the owner may, if he thinks fit, accept the structure and claim damages for the defects; in other words he may treat the breach of a condition as a breach of warranty. El Paso & S.W.R. Co. v. Eichel & Weikel, supra.

Applying the foregoing principles to the facts of the present case, Smith, the owner, is in no position to treat a breach of a condition as a breach of warranty since the trial court found that Baldwin substantially performed the essential conditions of the contract. By making this finding, the trial court failed to find there had been a material breach of the condition to perform in a workmanlike manner. Hence in the absence of a breach of such condition, Smith is in no position to claim that by accepting the house he was entitled to treat a breach of condition as a breach of warranty under the provision of Sec. 17.50(a)(2) of the Act.

Although the trial court did find that Baldwin failed to perform the condition requiring the house to be constructed in a workmanlike manner, the finding was made to apply only to a limited number of items. Thus, the finding merely explains why the court found substantial performance rather than full performance.

For the foregoing reasons, we have concluded that the appellee failed to discharge his burden of proof showing that his cause of action fell within the provision of either Section 17.46 or 17.50 of the Act. Consequently, that portion of the judgment awarding appellee treble damages for the cost of remedying the defects is reversed. Since there is ample evidence to support the trial court’s finding that the cost of remedying the defects amounted to the sum of $1,500, the judgment will be reformed so as to award appellee the sum of $1,500 rather than treble damages in the amount of $4,500 as decreed by the trial court.

Under his first point of error appellant contends that the trial court erred in awarding appellee the sum of $2,900 for interim interest. Appellant makes no contention that he did not contract to pay the interim interest. The record shows he paid the interim interest for the first 180 days. It is his contention that the interim interest which accrued thereafter should, be offset by the reasonable rental value of the house which appellee occupied free of any cost for approximately ten months before the permanent loan was closed. In our view the contention must be sustained.

Under the terms of the Builder’s and Mechanic’s Lien Contract,- appellant agreed to pay and save appellee harmless from all interim interest. At the time of the making of the contract the parties contemplated that the house would be completed within 180 days, being March 9, 1977. Shortly after the Builder’s and Mechanic’s Lien note and contract had been executed, appellant assigned the same to Mutual Savings Institution for the purpose of obtaining interim financing. Appellant commenced work on the house and by January 1977 Mutual estimated that the house was 98% complete. With the consent of appellant, appellee moved his furniture into the house at that time. It is undisputed that appellee took complete possession of the house on March 12, 1977, and moved into the house along with his mother. On March 28, 1977, appellee ordered the appellant to leave the premises and he left on that date.

The evidence shows that the Austin representative of the Veterans Administration approved the house but after appellee contacted the Waco offices of the Veterans Administration, the approval was held up.

The record reveals that on or about the 8th day of February, 1978, while the trial of this cause was in progress, appellee made a settlement with Mutual Savings Institution under the terms of which permanent financing for the house was to be arranged by Mutual on precisely the same terms and conditions as the commitment which appel-lee had previously obtained from the Veterans Administration.

It is without dispute that the appellant paid the interim interest to Mutual up to March 9, 1977, and it is likewise without dispute that appellee paid Mutual the interim interest in the amount of $2,900 covering the period from March 9, 1977, until February 1978, when Mutual agreed to handle the permanent financing. The $2,900 in interim interest paid by appellee was included in his permanent financing note. It is undisputed that appellee had the use and occupancy of the house for approximately ten months commencing on March 12,1977, and that during this period of time he made no payments other than for the amount of interim interest paid by him. Both parties concede that the reasonable rental value of the house during the period of time in question was $350 per month and the court so found. Without question appellant was liable for the $2,900 in interim interest paid by the appellee, because he stipulated in the contract that he would pay the interim interest and save appellee harmless therefrom. The question is whether the appellant is entitled to an offset for the reasonable rental value of the house during the period of approximately ten months until permanent financing was arranged.

Generally speaking, added interim interest costs during the construction period arising from the contractor’s unexcused delay are compensable as direct damages. Roanoke Hospital Ass’n v. Doyle & Russell, Inc., 215 Va. 796, 214 S.E.2d 155 (1975).

The evidence shows that during the period from March 28, 1977, until February 1978, appellant was prohibited from going on the premises except for a 30-day period from November 28 until December 27, 1977, when the trial judge, on his own initiative, ordered the appellee to vacate the premises so that corrections could be made. Thus, we have a situation where an owner, who has prevented the contractor from completing the work, seeks to recover interim interest which he claims was caused by the contractor’s delay in completing the contract. It is elementary that the owner is not entitled to recover damages brought about by his own wrong, regardless of whether the contract expressly so provides. 10 Tex.Jur.2d, Building and Construction Contracts, sec. 27 (1959); Alexander v. Good Marble & Tile Co., 4 S.W.2d 636, 639 (Tex.Civ.App.-Eastland 1928, writ ref’d). For this reason we are of the opinion that appellee was not entitled to recover for interim interest.

Further, we do not believe the ap-pellee is entitled to recover for the interim interest because of the doctrine of unjust enrichment. Even though we recognize the principle that by taking possession the owner does not necessarily waive his right to recover the cost of remedying defects and imperfections, the rule seems to be that the use and occupancy by the owner may show that he has derived some benefit from the work and render him liable to the builder to that extent. 17A C.J.S. Contracts § 514(2)b. (1963). There can be no doubt that the appellee derived substantial benefits by occupying the house for a period of ten months without paying anything except the $2,900 in interim interest. It is conceded by both parties in this case that the house had a reasonable rental value of $350 per month. To hold that appellee is entitled to recover all interim interest which he paid while occupying the house would be to hold that he could occupy the premises for ten months free of charge. This, in our opinion, would amount to unjust enrichment.

Generally, quasi-contractual liability for unjust enrichment is based upon the equitable principle that a person receiving benefits which are unjust for him to retain ought to make restitution or pay the value of the benefit to the party entitled thereto. 66 Am.Jur.2d, Restitution and Implied Contracts, sec. 3 (1973). In view of the fact that appellee derived a substantial benefit from appellant’s work during the ten-month period he occupied the premises before permanent financing was arranged, equity and good conscience would require him to pay the value of such benefits. Consequently, even though appellant was liable for the payment of interim interest in the amount of $2,900, appellee was quasi-contractually liable to appellant for the payment of the reasonable rental value of the house for the ten-month period totalling $3,500. Thus, the appellee’s liability more than offsets the liability of the appellant. For the reasons stated we are of the opinion that the portion of the judgment awarding appellee interim interest must be reversed.

Under the fifth and seventh points appellant seeks a reversal of the judgment awarding appellee a recovery for attorney’s fees.

The record reveals that appellee’s claim for attorney’s fees is predicated solely on the provisions of the Deceptive Trade Practices Act. In view of the fact that we have determined that the evidence offered by appellee on his counterclaim fails to establish a cause of action under the provisions of the Act, it follows that there is no basis for the recovery of attorney’s fees and therefore the portion of the judgment awarding attorney’s fees is reversed.

This brings us to the cross-points brought forward by appellee. Under the first cross-point appellee maintains that the trial court erred in refusing to award him treble damages for the reasonable rental value of the house during the one-month period in which the court ordered him to vacate the premises so that corrective repairs could be made. The point is overruled.

The record reveals that the trial judge ordered the appellee to vacate the premises for the thirty-day period on his own initiative. This being the case we fail to see how appellant could be held responsible for depriving appellee of the possession of the house during such period of time.

By his second cross-point appellee contends that the trial court erred in refusing to enter judgment under the Deceptive Trade Practices Act for treble damages for $4,000 for the cost of replacing the damper in the fireplace.

After appellant’s brick mason advised him that a five foot damper was not available, appellant relayed the message to appel-lee and asked him if he wanted to use a four foot damper. Appellee told the appellant to go ahead and use the four foot damper. Some time later, appellant testified appellee approached him and said he had found where he could obtain a five foot damper. After some discussion appellant offered to trade other “extra” work to make up the difference in the price. It was then agreed that an extra beam would be installed in the living room ceiling.

The trial court found that Smith accepted the fireplace when he moved into the house on March 12, 1977, and therefore waived the nonperformance of the contract in this respect. Smith concedes that he accepted the four foot damper, but argues that his acceptance was brought about by the false representation that the five foot damper was unavailable. In an effort to prove the representation was false, Smith called as a witness an employee of a manufacturing concern who testified that his company could manufacture a five foot damper provided it was furnished a sketch or drawing of the same. He further testified that his company was not in the business of manufacturing dampers and had never manufactured one. There is no evidence that a five foot damper was available in the open market in the Austin area. The trial court made no finding that a five foot damper was available. The trial court did find, however, that “Baldwin had told Smith a 5 ft. damper was not available when, in fact, one could be obtained.” [Emphasis ours.] Smith argues that the foregoing finding, together with the evidence, constitutes conclusive proof that his acceptance was brought about by fraud and therefore such acceptance does not constitute a waiver of nonperformance. We do not agree.

The word “available” as used in building and construction contracts means that the item was at hand or was accessible for use at the time. The fact that a damper might have been obtained on special order with proper drawings from a firm not in the business of making dampers does not mean that a five foot damper was available. Since there is no proof that a five foot damper was available at the time appellant made the statement, appellee’s proof falls short of establishing fraud.

The only question left is whether the appellee accepted the fireplace. The rule is that where the intention of the owner in connection with his occupation and use of the structure is not clear, it is for the trier of fact to say, under all of the circumstances, whether there has been an acceptance of the work. 13 Am.Jur.2d, Building and Construction Contracts, sec. 56 (1964). To say the least, appellant’s intention was not clear. There is ample evidence to support the trial court’s finding and therefore the appellee will be held to have waived the performance of the contract insofar as the construction of the fireplace is concerned.

Smith’s third and final cross-point reads as follows: “The trial court erred in not awarding Smith as assignee of Mutual, the reasonable attorney’s fees to which Mutual would have been entitled had its cause of action not been assigned to Smith.” We find no merit in this contention.

In order to understand the contention it will be necessary to consider the posture of the parties at the time Smith settled with Mutual Savings Institution. At that time Mutual was the holder of Smith’s Builder’s and Mechanic’s Lien note for $31,300. The note had therefore been assigned to Mutual by Baldwin, with recourse, in order to obtain the interim financing. Thus, Smith was primarily liable to Mutual on the note and Baldwin was secondarily liable. The Smith note provided for a 10% attorney’s fee in the event the note was placed in the hands of an attorney for collection. After it had been placed in the hands of an attorney for collection, Smith settled with Mutual, thereby discharging his liability on the note as well as his liability for attorney’s fees thereon. The assignment to Smith reads as follows: “ . . . Mutual agrees to transfer and assign and does hereby transfer and assign ... to Roland D. Smith any and all causes of action that Mutual has or might have against Alan Baldwin arising or resulting from or attributable to the . . . promissory note payable by Roland D. Smith

At this point it should be noted that Smith is not seeking indemnity against Baldwin for any attorney’s fees paid by him in his settlement with Mutual for the simple reason that Smith paid Mutual no attorney’s fees. He simply asserts that he had a cause of action for attorney’s fees against Baldwin because Mutual, his assignor, had a cause of action against Baldwin prior to the settlement.

As we view the record, appellee’s contention that the assignment from Mutual conferred him a cause of action for attorney’s fees against Baldwin is untenable. When Smith settled with Mutual and released him from liability as the principal obligor on the note, Mutual obviously had no longer a cause of action for attorney’s fees against Baldwin who was only secondarily liable on the note. Smith, as assignee, stepped into the shoes of Mutual and since Mutual had no cause of action against Baldwin, Smith would have none. Appellee’s third cross-point is overruled.

In summary, we reverse that part of the judgment awarding appellee treble damages for the cost of correcting the defects and reform the judgment so as to award appellee a judgment for the sum of $1,500, rather than $4,500. With regard to that part of the judgment awarding appellee treble damages for interim interest and for attorney’s fees, the judgment is reversed, and judgment is hereby rendered that the appellee, Roland D. Smith, take nothing on his claim for interim interest and attorney’s fees. In all other respects the judgment is affirmed.

Reversed and rendered in part; reformed in part; and as reformed, affirmed.

      . Texas Business and Commerce Code Secs. 17.41 to 17.63 (Vernon’s Supp.1978) hereinafter referred to as the “Act.”

      . Smith subsequently joined Mutual as a party to the suit but settled with Mutual prior to the entry of judgment.