author: WARD,. Justice.

text:
    Cleta LAWSON, d/b/a Odessa Marine Sales & Service, Appellant, v. FINANCE AMERICA PRIVATE BRANDS, INC., Appellee.
    No. 6508.
    Court of Civil Appeals of Texas, El Paso.
    May 5, 1976.

      Alexander, Lowe & Pratt, Bill Alexander, Benny J. Lowe, Odessa, for appellant.
    George M. Kelton, Odessa, for appellee.
   OPINION

WARD,. Justice.

Finance America Private Brands, Inc. sued Cleta Lawson, D/B/A Odessa Marine Sales and Service, on her two promissory notes payable to the order of GAC Private Brands, Inc. Trial was to a jury which resolved factual issues regarding payments and offsets on the notes, and thereafter judgment was entered for the plaintiff for the balance due on the notes. Points on appeal concern deficiencies as to proof of the execution of the notes and proof as to owner and holder rights. We affirm.

Cleta Lawson, under the name of Odessa Marine Sales and Service, sold boats which she purchased from Pipestone Mariner Corporation. GAC Private Brands, Inc. financed the boats and equipment for Cleta Lawson. Each promissory note in dispute is payable on demand to the order of GAC Private Brands, Inc. and is executed by Odessa Marine Sales and Service as maker by Erwin E. Moore, Attorney in Fact. Introduced into evidence along with the promissory notes was an authorization for signature executed by Cleta Lawson and addressed to GAC Private Brands, Inc., which authorized any of its employees in connection with her financing to execute any necessary promissory notes. Appellant filed a sworn answer containing a general denial and plea that the claim was not just and true and that all just and lawful offsets had not been allowed.

By three points of error, the Appellant complains of the admitting into evidence of the two promissory notes for reasons that there was no showing that they had been executed by Erwin E. Moore pursuant to a valid power of attorney, no showing that the notes were executed by any agent of the payee and that there was no showing that the notes were the originals. The Appellant did not file a sworn pleading or affidavit denying the execution of either the promissory notes or the authorization for signature. Rule 93(h), Tex.R.Civ.P. In the absence of such a sworn plea, the instruments shall be received in evidence as fully proved. The notes and authorization for signature were attached to the plaintiff’s original petition as exhibits and were offered into evidence. It was not necessary that the plaintiff prove execution of the instruments, notes or authorization. American Fiber Glass, Inc. v. General Electric Credit Corporation, 529 S.W.2d 298 (Tex.Civ.App.—Fort Worth 1975, writ ref’d n.r. e.); 2 McDonald, Texas Civil Practice § 7.29.

In addition, there was ample evidence as to the execution of the notes. In response to interrogatories submitted under Rule 168, Tex.R.Civ.P., the Appellant admitted that Erwin E. Moore was authorized to execute the two promissory notes on her behalf, that she executed the authorization for signature, and that Mr. Moore was an employee of GAC Private Brands, Inc. The promissory notes introduced into evidence appear to have been executed by Mr. Moore and appear to be the originals. The points under discussion are all overruled.

By point of error number two, Appellant complains of the admission of the two notes for the reason that there was no showing that the Appellee was the present holder of the notes in question. The plaintiff, Finance America Private Brands, Inc., alleged that it was formerly GAC Private Brands, Inc., and that the two notes in question were executed and delivered to the plaintiff. As stated, the two notes introduced into evidence are payable to the order of GAC Private Brands, Inc. No endorsement appeared upon the notes and no assignment or transfer appears of record. There is no evidence as to how GAC Private Brands, Inc. became Finance America Private Brands, Inc.

Prior to the adoption of the Uniform Commercial Code, the mere possession by a plaintiff of notes payable to the order of a different payee, and which were not endorsed by the payee, was not sufficient to establish the prima facie title to the instruments. Texas State Bank & Trust Co. v. St. John, 103 S.W.2d 1104 (Tex.Civ.App.—El Paso 1937, err. dism’d); 12 Am.Jur.2d, Bills and Notes, § 1194 at 218. The last authority points out that this is clearly the rule under the Uniform Commercial Code. Negotiation of commercial paper not payable to bearer takes effect only when the endorsement is made, and until that time there is no presumption that the transferee is the owner. The transferee, without endorsement of an order instrument, is not a holder and so is not aided by any presumption that he is entitled to recover on the instrument. He must account for his possession by proving the transaction through which he acquired the note. Tex.Bus. & Comm.Code Ann. § 3.201(c), Comment 8; 12 Am.Jur.2d, § 1197 at 224.

Contrary to its contention, the Ap-pellee, even though in possession, was not a holder of the instruments. Tex.Bus. & Comm.Code Ann. § 1.201(20); 9 Tex.Jur.2d, § 150 at 159. It could not enforce payment in its own name under § 3.301 without proving its right to the instruments and accounting for the absence of the necessary endorsements. See Note 2 to § 3.307.

The necessary proof was not furnished by any constructive admission resulting from any failure to comply with Rule 93. None of the subdivisions apply to the allegations that the present plaintiff was formerly GAC Private Brands, Inc. It is proof as a holder of the instruments that is involved and not the capacity or defect of the party to bring this suit.

However, reversible error is not presented. After the plaintiff had rested, the defendant, upon direct examination by attorney, testified that GAC Private Brands, Inc. was the former name of the present plaintiff. This admission established the missing proof. The point is overruled.

The Appellee’s cross assignments of error relate to certain payments and credits allowed on the notes and are before us only on condition of a reversal of the judgment. They are not reached.

The judgment of the trial Court is affirmed.


source: Caselaw Access Project

author: ROBINSON, Justice.

license: Public Domain

text:
    Rafaela C. CASTILLO, Appellant, v. ALLIED INSURANCE COMPANY, Appellee.
    No. 8673.
    Court of Civil Appeals of Texas, Amarillo.
    May 10, 1976.
    Rehearing Denied June 14, 1976.
    Tony Martinez, Brownsville, for appellant.
    Crenshaw, Dupree & Milam, Cecil Kuhne, Lubbock, for appellee.
   ROBINSON, Justice.

Plaintiff Rafaela C. Castillo filed suit to recover death benefits under the Workmen’s Compensation Act. The trial court dismissed for lack of jurisdiction because the suit in state court was filed more than twenty days after the award by the Industrial Accident Board. Plaintiff appeals contending that she filed suit in federal court within the prescribed twenty days and that in view of the provisions of Tex.Rev.Civ. Stat.Ann. art. 5539a, the suit was timely filed. Plaintiff also contends that she has substantially complied with art. 8307a, which permits the transfer of such cases to the county wherein the injury occurred when filed in a county wherein the injury did not occur. Affirmed.

The material facts are undisputed. On August 15, 1973, the Industrial Accident Board made its award. The record shows no notice of appeal from such award. On August 24, 1973, plaintiff filed suit against the defendant insurance company in the United States District Court for the Southern District of Texas in Brownsville. On June 28,1974, the court dismissed plaintiff’s suit because of a lack of diversity of citizenship. On July 17, 1974, plaintiff filed suit against defendant in a District Court of the State of Texas. On December 4, 1975, the state trial court dismissed the cause for lack of jurisdiction.

Article 8307, § 5, Tex.Rev.Civ.Stat.Ann., contains this provision:

All questions arising under this law, if not settled by agreement of the parties interested therein and within the provisions of this law, shall, except as otherwise provided, be determined by the Board. Any interested party who is not willing and does not consent to abide by the final ruling and decision of said Board shall, within twenty (20) days after the rendition of said final ruling and decision by said Board, file with said Board notice that he will not abide by said final ruling and decision. And he shall within twenty (20) days after giving such notice bring suit in the county where the injury occurred to set aside said final ruling and decision, and said Board shall proceed no further toward the adjustment of such claim, other than hereinafter provided.

The provisions of our workmen’s compensation statute with respect to the successive steps in the progress and maturity of a claim are mandatory, and the provisions of the statute must be complied with or an action is not maintainable in the courts. Industrial Accident Board v. Glenn, 144 Tex. 378, 190 S.W.2d 805 (1945); Oilmen’s Reciprocal Assn. v. Franklin, 116 Tex. 59, 286 S.W. 195 (1926); Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084 (1926); Garcia v. Employers Casualty Company, 519 S.W.2d 685 (Tex.Civ.App.—Amarillo 1975, writ ref’d n. r. e.); Richards v. Consolidated Underwriters, 411 S.W.2d 436 (Tex.Civ.App.—Beaumont 1967, writ ref’d); Brown v. McMillan Material Co., 108 S.W.2d 914 (Tex.Civ.App.—Eastland 1937, writ ref’d).

Nevertheless, plaintiff contends that art. 8307, § 5 must be interpreted in the light of art. 5539a, which provides that if an action be dismissed because of want of jurisdiction, and if within 60 days after dismissal such action shall be commenced in a court of proper jurisdiction, the period between the first filing and the second filing shall not be counted as a part of the period of limitation.

This question was decided adversely to plaintiff’s contention in Braden v. Transport Insurance Co., 307 S.W.2d 655 (Tex.Civ.App.—Dallas 1957, no writ) and Leadon v. Truck Ins. Exchange, 253 S.W.2d 903 (Tex.Civ.App.—Galveston 1952, no writ). In those two cases in which the facts were similar to the facts in this case, it was held that art. 5539a does not apply to the Workmen’s Compensation Act because it is a general statute of limitation which does not affect special statutory proceedings such as those enumerated in the Workmen’s Compensation Act. See also Poole v. Rutherford, 199 S.W.2d 665 (Tex.Civ.App.—Fort Worth 1947, writ ref’d n. r. e.), where art. 5539a was held inapplicable to an analogous probate statute.

Plaintiff also contends that by filing her suit in a state district court within 20 days after the federal action was dismissed for want of diversity jurisdiction, she had “substantially complied” with art. 8307a which permits transfer to the proper county of a case filed in a county other than that in which the injury occurred.

The federal diversity statute, 28 U.S.C. § 1332 was amended in 1964 to make an insurer a citizen of the state in which the insured is a citizen. Thus, there was no diversity of citizenship on which plaintiff could predicate jurisdiction of her 1973 federal suit. Hernandez v. Travelers Insurance Company, 489 F.2d 721 (5th Cir.1974). The provisions of art. 8307a apply only where the case is filed in a court having jurisdiction of the subject matter of the litigation. Federal Underwriters Exchange v. Pugh, 141 Tex. 539, 174 S.W.2d 598, 600 (1943), mandate conformed to, 176 S.W.2d 761. Price v. Continental Casualty Co., 229 S.W.2d 887 (Tex.Civ.App.—Eastland 1950, no writ). When plaintiff first filed her suit in a court having jurisdiction of the subject matter, the mandatory and jurisdictional time requirements of art. 8307, § 5, had long since expired. She cannot now be in “substantial compliance” with art. 8307a.

Plaintiff’s point of error is overruled. The judgment of the trial court is affirmed.


author: PHILLIPS, Chief Justice. O’QUINN, Justice

text:
    Grace Carol CONSTANCE, Appellant, v. Ray CONSTANCE, Appellee.
    No. 12412.
    Court of Civil Appeals of Texas, Austin.
    May 12, 1976.
    Rehearing Denied June 9, 1976.

      William Dickson, Dickson & Associates, Houston, for appellant.
    Charles E. Blackley, Austin, Bartram, Reagan & Burrus, New Braunfels, for ap-pellee.
   PHILLIPS, Chief Justice.

The sole question before this Court is whether reference to the disposition of certain community property in the “opinion” or “findings” portion of a decree of divorce and not contained in the decretal part of the decree is an adjudication of ownership of that property.

Appellant and appellee were married in September, 1952, and lived together as husband and wife until April 6, 1967, when they were divorced. Appellee served in the U. S. Army and completed 20 years’ service thus becoming eligible for retirement in February, 1965. He did not actually retire until May 1, 1967, one month after being divorced from appellant.

The divorce decree rendered in April, 1967, introduced into evidence in the case at bar, made certain findings, one of which, was: “. . . And it further appearing to the Court that the Defendant is being retired as a Sergeant from the U. S. Army on a 20 year retirement plan and will receive approximately $220.00 per month as retired pay at this time, and that plaintiff has spent approximately fifteen years of the twenty years upon which the retirement is based as his wife, and inasmuch as no award is being made to Plaintiff for any portion of the retired pay, the Court finds that the sum of $200.00 per month for child support is reasonable and it is accordingly ORDERED by the Court that the Defendant contribute the sum of $200.00 per month toward the support and maintenance of said minor children . . . ” (Emphasis added)

The decree then refers to a voluntary property agreement entered into between the parties, sets out the agreement, then decrees: . . it is therefore ORDERED, ADJUDGED, AND DECREED by the Court that the above enumerated property settlement agreement be and is hereby awarded to Plaintiff and Defendant as herein set out.”

There is no mention of the retirement benefits in the partition agreement, nor does the decree contain a residuary clause providing for disposition of community property not specifically adjudicated therein.

In October, 1973, appellant brought this suit for a partition of all funds received and to be received by appellee from the United States Army under the retirement benefit plan, maintaining that such benefits, having been vested at the time of divorce in 1967, were community property which, having been left unawarded by the divorce decree, have been held jointly by appellant and appellee as tenants in common.

Appellee answered with a general denial and a plea of res judicata asserting that the 1967 divorce decree reciting that “no award is being made to Plaintiff for any portion of the retired pay . . . ” constituted a prior adjudication of the matter in controversy. Appellee further pleaded the four-year statute of limitations, stale demand and laches on the part of appellant.

The trial court sustained appellee’s plea of res judicata and rendered judgment that appellant take nothing. Appellant perfected her appeal to this Court, and here asserts that the trial court erred in sustaining ap-pellee’s plea of res judicata. We sustain this point.

Both parties agree that retirement benefits which have vested during the marriage constitute community property, and that where a divorce decree fails to provide for a division of community property, the husband and wife become tenants in common or joint owners thereof. Busby v. Busby, 457 S.W.2d 551 (Tex.1970), Wilson v. Wilson, 507 S.W.2d 916 (Tex.Civ.App.1974, no writ).

We hold that the portion of the divorce decree stating that “no award is being made to Plaintiff for any portion of the retired pay . . constitutes nothing more than an opinion or finding by the court, and makes no adjudication of the retirement benefits. Consequently, these benefits were not awarded by the 1967 divorce decree and have since and are now held jointly by the appellant and appellee as tenants in common.

It seems settled that declarations of the legal effect of facts and rulings are the “heart of the judgment,” and that preceding recitations are not a part of the “sentence of the law,” but merely show justification for pronouncing the decree. The mere reasons for the determination form no part of the judgment itself, and insofar as the judgment undertakes to recite findings of fact, such findings are not conclusive. 4 McDonald, Judgments § 17.-09.3 (1971), 33 Tex.Jur.2d Judgments § 35 (1962). The recent cases of Rausheck v. Empire Life Insurance Co. of America, 507 S.W.2d 337 (Tex.Civ.App.1974, writ ref’d n. r. e.), Roberson Farm Equipment Co. v. Hill, 514 S.W.2d 796 (Tex.Civ.App.1973, writ ref’d n. r. e.), are in accord with these principles.

The 1967 divorce decree is quite specific as to what properties the parties agreed to partition between them and the retirement benefits were not included. The court issued its decree approving of the settlement and specifically awarded to each party certain properties. When considered as a whole, the decree simply does not partition, nor purport to partition, anything except the property particularly awarded to each of the parties in the decretal portion of the judgment. See Wilson, supra; Kirberg v. Worrell, 44 S.W.2d 940 (Tex.Comm’n App.1932, holding approved); Whetstone v. Coffey, 48 Tex. 269 (1877); Dessommes v. Dessommes, 505 S.W.2d 673 (Tex.Civ.App.1973, writ ref’d n.r.e.).

With respect to the question of limitations, Dessommes, supra, holds that as the right to partition is a continuous one, there is no statute of limitations applicable and such an action may be brought at anytime.

The judgment of the trial court is reversed and the cause remanded for proceedings consistent with this opinion.

Reversed and Remanded.

O’QUINN, Justice

(concurring).

My concurrence is limited to agreement that the trial court erred in sustaining the plea of res judicata and that the cause should be remanded for further proceedings.

In view of this Court’s holding in the recent case of Cearley v. Cearley, Tex.Civ.App. 536 S.W.2d 96 (1976) that military retirement benefits are not acquired by the serviceman merely by reason of the passage of the minimum twenty years of service, it appears possible in this case that the prospective retirement benefits of the appellee did not constitute any part of the community property at the time of the divorce decree.

In Cearley we said that retirement pay is not acquired, within the meaning of Article 5.01, Texas Family Code, “until the minimum service has been completed and all events fixing government liability have occurred in compliance with” the federal statutes to establish a “claim of money presently due.” Until the serviceman makes an election to retire, after completing the minimum years of service, and obtains administrative credit for satisfactory years of service, no pay or benefits can be acquired by him.

Upon further proceedings below, the court and the parties should not proceed on an assumption, without proof clearly establishing a completed claim for retired pay, that appellee’s prospective retirement pay had been acquired by him during the marriage so as to become a part of the community estate.

SHANNON, J., joins in this concurring opinion.


author: PHILLIPS, Chief Justice.

text:
    K-C FUEL COMPANY, INC., Appellant, v. Tommy O. DEAN, Appellee.
    No. 12439.
    Court of Civil Appeals of Texas, Austin.
    May 12, 1976.
    Rehearing Denied June 9, 1976.
    Earl L. Yeakel, III, Kammerman, Yeakel, Hineman & Trickey, Austin, for appellant.

      William A. Lusk, Lusk & Shortes, Austin, for appellee.
   PHILLIPS, Chief Justice.

This case involves the finality of a judgment in a garnishment suit and related questions.

On July 22, 1974, K-C Fuel Company obtained a judgment for $7,326.65 in Cause No. 219,649 in the district court of Travis County against Tommy 0. Dean. Subsequently, Dean did not perfect an appeal or post a supersedeas bond. On August 26, 1974, K-C Fuel Company filed an Application for Writ of Garnishment in the same district court, referring to its judgment against Tommy 0. Dean, and requesting that the court issue its writ to the Home State Bank of Marble Falls, Texas, as garnishee.

In September, 1974, Home State Bank filed its answer to appellant’s writ of garnishment and on October 23, 1974, the trial court entered a judgment, denominated “Interlocutory Judgment,”' awarding appellant $5,635.33, granting Home State Bank reasonable attorney’s fees and further ordering Home State Bank to make available the contents of a certain safety deposit box held in the name of appellee upon proper presentation of appellee’s key to the safety deposit box. This judgment was never appealed and appellant contends that the judgment became final.

On January 22, 1975, after the entry of this judgment, appellee filed a writ of error requesting that this Court review the judgment previously issued in Cause No. 219,-649. In June, 1975, this Court reversed the judgment of the trial court in Cause No. 219,649, and remanded the cause to the district court for further proceedings.

Thereafter, in September, 1975, appellee filed in the trial court his “Motion to Recover Sums Paid Under Garnishment Pursuant to Judgment Afterwards Reversed.”

On December 18, 1975, the court granted appellee’s motion and entered judgment ordering appellant to return to appellee the sum garnished, costs of suit and interest.

Appellant has duly perfected its appeal in this Court.

Two principal questions are presented on appeal: the first, whether the judgment in garnishment had become final, thus depriving the trial court of jurisdiction to act on appellee’s motion to recover; and second, if the judgment had become final, whether appellee’s motion served as a bill of review to reopen the case. We hold that the judgment had become final and that the trial court lacked jurisdiction to consider appel-lee’s motion to recover. We also hold that this motion failed to serve as a bill of review. Therefore, we reverse the judgment of the trial court granting appellee’s motion.

The judgment of October 23, 1974, awarded appellant judgment against garnishee Home State Bank in the stated amount plus reasonable attorney’s fees. It absolved garnishee, Home State Bank, of any liability to appellee, Tommy 0. Dean, as a result of the payments provided for in said judgment; and it ordered the garnishee to make the contents of a certain safety deposit box held by appellee available to appellant’s attorney.

Thus, by disposing of all of the matters in controversy, the judgment terminated the litigation of the parties and became final. Hargrove v. Insurance Investment Corporation, 142 Tex. 111, 176 S.W.2d 744 (Tex.1944); Granville v. Lea, 336 S.W.2d 795 (Tex.Civ.App.1960, no writ).

A final judgment is one which determines the rights of the parties and disposes of all the issues involved so that no future action by the court will be necessary in order to settle and determine the entire controversy. Howard Gault & Son, Inc. v. First National Bank, 523 S.W.2d 496 (Tex.Civ.App.1975, no writ).

Even a cursory review of the court’s judgment of October 23, 1974, reflects that it satisfied all of the requirements of a final judgment. The fact that it was rendered in a garnishment action in no way affects its finality. Roberts v. Stoneham, 31 S.W.2d 856 (Tex.Civ.App.1930, no writ).

We remain unimpressed with appellee’s assertion that the judgment lacked finality because it was labeled “Interlocutory Order.” As we stated above, the judgment was endowed with all the attributes of finality. Nor can it be said that because the judgment orders appellee to produce a key to the lockbox, it has failed to dispose of all of the matters in controversy. Hargrove, cited above, states that if the rights controverted by the parties be settled by the judgment, it will be held final, although further proceedings should be required to carry the judgment into full effect. Such proceedings may be expressly provided for in the face of the judgment without affecting its finality, provided they are merely incidental to its proper execution.

We also hold that the trial court was without authority to enter its subsequent judgment of December 18, 1975, ordering appellant to repay the sums garnished under the original judgment.

It is undisputed that appellee did not appear in the garnishment proceeding at the time it was originally heard by the trial court and took no appeal from the garnishment judgment originally entered by the trial court on October 23, 1974, although he clearly had a right to do so. Phillips v. Interstate Securities Co. of Texas, 250 S.W.2d 444 (Tex.Civ.App.1952, no writ). Also, appellee did not, within the period of time allowed by law, attack the judgment of October 23, 1974, by appeal or writ of error to this Court. The trial court has jurisdiction over its own judgments until they become final, with power to vacate, correct or amend same at the instance of proper parties upon grounds sufficient to authorize such action by the court. Standard Oil Co. v. State, 132 S.W.2d 612 (Tex.Civ.App.1939, writ dism’d jdgmt. corr.).

However, once the judgment of the trial court becomes final, the trial court loses authority to vacate or modify that judgment, except as provided for by law. In this case, the judgment of the trial court became final thirty days after its rendition on October 23, 1974. Cargill, Inc. v. Van Deweghe, 384 S.W.2d 216 (Tex.Civ.App.1964, no writ).

Nor can we treat appellant’s motion, described above, as a bill of review. Garcia v. Ramos, 208 S.W.2d 111 (Tex.Civ.App.1948, writ, ref.), states that although the bill of review is an equitable proceeding, before a litigant can successfully invoke it to set aside a final judgment, he must allege and prove: (1) a meritorious defense to the cause of action alleged to support the judgment, (2) which he was prevented from making by the fraud, accident or wrongful act of the opposite party, (3) unmixed with any fault or negligence of his own.

We are well aware that substance and not form determines whether a pleading can be designated as a bill of review, and that such pleadings need not be docketed as a separate and distinct cause of action. Apparently, there was no testimony taken in support of appellee’s motion and it is entirely possible that the court treated the motion as part of the garnishment suit. Even so, should the trial court have considered the motion as a bill of review it cannot stand, if for no other reason than that appellee has failed to prove that his failure to present a meritorious defense was unmixed with any fault or negligence of his own.

Appellee did not offer any evidence that would show when he learned of the offending judgment. It is clear that he learned of it at some point in time as he successfully prosecuted a writ of error from the judgment in the case on which the garnishment action was based. There is no evidence or explanation as to why he did not intervene in the garnishment proceeding in the trial court, file a motion for new trial, appeal this judgment or prosecute a writ of error therefrom. Consequently, we must reverse the judgment of the trial court granting appellee’s motion to recover money paid under garnishment and render judgment that appellee take nothing.

Reversed and Rendered.

      . Dean v. K-C Fuel Company, 524 S.W.2d 805 (Tex.Civ.App.1975, no writ).

      . See also: Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996 (Tex.1950); Hanks v. Rosser, 378 S.W.2d 31 (Tex.1964); Innmon v. Mouser, 493 S.W.2d 290 (Tex.Civ.App.1973, no writ).

      . Champion v. Kinney, 460 S.W.2d 173 (Tex.Civ.App.1970, no writ); Smith v. Kraft, 9 S.W.2d 472 (Tex.Civ.App.1928, no writ).


author: MOORE, Justice.

text:
    Gordon BANKS, Appellant, v. Ben MERRITT, Appellee.
    No. 922.
    Court of Civil Appeals of Texas, Tyler.
    May 13, 1976.

      Brad Hutchison, Fisher, McLaughlin & Harrison, Paris, for appellant.
    Welby Parish, Gilmer, for appellee.
   MOORE, Justice.

This is an appeal from an order overruling a plea of privilege. Appellant, Gordon Banks, a resident of Lamar County, Texas, sold appellee, Ben Merritt, a resident of Wood County, a Charoláis bull. Appellee instituted suit against appellant in Wood County seeking to recover the purchase price of the Charoláis bull alleging a breach of warranty and also seeking damages for fraud.

Appellant filed a plea of privilege to be sued in Lamar County, the county of his residence. While appellee alleged in his controverting affidavit that venue was properly laid in Wood County under various exceptions to the venue statute, the only issue on this appeal is whether appellee is entitled to maintain venue in Wood County under Exception 7 of Article 1995, Tex.Rev. Civ.Stat.Ann., relating to fraud and reading as follows:

“7. In all cases of fraud . . . suit may be brought in the county where the fraud was committed or . where the defendant has his domicile.”

In order to defeat a plea of privilege based on the expressed exception contained in Subdivision 7, Article 1995, the party relying on the exception has the burden of not only pleading but also proving by a preponderance of the evidence every constituent element of a cause of action for fraud. Safeway Stores, Inc. v. Amburn, 380 S.W.2d 727, 729 (Tex.Civ.App.—Fort Worth 1964, writ dism’d). To constitute actionable fraud it must appear: (1) that a material representation was made; (2) that it was false; (3) that, when the speaker made it, he knew it was false or made it recklessly without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by the other party; (5) that the party acted in reliance upon it; and (6) that he thereby suffered injury. Each of these elements must be established with a reasonable degree of certainty and the absence of any one of them will prevent a recovery. Custom Leasing, Inc. v. Texas Bank & Trust Company of Dallas, 516 S.W.2d 138, 143 (Tex.1974).

Exception 7 of Article 1995 is only applicable where the cause of action is clearly based upon fraud and has no application where fraud is merely incidental to the main cause of action. Morgan v. Box, 449 S.W.2d 499 (Tex.Civ.App.—Dallas 1969, no writ); Stegall v. Lytle, 360 S.W.2d 898 (Tex.Civ.App.—San Antonio 1962, no writ); Sowell v. Weisinger, 228 S.W.2d 574 (Tex.Civ.App.—Beaumont 1949, no writ).

In order to hold venue in the county where the fraud is alleged to have occurred, the fraud must be the gist of the cause of action. Roddy v. Denton County, 280 S.W.2d 793 (Tex.Civ.App.—Fort Worth 1955, writ dism’d); Western Irrigation Co. v. Reeves County Land Co., 231 S.W.2d 1011 (Tex.Civ.App.—El Paso 1950, no writ).

Appellant contends that the trial court erred in overruling his plea of privilege because appellee’s pleadings and proof conclusively show that his suit is based upon a breach of an express warranty of the fitness of the bull and not for fraud in the inducement of the contract. In passing on appellant’s point of error, we must examine the material allegations of appellee’s petition, as well as the testimony offered in his effort to overcome appellant’s challenge to the venue.

Appellee alleged in his petition that he entered into an oral contract agreeing to purchase the bull in question. He alleged that at the time he agreed to purchase the bull, appellant “guaranteed” the bull to be “potent and fertile.” He further alleged that pursuant to said “warranties and rep-reservations,” he paid appellant $6,000 for the bull; that shortly thereafter, he mated the bull with some of his cows only to find that the cows came back in heat without having been bred. Before discussing the remaining allegations, it should be noted that the petition is devoid of any allegations that the foregoing statements were false and that the appellant knew that the bull was not fit for breeding purposes, nor does the petition contain any allegations that such statements were negligently or carelessly made by appellant without knowledge of the facts. The petition further alleges that after appellee discovered that some of his cattle had not been bred, he called appellant and complained to him about the bull. While the pleadings do not show what the appellant did in response to the complaint, the testimony conclusively shows that in response to the complaint appellant, with appellee’s consent, went to Wood County and took the bull to Lamar County for the purpose of having it fertility tested by a veterinarian. Appellee further alleged in his petition that after the bull had been fertility tested and had been returned to him he contacted the appellant with regard to the bull and appellant told him that he had taken the bull to a veterinarian and had it fertility tested and that the bull was highly potent and fertile and would continue to service appellee’s cows. Further, appellee alleged that at the time appellant warrantied and represented that the bull had been tested by a veterinarian in Lamar County and found to be highly fertile, appellant was, in fact, lying and misrepresenting the facts, all of which appellant knew was a lie; that appellee relied upon the warranties and representations and as a result lost a calf crop. His prayer was for judgment for the purchase price of the animal, as well as for the loss of a calf crop in the amount of $30,000, together with exemplary damages in the amount of $15,000. Nowhere in his pleadings did he offer to return the animal.

Appellee’s proof of fraud, consists of ap-pellee’s testimony contained in a nine-page statement of facts. He testified that prior to the time he purchased the bull, he asked appellant if the bull would serve the purpose and be able to breed the cows that he had at the time. He testified that appellant assured him that it would and on that “recommendation” he bought it. He further testified that after he discovered that the bull was not breeding his cows he took it to his own veterinarian who told him that the bull tested weak but that it could possibly breed a few cows. The remainder of his testimony substantially follows the factual allegations set forth in his petition and for that reason we will not undertake to summarize the remainder of his testimony.

After a careful review of the pleadings and the evidence, we have concluded that appellee’s suit and complaint is basically one for damages for breach of the express warranty of fitness contained in the oral contract between the parties, and not a suit for fraud. In arriving at this conclusion we think it is significant that nowhere in appellee’s pleadings did he allege that appellant made any false statements to him prior to the time the contract was consummated. On the contrary the fraud made the basis of appellee’s complaint appears to have occurred after the consummation of the contract. As we understand appellee’s pleadings and testimony, appellee contends that the loss of the calf crop was due to the fact that he relied on appellant’s false representation that the veterinarian who tested the bull found it to be strong and capable of breeding. While there are no specific pleadings to that effect, it seems that ap-pellee is contending that but for the false representation that the veterinarian had found the bull to be strong and capable of breeding, appellee would have made arrangements to obtain another bull and would not have lost a calf crop. While there is no evidence showing that appellant actually misrepresented what the veterinarian told him with regard to the bull, even if appellant made a false representation in this regard, such would not be sufficient to constitute actionable fraud.

“To constitute actionable fraud, a false representation must have been an in-during cause for entering into the transaction, and must have been made either prior to, or contemporaneously with, the transaction so as to become a part of it. A subsequent representation is not to be considered in determining whether an instrument was obtained by fraud, since a transaction that was originally valid cannot be rendered invalid by a representation made after the transaction was entered into.” 25 Tex. Jur.2d, Fraud and Deceit, sec. 14, p. 629 (1970). We agree with appellant’s contention that the pleadings and the evidence reveal that the main thrust of appellee’s lawsuit is not founded on fraud but is essentially a suit for a breach of warranty. The alleged fraud is clearly incidental and collateral to the main purpose of appellee’s suit to recover for breach of a warranty and for that reason it cannot be used as a vehicle to establish venue in Wood County under Exception 7 of the venue statute.

The judgment of the trial court overruling appellant Banks’ plea of privilege is hereby reversed and judgment entered directing the clerk to transfer the cause to the District Court of Lamar County, Texas.


author: COULSON, Justice.

text:
    COMMERCIAL STANDARD FIRE AND MARINE COMPANY, Appellant, v. Odis Albert MURPHY, Appellee.
    No. 1283.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    May 19, 1976.
    Rehearing Denied June 9, 1976.

      Roger A. Rider, Robert C. Floyd, Butler, Binion, Rice, Cook & Knapp, Houston, for appellant.
    James W. Patterson, John G. Patterson, Patterson & Patterson, Houston, for appel-lee.
   COULSON, Justice.

This is a workmen’s compensation suit. The jury returned a verdict favorable to the appellee-workman, Odis Albert Murphy, and judgment was entered thereon. Commercial Fire and Marine Company appeals complaining of the trial court’s action in excluding certain evidence of prior inconsistent statements made by Murphy. We affirm.

Murphy was employed by Capital Steel and Iron Company from September 13,1961 until October 31, 1972. During his employment at Capital, Murphy suffered two injuries to his back. One of the back injuries was sustained by Murphy on April 8, 1968, when Pacific Employer’s Indemnity Company was Capital’s insurance carrier. This suit was brought by Murphy for an injury received on April 30, 1970, when Commercial was Capital’s insurance carrier. On May 3, 1973, in two separate proceedings, Murphy filed virtually identical petitions against Commercial and Pacific. The only difference in the petitions filed by Murphy are the dates of the injuries for which compensation is claimed.

Commercial pleaded that Murphy’s incapacity was caused solely by a preexisting compensable injury or congenital defect in his back, and alternatively that a prior com-pensable injury contributed to any incapacity suffered by Murphy. Prior to trial, Murphy filed a motion in limine requesting the court to order Commercial to refrain from making any mention that Murphy had prior or subsequent claims, suits, or settlements, including any claims of total and permanent disability, for the reason that they would be immaterial and irrelevant to any issue in this suit. The motion was granted.

Commercial’s first eight points of error complain of the trial court’s action in excluding evidence pertaining to claims made by Murphy in his suit against Pacific. Out of the jury’s presence Commercial offered Murphy’s original petition against Pacific for the purpose of impeaching Murphy with a prior inconsistent statement and for the purpose of offering an admission by Murphy. Commercial also offered evidence out of the jury’s presence of Murphy’s testimony as an admission by way of Pacific’s interrogatories to Murphy and his answers thereto. Additionally, specific deposition testimony of Murphy in the Pacific suit was offered out of the jury’s presence • to impeach Murphy with a prior inconsistent statement and as an admission. The trial court excluded all such evidence. Commercial claims that all of the evidence was admissible and that the trial court’s exclusion of such evidence resulted in reversible error. We disagree.

More specifically, the direct testimony of Murphy which Commercial sought to contradict by admissions and prior inconsistent statements was:

a) that Murphy recovered from the 1968 injury;

b) that Murphy left Capital because he was not able to do the work on account of the 1970 injury.

On cross-examination before any tender of prior inconsistent statements, Murphy stated that he was not totally and permanently disabled from the 1968 injury. On final cross-examination Murphy denied that there was no distinction in his mind between the 1968 and the 1970 injuries. To impeach this testimony out of the jury’s presence Commercial tendered prior inconsistent statements by Murphy that:

a) he had not recovered from his 1968 injury;

b) he was totally and permanently disabled as a result of his 1968 injury;

c) he quit Capital on account of his 1968 injury;

d) the disability he claims in this suit actually arose from the 1968 injury.

Murphy has replied that during the course of the trial he admitted the particulars which Commercial sought to impeach by introduction of prior inconsistent statements. This is true. Murphy stipulated in open court that he had a prior compensable injury. Murphy admitted that he had a permanent disability as a result of the 1968 injury. Murphy admitted that he claimed under oath that he was disabled for the remainder of his life as the result of the 1968 injury. Murphy agreed that he contended under oath that he left Capital because of his 1968 injury.

For Commercial to have been entitled to introduce Murphy’s prior inconsistent statements, they must have shown that an inconsistency existed between the witness’s testimony at trial and the prior statement. As stated in Hartford Accident and Indemnity Co. v. McArdell, 369 S.W.2d 331, 338 (Tex.Sup.1963):

Concerning the 1957 injury, plaintiff testified that he hurt his left arm and left shoulder while lifting a plate of sheet iron with three other men. Petitioner introduced notice of injury and claim for compensation filed with the Industrial Accident Board describing the injury almost exactly as respondent had testified. There is no inconsistency in the testimony and the statement made in the notice of injury. Therefore it was not admissible as an exception to the hearsay rule, and it was error for the trial court to admit it.

(emphasis supplied). Here, Murphy initially took inconsistent positions at this trial as compared with prior statements made by him in pleadings, depositions and interrogatories in his suit against Pacific for the 1968 injury. However, after tender of these inconsistent statements was made out of the presence of the jury, Murphy admitted these prior inconsistent statements. When the jury was recalled, Murphy freely admitted that he had made such prior inconsistent statements. Where the witness denies making the prior contradictory statement, the adverse party may prove that such statement was made, but where the witness admits making the prior contradictory statement this precludes further proof of the prior inconsistent statements by the adverse party. See 1 C. McCormick & R. Ray, Texas Evidence § 695 (2d ed. 1956).

We are aware of the rule that conflicting testimony of the same witness on the same issue creates a fact issue for the fact finder to decide. Washington v. Aetna Casualty and Surety Company, 521 S.W.2d 313 (Tex.Civ.App.-Fort Worth 1975, no writ). However, once the witness admits his prior inconsistent statement and does not later refute that statement, there is no testimony to contradict or impeach by introduction of prior inconsistent statements. While the trial judge initially erred in not admitting evidence of the prior inconsistent statements of Murphy tendered immediately after Murphy’s testimony denying such statements, such error is not reversible error because Murphy later admitted that he made prior inconsistent statements. See Tex.R.Civ.P. 484.

Commercial’s points of error nine through thirteen complain of the jury’s finding in response to special issue number 7(b). The jury found that Murphy’s previous injury contributed “one-half of 1%” to his present incapacity. Commercial claims that there is no evidence to support this finding and that there is insufficient evidence to support this finding. Commercial also claims that the evidence conclusively shows that the prior compensable injury of 1968 contributed 100% to any incapacity suffered by Murphy. After a review of the record and the testimony contained therein, we conclude that there is some evidence to support the jury’s finding that the prior compensable injury of 1968 contributed to Murphy’s present injury. Commercial’s points nine through thirteen are overruled.

Commercial’s points of error fourteen through twenty-five complain of findings of incapacity, both total temporary and permanent partial. These points of error raise no evidence as well as insufficient evidence points. Commercial claims that since Murphy offered no explanation for his previous testimony he is bound by it. This is not the law. As stated by the Supreme Court in Griffin v. Superior Insurance Company, 161 Tex. 195, 338 S.W.2d 415, 419 (1960), there are five rules that must apply before a party’s testimony is conclusive against him. They are (1) that the declaration relied upon was made during the course of a judicial proceeding; (2) that the statement is contrary to an essential fact embraced in the theory of recovery or defense asserted by the person giving the testimony; (3) that the statement was deliberate, clear and unequivocal; (4) that giving of conclusive effect to the declaration will be consistent with public policy; (5) that the testimony must be such as relates to a fact upon which a judgment for the opposing party may be based. Here, Murphy’s prior statements were not unequivocal, but were mere claims and contentions. Murphy is not bound in this suit by his prior statement in the Pacific suit that the 1968 injury was a cause of his disability.

There is ample testimony by Murphy and . others to support the jury’s findings of total temporary and permanent partial incapacity. Commercial’s points of error fourteen through twenty-five are overruled.

Commercial’s final two points of error complain of the jury’s finding of average daily wage and point to a jury conflict in the verdict between special issue numbers 6(b) and 6(e). Commercial first claims that there is no evidence from which the jury could have arrived at the figure of $34.06 as Murphy’s average daily wage. A review of the record indicates that there is testimony that Murphy worked 254 days in the year immediately preceding his injury of April 30, 1970, and that his salary for that year was $8,651.26. It is self-evident that by dividing 254 into $8,651.26, the jury arrived at the average daily wage of $34.06.

Finally, Commercial’s claim of an inconsistency in special issue numbers 6(b) and 6(e) is without merit. Special issue number 6(e) was predicated upon a “no” answer to special issue number 6(c) where inquiry was made as to what would be fair and just to both plaintiff and defendant as to average weekly wage, if plaintiff or no other employee had worked in such employment for at least 210 days. Special Issue No. 6(c) was predicated on a finding that Murphy had not worked for 210 days in the year immediately preceding his injury of April 30, 1970. The jury found that Murphy had worked 210 days of the year immediately preceding his injury and that his average daily wage was $34.06. The answer to special issue number 6(e) is surplus-age which may be disregarded. Appellant’s final points of error are overruled.

Affirmed.


text:
    J. Miller PORTER, Appellant, v. Patty Brannon HAJOVSKY et al., Appellees.
    No. 1383.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    May 26, 1976.
    Rehearing Denied June 16, 1976.
    John M. O’Quinn, Riddle, Murphrey, O’Quinn & Cannon, Eliot P. Tucker, Man-dell & Wright, Houston, for appellant.

      Charles W. Hurd, III, Fulbright & Jawor-ski, Houston, for appellee.
   COULSON, Justice.

This is a suit for personal injuries resulting from an automobile collision between J. Miller Porter and Patty Brannon Hajovsky. Porter sued Mrs. Hajovsky and her husband, Victor Hajovsky, for injuries received when Mrs. Hajovsky ran a red light and struck Porter’s car. A directed verdict was granted to Victor Hajovsky from which no appeal has been taken. The jury found Mrs. Hajovsky negligent and Porter negligent. The jury found Porter’s damages to be $2,000 for physical pain and mental anguish in the past and $3,000 for loss of earnings in the past. Judgment was entered that Porter take nothing. We affirm.

Porter was driving north on Stella Link when he stopped for a red light at the intersection of Stella Link and Bellaire Boulevard. Mrs. Hajovsky was driving east on Bellaire. A service truck was parked in the middle of the intersection and it partially blocked Porter’s lane of traffic. Continuing through the intersection, when the light turned green, Porter had to veer into the adjacent right lane to avoid the parked truck. Porter looked over his right shoulder to observe the traffic travelling in the adjacent lane so that he would not collide with that traffic when veering around the parked truck. While proceeding through the intersection, Porter’s car was struck by Mrs. Hajovsky’s car after she ran a red light.

The jury found Porter negligent in his lookout and that such negligence was a proximate cause of the collision. Mrs. Ha-jovsky was also found negligent and her negligence was found to be a proximate cause of the collision.

A driver, with the right of way, entering an intersection ordinarily has a duty to keep a lookout for other vehicles entering the intersection. Thornton v. Campise, 459 S.W.2d 455 (Tex.Civ.App.—Houston [14th Dist.] 1970, writ ref’d n. r. e.). A finding that Porter failed to keep a proper lookout, and that such failure was negligence, is a finding of contributory negligence. Here, the jury inferred that Porter was negligent in his lookout (not looking to his left and observing Mrs. Hajovsky run the red light). Contributory negligence is not established by evidence equally consistent with the exercise of care by a plaintiff, or where the inference of care is just as reasonable as the inference of the absence thereof. Williams v. Hill, 496 S.W.2d 748, 751 (Tex.Civ.App.—Tyler 1973, writ ref’d n. r. e.). The inference of care on Porter’s part is just as reasonable as the inference of the absence of care by Porter. The jury’s finding that Porter was negligent in his lookout is against the great weight and preponderance of the evidence.

Porter claims that the jury’s answer to the special issue on damages is against the great weight and preponderance of the evidence. The damage issue was answered as follows:

QUESTION!
What sum of money, if any, if paid now in cash, do you find from a preponderance of the evidence would fairly and reasonably compensate J. Miller Porter, Jr., for his injuries, if any, which you find from a preponderance of the evidence resulted from the occurrence in question? Consider the following elements of damage, if any, and none other. Answer in dollars and cents, if any:
a. Physical pain and mental anguish in the past.
Answer: $2.000.00
b. Physical pain and mental anguish which, in reasonable probability, he will suffer in the future.
Answer: None
c. Loss of earnings in the past.
Answer: $3,000.00
d. Loss of earning capacity which, in reasonable probability, he will sustain in the future.
Answer: None_.

Both Porter and the defendants stipulated at trial that the defendants are entitled to a credit of $14,601.64 against any recovery in this suit. The total amount of damages, $5,000, found by the jury, is well within the credit due the defendants.

As stated in Edmondson v. Keller, 401 S.W.2d 718, 720 (Tex.Civ.App.—Austin 1966, no writ):

The amount of damages is largely within the jury’s discretion. However, they must award something for every element of damage resulting from an injury.

Here, the jury did award damages for every element resulting from an injury. Those elements which the jury found resulted from Porter’s injury were physical pain and mental anguish in the past and loss of earning capacity in the past.

Porter’s income has increased every year following the accident. The extent of diminished earning capacity can best be shown by comparing actual earnings before and after the injury. Thomas v. Jenkins, 481 S.W.2d 464 (Tex.Civ.App.—Amarillo 1972, writ ref’d n. r. e.). The jury’s answer of “none” as to Porter’s loss of earning capacity in the future is supported by a comparison of actual earnings before and after the injury and is not against the great weight and preponderance of the evidence.

The jury was able to observe Porter from the witness stand. They heard testimony from Porter of his previous statement that he did not get hit too hard and was not severely hurt. The jury’s answer of “none” as to the physical pain and mental anguish which in reasonable probability Porter will suffer in the future is not against the great weight and preponderance of the evidence.

A review of the record shows that the jury’s answers on the damage issue are not against the great weight and preponderance of the evidence. In light of the credit due defendants, the judgment can be sustained solely on the jury’s verdict as to damages. It is immaterial that the jury’s finding of contributory negligence is against the weight and preponderance of the evidence when the answers to the damage issue will sustain the judgment. City of Lubbock v. Onley, 498 S.W.2d 429, 431 (Tex.Civ.App.—Amarillo), writ ref’d n. r. e. per curiam, 506 S.W.2d 208 (Tex.Sup.1973); Tex.R.Civ.P. 434.

Affirmed.

CURTISS BROWN, C. J., not participating.


text:
    REPUBLIC BANKERS LIFE INSURANCE COMPANY, Appellant, v. B. L. JAEGER, Appellee.
    No. 1396.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    May 26, 1976.
    Rehearing Denied June 16, 1976.

      Thomas L. Cook, Beard & Kultgen, Waco, for appellant.
    W. Timothy Lewis, Stephen Perel & Associates, Houston, for appellee.
   COULSON, Justice.

This suit concerns a disability insurance contract. B. L. Jaeger sued Republic Bankers Life Insurance Company to recover accrued and unaccrued disability benefits for an accidental injury. The court sitting without a jury rendered judgment for the plaintiff. We affirm.

On February 14, 1975 Jaeger filed suit against Republic, and Republic answered by way of a general denial. Jaeger testified that he was injured on September 10, 1974' and that Republic had refused to pay benefits due him on his disability insurance policy issued March 20, 1973. At the trial a letter was introduced from Republic to Jae-ger’s attorney stating:

[A]s the policy contract is still within the contestable period, we feel it to be in the best interests of all concerned to rescind the policy and refund all the premiums paid by Mr. Jaeger since the contract’s inception. Enclosed you will find our check in the amount of $429.75 which represents a refund of all premiums paid.

Jaeger initially brought suit only for accrued benefits under the policy, however, before judgment a trial amendment was allowed whereby Jaeger pled anticipatory breach and sought recovery of all benefits under the policy accrued and unaccrued. The trial judge permitted the trial amendment.

Republic claims that the trial judge erred and abused its discretion in allowing the trial amendment. Republic also claims that there was no evidence or that there was insufficient evidence of an anticipatory breach of the insurance policy and that there was no evidence of trial by consent of this issue. Texas Rule of Civil Procedure 66 permits the trial court to freely allow amendment of pleadings when the presentation of the merits of the action are subserved thereby and the objecting party fails to satisfy the court that by allowing such amendment he would suffer prejudice in maintaining his defense or action upon the merits. The standard of review in such cases is whether the trial court abused its discretion in allowing the trial amendment. Patino v. Texas Employers Insurance Association, 491 S.W.2d 754 (Tex.Civ.App.—Austin 1973, writ ref’d n. r. e.). The trial amendment was permitted by the court after the presentation of the evidence but before rendition of judgment. This is not an abuse of discretion. Jim Walter Corporation v. Bass, 356 S.W.2d 356 (Tex.Civ.App.—Texarkana 1962, no writ). The trial court did not abuse its discretion in permitting the filing of this trial amendment where Republic failed to plead surprise, request time for discovery of additional evidence on a point of repudiation, or object to this new theory. Mergele v. Houston, 436 S.W.2d 951 (Tex.Civ.App.—San Antonio 1968, writ ref’d n. r. e.).

“Anticipatory breach” of a contract is defined in American Bankers’ Ins. Co. v. Moore, 73 S.W.2d 620, 622 (Tex.Civ.App.—Fort Worth 1934, no writ), as follows:

In order to justify the adverse party in treating the renunciation as a breach, the refusal to perform must be of the whole contract or of a covenant going to the whole consideration, and must be distinct, unequivocal and absolute .

The letter introduced in evidence showed Republic’s distinct, unequivocal and absolute intent to refuse to perform its obligation under the insurance contract. We hold that there was evidence upon which the trial court based its finding of fact that Republic had repudiated the contract. All of Republic’s points of error complaining of the trial court’s finding of anticipatory breach are overruled.

This is not a case where the insurance company did nothing and was then sued on the theory of repudiation, as was the case in Continental American Life Insurance Company v. McCain, 416 S.W.2d 796 (Tex.Sup.1967). In this ease, Republic took action by writing a letter repudiating their contract with Jaeger. Jaeger was justified in treating the renunciation as a breach enabling him to sue for accrued and unaccrued benefits under the policy.

The measure of damages in an action for breach of contract by repudiation is the present value at the time of trial of all that the plaintiff would have received if the contract had been performed. Continental Casualty Company v. Boerger, 389 S.W.2d 566 (Tex.Civ.App.—Waco 1965, writ dism’d). Republic’s points of error complaining of the trial court’s award of unac-crued installments are overruled.

Republic claims that there is no evidence or insufficient evidence that Jaeger is and will be disabled. After a review of the evidence, it is clear that there was evidence to support the findings of fact that Jaeger has been and will be totally and continually disabled as such term is defined in the insurance policy. Republic’s points of error complaining of the present and future disability findings are overruled.

Republic claims that there is no finding that Jaeger will be under a doctor’s care as required by the policy. To recover on a contract a party must show that he has been ready and able to comply with all conditions precedent to his own right to proceed to perform. 13 Tex.Jur.2d Contracts § 314 (1964). Jaeger’s disability insurance policy required that the insured be under the regular and personal attendance of a licensed doctor of medicine, surgeon or osteopath other than the insured and other than a relative of the insured. There was no finding of fact filed by the trial court that Jaeger was under or would be under such care. However, this condition is part of the policy’s definition of disability. The trial court did find that the plaintiff, Jae-ger, will remain totally disabled for a period of at least 60 months, the life of the policy. Where findings of fact are filed by the trial court they form the basis of the judgment. Where one or more elements of a ground of recovery are supported by the evidence but are not expressly stated in the findings of facts then those elements will be supplied by presumption in support of the judgment. Tex.R.Civ.P. 299. The trial court’s finding that Jaeger is disabled under the terms of the policy is supported by the evidence. Jaeger’s back was operated on and he remained in the hospital for two weeks. Since his discharge from the hospital, Jae-ger has been consulting with his doctor and taking medication under his physician’s direction. The presumption is implicit in the finding of disability that Jaeger is under the care of a doctor, surgeon or osteopath and that he will remain under such care. Republic’s points of error in this regard are overruled.

Republic claims that the trial court erred in awarding damages in the amounts of the total value of the contract without discounting the money awarded for future installments due. We choose to follow Continental Casualty Company v. Boerger, supra, allowing such a measure of damages. Republic’s point of error complaining of the damages awarded without discount at the legal rate of interest is overruled.

Republic claims that the trial court erred in awarding a penalty and reasonable attorney’s fees to Jaeger under Article 3.62 of the Insurance Code. We hold the award of a penalty and attorney’s fees as provided by Article 3.62 of the Insurance Code is not error. See Continental Casualty Company v. Boerger, supra.

Republic also contends that the trial court erred in excluding a line from a documentary piece of evidence. The excluded line was a response to a question on Jaeger’s claim form for his injury: “Have you ever seen a doctor for this or similar conditions in the past?” Answer “Yes, back strain — December 1967.” Republic fully examined Jaeger about his prior injuries, therefore, any error in excluding this line from Jaeger’s claim form is harmless. Tex. R.Civ.P. 434.

We have carefully considered all of Republic’s points of error; they are overruled. The judgment of the trial court is affirmed.


author: O’QUINN, Justice.

text:
    Gertrude Wolf STOREY et al., Appellants, v. The DICK MATZ AGENCY, Appellee.
    No. 12400.
    Court of Civil Appeals of Texas, Austin.
    May 26, 1976.
    Rehearing Denied June 16, 1976.
    Barry K. Bishop, Clark, Thomas, Winters & Shapiro, Austin, for appellants.
    Douglass D. Hearne, Stayton, Maloney, Hearne & Babb, Austin, for appellee.
   O’QUINN, Justice.

Opposing parties in this cause disagree as to the total commissions due the agent who effected sale of two parcels of real property under written contracts between the parties. There is no claim by either party that the contracts, identical in terms on the subject of commissions, are ambiguous. The amounts of the commissions due the agent will be determined as a question of law under construction of the written instruments.

Appellants, Gertrude Wolf Storey and Marguerite Wolf Lee, are former owners of two contiguous tracts of land in Williamson County, each tract containing 100 acres. Each appellant entered into a written contract to sell her land to Richard L. Matz, as trustee, and also contracted in writing to pay real estate commissions to The Dick Matz Agency, an unincorporated real estate agency in Austin, operated by Richard L. Matz, a licensed broker.

The sales were completed early in December of 1974, and thereafter controversy as to the total amount of the commissions originated when the parties failed to agree as to the effect of their writings concerning the commissions.

The Matz agency brought suit for declaratory judgment in April of 1975 seeking to establish the agency’s right to interest on its commissions, which under the contracts are payable in installments coincident with installment payments received by the sellers on purchase money notes bearing interest. Sellers contend that the total commission, under each contract, is six percent of the “sales price,” or the “total consideration,” and that there is no agreement to pay interest on the commission, even though paid in installments instead of a lump sum.

The trial court agreed with Matz and entered judgment awarding Matz interest on the deferred payments of commissions. We will reverse the judgment of the trial court and will render judgment that Matz agency take nothing by its suit.

The controlling provisions of the contracts are set out in the sequence below.

Paragraph 3.A. provides:

“The total consideration for the sale and conveyance of the premises (hereinafter sometimes referred to as the ‘total consideration ’) shall be computed by multiplying the total number of acres contained in the premises (as certified by the surveyor .) times the sum of five Thousand Five Hundred and No/100 Dollars ($5,500.00), such consideration, as finally determined, to be payable as follows . . ” followed by detailed directions for initial and installment payments. (Emphasis added)

Provision for payment of commissions is made in paragraph 17 of the contracts:

“Seller agrees to pay a real estate commission, upon and subject to the consummation of the transaction contemplated hereby, to Dick Matz Agency (as ‘Agent’), in an amount equal to six percent (6%) of the total consideration, which commission shall be payable on the terms and at the times set forth in the Agreement attached hereto as Exhibit ‘F’ and made a part hereof for all purposes. Seller and Agent shall enter such Agreement at closing. . . . ” (Emphasis added)

The agreement described as Exhibit “F”, setting forth the terms and times for payment of the commissions, is quoted in pertinent part:

“. . . Seller . . . and Agent hereby indicate our agreement that the commission owed to Agent from the sale of property described on the attached Exhibit ‘A’ which is incorporated herein by reference, pursuant to the contract from Seller dated [blank], such commission being 6% of the sales price of [blank], shall be paid as follows:

“Seller shall pay to Agent 6% of the actual cash received in connection with said sale upon actual receipt thereof. Said 6% shall be inclusive of all payments, principal and interest, and shall be paid to Agent immediately upon Seller’s receipt thereof, and shall be paid only upon Seller’s actual receipt thereof.” (Emphasis added)

It is undisputed that the sales price, or total consideration, in each transaction, when calculated by multiplying the number of acres (100) times the price per acre ($5,500), amounted to $550,000.00. Under paragraphs 3.A. and 17 of the contract it is clear that under this formula the total commission for each sale would be six percent of $550,000.00. Matz agency contends that under Exhibit “F”, purporting to set forth the terms on which the commission “shall be payable” and the times for payment, the agency is entitled to interest at six percent, in addition to the commission of “6% of the sales price” (paragraph 17) or “6% of the total consideration” (Exhibit “F”).

Neither Matz agency nor sellers contend that the contracts are ambiguous. Matz disclaims ambiguity on appeal and invokes the rule that a contract not alleged to be ambiguous by either party is to be construed from the language of the contract itself. Sellers in their motion for summary judgment urged that the agreements are unambiguous.

The rule is firmly established that if there is no ambiguity in a contract in writing, construction of the instrument becomes a question of law to be determined by the court. City of Pinehurst v. Spooner Addition Water Company, 432 S.W.2d 515, 518 (Tex.Sup.1968). In Pinehurst the Court affirmed the rule that in construing a contract without ambiguity the courts “give effect to the intention of the parties as expressed or as is apparent in the writing.”

The specific amount of the commission is set forth in paragraph 17, in clearly stating “an amount equal to six percent (6%) of the total consideration,” and in Exhibit “F”, where the amount is reiterated “such commission being 6% of the sales price.” Paragraph 3.A. leaves no question that the “total consideration” must be arrived at by multiplying the number of acres times the selling price per acre. These agreements being plain and specific provisions, we find no reason to allow them to be controlled by the general provision indicating the manner of payment of the commission. We find no legal or grammatical inconsistency between the specific provisions as to the amount of the commissions and the general provisions as to the method and timing of paying the commissions. It is not inconsistent to provide for a commission in a specific amount and then provide that the commission shall be paid in installments from actual cash received by the sellers, including both principal and interest. The manner of such payments merely accelerates the discharge of the obligation to pay commissions in the specified amounts, and there is no provision in the agreements that Matz agency shall receive interest on the commissions until finally paid.

The terms of the contracts under which the purchaser was to meet interest and principal payments, when examined in the context of the entire sales transaction, appear to throw some light on intentions of the parties in making their agreements for installment payment of the commissions. The down payment of ten percent was to be applied as prepayment of interest, and no payment of principal was required until the sixth anniversary date of the contract. By providing that the commission payments were to be made out of actual cash received, whether interest or principal, the agent would receive payments on commissions even during the early years when sellers were receiving no principal payments on the total consideration.

We conclude that since the agreements specify the total amount of each commission to be paid Matz in plain and unambiguous language, and these specific provisions are not in disharmony with the manner of payment of the commissions, that is, out of all actual cash receipts, both principal and interest, we may not disregard the specific provisions in favor of a general provision indicating the manner of payment.

All parties filed motions for summary judgment in district court, and the trial court overruled the motion of Appellants Storey and Lee and entered judgment for Appellee Matz Agency. This Court is authorized, upon finding reversible error, to render such judgment as the trial court should have rendered. Rule 434, Texas Rules of Civil Procedure; Tobin v. Garcia, 159 Tex. 58, 316 S.W.2d 396, 400 (1958); Trinity Universal Insurance Company v. Bellmead State Bank, 396 S.W.2d 163, 169 (Tex.Civ.App. Dallas 1965, writ ref. n. r. e.); Aetna Life Insurance Company v. Eilers, 367 S.W.2d 732, 736 (Tex.Civ.App. Waco 1963, writ ref.).

The judgment of the trial court is reversed. We render judgment that Appellee Matz Agency take nothing by its suit.

Reversed and Rendered.


author: SHANNON, Justice. PHILLIPS, Chief Justice

text:
    J. R. CANION, Jr., Appellant, v. TEXAS CYCLE SUPPLY, INC., Appellee.
    No. 12409.
    Court of Civil Appeals of Texas, Austin.
    May 26, 1976.
    Rehearing Denied June 16, 1976.

      Malcolm Robinson, Hooper, Robinson & Moeller, Austin, for appellant.
    Robert C. (Lou) McCreary, Austin, for appellee.
   SHANNON, Justice.

The receiver for Texas Cycle Supply, Inc., filed suit in the district court of Travis County against J. R. Canion, Jr., appellant, seeking the cancellation of a deed to a parcel of land and a judgment declaring that the said real estate was owned in fee simple by the corporation. After trial to the court, judgment was entered in favor of the corporation. We will reverse that judgment.

The receiver’s cause of action and Can-ion’s defenses were not fully pleaded. For present purposes, it is sufficient to state that the receiver’s position was that Canion, as an officer and director of Texas Cycle Supply, Inc., appropriated an opportunity to which that corporation was entitled, when he purchased the property at a deed of trust sale. Canion denied that he usurped a corporate opportunity. His further position during trial was that if he appropriated a corporate opportunity, he was exonerated from liability because his act was ratified by the corporation.

The property in dispute consists of two lots located in Travis County, and situated on the lots is a business building. At the time Canion purchased the property, Texas Cycle Supply occupied one-half of the space in the building as a tenant under a lease agreement with the owner.

Texas Cycle Supply, Inc., was incorporated in Texas in 1971, and was placed in receivership by the district court of Travis County in 1974. The incorporators and the initial board of directors were G. T. Connor, Canion, and his wife, Geneva Williams Can-ion. The incorporators called no organization meeting of the board of directors. No bylaws were adopted, no minutes were prepared, and no stock was issued. No officers were elected but the parties referred to Connor as president, Canion as vice-president, and Mrs. Canion as secretary. Can-ion’s brief states, and the receiver does not deny, that there were no meetings of the board of directors during its existence.

The total capital of the corporation was $15,000.00 which Canion placed into the corporation in the beginning. During the life of the corporation, Canion also signed a personal guarantee to a local bank for $20,-000 to allow the corporation to obtain financing. Connor did not contribute any capital to the corporation. He received a monthly salary as president. Canion and his wife were paid no salary by the corporation and did not actively participate in the daily operation of the corporation.

The facts concerning Canion’s purchase of the property are as follows. In early 1972, Connor learned that the owner of the property was in financial difficulties and that the creditor intended to sell the property at a trustee’s sale. Connor began investigating the possibility of the purchase of the property by the corporation. As a part of his investigation, Connor inquired of counsel for the corporation, Vernon Le-mens, Jr., the best method of acquiring ownership. Connor told Canion that the property could probably be bought for the corporation. Canion had the property appraised. The appraisal showed the value of the property to be $77,057.55.

Connor and Canion had planned to attend the trustee’s sale. On the day of the trustee’s sale, Connor was busy and he asked Canion to tend to the purchase of the property. Vernon Lemens testified that prior to the sale, Canion told him that Canion and Connor had decided that the property would be held in Canion’s name temporarily for the benefit of the corporation. Lemens vouched further that he was so concerned about Canion’s statement that he telephoned Connor to inquire if Connor had discussed the matter with Canion. Connor told him that he had not talked with Canion about the subject but that he trusted Can-ion and it would be “fine” to do whatever Canion wanted. Connor did not object to Canion about Canion’s taking the property in his name. In fact, after the sale he never discussed the subject with Canion.

Lemens, acting as substitute trustee, placed Canion’s name in the trustee’s deed as grantee. Lemens testified that Canion asked him to prepare a deed for his signature so that Canion could “immediately” transfer the property back to the corporation.

No person connected with the corporation, or any other person, asked Canion to convey the property to the corporation until October, 1974, when the corporation was placed into receivership by G. T. Connor. Connor acted in this regard without informing Canion.

In this connection, the district court found as a fact that Canion did not “intentionally or willfully attempt to cheat or over-reach” the corporation.

Canion bid in the property for the amount owed on the note, $31,385.53. He paid that sum from his personal savings. Canion also paid $4,864.73 from his personal funds to Lemens for attorney’s and trustee’s fees. The court found as a fact that the corporation did not have the cash sum necessary to purchase the property at the trustee’s sale.

The district court found as a fact, that at the time of the trustee’s sale the market value of the property was between $77,-057.55 and $60,000.00, and that the mortgage debt against the property was $31,-385.53 in addition to attorney’s fees and trustee’s fees. At trial time, the court found that the value of the property was at least $82,000.00 and the mortgage debt against the property was $37,400.00.

After Canion’s purchase of the property, the corporation paid a monthly payment of $538.00 to the savings institution financing the purchase. That payment was listed in the corporation’s records as “rent.” Canion showed the said monthly payments in his United States income tax returns as income to him. Prom the date of its purchase, the property was shown as an asset in Canion’s personal financial statements. At Connor’s direction, the property was also reflected in the books of the corporation as an asset.

At the time of the entry of judgment, Canion had made payments on the mortgage of the property and had made permanent improvements to the property in the combined total of $7,507.00.

The district court determined inter alia that at all times pertinent Canion occupied a fiduciary relationship with the corporation because of his position as vice-president, director, and shareholder. The court concluded further that Canion was acting for and on behalf of the corporation when he acquired the property, and that Canion held the property as constructive trustee for and on behalf of the corporation. Finally, the court determined the corporation held title to the property subject only to the lien in favor of the financing institution, and the lien of $7,507.00 in favor of Canion, which lien represented the cost of permanent improvements made and the amount of mortgage payments paid by Canion.

The court refused to find, among other things, that in addition to the corporation’s not having the cash to bid in the property, there was no possibility for the corporation’s being able to purchase the property absent the use of Canion’s personal funds or guarantee.

The judgment cancelled the trustee’s deed to Canion and provided further that the corporation recover fee simple title from Canion, subject to the liens mentioned above.

Of importance in the disposition of this appeal is an analysis of the extent of Can-ion’s interest in the corporation. Appellee contends that Connor owned one-half of the shares of stock. As previously written, the corporation never issued any shares of stock. The district court made no direct findings with respect to ownership. The district court did find that Canion was “. . . the Vice-President, a Director and Shareholder . . . ” in the corporation, and that Connor “. . . was and is the President and Director.” It is undisputed that only Canion placed any money into the corporation. There is some mention in the record of Connor’s services with respect to his ownership in the corporation. There is also some mention by Canion that he thought that he and Connor owned the corporation “fifty-fifty.”

Tex.Bus.Corp.Act Ann. art. 2.16 B provides that promise of future services shall not constitute payment for shares in a corporation. Connor’s future services, then, could not be viewed as payment for shares of stock. Also, what Canion may have supposed concerning ownership of shares does not make it so. We have concluded, as a matter of law, that Canion was the sole stockholder.

Canion attacks the judgment by many points of error in several briefs. No effort will be made to discuss the points in the order of their appearance in the briefs. The subject of most of the points is the claimed error of the court in its determination that Canion usurped a corporate opportunity. Canion’s other major contention is that, assuming arguendo the usurpation of a corporate opportunity, the corporation ratified Canion’s action by informal permission or acquiescence after the purchase of the property.

The relationship of officers and directors to a corporation is a fiduciary one imposing upon them the duty to exercise their powers as officers and directors solely for the benefit of the corporation and its stockholders. Implicit in such duty is that of not exercising their powers as officers and directors to serve their own personal interest at the expense of the corporation and its stockholders. Officers and directors have no more right to divert corporate opportunities and make them their own than they have to appropriate corporate property. On one hand, an officer’s and director’s duty of loyalty to the corporation and the stockholders is unyielding in its demand; on the other hand, the officer or director is not bound to act in noncorporate matters for the benefit of the corporation and stockholders to the exclusion of self-interest, and he may avail himself of all opportunities lying outside the field of his duties as an officer or director. Diedrick v. Helm, 217 Minn. 483, 14 N.W.2d 913 (1944).

Where a business opportunity is in the line of the corporation’s activities, and is one in which the corporation has a legitimate interest or expectancy, the opportunity belongs to the corporation. An officer or director who diverts the opportunity and embraces it as his own is chargeable as a constructive trustee for the benefit of the corporation and holds all of the profits and benefits received therefrom for the corporation. Diedrick v. Helm, supra; International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567 (Tex.1963).

A corporation’s financial inability to take advantage of a corporate opportunity is one of the defenses which may be asserted in a suit involving an alleged appropriation of a corporate opportunity. The burden of pleading and proving the corporate inability should be placed upon the officer or director who allegedly appropriated the corporate opportunity. See Huffington v. Upchurch, 532 S.W.2d 576 (Tex.1976).

We have some difficulty in understanding how an officer and director of a corporation, who is its sole shareholder, may appropriate a corporate opportunity of his solely owned corporation. For purposes of this opinion, though, we will assume that Canion usurped a corporate opportunity and failed, as well, to prove the defense of the inability of the corporation to take advantage of the opportunity.

With respect to ratification, the rule is that where the actions or transactions of directors of a corporation are involved, and the claim is made that the directors are personally interested, such action or transaction may be ratified by vote or acquiescence of all, or a majority, of the stockholders. Pruitt v. Westbrook, 11 S.W.2d 562 (Tex.Civ.App.1928, no writ), Western Inn Corporation v. Heyl, 452 S.W.2d 752 (Tex.Civ.App.1970, writ ref’d n. r. e.). See also Baylor University: Lebow-itz, Director Misconduct and Shareholder Ratification in Texas, 6 Baylor L.Rev. 1 (1953).

Canion did not plead that the corporation ratified the purchase of the property by Canion, but the defense of ratification was tried by implied consent. Tex.R. Civ.P. 67. In support of his contention of ratification, Canion points out that Connor, the president, knew that Canion had taken the property in his name, and for two years never protested. Moreover, the president of the corporation knew that the monthly drafts in payment to the financing institution were marked “rent.” More to the point, the only stockholder of the corporation, Canion, obviously ratified his act as director in taking the corporate opportunity. See Zorn v. Brooks, 125 Tex. 614, 83 S.W.2d 949 (1935).

The judgment is reversed and judgment is here rendered that appellee take nothing. Reversed and Rendered.

PHILLIPS, Chief Justice

(dissenting).

I respectfully dissent.

After trial to the court whereupon an extensive, well-developed record was compiled, the court held that at all pertinent times appellant occupied a fiduciary relationship with Texas Cycle Supply, Inc., because of his position as vice-president, director and shareholder; that he was acting for and on behalf of the corporation when the property was acquired; and that he holds the property as constructive trustee for and on behalf of appellee corporation with rights to certain setoffs for personal funds expended.

I would affirm this judgment.

The facts of this case, as found by the trial court, place it squarely within the aegis of those cases which hold that under certain circumstances, opportunities to acquire assets are corporate opportunities. The leading Texas case is International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567 (Tex.1963), and the doctrine has been reaffirmed recently in Huffington v. Upchurch, 532 S.W.2d 576 (Tex.1976). The essence of the trial court’s findings of fact is that the purchase of the building had all of the trappings of a corporate enterprise from beginning to end. Connor located the building and began negotiations. The monthly payments in the amount of the mortgage notes were noted as corporate payments on principal (with the exception of several checks made out by appellant with the self-serving notation “rent”).

During the trial of this case, seven witnesses, including the appellant, testified. The testimony of six of those witnesses supports the findings made by the trial court. The only testimony to the contrary is that of the appellant.

During the trial the appellant testified that he and Connor were each 50 percent shareholders of the corporation. This fact has not been challenged in any way nor was it ever in issue. Yet, the majority of this Court has concluded and found that appellant was the sole stockholder because of some innuendo that Connor’s stock was paid for either by a note or by the promise of services to be rendered, either of which method of acquiring stock is proscribed by Tex.Bus.Corp.Act Ann. art. 2.16(B). A fair reading of the statement of facts does not clearly disclose how Connor’s stock was acquired.

The testimony of Guzman, the corporate accountant, was that Connor and Canion were each 50 percent shareholders, and that the initial capital of the corporation was $15,000 by “a check from . . . Mr. J. R. Canion to the corporate account, and Mr. Connor was supposed to give Mr. Canion a note for $7,500 for his half.’’ (Emphasis added) Borrowing funds from a third party for the purchase of corporate stock does not fall within the prohibition of Tex.Bus. Corp.Act Ann. art. 2.16(B). Ruthart v. First State Bank of Tulia, Texas, 431 S.W.2d 366 (Tex.Civ.App.1968, writ ref’d). There is no evidence whatsoever of any note executed to, or funds borrowed by Connor from the corporation for stock.

In addition, Connor testified that he invested $5,000 in the corporation in early 1972 “as my part in putting in some money just like Mr. Canion put money in in the beginning. It was in the nature of capital.” The fact that no stock certificates were issued either to Connor or Canion, is immaterial. Tex.Bus.Corp.Act Ann. art. 2.16(A) (Supp.1976). Connor’s testimony was that he invested this sum at that time because “Mr. Canion was needing $5,000 for something, and I put $5,000 in the company, he took it out, he returned it.” Connor’s testimony of his investment was corroborated by the accountant Guzman, who testified that $5,000 was put into the corporation before his February, 1972, balance sheet was drawn, and was taken out of the business by Canion.

The majority has chosen to reverse the judgment of the trial court by finding facts neither alleged at trial, nor supported by any evidence in the record. As a result, the appellant is allowed to withdraw from the corporation its only substantial asset, and leave only a shell corporation against which fifty-three creditors may attempt to recover $95,231.60 in claims.

      . See: Comment, 42 Texas L.Rev. 252 (1963); Hamilton Business Organizations, § 717, p. 219, n. 91, and the cases cited therein; Comment, The Corporate Opportunity Doctrine, 18 Sw. L.J. 96 (1964).

      . Article III of the Articles of Incorporation states: “The purposes for which this corporation is organized are (the) wholesale and retail sales of motorcycles, parts, accessories, and related items to include all sporting goods as may be used in indoor and outdoor activities. To own and control under lease or otherwise, land, buildings, and property necessary to the conduct of such business.” (Emphasis added)


author: SHANNON, Justice.

text:
    Eugene H. SMITH, Appellant, v. ORTMAN-McCAIN COMPANY et al., Appellees.
    No. 12446.
    Court of Civil Appeals of Texas, Austin.
    May 26, 1976.
    Rehearing Denied June 16, 1976.

      David M. Moore, House, Mercer, House, Brock & Wilson, E. B. Fuller, Austin, for appellant.
    John F. Morehead, Gibbins & Spivey, Austin, for Ortman-McCain Co.
    Barry K. Bishop, Clark, Thomas, Winters & Shapiro, Austin, for Wax Refining Co.
   SHANNON, Justice.

This is a summary judgment appeal.

Appellant Eugene H. Smith filed a personal injury suit for $76,000.00 against Consolidated Papers, Inc., and appellees, Ort-man-MeCain Company and Wax Refining Company. Appellees filed motions for summary judgment. The district court severed the cause of action asserted by appellant against Consolidated Papers, Inc., from those asserted against appellees and entered summary judgment that appellant take nothing from appellees. We will reverse the judgment and remand the cause for trial.

For years appellant worked as a paper cutter for Von Boeckmann-Jones, a printing concern in Austin. As a part of his job, appellant sprayed chemical solutions on sheets of printed paper to prevent one printed sheet from touching the other and thereby smearing the wet ink. Over the years appellant developed a severe skin condition known as “contact dermatitis” which left him unable to work.

In his petition appellant claimed that the appellees placed their products “in the channels of trade” and that those products were used for spraying printed matter. Appellant pleaded that such products ultimately were sold to Von Boeckmann-Jones. Appellant was not aware of the names or the chemical composition of the appellees’ products, but appellant pleaded that he believed that appellee Ortman-McCain Company sold “O. M. C. Powder” and that ap-pellee Wax Refining Company sold “W. R. Spray Wax No. 5.” .

The chemical composition of the companies’ products, appellant declared, “. was caustic, dangerous and capable of causing a severe injury by contact with the skin of the Plaintiff . . . particularly when occurring over a period of time.”

Appellant averred further that he was exposed to those “harmful substances” for a number of years and that those substances caused injuries to his fingers to the extent that he could not work as a paper cutter. Appellant declared further that the “. materials furnished by the various Defendants, acting separately or in concert, were the direct proximate cause . . .’’of his injuries. Appellant pleaded that, “as a proximate cause of constant exposure to the materials in question, the Plaintiff developed a severe case of contact dermatitis.”

Finally, appellant pleaded as follows:

“The Defendants are jointly and severally responsible for the contact dermatitis inflicted upon the Plaintiff and the injuries occasioned thereby and are jointly and severally liable for all damages to which he might be entitled.
“The Defendants are negligent in failing to properly warn users of their products as to the caustic or dangerous nature thereof, they are negligent in failing to properly manufacture and produce such products so that it will not have the effect upon persons such as the Plaintiff and are further negligent as a matter of law in putting such caustic and dangerous substances into interstate commerce."

After hearing and argument, the district court granted appellees’ motion for summary judgment.

The order granting the motions for summary judgment recited that there were two grounds for Summary Judgment presented by each of the appellees in their respective motions.

“1. Both Defendants allege that the Plaintiff’s Original Petition did not state a cause of action on which relief could be granted against either of the moving Defendants. In particular, these Defendants assert that said Original Petition does not make any allegations that either one of these Defendants was negligent in either way, or that either one of these Defendants sold a defective product which in fact caused the damages which are alleged to have been sustained by the Plaintiff.
“2. Secondly, the moving Defendants also allege, assuming arguendo that the complaint does in fact state a cause of action, that in view of the Plaintiff’s answer to the request for admission that he does not know and has no proof that either of the products sold by the respective defendants in fact caused the damages of which he complains.”

Although there is authority that a motion for summary judgment may be used to test whether the pleading states a cause of action, ordinarily, that is the function of a special exception. Jones v. Travis County Child Welfare Unit, 487 S.W.2d 252 (Tex.Civ.App.1972, no writ). 2 McDonald, Texas Civil Practice § 7.19 (Rev.1970).

Generally, pleadings will be construed in favor of the pleader. The court will look to the pleader’s intendment and the pleadings will be sustained even if some element of a cause of action has not been specifically alleged. Every fact will be supplied that can be inferred reasonably from what was stated. Gulf, Colorado & Santa Fe Railway Co. v. Bliss, 368 S.W.2d 594 (Tex.1963). The above rules are particularly applicable in a summary judgment proceeding. Benson v. Grace Oil Co., 430 S.W.2d 98 (Tex.Civ.App.1968, no writ).

We have previously described and quoted from appellant’s petition. Though the petition is not well pleaded, we are of the opinion that, in the absence of special exceptions, appellant pleaded a cause of action in negligence and in strict liability. The summary judgment, then, may not be affirmed upon the basis that appellant failed to state a cause of action.

The other basis for the order of summary judgment is that the summary judgment proof showed that appellant did not know and had no proof that either of the products sold by the respective appellees caused his damages.

Appellees’ summary judgment proof consisted of Rule 168-Interrogatories to the Party, and Rule 169-Request for Admissions. The pertinent interrogatories and requests, and the respective responses, follow.

Appellee Ortman-McCain’s request for admission number five provided: “Again referring to Exhibit A, please admit that it is this powder on the paper stock which you told Dr. Schock about in September of 1972 about which you complained in the case at bar.” Appellant’s response to request number five was: “It is the understanding of Plaintiff that some of the materials made by the various defendants is [sic] a powder and some is [sic] a liquid and he is not in a position to testify which particular powder or liquid was the cause of his problem.”

Appellee Ortman-McCain’s interrogatory number forty-nine inquired, “Please state the name and address of all expert witnesses whom you expect to call at the trial of the above entitled and numbered cause, or from whom you have received a written report.” Appellant’s response to this interrogatory was, “Plaintiff has no names which he can give the requesting party at this time.”

Appellees argue in support of the summary judgment order that appellant admitted by the quoted responses that he had no proof that any material sold by them caused any of the injuries of which he complained.

The affirmance of a summary judgment for a defendant depends upon whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff’s cause of action. If the defendant’s summary judgment proof does not establish as a matter of law that there is no genuine issue of fact as to one or more of essential elements of the plaintiff’s case, then the plaintiff does not have the burden, to avoid summary judgment, of going forward with summary judgment proof of like quality. Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970), Torres v. Western Casualty and Surety Company, 457 S.W.2d 50 (Tex.1970), Swilley v. Hughes, 488 S.W.2d 64 (Tex.1972).

Appellant’s response to the request for admission was that he was not in a position to testify which particular powder or liquid was the cause of the problem. In reply to the interrogatory requiring appellant to identify all expert witnesses which he expected to call, appellant answered that he had no names which he could “. give the requesting party at this time.” (Emphasis added)

The fact that appellant did not know which powder or liquid produced his injuries and that he did not know what expert witnesses his attorney would call at trial does not establish, as a matter of law, that appellees’ products did not cause appellant’s injuries. Upon trial, if appellant rested his case with no more evidence adduced than is contained in his responses, he would, of course, suffer a directed verdict because of his failure to sustain his burden of proof. Appellant, however, has no such burden on appellees’ motions for summary judgment. Torres v. Western Casualty and Surety Company, supra.

The judgment is reversed and the cause is remanded for trial.

Reversed and Remanded.

      . Hidalgo v. Surety Savings and Loan Association, 462 S.W.2d 540 (Tex.1971); Gonzales v. Lubbock State School, 487 S.W.2d 815 (Tex.Civ.App.1972, no writ).