author: CADENA, Justice.

text:
    Delia Garcia SIMMS, Appellant, v. SOUTHWEST TEXAS METHODIST HOSPITAL et al., Appellees.
    No. 15387.
    Court of Civil Appeals of Texas, San Antonio.
    March 3, 1976.
    Rehearing Denied April 7, 1976.

      Hardberger, Branton & Herrera, Maverick & Tynan, San Antonio, for appellant.
    Wiley, Plunkett, Gibson & Allen, Lewin Plunkett and Daniel Diaz, Jr., Thomas H. Sharp, Jr., Chester H. Brown, San Antonio, for appellees.
   CADENA, Justice.

Plaintiff, Delia Garcia Simms, complains of a judgment, based on a jury verdict, denying her recovery for personal injuries which she alleged resulted from the presence of cornstarch on surgical gloves used by surgeons who operated on her for the purpose of removing an ovarian cyst.

Named as defendants in plaintiff’s petition were Southwest Texas Methodist Hospital; William F. Pipes, M.D., and Everett M. Boyd, M.D., the surgeons who performed the operation; Pioneer Rubber Company, a division of Sherwood Medical Industries, Inc.; Pharmaseal Laboratories; American Hospital Supply Corporation; and Genetic Hospital Supply Company. Prior to entry of judgment plaintiff took a nonsuit as to the last three named defendants. In this Court plaintiff has abandoned her appeal insofar as Southwest Texas Methodist Hospital, William F. Pipes, M.D., and Everett M. Boyd, M.D., are concerned, so that the judgment, insofar as it denies plaintiff recovery against these three defendants, must be affirmed. This appeal, therefore, concerns only the liability of Pioneer Rubber Company, a division of Sherwood Medical Industries, Inc., who, in the course of this opinion, will be referred to as “defendant.”

On May 5, 1970, plaintiff underwent surgery for the removal of an ovarian cyst, and was released from the hospital six days later. On May 14, 1970, plaintiff was readmitted to the hospital with symptoms of an obstruction of the bowel. Exploratory surgery revealed the presence of “extensive adhesions between the small bowel and pelvis and small bowell [sic] and anterior abdominal wall.” This condition required the removal of ½ of the small intestine. As a result, plaintiff has little or no control of her bowels and has suffered, and will continue to suffer, extreme pain and mental anguish. It is not necessary, for the purpose of this opinion, to go into detail concerning the nature of plaintiff’s problems.

Plaintiff’s contention is that, during the first operation, corn starch powder present on the surgical gloves manufactured and supplied by defendant, was introduced into her abdominal cavity, producing a “starch granuloma” which necessitated the removal of a portion of her small intestine.

Surgical gloves are used by surgeons and those assisting them in performing operations for the purpose of preventing infection caused by the presence of bacteria and other infection-causing agents on the hands. For many years, talcum powder was applied to the gloves as a lubricant in order to make it easier for the surgeon and his assistants to don the gloves. The body is incapable of absorbing and eliminating talcum powder, and its introduction into the body during an operation caused serious problems in some individuals. For this reason, corn starch, which is more readily ab-sorbable by the body, was substituted for talcum power as a lubricant on surgical gloves.

There is evidence that corn starch, when introduced into the abdominal cavity during an operation, can cause granuloma. Plaintiff contends that it was defendant’s duty, as part of of its obligation to furnish a product which was not unreasonably dangerous, to warn of the danger of granuloma and to place on the package instructions concerning the best method for removing the starch from the outer surfaces of the gloves. At the time that plaintiff underwent surgery for the removal of the ovarian cyst, it was not defendant’s practice to warn users of the gloves of the danger or to instruct them as to the most efficient method of removal of the powder. The persons who participated in the surgery donned the gloves and then washed their gloved hands in a “splash basin.” The evidence shows that this method was ineffective, since the starch floated on top of the water in the basin and adhered to the gloves. In order to properly remove the starch, it is best to wash the gloved hands under running water and then wipe them with a damp sterile cloth.

Plaintiff asserts that defendant’s failure to warn of the danger and to inform users of the gloves of the proper procedure to eliminate the danger rendered the gloves unreasonably dangerous. In her pleadings, plaintiff relied on theories of negligence, strict liability in tort, and breach of express and implied warranties. However, in this Court she relies only on breach of the implied warranty of merchantability, contending that defendant’s failure to give the mentioned warning and instructions rendered the gloves unreasonably dangerous and, therefore, unfit for the ordinary purposes for which such gloves are used. Tex. Bus. and Com.Code Ann. § 2.314(b).

The jury, in answer to special issue 8, found that the absence of warning and instructions rendered the gloves unreasonably dangerous. However, in answer to special issue 9, which inquired if the jury found that “such dangerous condition was a producing cause of the plaintiff’s injuries,” the jury answered, “We do not.” The trial court overruled plaintiff’s motion that the court disregard the answer to issue 9 and render judgment in favor of plaintiff. Plaintiff’s first 13 points complain of this ruling.

There is ample testimony to the effect that the adhesions which were the source of plaintiff’s troubles were caused by the introduction of corn starch into her abdominal cavity during the first operation. Defendant’s theory was that plaintiff’s condition which necessitated removal of part of her small intestine was a “talc granuloma” which was the sole cause of her condition. According to defendant, during an earlier operation, when surgical gloves were treated with talc, talcum powder was introduced into plaintiff’s body, and the adhesions were the result of the presence of the non-ab-sorbable talc. The state of the testimony is accurately and tersely summarized by plaintiff in her brief, under the heading, “Who killed Cock Robin?” as follows: “The starch powder did it said the plaintiff’s experts. The talc powder did it, said the defendants’ experts.”

It is, then, clear that the evidence did not establish as a matter of law that plaintiff’s condition was caused by starch. Nor can it be said that the jury’s negative answer to the causation issue is so contrary to the overwhelming weight and preponderance of the evidence as to be manifestly wrong and unjust. The sharp conflict in the evidence merely created an issue of fact which the jury resolved in favor of defendant.

Plaintiff’s next contention supporting its argument that the trial court erred in not disregarding the jury’s negative answer to special issue 9 (relating to causation) and rendering judgment for plaintiff requires a consideration of the jury’s answers to special issues 10 and 10—A.

In answer to special issue 10, which inquired whether plaintiff’s adhesions and obstruction of the bowel were the result of an “abreaction,” the jury answered, “No.” Special issue 10-A inquired whether the second operation (removal of part of small intestine) “was necessitated by a talc gran-uloma?” The jury answered this issue in the negative. It should be pointed out that these issues were framed in a manner which placed on defendant the burden of proving that the bowel obstruction and adhesions were the result of an abreaction (special issue 10), and that the second operation was made necessary by “talc granuloma.” (Special issue 10-A.)

Plaintiff argues that, under the testimony, there were only three possible causes of her condition: (1) abreaction, (2) talc granu-loma, (3) starch granuloma. Plaintiff then insists that since the verdict eliminated two of the only three possible causes (abreaction, by its answer to special issue 10, and talc granuloma by its answer to special issue 10-A), it follows necessarily that plaintiff’s injury resulted from starch gran-uloma.

This argument is without merit. In the first place, it misinterprets the jury’s answers to issues 10 and 10-A. The “No” answer to the inquiry, “Do you find, from a preponderance of the evidence, that Delia Garcia Simms’ obstruction of the bowel and adhesions discovered in the May 14, 1970, surgery was the result of an abreaction?” is not a finding that such condition was not the result of an abreaction. The negative answer is no more than a refusal by the jury to find from a preponderance of the evidence that plaintiff’s condition was the result of an abreaction. City of Beaumont v. Graham, 441 S.W.2d 829, 835 (Tex.1969). As submitted, special issue 10 placed the burden of proving the fact of abreaction on defendant. Whether the trial court erroneously placed such burden on defendant is irrelevant. The negative answer, when related to the form in which the issue was submitted, merely means that defendant failed to persuade the jury of the existence of the fact of abreaction. C. & R. Transport, Inc. v. Campbell, 406 S.W.2d 191, 194 (Tex.1966).

The same is true of the jury’s answer to special issue 10-A. This issue inquired whether the jury found from a preponderance of the evidence, that the second operation “was necessitated by a talc granulo-ma?” The answer, “We do not,” is not a finding that the preponderance of the evidence established the fact that a talc granu-loma was not the cause of the second operation.

The verdict, then, cannot be interpreted as embodying findings that plaintiff’s problems were not the result of an abreaction or of talc granuloma.

In the second place, plaintiff’s argument completely overlooks the fact that the jury answered “We do not” to the inquiry, contained in special issue 9, whether the jury found, from a preponderance of the evidence, that the dangerous condition of the gloves was a producing cause of plaintiff’s injuries. Whether plaintiff sought recovery because of negligence, breach of warranty, or a theory of strict liability in tort, the burden was on her to prove that her injury resulted from a defect in the product. 1 Hursh & Bailey, American Law of Products Liability § 1.29 (2d ed. 1974). Plaintiff simply failed to obtain the necessary affirmative response to special issue 9.

Plaintiff’s argument to the effect that since the record discloses only three possible causes; i. e., talc granuloma, abreaction, or starch granuloma, the jury’s failure to find that her condition was caused either by abreaction or talc granuloma conclusively establishes that it was the result of starch granuloma, could, with a single, although significant, change, be adapted to a defendant-oriented argument by pointing out that the jury’s failure to attribute the necessary causative effect of starch granuloma and abreaction conclusively establishes that plaintiff’s condition was caused by talc granuloma. Or, defendant could just as plausibly argue that the “elimination” of starch granuloma and talc granuloma as causes conclusively establishes that plaintiff’s condition was the result of abreaction, the only other possibility.

The simple truth is that plaintiff’s failure to obtain an affirmative answer to special issue 9 precludes her recovery without reference to the answers to special issues 10 and 10-A.

Plaintiff urges that there were no pleadings to support the submission of special issue 9. The contention is clearly unsound. Plaintiff had the burden of pleading and proving the causal connection between the defect in the product and her injury. That is, causation'was an essential factual element of her cause of action. Defendant’s general denial was sufficient to insure that the burden of persuasion remained on plaintiff. Further, (defendant’s pleading to the effect that plaintiff’s injury was solely the result of a talc granuloma clearly constituted a denial of plaintiff’s claim that the starch on the gloves was a cause of plaintiff’s injury. The pleadings clearly raised the issue of causation, and as we have already pointed out, the evidence raised the issue. Since Rule 277, Tex.R. Civ.P., requires the submission of all issues raised by the pleadings and the evidence, we know of no theory which would have justified the failure to submit special issue 9. It cannot be argued that the causation issue was not a “controlling” issue “made by the written pleadings and the evidence . .” Rule 279 clearly required the submission of such issue.

We cannot agree with plaintiff’s contention that special issue 9 is immaterial. We have no quarrel with plaintiff’s assertion to the effect that there may be more than one producing cause of an injury. But this elementary rule in no way supports the conclusion that it was not necessary, in order for plaintiff to recover, that she obtain an affirmative finding that the defect in the gloves was a “concurring cause.” It was not incumbent on her to establish that the defect was “the producing cause.” But she had the burden of establishing that it was “a producing cause.” Clark v. Waggoner, 452 S.W.2d 437, 439 (Tex.1970), relied on by plaintiff, clearly holds that it was plaintiff’s burden to prove that the defect was “a” cause of her injury.

A jury’s answer to a special issue may be disregarded only when it has no support in the evidence or when it is immaterial. C. & R. Transport, Inc., v. Campbell, supra, at 194. The negative answer to special issue 9 cannot be said to lack support in the evidence or, more properly stated, it cannot be said that the required causal connection was established as a matter of law. The causation issue is not immaterial in the sense that it should not have been submitted. Even if it be assumed that the answers to special issues 10 and 10-A are in fatal conflict with the answer to special issue 9, such conflict would not justify disregarding the answer to special issue 9. 4 McDonald, Texas Civil Practice § 17.31, p. 204 (1971 rev.).

The trial court did not err in refusing to disregard the answer to special issue 9. Plaintiff’s points 1 through 13 are overruled.

Points 14 through 18 complain of the exclusion of evidence proffered by plaintiff.

In considering the evidentiary points, we must bear in mind that the jury found, in response to special issue 8, that the gloves, because of the absence of the warning and instructions concerning removal of the powder, were unreasonably dangerous, and that, in answer to special issue 10, the jury failed to find that plaintiff’s condition was the result of an abreaction. The finding that the product was unreasonably dangerous must be interpreted in the light of the special instruction accompanying special issue 8 to the effect that (1) the manufacturer of surgical gloves must keep reasonably informed of scientific knowledge and discoveries “in its field”; (2) such manufacturer is under a duty to impart such knowledge to those who, without such information, would be unable to protect themselves from the dangerous propensities of the product; (3) if the manufacturer knows, or, by the application of “reasonable [sic] developed human skill and foresight,” should have known that the product might cause harm to sensitive users, failure to warn of the dangers renders the product defective and not reasonably fit for its intended use; and (4) if the manufacturer knew, or should have known, that its product might be dangerous to only some persons, even though few in number as compared to the total number of users, it has a duty to warn of the danger.

Insofar as the excluded evidence tended to show (1) that the gloves, in the condition in which they were marketed, created an unreasonable risk of harm; (2) that defendant knew of such danger and was under a duty to warn potential users; and (3) that such duty to warn existed even though the product would cause harm only to a few users, if plaintiff knew, or should have known, of such danger to sensitive users, its exclusion was rendered harmless by the finding that the gloves were unreasonably dangerous. Insofar as the excluded testimony tended to show that plaintiff’s injury was not the result of an unusual reaction resulting from plaintiff’s unusual sensitivity to starch, the exclusion of such evidence was rendered harmless by the fact that the jury answered the “abreaction” issue favorably to plaintiff.

Therefore, the cases relied on by plaintiff, which do no more than hold that the excluded evidence would be admissible as tending to show that the product was unreasonably dangerous; that defendant is chargeable with knowledge of such danger and was under a duty to warn users of such danger; and that plaintiff’s injury was not the result of her unusual sensitivity to corn starch, are considered irrelevant.

Plaintiff’s complaint concerns the exclusion of (1) medical journals published subsequent to the time she underwent the operation for the removal of the cyst on May 5, 1970; (2) a letter or memorandum issued by Southwest Texas Methodist Hospital, where plaintiff underwent the operation, warning of the danger of starch and specifying the manner in which surgical gloves should be cleaned, written and published after plaintiff’s operation; (3) the package in which defendant is currently encasing its surgical gloves, which now bears a warning of the danger and instructions for removing the starch from the gloves; and (4) a regulation adopted by the Federal Drug Administration, more than a year after plaintiff’s operation, requiring that the packages in which such surgical gloves are enclosed have printed on them a warning and instructions for the removal of the starch before the gloves are used.

Plaintiff contends that such excluded items of evidence were admissible for the purpose of establishing producing cause and for impeachment purposes.

It is well settled that an expert witness may properly be cross-examined, for impeachment purposes, by reading to him excerpts from treatises, books and scientific journals and asking him whether he agrees or disagrees with the statements contained in such writings. In Texas, even this use of such documents is limited to publications which the witness recognizes as authoritative. Bowles v. Bourdon, 148 Tex. 1, 219 S.W.2d 779 (1949). However, it is equally well settled that the statements contained in such writings are, nevertheless, hearsay and inadmissible as original evidence for the purpose of establishing the existence of the facts affirmed in such publications. 1 McCormick and Ray, Texas Law of Evidence § 790 (1956).

Plaintiff’s brief makes it clear that such writings were attempted to be introduced not only for impeachment purposes but also as proof that the starch powder was the cause of her injuries. Even if we assume that excerpts from such publications were properly admissible for impeachment purposes, since plaintiff sought the admission of such evidence for an impermissible purpose, the trial court’s exclusionary ruling must be upheld. O'Brien v. Hilburn, 22 Tex. 616 (1858); Singleton v. Carmichael, 305 S.W.2d 379 (Tex.Civ.App.—Houston 1957, writ ref’d n. r. e.).

On January 31, 1973, more than 20 months after plaintiff’s operation, the hospital issued a memorandum concerning the establishment of a “written policy for sterile gloving.” This letter or memorandum warned that introduction of starch into an open wound might cause granuloma and contained instructions for the cleaning of surgical gloves prior to surgery.

Plaintiff offered the written memorandum “against the hospital.” Since plaintiff does not complain in this Court of that portion of the judgment absolving the hospital from liability, the error, if any, in excluding the evidence cannot be considered prejudicial from the viewpoint of plaintiff’s claim against the supplier of the gloves.

The warning posted by the hospital in its operating room more than a year after the operation was offered in evidence for the purpose of impeaching the administrator of the hospital. This witness, in answer to the question, “You have posted regulations before in the operating rooms on gloves, before?” answered “No.” He was then shown the warning and asked if it “wasn’t something” he had posted in the operating rooms “regarding the cleaning of gloves.” He replied that it was not. In answer to a question inquiring whether the warning “was never posted in your operating room,” he answered, “Not May 5th, or before 1970, because that was not printed or published by the—,” at which point the witness was interrupted by plaintiff’s counsel. Plaintiff then tendered the warning as evidence for “The limited purpose of impeachment of a hostile and adverse witness, that they do not give any instructions to doctors, ever.” The evidence was excluded.

The conclusion is inescapable that plaintiff was attempting to impeach the witness with reference to a matter which is entirely collateral to her cause of action against the supplier of the gloves, who is the only defendant who is a party to plaintiff’s appeal.

Some time after plaintiff’s operation on May 5, 1970, defendant began placing the following on the packages in which its surgical gloves are enclosed: “CAUTION: After donning, remove powder by wiping gloves thoroughly with a sterile wet sponge, sterile wet towel or other effective method.”

Evidence. of safety or precautionary methods taken by a defendant after an accident or injury is almost universally excluded as evidence of negligence for reasons of policy. It is felt that the admission of such evidence would have the result of discouraging subsequent repairs or precautions. 2 McCormick and Ray, op. cit. § 1151, p. 43. It is true that such evidence may be admitted for other purposes, such as “rebutting evidence, to explain other evidence in the case, to show that the defect could have been remedied, to show the effect that an obstruction, which was afterward removed, had in causing the injury.” Id.

The evidence establishes beyond dispute that the defect in the product (absence of the warning) could have been remedied easily and at little expense to defendant. There was, therefore, no dispute that the defect could have been easily remedied. By their finding that the absence of the warning rendered the gloves unreasonably dangerous, the jury demonstrated a conviction that the elimination of the danger was feasible. Insofar as the evidence tended to show the feasibility of remedying the defect, the jury’s findings of unreasonable danger renders the error, if any, in excluding the evidence, harmless.

Admission of evidence of subsequent precautionary or safety measures for the purpose of establishing causation would discourage the taking of remedial measures after the accident as effectively as will the reception of such evidence on the issue of negligence. It is true that in Texas & N. O. R. Co. v. Anderson, 61 S.W. 424 (Tex.Civ. App. — Galveston 1901, no writ), evidence of subsequent repairs was admitted for the purpose of showing that the condition remedied was the cause of plaintiff’s injury. In that case plaintiff sought to recover damages to his land resulting from the overflow of water from defendant’s ditch. Plaintiff was allowed to show that after an obstruction was removed from the ditch the water receded and no further injury resulted. The Court said that such evidence tended to prove that the obstruction was the cause of the overflow which caused plaintiff’s injury. Under such circumstances, the result of the subsequent improvement bears an almost undeniable relationship to the question of causation. In such a case, it is the result of the subsequent repairs which is persuasive. That is, the mere making of the repairs is not received as an admission by the defendant that the defect caused the injury. In this case, plaintiff does not point to any evidence which tends to show that the placing of the warning on the glove package eliminated, or reduced to any extent, the incidence of starch granuloma.

The trial court refused to permit plaintiff to introduce into evidence a regulation promulgated by the Federal Drug Administration on May 25, 1971, slightly more than a year after plaintiff’s injury, which in effect, required that packages containing surgical gloves which had been sprayed with starch bear a warning statement and instructions for removing the powder.

The only case cited by plaintiff concerning the admissibility of a rule adopted by a regulatory agency subsequent to the injury of which plaintiff complains is Curtis v. District of Columbia, 124 U.S.App.D.C. 241, 363 F.2d 973 (1966). In that ease plaintiff was injured when he tripped over the hinge of a vault which protruded above the surface of a public sidewalk. It was held that evidence of a subsequently adopted building code regulation, requiring that such hinges be constructed so as to be flush with the pavement was admissible as evidence of negligence, since it constitutes a standard of care against which the jury could measure the defendant’s conduct.

Curtis clearly did not involve the question of admissibility of a governmental regulation which defendant has violated, since the regulation there in question was not in force at the time of the accident. The same is true here. The actual holding in Curtis, therefore, is that a governmental regulation which defendant has not violated is nevertheless admissible as some evidence of the standard of care in a sufficiently analogous situation. There is some authority supporting this view. Edmonds, Inc. v. Vojka, 118 U.S.App.D.C. 109, 332 F.2d 309 (1964); Marshall v. Lyon, 77 Cal.App.2d 905, 177 P.2d 44 (1947); 2 Harper and James, Law of Torts § 17.6, p. 1006 (1956). However, the great weight of authority is to the contrary. Mechler v. McMahon, 184 Minn. 476, 239 N.W. 605 (1931); Meadors v. Huffman, 191 Okl. 204, 127 P.2d 806 (1942); Garthe v. Ruppert, 264 N.Y. 290, 190 N.E. 643 (1934); Florentine v. Church of Our Lady of Mt. Carmel, 340 F.2d 239 (2d Cir. 1965); 2 Wigmore, Evidence § 461, pp. 500-01 (3d ed. 1940). That is, the prevailing view is that provisions of a regulatory measure are inadmissible absent a showing of its application to the situation in question and a clear violation of the regulation. Even then, in jurisdictions where, as in Texas, the violation of the statute constitutes negligence per se, the statute itself is not introduced in evidence. In Texas, the jury is merely asked if defendant engaged in the conduct which is violative of the statute, and the statute has the effect of dispensing with the necessity for inquiring whether such conduct constituted negligence.

It has been pointed out that, with reference to the issue of causation, evidence of subsequent precautionary measures at most merely indicates that the defendant now admits that the condition in question was capable of causing the injury. 2 McCormick and Ray, op. cit. § 1151, p. 43. This inference is, perhaps, justified when the defendant voluntarily decided to take the precautionary measure. But the inference is not justified when the decision concerning the wisdom or desirability of such precautionary measures is made by a person other than defendant.

We know of no case where it has been held that governmental regulations adopted subsequent to the injury in question have been held admissible as evidence of causation.

Plaintiffs points 14-18 are without merit. In view of our holding, it is unnecessary to discuss defendant’s cross-points.

The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: CORNELIUS, Justice.

license: Public Domain

text:
    Dan FINCH et ux., Appellants, v. TEXAS EMPLOYERS’ INSURANCE ASSOCIATION, Appellee.
    No. 8347.
    Court of Civil Appeals of Texas, Texarkana.
    March 9, 1976.
    Rehearing Denied April 13, 1976.

      John E. Agnew, Carter, Jones, Magee, Rudberg, Moss & Mayes, Dallas, for appellants.
    Wayne Pearson, Burford, Ryburn & Ford, Dallas, for appellee.
   CORNELIUS, Justice.

This is a breach of contract suit brought by Dan Finch and wife against Texas Employers’ Insurance Association based upon a compromise settlement agreement which paid Finch $40,194.93 in workmen’s compensation and medical benefits for total and permanent disability, and provided that Texas Employers’ would “. . . pay for all future hospital and medical expenses, if any, . . . authorized in advance by the association.” Finch alleged that Texas Employers’ refused to pay for certain nursing services he had incurred since the settlement, and that it committed an anticipatory breach of the agreement by refusing to authorize future services and by repudiating any obligation on its part to pay for them. Finch sought to recover the value of nursing services previously performed by his wife, and damages amounting to the value of future nursing services for the remainder of his life.

After settling his workmen’s compensation claim with Texas Employers’, Finch had brought a third party tort action against Big Chief Drilling Company, alleging it was responsible for his injuries. As a result of that suit, Finch was awarded $250,000.00, and out of that award Texas Employers’ was reimbursed for the initial benefits it had paid Finch pursuant to the settlement agreement.

The trial court granted Texas Employers’ motion for summary judgment, which contended that Finch could not recover because (1) by reason of Sec. 6a of Article 8307, Tex.Rev.Civ.Stat.Ann., Finch’s recovery in the third party tort action waived his right to future medical expenses under the compromise settlement agreement, or in the alternative, Texas Employers’ was subro-gated to Finch’s third party recovery to the extent that it had no liability for medical expenses until the award in the third party action was first used for those purposes, (2) no “medical services” as contemplated by the compromise settlement agreement had actually been performed, and (3) no recovery could be had for medical services not yet performed.

Article 8307, Sec. 6a, as amended in 1973, provides that the net amount recovered from a third party action shall be applied to reimburse the association for past benefits and medical expenses it has paid, and any amount in excess of those benefits shall be treated as an advance against future benefit payments of compensation which the injured party is entitled to receive. But the events pertinent to this cause of action occurred prior to the 1973 amendment when Sec. 6a provided in part as follows:

“Where the injury . . . was caused under circumstances creating a legal liability in some person other than the subscriber to pay damages in respect thereof, the employé may at his option proceed either at law against that person . or against the association . but not against both, and if he elects to proceed at law against the person other than the subscriber, then he shall not be entitled to compensation under this law. If compensation be claimed under this law by the injured employé then the association shall be subrogated to the rights of the injured employé in so far as may be necessary and may enforce . the liability of said other person, and in case the association recovers a sum greater than that paid or assumed by the association to the employé . then out of the sum so recovered the association shall reimburse itself and pay said cost and the excess so recovered shall be paid to the injured employé . .

There is no equitable right of subrogation as to workmen’s compensation benefits paid by an insurance carrier. Fidelity Union Casualty Co. v. Texas Power & Light Co., 35 S.W.2d 782 (Tex.Civ.App. Dallas 1931, writ ref’d); Fox v. Dallas Hotel Co., 111 Tex. 461, 240 S.W. 517 (1922); Aetna Life Ins. Co. v. Otis Elevator, 204 S.W. 376 (Tex.Civ.App. Galveston 1918, writ ref’d). Therefore, Texas Employers’ subrogation rights as to future medical expenses in this case must be found, if at all, in Sec. 6a as it existed prior to the 1973 amendment. In construing that section our Supreme Court said in Watson v. Glen Falls Insurance Company, 505 S.W.2d 793 (Tex.1974):

“The legislators ... did not draft the statute with future medical payments in mind; the objective was to protect the compensation carrier’s subro-ga tion rights to the initial award. Medical payments were nonexistent in 1917.”
“A harmonizing of the statute leaves only one conclusion; the Legislature did not intend to include future medical payments within the election provision of Section 6a. The recent amendment to Section 6a bears this out. Section 6a now considers any excess over the initial compensation claim recovered in a third-party action as an advance against future medical payments.” (emphasis supplied).

Since Sec. 6a prior to its amendment did not apply to future medical expenses, Finch’s recovery in the third party action did not waive his right to them, and Texas Employers’ subrogation rights extended only to the initial benefits paid under the terms of the compromise settlement agreement.

As shown by the motions for summary judgment and supporting proof, there are genuine issues of fact as to whether nursing services of the character covered by the compromise settlement agreement had actually been performed, and whether Texas Employers’ had refused to authorize future services in such a way as would constitute an anticipatory breach of its agreement, for which damages would be recoverable. See 13 Tex.Jur.2d, Contracts, Sec. 309, p. 562; Sec. 315, p. 572; Sec. 316, p. 574. Summary judgment was therefore improper.

The judgment of the trial court is reversed and the cause is remanded for trial on the merits.


author: BREWSTER, Justice.

text:
    W. T. FAIL, Appellant, v. Charles L. LEE et al., Appellees.
    No. 17703.
    Court of Civil Appeals of Texas, Fort Worth.
    March 12, 1976.

      Brown & Hill, and Barrett Keith Brown, Sherman, for appellant.
    Stark & Barnhart, Inc., and Barry D. Moore, Gainesville, for appellees.
   OPINION

BREWSTER, Justice.

The trial court sustained the motion for summary judgment filed herein by the two plaintiffs, Charles L. Lee and James R. Green, and the defendant, W. T. Fail, has appealed.

The two plaintiffs originally sued Fail alleging that the parties owned an oil and gas lease jointly (describing the land involved). They therein sought a partition of the oil and gas leasehold estate, the appointment of a receiver to carry out the partition through sale and division of the proceeds, and they asked for an accounting and an inventory of all jointly owned property that Fail had possession of.

The plaintiffs later filed an amended petition in the case alleging that the above referred to suit had been filed and that while said case was pending Fail’s attorney of record, Barrett Keith Brown, submitted to Richard S. Stark, the plaintiff’s attorney of record, an offer in writing by letter dated March 10, 1975, in which defendant offered to settle all issues in controversy in the partition and accounting suit. Mr. Brown’s written offer of settlement, signed by that attorney, that is referred. to is as follows:

“March 10, 1975
“Mr. Richard S. Stark
Stark and Barnhart, Attorneys
P. 0. Box 656
Gainesville, Texas 76240
“Re: Charles L. Lee, et al
vs. W. T. Fail, et al
“Dear Mr. Stark:
“In connection with the above captioned matter, I submit the following for the consideration of you and your clients in full and final settlement of all claims of Charles L. Lee and James R. Green against W. T. Fail.
“(1) In consideration of an assignment of Messrs. Lee and Green’s entire working interest in the Harrell Lease in Cooke County, Texas, and further consideration of Messrs. Lee and Green’s payment of one-half (¾⅞) of all court costs incurred in the above matter, Mr. Fail will pay to Messrs. Lee and Green $2,500.00 each and all claims made by Mr. Fail against Messrs. Lee and Green resulting from the operation of the Harrell Lease in Cooke County, Texas will be released. Further, the assignment mentioned above will be effective with the first runs on the first day of March, 1975, and Messrs. Lee and Green shall receive their pro-rata share of runs as of March 1, 1975.
“(2) This offer is conditioned upon its acceptance by Messrs. Lee and Green and the exchange of the necessary instruments to effectuate the above offer and the agreement by Messrs. Lee and Green to pay one-half (½) of all court costs incurred in this matter prior to March 25, 1975.
“Please submit this offer to your clients and let me hear from you at your earliest possible convenience.
“Yours very truly,
“(Signed) Keith Brown
“Barrett Keith Brown”

The amended petition alleged that the attorney, Brown, was authorized by Fail to make that written offer to plaintiffs, and that the plaintiffs accepted such offer by fully performing and by furnishing to Fail all of the things that the written offer had required him to furnish before March 25, 1975. Plaintiff alleged that after the offer was made and after it had been accepted by plaintiffs the defendant thereafter breached the contract by refusing to carry out its part of the settlement agreement.

In plaintiffs’ amended petition they prayed for a decree of specific performance against the defendant, Fail.

While the case was pending the plaintiffs moved for a summary judgment requiring specific performance by Fail and the trial court rendered the requested summary judgment. This appeal is from that decree.

Fail’s only point of error is that the trial court erred in granting the summary judgment because the affidavit filed by Fail in opposition to the motion for summary judgment raised fact issues.

Defendant’s argument made thereunder shows that the sole issue presented by the point is: Is the defendant’s affidavit filed in opposition to plaintiffs’ motion for summary judgment sufficient to raise the following fact issue, to-wit: did defendant’s attorney have the authority to submit the offer of settlement that he submitted to plaintiffs?

We overrule defendant’s point of error and affirm the trial court’s decree.

The record reveals that the only pleading that was ever filed in the case by the defendant, Fail, consisted of an unsworn general denial and nothing else. The answer was signed by Keith Brown, attorney for Fail.

The action sued on by plaintiffs in their first amended petition is founded, at least in part, upon the written offer of settlement which plaintiffs charged that Fail’s attorney executed, with Fail’s authorization, and submitted to them through their attorney. There was no allegation that such written offer had been either lost or destroyed.

Rule 93(h), T.R.C.P. provides in part as follows: “Certain Pleas To Be Verified — A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.

“(h) Denial of the execution by himself or by his authority of any instrument in writing, upon which any pleading is founded, in whole or in part, and charged to have been executed by him or by his authority, and not alleged to be lost or destroyed. . In the absence of such a sworn plea, the instrument shall be received in evidence as fully proved.”

Our analysis of the contention urged in defendant’s brief is that he claims that plaintiffs did not prove as a matter of law at the summary judgment hearing their right to a summary judgment, because they did not establish as a matter of law that defendant’s attorney of record, Brown, was authorized by the defendant to make the offer of settlement contained in the letter above set out. They contend first that plaintiffs offered no summary judgment evidence that tends to show such authority, and that even if plaintiffs did offer some evidence at the summary judgment hearing tending to establish Brown’s authority to make the settlement offer, that the contents of Fail’s affidavit that he filed in opposition to the plaintiffs’ motion for summary judgment created a fact issue as to that question.

We disagree with those contentions.

Because the defendant failed to file a pleading prior to the summary judgment hearing denying under oath that his attorney of record, Keith Brown, was authorized by him to execute the written offer of settlement on which plaintiffs’ action is in part founded, the authority of the attorney to act for the defendant, Fail, in making such written settlement offer was admitted. Rule 93(h), T.R.C.P.; Public Service Life Insurance Company v. Corpus, 494 S.W.2d 200 (Tex.Civ.App., Tyler, 1973, no writ hist.); Red Fish Boat Company v. Jarvis Press, Inc., 361 S.W.2d 588 (Tex.Civ.App., Dallas, 1962, no writ hist.); and 2 Tex. Jur.2d 680, Agency, Sec. 224, Note 5 for additional cases holding the same way.

Because of Fail’s failure to file herein the denial under oath required by Rule 93(h), there was no fact issue involved at the summary judgment hearing as to whether or not Fail’s attorney of record had authority from him to make the offer of settlement. Seale v. Major Oil Company, 428 S.W.2d 867 (Tex.Civ.App., Eastland, 1968, no writ hist.).

For the" reasons stated it was not necessary that plaintiffs prove at the summary judgment hearing the authority of Brown to make the written offer of settlement involved.

To prove their case at the summary judgment hearing, under the facts involved here, it was only necessary that the plaintiffs prove the contents of the written offer of settlement sued on, that the plaintiffs accepted such offer of settlement, that they fully performed their part of the contract, that the defendant, Fail, thereafter breached the contract by refusing to perform his part of the agreement.

This proof the plaintiffs made by means of the affidavit of attorney Stark, together with its attachments. The evidence contained in Stark’s affidavit, although he is an interested witness, is clear, direct and positive and there are no circumstances in evidence tending to discredit or impeach such evidence. In addition, the defendant had the means and opportunity of disproving the contents of Stark’s affidavit, if such contents were not true, and failed to do so. In fact, in the defendant’s affidavit filed in opposition to the motion for summary judgment, the defendant admitted that his attorney made and transmitted the written offer of settlement to Stark and in effect admitted his refusal to perform the contract. He made no effort to deny that plaintiffs had performed their part of the agreement. Defendant also admitted that he had authorized his attorney to submit to plaintiffs an offer of settlement.

With the record in this state, we hold that the plaintiffs proved their case as a matter of law at the summary judgment hearing. Great American R. Ins. Co. v. San Antonio PI. Sup. Co., 391 S.W.2d 41 (Tex. Sup., 1965).

What we have said disposes of the single point of error urged on this appeal by the defendant, but we will go further.

When a motion for summary judgment is supported by affidavit or other extrinsic evidence sufficient on its face to establish facts, which, if proven at the trial, would entitle movant to an instructed verdict, the opponent must show opposing evi-dentiary data which will raise an issue as to a material fact, or justify his inability to do so, or the summary judgment will be granted. McDonald Texas Civil Practice, Sec. 17.26.8, Subsec. (iv), and Gulf, Colorado & Santa Fe Railway Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492 (1958).

Defendant contends that the affidavit he filed in opposition to the motion for summary judgment contained a denial that he had authorized his attorney, Brown, to make the settlement offer that was actually submitted, and that this was a material fact.

At no place in his affidavit does Fail swear that his attorney had not been authorized by him to make a settlement offer to plaintiffs in his behalf. Fail states in effect, in the third paragraph of his affidavit, that he had instructed his attorney, Brown, to make plaintiffs an offer of settlement, but that the offer of settlement actually made by Brown to plaintiffs was not the offer that Fail had intended to make, and that the mistake and omission in the offer that was actually made was the result of a misunderstanding between defendant and his lawyer. The record shows that plaintiffs accepted the offer made and fully performed their part of the contract before defendant made any attempt to withdraw the offer.

The facts stated in defendant’s affidavit state no defense to plaintiffs’ cause of action.

The general rule governing liability of a principal for the acts of his agent is: the principal will be bound to third persons by the act of his agent whenever the agent’s acts are within the scope of his authority. 2 Tex.Jur.2d 618, Agency, Sec. 173, Note 7; Lane v. Security Title & Trust Company, 382 S.W .2d 326 (Tex.Civ.App., Dallas, 1964, writ ref., n. r. e.); and Woods-Taylor & Co. v. Smith, 288 S.W. 1090 (Tex. Civ.App., Beaumont, 1926, no writ hist.).

“. . . if an agent’s conduct is within the scope of his apparent authority, his principal will be deemed to be bound thereby, even though the agent’s conduct may violate certain private instructions given by the principal to the agent only. . the rule may also be applied to prevent a principal from denying liability in a wide variety of other situations.” 2 Tex.Jur.2d 491, Agency, Sec. 49; United Federal Life Insurance Company v. Cloud, 370 S.W.2d 147 (Tex.Civ.App., Eastland, 1963, no writ hist.); Dungan v. Utica Mutual Insurance Company, 331 S.W.2d 496 (Tex.Civ.App., Waco, 1960, writ ref.); and Jarbe Oil Company v. Birdwell & Son Drilling Co., 335 S.W.2d 394 (Tex.Civ.App., Eastland, 1960, writ ref., n. r. e.).

The rule just stated was applied to dispose of a case involving a situation similar to that involved here. In Townsend, Townsend & Co. v. South Plains Monument Co., 257 S.W. 648 (Tex.Civ.App., Amarillo, 1924, no writ hist.), the appellants had sent their agent to Plainview for the express purpose of adjusting a dispute that it had with the appellees. The appellees had no knowledge of any limitations that appellant had placed on the agent’s authority to complete the adjustment or settlement. That court held: “Undisclosed instructions to an agent do not bind the opposite party, and limitations put upon an agent by the principal in making a settlement are not binding upon the opposite party, where the settlement is made within the apparent scope of his authority. (Citing cases.)”

In defendant’s affidavit he admitted that he had instructed his attorney to submit an offer of settlement to the plaintiffs. In submitting the offer of settlement defendant’s attorney, Brown, was acting within the scope of his apparent authority and we hold that under the authorities cited defendant became legally bound to the contract when the offer was accepted and the contract performed by plaintiff before the offer was withdrawn.

The law is that every reasonable presumption will be indulged in favor of a settlement made by an attorney duly employed. Williams v. Nolan, 58 Tex. 708 (1883); Dunlap v. Villareal, 91 S.W.2d 1124 (Tex.Civ.App., San Antonio, 1936, no writ hist.); Walden v. Sanger, 250 S.W.2d 312 (Tex.Civ.App., Austin, 1952, no writ hist.); and Applewhite v. Sessions, 131 S.W.2d 301 (Tex.Civ.App., El Paso, 1939, error dism.).

Defendant in his affidavit states that after his attorney, Brown, made to plaintiffs the offer of settlement he later told Brown that such offer was not the one that he had intended and was not as Pail had instructed Brown. He also states therein that his attorney, Brown, later told Stark of the mistake and told him that the offer as transmitted was not as Fail had intended the offer to be. The affidavit also states that Fail later told the plaintiffs that the offer was not the offer intended to be made by Pail and that the offer transmitted to Stark by his attorney, Brown, was not authorized by Fail.

It will be noted that the defendant at no place in his affidavit swears as a fact that he did not authorize his attorney, Brown, to make to plaintiffs the very offer of settlement that he did submit to them. It appears that the affidavit was carefully drawn to keep from having defendant swear outright to that fact, which was the material fact here, had there been an issue on it.

In the affidavit presented to the trial court, defendant made affidavit only as to statements that he and his attorney allegedly made to others about the offer at times when neither of them were under oath. Such matters are not material to a decision of the case.

It is also noted that no time is given in defendant’s affidavit as to when these statements were claimed to have been made, but plaintiffs’ proof makes it clear that no such statements were made until after plaintiffs had accepted the offer and fully performed the contract.

In defendant’s affidavit he stated in substance that the offer involved was made in an attempt to settle a lawsuit between the parties, but it was not the offer that Fail intended to make to the plaintiffs and that the mistake and omission in the proposed offer was the result of a misunderstanding between Fail and his attorney, Brown.

Defendant made no effort to swear to facts that would have enlightened the trial court on the question of whether or not there was in fact a mistake or misunderstanding between Fail and his attorney. In that respect he only stated the conclusion. Defendant’s attorney that submitted the offer is still his attorney in the case and he made no affidavit for the consideration of the trial court.

The following is from the Restatement of the Law of Contracts, Sec. 503—Mistakes by Only One Party; . . . . “A mistake of only one party that forms the basis on which he enters into a transaction does not of itself render the transaction voidable; . . Comment: a. There is a contract formed by the acceptance of an offer even though the offer is made under a mistake or fails to express what the offeror intends.”

A mistake by only one party to the agreement where it is not induced by the acts of the other party will not usually constitute grounds for relief. Morris v. Millers Mutual Fire Insurance Co. of Texas, 343 S.W.2d 269 (Tex.Civ.App., Fort Worth, 1961, no writ hist.).

An offer becomes a binding contract when it is accepted by the other party according to its terms. After it is accepted it cannot be withdrawn. Rowson v. Fuller, 230 S.W.2d 355 (Tex.Civ.App., Dallas, 1950, writ ref., n. r. e.).

We hold that the affidavit filed by defendant, Fail, in opposition to plaintiffs’ motion for summary judgment was insufficient to raise an issue as to any legally material fact, even if the authority question had been in issue at the summary judgment hearing. The summary judgment was properly granted.

A case holding that an agreement such as the one involved here can be enforced by specific performance is Stewart v. Mathes, 528 S.W.2d 116 (Tex.Civ.App., Beaumont, 1975).

We affirm the trial court’s decree.


author: SHANNON, Justice.

text:
    Gertrude WILLIAMS et al., Appellants, v. VETERAN’S LAND BOARD of the State of Texas et al., Appellees.
    No. 12397.
    Court of Civil Appeals of Texas, Austin.
    March 17, 1976.
    Rehearing Denied April 28, 1976.
    John G. Angelí, Seguin, for appellants.
    Aubrey H. Fielder, Lockhart, for appel-lees.
   SHANNON, Justice.

This is an appeal from the judgment of the district court of Caldwell County dismissing a suit for want of prosecution. We will reverse that judgment.

In April, 1968, appellant, Gertrude Williams, and others, filed a trespass to try title suit concerning the title to eighty-one acres near Luling. The appellees, the Veteran’s Land Board of the State of Texas, J. M. Fairchild, Lyda M. Fairchild, and Monroe Fairchild, made timely appearance.

By the summer of 1975, appellants had made no effort to bring the case to trial. The only activity generated in the case thereafter was at the instance of the trial court. In June of 1975, the district clerk notified appellants’ counsel that the suit had been transferred to the “drop docket,” and that the suit would be dismissed on July 18, unless good cause was shown. The time for dismissal was extended to August 18, and, thereafter, a hearing was set for September 5, on a plea in bar asserted by appellees.

On September 5, appellees’ counsel appeared, but appellants’ counsel did not. Nevertheless, a number of the appellants were present in the courtroom. One appellant, Nan Huddleston, told the court that their attorney had informed appellants the preceding afternoon that “. . .he just couldn’t be here.”

After a colloquy among Nan Huddleston, counsel for appellees, and the court, the court dismissed the case for want of prosecution. The order dismissing the suit was signed on September 5, 1975. Thereafter appellants obtained other counsel who prepared and filed on October 1,1975, a motion for reinstatement. On October 2, 1975, the district court denied the motion to reinstate without a hearing.

The authority to dismiss for want of prosecution is found in Tex.R.Civ.P. 165a. That rule provides in part that, “A case may be dismissed for want of prosecution on failure of any party seeking affirmative relief or his attorney to appear for any hearing or trial [docket call] of which he had notice . . . ” (Emphasis added) As previously mentioned, the appellants were present for the hearing.

We recognize that the passage of over seven years and four months presents a substantial impediment to the full and fair determination of the facts in the case. See Southern Pacific Transportation Company v. Stoot, 530 S.W.2d 930 (Tex.1975). We also appreciate the difficulties of the district court in attempting to bring the case to trial. Nevertheless, the parties were present at trial, and according to their motion to reinstate, the absence of their counsel was not at their choice. Under those circumstances, Rule 165a did not authorize a dismissal for want of prosecution.

The judgment is reversed and the cause is . remanded to the district court.

Reversed and Remanded.

      . Rule 165a was amended effective January 1, 1976. The phrase “or docket call” was deleted in the quoted sentence.


author: PHILLIPS, Chief Justice.

text:
    Ann Ingrum FAWCETT, Appellant, v. Robert P. INGRUM, Jr., Individually and as Independent Executor of the Estate of Robert P. Ingrum, Sr., Appellee.
    No. 12404.
    Court of Civil Appeals of Texas, Austin.
    March 24, 1976.
    Rehearing Denied April 14, 1976.

      Elwood Cluck, Peter M. Wolverton, Cluck, Austin & Johnson, San Antonio, for appellant.
    John T. Anderson, Graves, Dougherty, Hearon, Moody & Garwood, Austin, for ap-pellee.
   PHILLIPS, Chief Justice.

This is a declaratory judgment suit which was brought by appellant, Ann Ingrum Fawcett, seeking a determination of certain questions involving construction and interpretation of the wills of Addiebel Ingrum and Robert P. Ingrum, Sr., and additional questions relating to the administration of the estate of Robert P. Ingrum, Sr.

The district court granted summary judgment to appellee, Robert P. Ingrum, Jr., ruling that: there was.no genuine issue of material fact involved in the construction of Article II of the will of Robert P. Ingrum, Sr.; and, that Article II of the will of Robert P. Ingram, Sr., disposed of all of his interest in the Addiebel Allen Ingrum Ranch, regardless of whether such interests were interests in realty or personalty and regardless of whether such interests were legal or equitable in nature. We affirm this judgment.

Addiebel Ingrum died testate on July 11, 1970. She was survived by two sons and four grandchildren, namely, her son Allen Ingrum and his children, Raquet Box and John Ingrum, and her son Robert P. Ing-rum, Sr., and his children, Ann Ingrum Fawcett, who is appellant herein, and Robert P. Ingrum, Jr., appellee herein.

The principal asset of the estate of Addie-bel Ingrum is a 4,589-acre ranch located six miles west of Uvalde in Uvalde County, Texas. Addiebel Ingrum devised this ranch to her son, Allen Ingrum, as trustee of a testamentary trust established by Article III of her will. The trustee was instructed to hold the ranch intact for at least ten years after Addiebel Ingrum’s death and thereafter was given authority to sell the ranch at his discretion and distribute the proceeds equally among the six beneficiaries of the trust, namely Allen Ingrum, John Ingrum, Raquet Box, Robert P. Ingrum, Sr., Robert P. Ingrum, Jr. (appellee), and Ann Ingrum Fawcett (appellant).

Allen Ingrum, as executor and trustee of the Addiebel Ingrum estate, has heretofore sought and obtained a declaratory judgment authorizing the sale of the ranch, notwithstanding the ten-year provision against alienation contained in Article III of Addiebel Ingrum’s will. See Ingrum v. Ingrum, 520 S.W.2d 585 (Tex.Civ.App.1975, writ ref. n. r. e.). However, the ranch had not sold at the time of the summary judgment proceeding.

While the aforesaid litigation was pending, Robert P. Ingrum, Sr., died on April 22, 1973, leaving a will dated September 25, 1972, which was admitted to probate in due order. Both of his children, Robert P. Ing-rum, Jr., and Ann Ingrum Fawcett, appel-lee and appellant herein, respectively, survived him.

The provisions of Article III of Addiebel Ingrum’s will pertinent to this case are as follows:

“Article III
“ * * * the afore appointed Trustee, ALLEN INGRUM, shall have the full right and power in his sole discretion to sell and convey the aforesaid ranch upon [such] terms as he may consider advisable by conveying the fee simple title to said ranch and shall distribute the income proceeds from the sale after all expenses of the sale have been deducted, equally among the six beneficiaries of this Trust.
Provided further that should any of the beneficiaries of this trust be not living at the time the said ranch is sold and the proceeds of the sale are to be divided among the beneficiaries, that such share or shares of such deceased person or persons are to pass to and vest in said persons or persons heirs, as provided by his or her Last Will and Testament or in the event that such person dies intestate his or her share is to pass to his or her heirs at law as provided for by the laws of decent [sic] and distribution of the State of Texas.”

The provisions of the will of Robert P. Ingrum, Sr., which are pertinent to this case are as follows:

“II.
In the event my son, ROBERT P. ING-RUM, JR., shall survive me, I give, devise and bequeath unto my son, ROBERT P. INGRUM, JR., all of my right, title, interest and estate in and to all of the real estate now owned by me or which shall be hereafter acquired, lying and situated in Uvalde County, Texas, and particularly 470 acres of land known as the ‘Iron Mistress’ * * * together with all improvements situated thereon, and all of my interest in the ADDIEBEL ALLEN INGRUM RANCH composed of 4,588.14 acres of land, together with all improvements situated thereon, forever.
* * * * * *
“IV.
All the rest, residue and remainder of my estate of every description and wherever situated, especially including all personal property owned by CIRCLE I RANCH COMPANY, I give, devise and bequeath unto my children, ROBERT P. INGRUM, JR. and ANN INGRUM FAWCETT, to share and share alike, if they shall survive me * * * ”

Appellant is before us on five points of error which assert that the trial court erred in holding that under the terms of the will of Robert P. Ingrum, Sr., the beneficial interest provided for his benefit in the testamentary trust created under Article III of the will of Addiebel Ingrum passed to and vested in Robert P. Ingrum, Jr., to the exclusion of appellant; and that the trial court erred in holding that there was no genuine issue of material fact involved in the construction of the will of Robert P. Ingrum, Sr. The remaining points pivot on the refusal of the trial court to hold that Article III of Addiebel Ingrum’s will created a power of appointment in favor of Robert P. Ingrum, Sr.

Appellant contends that the language of Article III of the will of Addiebel Ingrum, to wit: “ . . . such share or shares of such deceased person or persons are to pass to and vest in said persons or persons heirs, as provided by his or her Last Will and Testament . . . ” creates and establishes a power of appointment in favor of Robert P. Ingrum, Sr. Appellant then contends that a power of appointment is neither property nor an estate but is a mere right or power; further, that from the language of Article III of Addiebel Ingrum’s will that she intended to grant the beneficiaries of the trust the power to appoint their rights in the proceeds from the sale of the ranch and did not intend to grant her beneficiaries any interest of any kind in the realty composing the corpus of the trust. Appellant reasons further that Article III of the will in devising the fee simple title in the ranch to Allen Ingrum as trustee for six named persons, including Robert P. Ingrum, Sr., effected an equitable conversion of the ranch from an interest in realty to an interest in personalty, specifically, an interest in the proceeds from the sale of the ranch.

We can find no basis in either of the wills to support appellant’s thesis. The gist of this argument is that Ingrum, Sr., had no vested interest in the ranch, but rather only a power of appointment over his share of the proceeds of its sale. We cannot agree. In our judgment, the Addiebel Ingrum will leave's the Addiebel Ingrum Ranch in trust for the benefit of six individuals for a period of ten years. The will then gives the trustee discretion to sell the ranch and directs that, if and when the ranch is sold, he pay over the proceeds of the sale equally to the six beneficiaries. It further provides that if any of the beneficiaries die prior to the sale, the trustee is to pay over the proceeds to the heirs of any such beneficiary.

Addiebel Ingrum’s will created an express trust for the benefit of the named beneficiaries, among them, Robert P. Ing-rum, Sr. By that instrument legal title to the ranch vested in the trustee and the equitable title vested in the beneficiaries. Rekdahl v. Long, 417 S.W.2d 387 (Tex.1967). The extent of the beneficiaries’ interest in the trust property was determined by the terms of the trust. It vested at the time of the death of the testatrix, since the beneficiaries were determined at that time. Rek-dahl, supra. Under the terms of the will, the beneficiaries, Robert P. Ingrum, Sr., among them., received full equitable title to the trust property, and could therefore pass their interests to their heirs. Schmidt v. Schmidt, 261 S.W.2d 892 (Tex.Civ.App.1953, writ ref.).

Robert P. Ingrum, Sr., was one of the named beneficiaries and his will is equally clear. In Article II of his will, he gives his son, Robert P. Ingrum, Jr., the appellee, all of his interest in the ranch. His intent is clear and we must give effect to that intent. Estes v. Estes, 267 S.W. 709 (Tex. Com.App.1924, jdgmt adopted). It makes no difference whether the interest Ingrum, Sr., gave his son was legal or equitable, realty or personalty. The will made no such distinctions. It simply gave “ .

all of my interest in the ADDIEBEL ALLEN INGRUM RANCH . . . forever.” See Schmidt, supra.

The judgment of the trial court is affirmed.

Affirmed.

      . Appellant compares this language with what she contends is similar language in Republic National Bank of Dallas v. Fredericks, 155 Tex. 79, 283 S.W.2d 39 (1955). We find this case inapplicable.

      . “ . . . should any of the beneficiaries of this trust be not living at the time the said . ranch is sold and the proceeds of the sale are to be divided among the beneficiaries, that such share or shares of such deceased person or persons are to pass to and vest in said persons or persons heirs, as provided by his or her Last Will and Testament . . . ” (Emphasis added by appellant)


author: YOUNG, Justice.

text:
    In the Matter of E. F., Appellant.
    No. 1070.
    Court of Civil Appeals of Texas, Corpus Christi.
    March 25, 1976.

      Marion Williams, Jr., Newton, Handly & Williams, Beeville, for appellant.
    William R. Pemberton, County Atty., Beeville, for appellee.
   OPINION

YOUNG, Justice.

This is an appeal from an order committing the appellant, a sixteen year old boy, to the custody of the Texas Youth Council. Appellant appeals only from the commitment order and not from the associated order adjudicating him a child who has engaged in delinquent conduct.

In two points of error, the appellant complains: (1) that there is no evidence to indicate that the child is in need of rehabilitation or that the protection of the child or the public requires disposition; (2) that a preponderance of the evidence at the adjudication hearing indicates that the child did not engage in delinquent conduct.

The trial court held separate, successive adjudication and disposition hearings as required by Tex.Family Code Ann. §§ 54.03 and 54.04 (1975). After each hearing, the trial court entered an order stating the results. The adjudication order was based on the petition alleging burglary of a store. The disposition order found, among other things, that the child is in need of rehabilitation.

About appellant’s no evidence point, we apply the usual rule that requires us to look only to the evidence favorable to the court’s holding in determining this legal sufficiency point. Humphreys v. Humphreys, 364 S.W.2d 177, 178 (Tex.Sup.1963); Hall v. Villarreal Development Corporation, 517 S.W.2d 326, 329 (Tex.Civ.App.—Corpus Cbristi 1974, writ dism’d). See also In Matter of Hartsfield, 531 S.W.2d 149, 152 (Tex. Civ.App.—Tyler 1975, no writ).

In that regard, a deputy sheriff, a city policeman, and a probation officer all testified that the appellant’s reputation for being a peaceable and law-abiding citizen was bad. • In the record is a document called a “Pre-Dispositional Report” executed by two probation officers. The trial court was entitled to consider this report under § 54.04(b) of the Family Code. That report reflects that the appellant’s school attendance was irregular and that his grades were poor to failing; that he had no hobbies nor school club activities. Further, the report shows the appellant’s lack of remorse and his indifference toward his commission of the crime of burglary. We hold that the aforegoing is some evidence of the appellant’s need for rehabilitation.

Appellant contends further, under his first point, that disposition of him to the Texas Youth Council was an abuse of discretion by the trial court. In that respect, trial courts in juvenile proceedings are granted broad powers and discretion in determining suitable disposition of children who have been adjudicated to have engaged in delinquent conduct. In Matter of P A O, 530 S.W.2d 902, 903 (Tex.Civ.App.—Houston [1st Dist.] 1975, no writ); Dudley v. State, 219 S.W.2d 574, 575 (Tex.Civ.App.— Amarillo 1949, writ ref’d).

In the case at bar, the trial court heard legally sufficient evidence to support its finding of the appellant’s need of rehabilitation in a hearing separate, distinct and subsequent to the adjudication hearing, as provided by § 54.04(a) and (c) of the Family Code. At the conclusion of the adjudication hearing, the trial court had found that the appellant had engaged in delinquent conduct that was a violation of a penal law (burglary) of this state punishable by imprisonment or by confinement in jail under § 51.03 of the Family Code. That finding under § 54.04(d)(2) of the Family Code, and the subsequent finding of the need for rehabilitation provided the trial court with the discretion necessary to commit the appellant to the Texas Youth Council. For all of those reasons, we hold that the trial court did not abuse its discretion by committing the appellant to the Texas Youth Council. Appellant’s first point is overruled.

In his second point, the appellant asserts that a preponderance of the competent evidence indicates that he did not engage in delinquent conduct. As we have mentioned, the appellant has appealed from the commitment order arising from the disposition hearing and not from the order arising from the adjudication hearing finding him to have engaged in delinquent conduct.

Appellant’s complaints in his second point arise from alleged errors committed in the adjudication hearing. We cannot review alleged errors in the adjudication hearing on an appeal only from an order arising from the disposition hearing. In Matter of R. A. B., 525 S.W.2d 892, 894 (Tex.Civ.App.—Corpus Christi 1975, no writ). See § 56.01(c)(2) and (3) of the Texas Family Code. Appellant’s second point is overruled.

The judgment of the trial court is affirmed.


author: MOORE, Justice.

text:
    A. G. CARTER, Jr., Appellant, v. James CARTER, Appellee.
    No. 900.
    Court of Civil Appeals of Texas, Tyler.
    March 25, 1976.
    Rehearing Denied April 15, 1976.

      Jesse M. DeWare, IV, Lawrence & Lawrence, Tyler, for appellant.
    Kenneth L. Ross, Sharp, Ward & Ross, Longview, for appellee.
   MOORE, Justice.

This is an appeal from a judgment based upon a compromise settlement agreement made between the parties.

Appellee, James Carter, instituted this suit against appellant, A. G. Carter, to set aside a deed to A. G. Carter executed to him by the mother of the parties. The case was called for trial on January 27, 1975. Thereupon the attorneys for both parties announced in open court that a compromise settlement agreement had been reached. The terms of the settlement agreement were dictated and recorded by the court reporter in open court. The attorneys announced that an agreed judgment would be prepared and submitted for the court’s signature at a later date. Subsequently a dispute arose over the terms of the proposed judgment. On April 8,1975, appellee, James Carter, filed a motion for judgment. In his motion for judgment appellee requested the court to enter judgment in accordance with the settlement agreement previously dictated to the court reporter. Attached to the motion was a copy of the settlement agreement as dictated, as well as a proposed judgment. In reply, appellant, A. G. Carter, alleged that the proposed judgment submitted by appellee did not accurately reflect the settlement agreement, but even if it did, he was repudiating the agreement. The trial court conducted a hearing on appellee’s motion for judgment on May 5, 1975. At the hearing testimony was taken concerning the entry of judgment. In the course of his testimony appellant testified that he was not agreeable to the entry of the judgment because it did not represent the agreement reached by the parties. After the hearing the trial court granted appellee’s motion and the proposed judgment was signed and entered of record in the cause.

On appeal appellant urges that the trial court erred in signing appellee’s proposed judgment because the undisputed evidence shows he did not consent to the judgment at the time of its rendition. Appellant’s position basically is that the settlement agreement agreed to by the parties and dictated to the court reporter on January 27, 1975, cannot, under applicable Texas law, furnish the basis for the court’s judgment because he withdrew his consent before the judgment was rendered. Therefore, he contends that since the trial court was appraised of his withdrawal of consent prior to the rendition of judgment, the court was without authority to render judgment. We agree with appellant’s position and accordingly reverse and remand.

The law seems to be clear that a consent judgment cannot be rendered by a trial court when consent of one of the parties is lacking, even though consent may have theretofore been given by such dissenting party. The rule is that consent must exist at the very moment the trial court undertakes to make the agreement the judgment of the court. Burnaman v. Heaton, 150 Tex. 333, 240 S.W.2d 288, 291 (1951); W. L. Moody Company, Bankers v. Yarbrough, 510 S.W.2d 396, 399 (Tex.Civ. App.—Houston (1st Dist.) 1974, writ ref’d n. r. e.); Farr v. McKinzie, 477 S.W.2d 672, 676 (Tex.Civ.App. — Houston (14th Dist.) 1972, writ ref’d n. r. e.). Appellant, having made it known to the trial court that he was repudiating the settlement agreement and would not consent to a judgment based on the agreement, the action of the trial court in rendering judgment without his consent was unauthorized. Burnaman v. Heaton, supra.

Appellee undertakes to sustain the judgment on the ground that the settlement agreement was made in open court and entered of record in compliance with Rule 11, Texas Rules of Civil Procedure. Therefore he argues that the agreement became enforceable and could be made the basis of the court’s judgment. This same argument was rejected by the Supreme Court in Burnaman v. Heaton, supra. Consequently, the judgment cannot be sustained on this theory.

Appellee also undertakes to sustain the judgment by arguing that his motion for judgment did not amount to a request for the entry of a consent judgment, but rather was a plea seeking enforcement of the settlement agreement and a rendition of judgment based upon that “contract.” We do not agree with this proposition. The motion for judgment merely requested the court to render judgment in accordance with the settlement agreement. Whether the settlement agreement amounted to a valid enforceable contract was an issue not raised by the motion for judgment. The motion only requested the court to make the agreement of the parties the judgment of the court. In any event, the enforcement of the agreement as a contract would involve issues of fact which could only be determined by the court or jury in a trial on the merits.

Our reversal of the judgment is without prejudice to the right of appellee to plead the settlement agreement as a contract and seek enforcement thereof and the reversal is likewise without prejudice to appellant’s right to attempt to avoid the agreement by pleading lack of mutuality of assent or other defensive matters. These are issues that can be settled only by the court or jury in a trial of the case.

The judgment is reversed and the-cause is remanded.


author: PER CURIAM.

text:
    George Y. SHPILBERG, Appellant, v. MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., Appellee.
    Supreme Court of Kentucky.
    Jan. 23, 1976.
    Rehearing Denied May 7, 1976.

      Edward M. Steutermann, Goldberg, Steu-termann & Nicholas, Louisville, for appellant.
    Morris B. Borowitz, Borowitz, Slyn, Goldsmith & Ballard, Louisville, for appel-lee.
   PER CURIAM.

George Y. Shpilberg appeals from a judgment holding him liable to the brokerage firm of Merrill Lynch, Pierce, Fenner & Smith, in the sum of $22,300, as damages for breach of an alleged contract under which Shpilberg agreed to purchase $1,000,-000 face amount of TVA bonds at the price of $1,005 per thousand dollar bond. The circuit court made a summary determination that Shpilberg had breached the contract, and then conducted a trial on the issue of damages.

Shpilberg’s primary contention on this appeal is that the summary determination that he had breached the contract was error because there was a genuine issue of fact as to whether there was a contract in existence. He maintains that Merrill Lynch had the burden of proving that there was a contract, or at the least he was entitled to offer proof that there was no contract.

The problem grows out of the fact that the alleged contract on which Merrill Lynch sued was evidenced only by a broker’s confirmation slip which was mailed to Shpil-berg and to which he made no written objection within ten days of its receipt by him. The circuit court held that under KRS 355.8-319 (a section of the Uniform Commercial Code) the confirmation slip, not objected to in writing within ten days, established the existence of a contract, which could not be contradicted by mere testimony that the parties never had reached a firm oral agreement. Shpilberg maintains that the statute merely lifted the bar of the Statute of Frauds, and that Merrill Lynch was not relieved of the burden of proving that there was an oral contract in the terms stated in the confirmation slip, or in any event Shpilberg was entitled to offer proof that there was no oral contract.

The issue requires an interpretation of KRS 355.8-319, the language of which is:

“(1) A contract for the sale of securities is not' enforceable by way of action or defense unless
(a) there is some writing signed by the party against whom enforcement is sought or by his authorized agent or broker sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price; or
(b) delivery of the security has been accepted or payment has been made but the contract is enforceable under this provision only to the extent of such delivery or payment; or
(c) within a reasonable time a writing in confirmation of the sale or purchase and sufficient against the sender under paragraph (a) has been received by the party against whom enforcement is sought and he has failed to send written objection to its contents within ten (10) days after its receipt'; or
(d) the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract was made for sale of a stated quantity of described securities at a defined or stated price.”

Admittedly, Merrill Lynch mailed to Shpilberg a confirmation slip, signed by Merrill Lynch, describing the securities sold, stating the quantity, and stating the'price per $1,000 bond and the gross price, and he did not within ten days of receipt of the slip ' send written objections. He did, however, on the day the slip was placed in the mail and before he received it, have a telephone conversation with Merrill Lynch concerning the bond transaction. On the motion for summary judgment the showing was that his testimony would be that he told Merrill Lynch that he did not desire to make an agreement to buy the bonds, the parties not then having advanced beyond the negotiating stage, while the evidence for Merrill Lynch would be that he said he wanted to get out of his agreement to buy the bonds, which definitely had been made. Our question is whether the circuit court correctly interpreted the statute to mean that the confirmation slip, unobjected to, established the existence of the contract, not subject to contradiction by mere testimony that there was no contract.

It will be noted that the statute (as it relates to this case) provides that a contract for the sale of securities is not enforceable unless the party against whom enforcement is sought either:

1. Has signed a writing sufficient to indicate that a contract has been made for sale of a stated quantity of described securities at a defined or stated price; or
2. Within a reasonable time has received from the other party a writing that would be sufficient to bind the other party and has failed within ten days after its receipt to send written objections to its contents.

We think the clear meaning to be derived from the words of the statute is that the party who has received the writing and not objected to it is in the same legal position, as concerns enforceability, as the party who signed the writing. We cannot find in the statute any basis for holding that where the party against whom enforcement is sought is the party to whom the writing was sent, and to which he did not object, he has any greater rights than the party who signed and sent the writing.

Calamari, in The Law of Contracts, in effect agrees with our interpretation of the statute because in a footnote to Section 313, Chapter 16 of his work, on page 487, in reference to the comparable provision of section 2 — 201 of the Commercial Code (relating to sales of goods), he says that the nonobjecting receiver of the writing is in the equivalent position of having signed the writing. The official comment under Section 2 — 201 says the same thing.

We are aware that the official comment under Section 2-201 of the Commercial Code goes on to say that the only effect of the failure to give written notice of objection is to deprive the party who received the writing of the defense of the Statute of Frauds, and that the burden of persuading the trier of fact that a contract was in fact made orally prior to the sending of the written confirmation is unaffected. We are aware also of the decision of some courts interpreting Section 2-201 as the comment would indicate. See American Parts Co., Inc. v. American Arbitration Ass’n (1967), 8 Mich.App. 156, 154 N.W.2d 5; Harry Rubin & Sons, Inc. v. Consolidated Pipe Co. of America (1959), 396 Pa. 506, 143 A.2d 472. However, the comment obviously does not mean that the writing, which under the statute is required to be sufficient to “indicate that a contract has been made,” is not acceptable evidence of the fact that a contract was made. In Tripp v. Pay ’N Pak Stores, Inc. (1974), Or., 518 P.2d 1298, the court specifically held that the writing was evidence sufficient to sustain the findings of the trial court that there was a contract. The holding in Harry Rubin & Sons, supra, was to the same effect. And, of course the whole purpose of the writing required by a Statute of Frauds is to provide evidence of a contract. 72 Am.Jur.2d, Statute of Frauds, sec. 285, p. 805.

Since it appears that the writing is acceptable evidence of the existence of a contract, the question then is how conclusive evidence is it?- We think the answer must be that if the writing contains all of the essential elements of a contract, rather than being merely a skeleton memorandum, it should be treated as conclusive evidence of the existence of the contract, subject to attack only on the grounds on which a written contract may be attacked. Surely where as here, the writing recites that on a stated day the broker sold a stated quantity of clearly described securities at a stated price per unit totalling a stated gross price, with payment to be made on a stated settlement date, and the broker has signed the writing, he, if sued, would not be heard to say that there was no contract, unless he offered to explain away the writing. And the statute puts the nonobjecting receiver of the writing in the same legal position as the signer.

What we have just said is, we think, the substance of the holding in Alderson v. Francis I. Dupont & Co. (1971), Fla.App., 251 So.2d 710, where the court said that if the receiver of the writing wishes to deny the existence of the contract he must object within ten days, and if he fails to do so, the other party has the right to enforce the terms of the contract (set forth in full in a confirmation letter).

In accord is the law under the traditional Statute of Frauds. In 37 C.J.S. Frauds, Statute of § 281, p. 809, the general rule is stated to be that a memorandum sufficient under the statute may not be contradicted by parol evidence, though it may be attacked on the grounds of fraud or mistake. This means, we think, that if the writing clearly shows the existence of a contract, it is conclusive evidence of that fact to the extent that it cannot be contradicted simply by parol evidence that there was no agreement.

In the instant case the confirmation slip set forth all of the elements of a complete contract. Shpilberg did not claim by way of defense that his failure to send written objections (which put him in the equivalent position of having signed the writing) was due to fraud, mistake or other excusing cause. He simply claimed that the parties never got beyond the negotiating stage to the point of reaching a firm agreement for the sale of the bonds. In these circumstances we think the confirmation slip was entitled to be treated as conclusive evidence of the contract, warranting summary judgment for Merrill Lynch.

Shpilberg argues that the confirmation slip did not meet the requirement of the statute that it state the sale price of the securities, because the negotiations contemplated that Shpilberg would be given a margin-purchase loan. We think that this was not a matter of insufficiency of the writing, but of a variance of the writing from the terms of the oral agreement, which Shpilberg could raise only by written objection sent within the prescribed ten-day period.

This court does not find sufficient merit to warrant discussion in Shpilberg’s contention that there was an issue of fact as to a claimed breach of the contract by Merrill Lynch, and that the trial court erred in fixing the damages by reference to the market price of the bonds at the close of the market on a certain day rather than at the opening of the market on that day.

The judgment is affirmed.

All concur.


text:
    LOUISVILLE CYCLE & SUPPLY COMPANY, INC., Movant, v. Jack E. BAACH, Individually, et al., Respondents.
    Supreme Court of Kentucky.
    March 9, 1976.
    Rehearing Denied May 4, 1976.

      Stuart E. Lampe, David C. Fannin, Wyatt, Grafton & Sloss, Louisville, for movant-appellant.
    Leslie D. Aberson, Louisville, for respondent-appellee.
   PER CURIAM.

This matter is before us on a CR 65.07 motion for a temporary injunction. It is being made the subject of an opinion because the chancellor’s reason for denying relief in the trial court goes to the merits of the controversy.

The suit is on a written contract in which the defendant, Baach, agreed “that while he is in the employ of the Company [plaintiff], whether under this contract or any renewal thereof, or under a new contract or substitute contract, and for a period of eighteen months after leaving the service of the Company,” he would not do business in competition with the plaintiff in the same territory covered by him during his employment with the plaintiff.

The contract was drafted over a period of about two months from March 28 to May 14, 1968, and apparently was signed shortly after the latter date. By its terms the Company employed Baach “for a period effective as of March 11th, 1968 and terminating September 1st, 1969, to operate a division of the Company for the sale of advertising specialties, business gifts, novelties and incentive programs,” etc. It provided that upon its expiration on September 1, 1969, “said Agreement may be renewed or extended by mutual agreement of the parties for one year or for longer periods thereafter, by simple endorsement added thereto.” Baach was to receive an annual salary of $12,500 plus 25% of the net profits in excess of $12,500 from the operation of the advertising specialties division, of which division “the said Baach is in charge,” etc.

The contract was not formally renewed or extended on September 1, 1969, but Baach continued in the Company’s employment and occupied the same position and relationship until July of 1975, when he left the Company and went into business for himself in competition with it, thus precipitating this lawsuit. At some time during this interim, however, Baach had become dissatisfied with the compensation arrangement, and by mutual agreement it was changed from a salary plus 25% of net profits to a salary plus 2lh% of gross sales. With particular reference to the interim between September 1, 1969, and July of 1975 Baach testified as follows:

Q. “Now, is there any question — you heard Mr. Lipski testify that you were continuously employed there up until the first of July of this year?
A. “I was employed as of — I don’t know the exact specified date in September. As far as I was concerned it was on a contingent day to day basis, I had no contractual arrangement.
Q. “Mr. Baach, Louisville Cycle did agree to pay you a salary after that September date that you have talked about?
A. “Yes, I received a salary.
Q. “You did agree to continue to work? As a matter of fact you did go on doing the work?
A. “Yes, I continued to work, but not under any contract.
Q. “You had an oral agreement with Mr. Lipski that you would go on and sell articles for him, didn’t you?
A. “There was no oral agreement at all. I continued to work, but there was no oral agreement ever made.
Q. “What happened, Mr. Baach, when you asked for a raise in compensation?
A. “At which time?
Q. “Tell me all the times.
A. “Many too numerous to elaborate, sir.
Q. “How many times were you successful? Let’s put it that way.
A. “I think once, to my knowledge, sir.
Q. “Mr. Lipski explained that; he raised your salary some, and agreed to give you one and a half percent of gross sales?
A. “Yes.
Q. “He agreed to do that?
A. “Sir?
Q. “He agreed to do that?
A. “Yes, sir.
Q. “And you agreed to accept it, didn’t you?
A. “I agreed to accept it.
Q. “And you went on working under those terms?
A. “Yes, sir, I was paid.”

Generally speaking, “it is well settled that if an employee’s covenant not to engage in competition with his employer or former employer ... is valid and reasonable, equity will assume jurisdiction to enjoin its breach by the employee.” 42 Am.Jur.2d, Injunctions, § 115; Crowell v. Woodruff, Ky., 245 S.W.2d 447, 449 (1952).

Three volumes of testimony and numerous exhibits'were introduced in connection with the Company’s motion for a temporary injunction. They disclose, essentially, that in 1968 Baach was sole proprietor of a business enterprise different from and much smaller than that in which the Company was engaged. He and the principal owner of the Company were friends. They decided that it would be to their mutual advantage to combine the enterprises. The result was that on or about March 11, 1968, Baach’s business was merged with that of the Company and Baach became an employe of the Company in charge of the phase of its operations that had formerly been his own independent business. The details of their business arrangement were finalized and formalized by the written contract of May, 1968. In 1975 Baach decided to get out and resume his independent enterprise, competing with the Company and seeking to take from it as many as possible of the customers whose accounts he had served while in the Company’s employment. Some of the personnel he had had under his supervision during that employment also left the Company and went with him, thus necessitating the Company’s securing new employes in order to continue in the phase of its business that had been brought to it by Baach in 1968.

There is nothing in the record thus far produced to suggest that the non-competition agreement embraced in the 1968 contract was unreasonable. Hence it is enforceable by injunction if it is still in force. The chancellor held, however, that because the employer-employe relationship existing after September 1, 1969, was terminable at will by either party the Company has no cause of action for relief under the non-competition clause of the 1968 contract. We quote from the chancellor’s written opinion as follows:

“Throughout these proceedings plaintiff has based his [its] claim for injunction and damages on the May 1968 contract. To prevail the original provisions of the agreement must be enforceable under the terms of a ‘hiring at will.’ The Court does not believe that a ‘hiring at will’ is an enforceable contract. This argument of course assumes the original agreement is still enforceable. The Court is of the opinion that under none of those arguments is plaintiff entitled to any of the relief he [it] seeks in his [its] complaint.”

Presumably, what the chancellor meant by reference to hiring at will as not enforceable is that such a contract is not breached by a unilateral termination and, of course, could not be kept alive by the equitable remedy of specific performance. It is nevertheless a “contract” under which rights and obligations exist prior to its termination, and for breach of which there is a remedy at law. Fundamentally, “The relationship of master and servant or employer and employee is contractual in nature.” 53 Am.Jur.2d, Master and Servant, § 14.

What is sought to be specifically enforced in this case, however, is not the employment agreement as it existed at the time of its termination in July of 1975, but the non-competition clause contained in the written contract of May, 1968. That clause covered the period of 18 months following cessation of the employment relationship existing either by virtue of the May 1968 contract or by virtue of any new or substitute contract. The only significant issue, therefore, is . whether the oral understanding, or understandings, under which the employment relationship continued to exist between September 1, 1969, and July of 1975 constituted a new or substitute contract or contracts within the meaning of the 1968 contract, and it seems quite clear to us that until Baach terminated the employment he and the Company were operating under a mutual agreement that in fact and law was “a new contract or substitute contract” to which the non-competition clause of the 1968 contract remained fully applicable by its express terms.

Baach’s argument that enforcement of the non-competition clause is barred by the one-year restriction of the Statute of Frauds (KRS 371.010) apparently assumes that it must be treated as a part of the oral substitute agreement, replacing the 1968 contract in toto, but as we view it the non-competition clause of the written contract continued in full force and effect and was never replaced.

One of Baach’s contentions is that the provision of the 1968 contract to the effect that it could be renewed or extended for one year or longer “by simple endorsement added thereto” was meant to be the exclusive method by which the non-competition clause, as a part of the contract, could remain in force beyond the period of 18 months following the original termination date of September 1, 1969. We cannot so construe it. The non-competition clause clearly was aimed at the end of the employment, whether it continued under the original contract or under any substitute agreement that did not expressly or by necessary implication abrogate it.

The further argument that there was no consideration for the non-competition clause borders on the specious. It is immaterial that Baach was already at work for the Company at the time the 1968 contract was finalized and signed. Harking back to the Statute of Frauds point, for example, it was not until the agreement was reduced to writing and signed that Baach had an “enforceable” right protecting the terms of his employment in futuro (that is, until September 1, 1969). This protection alone was a valuable consideration running in his favor.

Subject to the bond requirements of CR 65.05 and 65.07(3), and subject to further order of this court, pending final judgment of the Jefferson Circuit Court in the trial proceeding the respondent, Jack E. Baach, d/b/a JEB Enterprises, is temporarily enjoined from engaging in the business of buying and selling or otherwise dealing in advertising specialties, business gifts, novelties, incentive programs or any similar activity in competition with the movant, Louisville Cycle & Supply Company, Inc., in the same territory in which he engaged in a similar business in the course of his employment with the respondent prior to July 1, 1975. The order entered by the Jefferson Circuit Court on February 2, 1976, denying such relief is vacated, subject to execution of reasonable bond as may be prescribed and approved by that court.

Full court sitting. All concur.