author: EVANS, Justice.

text:
    James L. RUSSELL, Appellant, v. NORTHEAST BANK, Appellee.
    No. 16514.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Aug. 7, 1975.
    Rehearing Denied Oct. 2, 1975.

      W. Timothy Lewis, Stephen Perel, Houston, for appellant.
    Ducoff & Chanon, Bernard L. Chanon, Houston, for appellee.
   EVANS, Justice.

Northeast Bank was awarded a default judgment against James L. Russell in the amount of $26,875.00 and attorney’s fees in the amount of $4,031.25 in a suit brought by Northeast Bank against Russell on a promissory note. Russell asserts the'trial court erred in overruling his timely filed motion to set aside the default judgment and for a new trial, contending that the evidence established that his failure to answer before judgment was not intentional or the result of conscious indifference but was due to mistake or accident; that he had set up a meritorious defense and that a delay would not injure Northeast Bank. He also asserts that the court erred in considering opposing testimony and evidence upon the hearing of his motion to set aside the default judgment and for new trial.

In his affidavit attached to his motion, Russell stated that he had been served with citation on September 18,1974 and immediately called the bank’s attorney whom he had known for twenty-five years. He stated that he explained to the bank’s attorney that he had an agreement with J. Felton Leake, the president, of Northeast Bank, and Herb Handley, chairman of its board of directors and a principal stockholder, whereby Handley was to pay off Russell’s note out of the funds which he owed to Russell. According to his affidavit, Russell owned 16,400 shares of stock in the bank and on April 22, 1974 Handley had agreed to purchase his stock for $4.80 per share (or a total purchase price of $78,720.00). Russell stated in his affidavit that the bank’s attorney replied that he would “hold off on the suit and wouldn’t do anything further” so that Russell could complete his agreement with Handley and the bank. He stated that relying on the attorney’s representation he proceeded to try to complete the agreement but that “the next thing” he knew, he received a postcard from the District Clerk’s office advising that the default judgment had been taken against him. He stated he then contacted his attorney and related the events to him. He further stated that between September 18, 1974, v/hen he talked to the bank’s attorney, and December 10,1974, when he received the postcard from the District Clerk, he had been in the bank on several occasions and conversed with various bank officers, but that nothing was ever said about the note or the lawsuit. He said that if he had known the attorney’s representations were untrue he would not have relied thereon and certainly would have instructed his attorney to file an answer in the suit. He said he had been a director of the bank and felt that the bank would not do anything to prejudice his rights. At the hearing on the motion, Russell testified that he had an agreement with Mr. Leake, the president of the bank, and Mr. Handley, chairman of the board, and chief executive officer of the bank, under the terms of which Handley was to purchase Russell’s stock in the bank and from the purchase price, the sum of $25,000.00 was to be paid to the bank. He further testified, however, that the president of the bank had never agreed not to collect the note from him or that he would no longer be responsible for its payment.

Over objection the attorney for the bank was permitted to testify that all conversations which he had had with Russell had occurred prior to filing suit and that he had only agreed to postpone filing of the suit for thirty days.

The trial court found that Russell’s failure to timely file answer was of his own doing and such failure did not result from representations alleged to have been made to him or from accident or mistake. The trial court also found that the Northeast Bank had not agreed to release Russell from, his obligation nor to accept another debtor in his stead. Russell attacks both the legal and factual sufficiency of these findings.

“A default judgment should be set aside and a new trial ordered in any case in which the failure of the defendant to answer before judgment was not intentional, or the result of conscious indifference on his part, but was due to a mistake or accident; provided the motion for new trial sets up a meritorious defense and is filed at a time when the granting thereof will occasion no delay or otherwise work an injury to the plaintiff.” Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939); Ivy v. Carrell, 407 S.W.2d 212, 213 (Tex. 1966).

In Beard v. McKinney, 456 S.W.2d 451, 453 (Tex.Civ.App.Houston [1st], 1970, no writ), the appellant asserted that a timely answer had not been filed on his behalf because of a breakdown in the procedure of his attorney’s office and his attorney’s reliance upon the actions of appellee’s attorney which were inconsistent with the taking of the default judgment. We indicated that in a case of this nature a “slight excuse” may constitute justification for failure to file a timely answer. Considered alone, Russell’s testimony would tend to support his contention that his failure to file timely answer was not intentional or the result of conscious indifference on his part. However, his testimony was contradicted by the testimony of the bank’s attorney who stated that their conversation had occurred prior to filing of suit and that he had only agreed to postpone filing for 30 days. The trial court was at liberty to consider such contradictory testimony and to accept it as true. Strode v. Silverman, 217 S.W.2d 454, 457 (Tex.Civ.App.-Waco, 1949, writ ref’d); Capps v. Huff, 427 S.W.2d 121 (Tex.Civ.App.-Eastland, 1968, no writ). We hold its findings are supported by the evidence and are not against the great weight and preponderance of the evidence.

We are further of the opinion that Russell failed to establish a meritorious defense to the bank’s suit. In his answer Russell pleaded only that he was not liable on the note for the reason that the bank had agreed to accept Handley as a debtor in his place and stead and that a novation was therefore created. To effect a novation by the substitute of one debtor for another and thereby release the first party, there must be an agreement to that effect between all three parties. The addition of a second obligor on the debt does not give rise to a presumption that the first has been released. Chastain v. Cooper & Reed, 152 Tex. 322, 257 S.W.2d 422 (1953).

The principal testimony offered by Russell on this point was as follows:

“Q. And wasn’t this conversation more a request on your part, a request to Mr. Leake, that when you got paid you would be able to pay the bank this money?
“A. Well, I guess you could put it that way. No it was more Mr. Leake said, ‘Whenever Handley pays you I am going to take the money out of what he pays you that you owe the bank.’ I said, ‘Fine. All right?’ He never did.
“Q. All right. He never did agree not to collect that note from you?'
“A. No, sir.
“Q. He never told you that you would not be responsible for the payment of that note in the future?
“A. No, he didn’t.”

It is clear from the record that no specific representations were made to Mr. Russell that he would be relieved of his obligation to the bank and that Mr. Handley would be substituted in his stead. On the other hand it might be inferred from his affidavit and testimony that some understanding had been reached with the bank whereby the bank would be afforded the right to intercept the proceeds of his stock sale to Hand-ley and to deduct the amount of its debt from such funds.

In Ferguson v. D. S. A., Inc., 430 S.W.2d 553 (Tex.Civ.App.-Waco, 1968, no writ), the payee of a $10,000.00 note had written a letter to the maker in which he acknowledged his understanding that the principal balance of the note was to be reduced by the sum of $2,000.00 which was to be paid by a third party. The trial court entered a take nothing summary judgment against the maker although he had stated in his affidavit filed in opposition to the motion for summary judgment, that he had not intended to release the maker from its obligation to pay the full amount of the note and that his letter merely constituted a restatement of a supposed agreement between the maker and the third party. On appeal the trial court’s judgment was affirmed on the ground that the payee had renounced his rights to the last $2,000.00 of the $10,000.00 note and had effectively discharged the maker’s liability.

In the case before us there is only parol evidence of the alleged agreement between Mr. Russell and the bank. In our opinion this evidence would not in itself support a defense based upon either novation or renunciation.

Section 3.605, Texas Business & Commerce Code, provides that the holder of an instrument “may even without consideration” discharge the obligor “by renouncing his rights by a writing signed and delivered or by surrender of the instrument to the party to be discharged.” The evidence offered on behalf of Mr. Russell does not establish a defense of renunciation under the provisions of this statute.

We recognize that an express release is not necessary to effect a discharge of an original obligation by novation and that an agreement to accept a new obligation in lieu of and in discharge of an old debt may be inferred from the acts and conduct of the parties and other facts and circumstances. In Utay v. Urbish, 433 S.W.2d 905 (Tex.Civ.App.-Dallas, 1968, writ ref’d n. r. e.), a novation was established by proof of an instrument executed by a deceased payee of the note evidencing an intent that the debt be cancelled upon her death and proof that the maker had performed under such agreement by paying the interest on the note up to the time of the payee’s death. In Tyler Company v. Bellows, 78 S.W.2d 1100 (Tex.Civ.App.-El Paso, 1935, no writ), a novation was established by proof that the payee of the note had accepted notes from a third party in discharge of the maker’s debt, had insisted upon payment from the third party and had accepted payment under the substituted notes. In those cases, however, there was evidence, either in the nature of a writing or by a showing some affirmative conduct on the part of the payee, which tended to support the inference of an agreement by payee to accept payment from a third party in discharge of the maker’s obligation. In the case before us there is no evidence tending to show that the bank did in fact collect some portion of the proceeds of the sale of Russell’s stock to Handley and, on the contrary, the inference to be gained from the evidence is that it did not effect collection.

In its findings of fact the trial court found that the bank had not agreed to release Russell from his obligation and did not agree to accept another as a debtor in his stead and as a matter of law concluded that Russell had failed to establish a prima facie showing of the existence of a meritorious defense. In our opinion the evidence presented by Russell did not establish a novation and the findings of the trial court are not against the great weight and preponderance of the evidence. Kohn v. Zaludek, 38 S.W.2d 110 (Tex.Civ.App.-Waco, 1931, no writ).

In determining the question of a meritorious defense the trial court should have considered only the affidavits and other evidence offered by Russell which prima facie showed his entitlement to a new trial and should not have considered contradictory testimony. Ivy v. Carrell, 407 S.W.2d 212, 214 (Tex.1966); Cragin v. Henderson County Oil Development Co., 280 S.W.2d 554, 555 (Tex.Civ.App.1926, judgment approved). However, the affidavit and other evidence offered by Mr. Russell in support of his motion failed to set forth sufficient facts which, considered alone, would constitute a defense to the cause of action asserted by plaintiff. Thus, the hearing of contradictory testimony was harmless under Rule 434, T.R.C.P.

The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: PEDEN, Justice.

license: Public Domain

text:
    E. Eugene PALMER, Appellant, v. FEDERAL DEPOSIT INSURANCE CORPORATION, as receiver of Sharpstown State Bank, Appellee.
    No. 16504.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Aug. 14, 1975.
    Rehearing Denied Sept. 18, 1975.

      M. Wayne Tinkler, Austin, for appellant.
    Norris Dennard, Houston, Louis Bagwell, for appellee; Baker & Botts, Houston, of counsel.
   PEDEN, Justice.

Appeal from a summary judgment entered against a co-maker of a promissory note in a suit brought by the Federal Deposit Insurance Corporation acting as receiver for Sharpstown State Bank. The F.D.I.C. had, in another suit, previously taken a judgment against John Osorio, the other co-maker of the note, but that judgment had not been satisfied. The judgment entered in the instant case provides that payment received on either judgment shall be applied to both.

In 1971 the directors of the Sharpstown State Bank placed it in the hands of the State Banking Commissioner for liquidation and the F.D.I.C. accepted the Commissioner’s tender of appointment as receiver of the bank. An inventory of the bank’s assets was filed in the 152nd District Court of Harris County, so those assets are deemed placed in the custody of that court under the provisions of Article 342-806, Vernon’s Texas Civil Statutes.

The appellant’s first point of error is that the trial court, the 129th District Court of Harris County, erred in taking jurisdiction over this case because exclusive jurisdiction oyer it is vested in the receivership court, the 152nd District Court. His second point is that the trial court erred in taking jurisdiction over this case because the 152nd District Court has entered no order authorizing its prosecution.

Appellant contends that exclusive jurisdiction over all proceedings dealing with the liquidation were vested in the 152nd Court by Article 342-806, which provides:

“Promptly after the Commissioner has acquired possession of the assets of a state bank for liquidation, he shall prepare and file in the office of the district clerk of the county of the bank’s domicile an inventory of such assets, and the clerk shall assign a cause number to the proceedings so instituted. The assets of the bank shall be deemed to be in the custody of the court in which such proceedings are pending and all suits and orders provided for under this chapter1 shall be deemed to be in the nature of interventions or orders in said proceedings, of which suits and orders said court shall have exclusive jurisdiction. Provided, however, that during vacation of such court, the judge thereof shall be authorized to enter any of such orders and to conduct any hearing incident thereto.” (emphasis added)
Art. 342-801 et seq.”

The appellant says that these provisions of Article 342-812 apply to a suit by a receiver to recover the amount due under a promissory note:

“Pursuant to the order of the district court . . . the Commissioner may compromise or compound any bad or doubtful claim held by . such bank; and may enter into any other kind or character of contract or agreement on behalf of such bank which he deems necessary or proper to the management, conservation or liquidation of its assets . . . .”

We do not consider this statute applicable to our case. The F.D.I.C., acting under authority of the Banking Commissioner, did not seek through this cause of action to “compromise or compound - any bad or doubtful claim held by such bank,” nor did it “enter into any other kind or character of contract or agreement on behalf of such bank.” It merely sued to recover the proceeds due under the terms of the note.

The F.D.I.C. argues that Art. 342-806 places only “those suits . ... provided for under this chapter” (Chapter 8 of the Banking Code) within the exclusive jurisdiction of the receivership court. We agree. And having examined all of the provisions of the statutes contained in Chapter 8, we hold that they do not place this suit under the exclusive jurisdiction of the receivership court. Art. 342-806 has the effect of placing the assets of the bank in custodia legis, but neither it nor any of the other statutes in Chapter 8 applies to suits by the receiver to recover the amount owed to the bank under a promissory note unless the receiver compromises or compounds the bank’s claim or enters into an agreement concerning such recovery. See Skillern, Closing and Liquidation of Banks in Texas, 26 Southwestern Law Journal 830 (1970). Although the author of that authoritative article apparently lists and discusses all the actions of receivers placed by the provisions of Articles 342-806 and 342-812 within the exclusive jurisdiction of the receivership court, suits by receivers to recover for banks on promissory notes are not among those included.

The nearest precedent we have found was based on slightly different statutes but similar case law. It was held in Chapman v. Seabury, 263 S.W. 1107 (Tex.Civ.App. 1924, no writ), that suits by the banking commissioner or receiver to recover on behalf of the bank are not within the exclusive jurisdiction and venue of the district court of the county where the bank is domiciled, but are subject to the general venue statutes.

We overrule the appellant’s first two points.

Appellant’s third point of error is: “The court erred in granting the motion for summary judgment in that appellant’s answer and affidavit opposing motion for summary judgment raise genuine issues as to material facts, as well as questions of law not raised by said motion for summary judgment.” Appellant’s argument under this point consists of a statement that his answer “raises various defenses” and that the “summary judgment does not touch upon all of these issues,” plus citation of a case holding that the movant must meet its burden of proof.

This point of error, even when considered with the argument made under it, is too general to call our attention to any error relied on, so it does not require our attention. Rule 418, Texas Rules of Civil Procedure. Further, the “various defenses” to which he refers in argument under this point are the subject of his fourth and fifth points (collateral estoppel and necessary parties).

In those points the appellant says that the trial court erred in granting the appel-lee’s motion for summary judgment in that (4) the pleadings establish that by a prior suit on the same cause of action, appellee was estopped from maintaining this suit and (5) there was a fundamental and fatal defect of parties in both the suits brought by the appellee on the same cause of action.

Taking the latter point first, we hold that there was no defect in the parties to the suit. One co-maker of a promissory note is not an indispensable or necessary party to an action against the other; one principal obligor on a note may be sued either alone or jointly with the other principal obligor. Art. 1986, Vernon’s Texas Civil Statutes; Swinford v. Allied Finance Co. of Casa View, 424 S.W.2d 298 (Tex.Civ.App.1968, writ dis., cert. denied, 393 U.S. 923, 89 S.Ct. 253, 21 L.Ed.2d 259, 1968); Shield v. First Coleman Nat. Bank of Coleman, 160 S.W.2d 277 (Tex.Civ.App.1940, affirmed 140 Tex. 117, 166 S.W.2d 688, 1942). See also Lang v. Bass, 374 S.W.2d 900 (Tex.Civ.App.1964, no writ).

Under his fourth point the appellant says that the F.D.I.C. was barred by the doctrine of collateral estoppel from prosecuting this case.

A party and those in privity with him are barred by collateral estoppel from relitigation in a subsequent action of fact issues actually litigated and essential to the prior judgment. Benson v. Wanda Petroleum Co., 468 S.W.2d 361 (Tex.1971); Atchley v. Superior Oil Co., 482 S.W.2d 883 (Tex.Civ.App.1972, writ ref. n.r.e.).

The appellant was neither a party to the prior suit by the F.D.I.C. against Osorio nor was he in privity to a party. Even if the doctrine of collateral estoppel was available, it would not help the appellant. The finding of liability against Osorio and in favor of the appellee on the note in the prior suit would bar relitigation of that issue in subsequent suits involving the ap-pellee.

The judgment of the trial court is affirmed.


author: CHADICK, Chief Justice.

text:
    Grady O. STAGGERS, Appellant, v. Sam F. VAUGHAN III, Appellee.
    No. 8299.
    Court of Civil Appeals of Texas, Texarkana.
    Aug. 19, 1975.
    Rehearing Denied Sept. 16, 1975.

      Paul W. Anderson, Marshall, L. F. Burke, Longview, for appellant.
    Robert M. Parker, Nichols & Parker, Longview, for appellee.
   CHADICK, Chief Justice.

Sam F. Vaughan III, as plaintiff, sued defendant, Grady 0. Staggers to establish a partner relationship between them for an accounting and to recover damages occasioned by Staggers’ alleged breach of the relationship and conversion of partnership assets. The judgment of the trial court awarding Vaughan damages is reversed and the case is remanded for a new trial.

I

Appellant Staggers’ points of error raise three issues for discussion. They are:

1. Whether prosecution of the action is debarred by a statute of limitations;
2. Whether prosecution of the suit should have been abated or suspended pending an accounting between the partners and winding up of partnership affairs; and
3. Whether there is evidence that would support the judgment of the trial court on the basis that a trial of issues outside the written pleadings occurred and the trial judge impliedly found Staggers’ fraudulent conduct in the formation of the partnership entitled Vaughan to recover damages.

II

In his original petition, filed June 20, 1969, Vaughan alleged that he and Staggers “entered into a business, relationship in February 1967” and followed the allegation with a statement of his claims against Staggers. In an amended pleading, filed September 30, 1974, Vaughan alleged he and Staggers entered into a business relationship that “constituted a partnership” and followed with substantially the same allegations set out in his original petition.

Appellant Staggers asserts the original petition is vague and at best stated a “maverick action” for conversion and debt, and so construing it argues that the pleading shows Vaughan’s claim is debarred by the two year statute of limitation (Tex.Rev.Civ. Stat.Ann. art. 5526). Simultaneously, Vaughan also argues that the amended petition alleged a partnership for the first time and constituted a new, separate and distinct cause of action. At trial time, Vaughan offered proof that he first heard of Staggers’ sale and disposition of a substantial portion of partnership cattle in November of 1968 and considered the partnership breached as of the time Staggers made the sale, April 1968, and dissolved as of the same date. Construing the amended pleading as stating a new cause of action and accepting Vaughan’s date of partnership dissolution, Staggers contends that the four year statute of limitation (Tex.Rev.Civ.Stat. Ann. art. 5527) debars prosecution of the newly plead action.

Vaughan’s claim in both the original and amended pleading is grounded in the same aggregation of facts and events. The material difference between the original and the amended is that in the first the relationship of the parties is characterized as one of business and in the second as a partnership. A claim embodied in an amendment changing facts or grounds of liability is not debarred by a plea of limitations when not wholly based upon and growing out of new transactions and occurrences distinct or different from those theretofore timely plead. Tex.Rev.Civ.Stat. Ann. art. 5539b. The cited statute relates Vaughan’s amended pleading back to the date the original petition was filed. Leonard v. Texaco, Inc., 422 S.W.2d 160 (Tex.1967); Global Corporation v. Vincent, 156 Tex. 398, 295 S.W.2d 640 (1956); Stanfield v. O’Boyle, 421 S.W.2d 745 (Tex.Civ.App. Dallas 1967, writ ref’d n. r. e,); 2 McDonald, Tex.Civ.Practice, Sec. 8.12.2 (1970); 37 Tex. Jur.2d, Limitation of Actions, Sec. 123; 171 A.L.R. 1087. Neither the two nor four year statute of limitation applies as the action was instituted within two years after Vaughan learned of the breach. Though it is deemed immaterial, the original petition, if construed as an action for conversion or debt does not show on its face, or by proof, that the claim for conversion was actionable more than two years before suit was filed or that indebtedness alleged was due and payable more than two years prior to suit.

The details of Vaughan’s amended pleadings, together with a prayer for equitable relief, are construable as an action for an accounting, as well as for other purposes. See Santleben v. Froboese, 17 Tex.Civ.App. 626, 43 S.W. 571 (1897, writ ref’d). Preliminary to trial, Staggers, by written motion, moved to dismiss Vaughan’s action because it was instituted before an accounting between the partners had been made. Thereafter in the course of the trial, when plaintiff Vaughan rested, Staggers moved by written motion for leave to file a trial amendment pleading that in the event it was determined a partnership existed, a “full, complete, accurate and detailed .accounting” of partnership affairs be made. Both motions were denied. Such action was erroneous.

The law is well settled that one partner may not sue another partner on a claim arising out of partnership business until an accounting and settlement of partnership affairs is made. Chipley v. Smith, 292 S.W. 209 (Tex.Comm’n App.1927, jdgmt. adopted); 44 Tex.Jur.2d, Partnership, Sec. 156; 68 C.J.S. Partnership § 108; 60 Am.Jur.2d, Partnership, Sec. 365. The pleadings in this case do not bring it within any of the recognized exceptions to the general rule. However, the right of a partner to maintain an action at law to vindicate legal rights growing out of agreements and transactions looking to the formation of a partnership is treated as outside the rule. In 21 A.L.R., Partners — Action At Law, page 22 it is said:

“ . . . claims arising out of agreements looking to the formation of a partnership are the subject of actions at law, but . . . such an action, in the absence of an accounting or express promise, cannot be maintained with respect to partnership transactions.”

See Tex.Rev.Civ.Stat.Ann. art. 6132b, Sec. 39; 44 Tex.Jur.2d, Partnership, Sec. 160; 68 C.J.S. Partnership, § 13b; 60 Am. Jur.2d, Partnership, Sec. 353.

The trial judge regarded the action prosecuted as one of law based on fraud arising out of agreements looking to the formation of the partnership. The trial judge’s view appears from his remarks, preserved in the record, and may be inferred from the wording of the damage issue submitted to the jury. The damage issue required the jury to find a sum that would compensate Vaughan for money paid by him for the purchase of an interest in the partnership and for capital and advances to it. No special issue or issues submitted, as a ground of recovery, fraud by Staggers in the formation of the partnership. The trial court did not make or file written findings as authorized by Rule 279. The record does not contain evidence of fraudulent conduct by Staggers at or prior to formation of the partnership contract. Findings by the trial judge in support of the judgment rendered cannot be implied in the absence of evidence tending to prove fraud in the formation of the partnership. Warren Petroleum Corp. v. Martin, 153 Tex. 465, 271 S.W.2d 410 (1954); Southern Roofing and Sheet Metal Company v. Paramount Construction Company, Inc., 512 S.W.2d 781 (Tex.Civ.App.Houston 14th Dist.1974, writ ref’d n. r. e.).

Neither does the record furnish a basis for recovery by Vaughan on a cause of action tried and proved-outside the written pleading as contemplated by Rule 67. The award of damages is not supported by the jury’s answer to special issues and no basis for judgment on implied findings by the judge is supported by evidence. A valid judgment must conform to the pleadings, the nature of the case proved and the verdict, if any; and be so framed as to give full relief. Tex.R.Civ.P. 301. The judgment does not conform with the nature of the case proved and was improvidently entered.

Ill

All points of error and counter points have been considered. The trial court judgment must be reversed and the case remanded for new trial. It is so ordered.

       The amended pleading supplanted the original petition, Tex.R.Civ.P. 65. It became Vaughan’s trial pleading.


author: EVANS, Judge.

text:
    Cathy E. BLACK et vir., Appellants, v. KROGER CO., Appellee.
    No. 16521.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Aug. 21, 1975.
    Rehearing Denied Sept. 18, 1975.

      Philip E. Hosey, Galveston, for appellants.
    Mills, Shirley, McMicken & Eckel, Alton C. Todd, Russell Serafín, Galveston, for ap-pellee.
   EVANS, Judge.

This is a suit for damages for false imprisonment.

Cathy E. Black sued her former employer, Kroger Co., alleging that she had been illegally detained by the company’s agents who had accused her of theft by failing to ring up purchases of merchandise while employed as a checker at one of its grocery stores. The jury found that Kroger through its agents, servants or employees had caused Cathy Black to be falsely imprisoned; that prior to the date in question, Cathy Black had failed to ring up purchases of merchandise and that Kroger had a reasonable belief that she had failed to record such purchases. The jury failed to find, however, that Kroger had detained Cathy Black in a reasonable manner and for a reasonable period of time for the purpose of investigating her activity. The jury found the sum of $25,700.00 would be reasonable compensation for the expenses incurred in obtaining her release and for her physical and mental suffering. The trial court entered a take nothing judgment non obstan-te veredicto.

In order to uphold the judgment of the trial court, we must determine that there was no evidence upon which the jury could have made the findings relied upon by Cathy Black. In making this determination we must consider all the testimony in the light most favorable to Cathy Black and every reasonable inference must be indulged in her favor. Douglass v. Panama, Inc., 504 S.W.2d 776 (Tex.1974).

False imprisonment in Texas is the direct restraint by one person of the physical liberty of another without adequate legal justification. Its essential elements are: (1) a wilful detention of the person; (2) a detention without authority of law; and (3) a detention without the consent of the party detained. J. C. Penney Co. v. Duran, 479 S.W.2d 374 (Tex.Civ.App.—San Antonio, 1972, writ ref’d n.r.e.). Where it is contended that the unlawful detention is brought about by threat, it must be shown that the threat was such as would inspire in the threatened person a just fear of injury to his or her person, reputation or property. Kroger Co. v. Warren, 420 S.W.2d 218 (Tex.Civ.App.—Houston [1st], 1967, no writ).

Cathy Black was eighteen years old on April 5, 1974, the date of the incident in question. She was married, had a two year old child and had completed the tenth grade of school. Her mother had worked for Kroger for thirteen or fourteen years and her husband had worked for the company for two and a half to three years. She had first started working for Kroger in 1972 when she was still in school but left in October, 1972 to have her baby. She returned to the store as a checker in April of 1973 and worked in that capacity until September, 1973 when she was transferred to work in the drug department of the store. She worked in the drug department until January, 1974, when she was again assigned duties as a checker in the grocery section.

On April 5, 1974, Cathy Black had taken her regular coffee break between noon and 12:30 p. m. and had been visiting with a friend in the back room of the store where extra merchandise was kept. When her break was over she started walking up the aisle to the front of the store where she met the store manager. He told her to come upstairs to his office with him because he needed to talk to her. They walked through two rooms into “a little room with a table and a few chairs.” The room had no windows and was just big enough for a table and four or five chairs. It had one door and could be reached only by walking through the two larger rooms. The lighting consisted of unshaded bulbs. When her employer opened the door to the small room, Cathy Black saw a man and woman sitting at the table. The man introduced himself as Roy Mathews who worked for “Kroger Security.” Cathy Black testified:

“Q. What did your boss do at that time?
“A. He left.
“Q. Then what happened?
“A. Then he told me to close the door and come sit down, then, they asked me if I knew why I was up there and I told them, ‘No,’ and they told me that they worked for Kroger Security and they said that if I wasn’t perfectly honest with him they were going to handcuff me and take me to jail.
“Q. Did they say why they were going to take you to jail?
“A. They said that they knew that I had stolen money and if I didn’t admit to that, they would handcuff me and take me to jail.
“Q. Did you think about turning around and leaving?
“A. Yes, sir.
“Q. Did you?
“A. No, I didn’t.
“Q. What kind of voice were they using when they told you this?
“A. Well, I was real scared, you know. It was enough to scare me.
“Q. Were they using a loud tone of voice or a soft tone of voice?
“A. It wasn’t soft; no, sir.
“Q. So, how long were you up there after you went in and sat down, I suppose and then — go ahead and tell the jury what happened.
“A. Okay. Well, so I sit down and he asked questions like about my family, my mother, my husband and my mother-in-law and my father-in-law. Then he said that he was going to name off the months and if I don’t name the amounts I took that month, he was going to put me in jail and it would be a long time before I saw any of my family, my little girl, you know, any of them. So he started naming off months, and I started naming off figures and even the time that I worked in the Drug Department, I just named off any figure. I didn’t even check except for, maybe one day out of the two weeks, or something like this whenever we got real busy, and he needed an extra checker up there, I’d go check for him until he could get somebody to relieve me. He just named off the months and I just named off any figures
“Q. What were your thoughts during this questioning?
“A. I just had it in my mind that, you know, that they were going to put me in jail no matter what I did and I wasn’t going to see my little girl, you know, for a long time.
“Q. What happened after he would name a month and tell you how much? Then, what would happen? Did he write up something or did he tell you to, or what?
“A. He wrote the months down on a piece of paper. Everytime I said something — He had told me what I had taken, and after he got through naming off all the months, He added everything up, and he told me that I owed him at least seven hundred dollars, and if I didn’t come up with that money, they would put me in jail, handcuff me and put me in jail and it would be a long time before I even got out, and that was on a Friday and I had gotten paid $79.25 from my paycheck. So, he said that he could take $75 from my paycheck to help pay back this money and he asked me if I had any money saved or anything like this. And I told him I was in the Credit Union, and, I believe, he asked me my account number and I told him I didn’t know. So he went downstairs and he called the Credit Union. It was money they took out of my paycheck every week to put towards savings and he went downstairs to call the Credit Union in Houston to ask them how much that I had in there. They said, I believe, it was $149 and something. So, he found out my account number and he told me to write — he told me what to write saying they could take that money out of the Credit Union and put it towards the money that I owed them.
“Q. That’s $149? Then, your paycheck, they took $75 and they left you a little bit; is that correct?
“A. Yes, sir, four dollars.
“Q. Did they take anything else from you?
“A. Yes, sir. Whenever my husband had gotten my income tax money in, we decided to open up a checking account. We had never had one before. So, we put our money in the bank in Galveston, and whenever this came around, I had two hundred and nineteen dollars in my bank account. They told me to write out a check for $200 and they would take me down to the bank to get it out.
“Q. Did they take you down to the bank?
“A. Yes, sir, they did.”

Cathy Black testified that she was inter- . rogated about one and a half hours in the small room before being taken to the bank. At the conclusion of this initial interview, she was told to sign and did sign a statement admitting that she had taken designated sums of money while she was working as a checker. Her testimony continued:

“Q. All right. Did both Mr. Mathews and this woman go with you to the bank?
“A. Yes, sir, they did.
“Q. What did they tell you to do, if anything?
“A. They told me to write out a check. They told me, at first, to write to Kroger’s a two hundred dollar check, so I did and whenever we got to the window, the lady said I would have to write it out to cash. I scratched it out, Kroger, and put cash on it and they got their money and we went back to the store.
“Q. Then what happened? What did you do next?
“A. We drove back to the store and we sat in the car and they were asking me, you know, I had better start thinking where I could get $275 more dollars. They started suggesting then that I call my mother-in-law or my mother or my brother-in-law or somebody like that to get the money from them. I told them they didn’t have that kind of money.
So, finally, I thought of my sister, Linda I thought maybe she had $275 saved somewhere. .
So, they told me to tell her I needed $275 or they were going to put me in jail, and not to bring a check, but to bring cash.”

Mrs. Linda Mabe, Mrs. Black’s sister, testified that after her sister called her, she called Kroger and spoke with the man who was with her sister. He told her that if she did not bring the money in thirty minutes they were going to take her sister to jail.

After talking to her sister on the phone Cathy Black accompanied Mr. Mathews and the woman companion back to the room in the upstairs offices. They stayed there 30 to 40 minutes more until Cathy Black’s sister arrived with the money. Mathews and the woman then gave Cathy a receipt which recited: “Received of Cathy E. Black, $550.00 cash for restitution of moneys from Kroger Company. This money was taken over a period of several months. Balance of $150.00 to come from Kroger Credit Union.”

Cathy Black denied that she had ever taken any money from Kroger Company. She said she had been complimented on her good work as an employee of the store and that she felt that she had been doing the best job that she could.

It is the position of Kroger that the facts of this case bring it within the rationale of Safeway Stores, Inc. v. Amburn, 388 S.W.2d 443 (Tex.Civ.App.— Ft. Worth, 1965, no writ). In that case the employee Amburn was loading produce crates on a grocery truck when his district manager requested that he accompany him “for the purpose of talking to somebody,” to a secluded area at the back of the store. This was a “U” shaped area about 14 feet in length and 12 feet in width and was the most private place available in the store for a conference. Amburn was there introduced to a security agent for the store. The agent told Am-burn that he had cheeked the tapes from the cash registers and that “they were all the evidence needed to send Amburn to the penitentiary.” Upon being confronted with the tapes and the alleged theft, Amburn signed a statement admitting he had been guilty of stealing $500.00 from the cash register. The trial court entered judgment on the jury’s verdict in favor of Amburn. The appellate court reversed and rendered, holding that there was no direct evidence to support the submission of issues on false imprisonment. In its opinion the court stated that while the threats of arrest and imprisonment might have invalidated Am-burn’s confession, they had no bearing on the issue of false imprisonment since there was no detention by force or threats of force. The court further concluded that its decision was not inconsistent with its prior opinion in Skillern & Sons, Inc. v. Stewart, 379 S.W.2d 687 (Tex.Civ.App.—Ft. Worth, 1964, writ ref’d n. r. e.).

In Skillern the plaintiff, Marie Stewart, a widow, had been employed for almost ten years by Skillern’s and worked in their cosmetic department. She was told by the store manager that she had to go to a meeting with him and they went to the offices of Skillern’s security agent where she was questioned about the loss of merchandise. Several weeks later she was told that she would have to return to the security agent’s office and she was taken to a small room where two strange men started “throwing accusations” at her. She said the agent beat on the desk and told her that she had stolen and insisted she write a confession. They accused her of stealing numerous items and said, “We have the goods on you. We know you stole a coffee pot. We know you have been stealing money. AH we want you to do is tell us what else you have stolen.” She was advised that she could not leave until she wrote a statement that she had stolen money and merchandise. She refused to sign, but left the room and went to a phone to call her son. She then went back to the lobby to wait for the store manager. She and the mafiager were leaving the store when the store supervisor ran out and ordered her back. The store manager took her arm, turned her around and they went back into the room where the security agent told her to sign a confession or she was going to the penitentiary, that she had no other choice. She was told that she would either sign or would never get out of there, that they were going to send her to the penitentiary. She finally signed a statement indicating her guilt. She also testified that before she signed the statement the security agent would put his hands on her shoulders when she tried to rise out of the chair. The appellate court held that the evidence supported the jury’s finding of false imprisonment and that it was not error for the trial court to refuse to give an additional instruction to the effect that the nature of the false imprisonment must be calculated to have detained the person and from which the person could not by ordinary means relieve herself.

Kroger contends that there were no threats of force or efforts to use force to detain Cathy Black on the occasion in question; that she never made any effort to leave and that there was no impediment to her leaving. Kroger points out that Cathy Black made no request to use the telephone; never asked that the security agents leave her alone; never refused to answer questions and that she voluntarily accompanied the store manager and remained in the room during the course of the interview. It argues that she voluntarily accompanied the security agents to the bank and again upon their return to the store, and that the entire episode lasted only two hours.

On cross-examination Cathy Black testified that she initially went upstairs voluntarily but that she did not leave the room during the interview because she knew she could not. She didn’t ask to call her husband or an attorney because she knew it would do no good. She answered questions because she knew she had to. She testified that she did not have fear of bodily injury but she would have “done anything” if they would just let her go home. The following testimony is indicative of her reason for not leaving the interview:

“Q. Did you think you had to stay there?
“A. Yes, sir, because they just kept on telling me if I didn’t, you know, say I had done that, that they were just going to handcuff me and put me in jail and that I wouldn’t see my little girl for a long time.
“Q. Is that why you signed that statement?
“A. Yes, sir.
“Q. Have you ever taken any money from the Kroger Store?
“A. No, sir.
“Q. Is that statement that you signed true?
“A. No, sir.
“Q. Why did you sign it, again?
“A. I felt like I had to.”

The decisions of the Ft. Worth Court of Civil Appeals in the Amburn and Skillern cases demonstrate that the relationship between the parties and the circumstances surrounding the incident have an important bearing upon the question of whether particular words or acts have inspired “a just fear of injury” to person, reputation or property. In Amburn, the produce loader, a man, was interviewed in a relatively open area on the main floor of the store. He was told only that there was evidence upon which he might be sent to the penitentiary. In Skillern, the cosmetic department employee, a widow, had been employed by the store for a considerable number of years. She was threatened over a period of time by the security agent and advised that if she did not sign the confession, she was going to the penitentiary and that she had no other choice. There was also some physical force used in detaining her in her chair during the interview, but this does not appear to have been crucial to the court’s decision.

In considering whether Cathy Black could voluntarily have terminated the interview with Kroger’s security agent without giving the statement admitting her guilt, or whether she was so overawed and intimidated by the agent’s threats that she was not able to exercise her free will, the jury was at liberty to consider not only the actual words spoken but the relative size, age, experience, sex and physical demeanor of the participants. A. Harris & Co. v. Caldwell, 276 S.W. 298 (Tex.Civ.App.—Dallas, 1925, writ dism’d). The jury could also consider the bearing which Cathy Black’s employment might have upon her submission to the authority of her employer.

There are some distinct differences in the facts of this case from those reviewed in either the Amburn or Skillern cases. Cathy Black’s mother and her husband had also been employees of Kroger and her testimony indicated that Cathy Black entertained a healthy respect for the authority of her store manager. Cathy Black was obviously without extensive business experience, having been married and worked as a clerk at Kroger’s since she was sixteen years of age. Considering the incident in the light of these circumstances, the jury was at liberty to believe Cathy Black’s testimony that she was directed by the store manager to accompany him to a small room where she was introduced to two strangers, one of whom immediately spoke to her in a loud voice and accused her of theft. This stranger whom she took to be higher in authority than the store manager threatened that he was going to put her in jail if she didn’t name off amounts she had taken for a period of months and that it would be a long time before she saw any of her family. He told her that he knew she had stolen money and that if she didn’t admit to having taken the money, they were going to handcuff her and take her to jail. She testified that she stayed in the room and admitted the theft because of the threats made by the security agent that if she did not confess, she would be handcuffed, taken to jail and would not see her daughter for a long time. From this testimony, the jury could reasonably have concluded that the threats of Kroger’s agent intimidated Cathy Black to the degree that she was unable to exercise her free will to leave the interview and that she was unreasonably detained. Newton v. Rhoads Bros., 24 S.W.2d 378 (Tex.Comm’n App.1931, holding approved).

We next consider Kroger’s cross-points that the jury’s findings with respect to the unlawful detention of Cathy Black are against the great weight and preponderance of the evidence. Kroger calls attention to the testimony of the security agents to the effect that Cathy Black voluntarily participated in the interview and admitted taking the money after being confronted with written reports tending to show that she had failed to ring up certain purchases. Although the testimony of these witnesses cast doubt on the testimony of Cathy Black, and directly contradicted her testimony that she was threatened with being handcuffed and taken to jail if she did not sign the statement admitting her guilt, the jury was entitled to accept her version of the incident. We cannot say that the jury’s findings are against the overwhelming weight and preponderance of the evidence and overrule Kroger’s cross-points 1 and 2.

Kroger’s cross-points 3 and 5 assert that the jury’s finding of damages in the amount of $25,700 was without evidentiary support and is against the great weight and preponderance of the evidence. In its cross-points 4 and 6, Kroger asserts that the damage finding is so excessive that a new trial should be granted and, alternatively, that a remittitur should be ordered.

The evidence established that Cathy Black was required to pay $700.00 to Kroger as restitution under circumstances evidencing duress and hardship. • She testified that she had not paid this money voluntarily:

“Q. . . . Did you give them your money of your own free will and accord?
“A. No, I felt like if I didn’t, they were going to take me to jail anyway, so, why not just give it to them. It didn’t mean that much.
“Q. Did you fear he was going to actually handcuff you and take you down to jail?
“A. That’s all he kept on throwing at me the whole time that we were up there.
“Q. Did you fear that he was actually going to do that?
“A. I knew he would.
“Q. Did you give permission of your own free will and accord for the Kroger Company to take your money?
“A. No, I didn’t.”

Cathy Black’s testimony tended to show that she had been extremely frightened and embarrassed by the incident and there was testimony that subsequent to the occurrence she had been a “nervous wreck,” was always worried and irritable. She testified that she no longer enjoyed the association of several of her fellow employees and the jury could have inferred from the evidence that her reputation had been damaged by the occurrence.

We are of the opinion that there was evidence to support the jury’s award of damages and that its finding is not against the great weight and preponderance of the evidence. Despite' the substantial nature of the award, we cannot say it is excessive under the circumstances of the case and the jury’s considerable discretion in such matters. Skillern & Sons v. Stewart, supra.

The trial court’s judgment is reversed and judgment rendered in favor of appellant, Cathy Black, for the sum of $25,700.00, and interest at the legal rate from and after February 7, 1975, the date of the court’s judgment below, together with costs of suit, including costs of this appeal.


author: COLEMAN, Chief Justice.

text:
    William FURLOW, Appellant, v. HARRIS COUNTY CHILD WELFARE UNIT, Appellee.
    No. 16538.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Aug. 28, 1975.

      Robert C. Finlay, III, Houston, for appellant.
    Carol S. Vance, Dist. Atty., Robert D. Ford, Asst. Dist. Atty., Houston, for appel-lee.
   COLEMAN, Chief Justice.

This is an appeal from a judgment denying appellant’s petition for adoption. We affirm.

Mr. Furlow filed his petition for the adoption of a baby girl in the Juvenile Court No. 3 of Harris County, Texas. He alleged that Harris County Child Welfare Unit is the managing conservator of the child. He asked a waiver of the requirement that the child live in the home of the petitioner for six months. He alleged that the parent-child relationship between the child and her mother and father had been terminated, and that the managing conservator refused to give its consent to the requested adoption, but that the refusal by the managing conservator is without good cause. He further alleged that he is the natural father of the child. The judgment rendered by the trial court provides:

“It is further ORDERED, ADJUDGED, AND DECREED that it is NOT in the best interest of the child, . , that Petitioner, William Fur-low, be allowed to adopt her, and said adoption is denied and refused.”

Prior to the introduction of evidence appellant made an oral motion “that this case be set aside until Mr. Furlow’s rights are terminated by the Harris County Child Welfare Department because Child Welfare Department had notice at the time of the termination of the legal mother and father regarding the rights of this child; that Mr. Furlow was the natural father of the child, and as such under Gomez case and under Texas Family Code, they should and by law should be made to terminate his rights before the child be even put up for adoption, or . . . ” This motion was denied.

The appellant’s only point of error reads:

“The Court committed reversible error when it overruled Petitioner’s motion to have Baby Girl . . . ⅛ adoption stayed until such time as Petitioner’s rights as the child’s natural father have been terminated.”

Generally, a motion for new trial is not required as a prerequisite for appeal in a non-jury case. Rule 324, Texas Rules of Civil Procedure. An exception to this general principle is contained in Rule 325 providing:

“In cases of motions for continuance, or for change of venue, or other preliminary motions made and filed in the progress of the cause, the rulings of the court thereon shall be considered as acquiesced in, unless complained of in the motion for new trial; . . Nothing in Rule 324 shall render a motion for new trial unnecessary in the instances mentioned in this Rule ...”

Appellant filed a motion for new trial, but no assignment in said motion clearly presented to the trial court his contention that the trial court erred in overruling the motion, in the nature of a plea in abatement, that the proceedings be stayed until such time as appellant’s parental rights were terminated by court decree. Appellant’s point of error must be considered as waived. Rule 374, T.R.C.P.; City of Corpus Christi v. Gregg, 155 Tex. 537, 289 S.W.2d 746 (1956).

In argument under the sole point in his brief, appellant attempts to raise a constitutional question. Section 16.02, Vernon’s Texas Codes, Ann., Family, provides that any adult is eligible to adopt a child who is a resident of this State at the time the petition for adoption is filed. Section 16.03, par. (b), supra, provides, with certain exceptions, that no petition for adoption of a child may be considered unless there has been a decree terminating the parent-child relationship as to each living parent of the child.

The word “parent” when it appears in the Family Code must be presumed to mean a parent recognized as such under the law of this State. The child in question was both conceived and born during a lawful marriage of its mother. The law presumes that the husband of the child’s mother is the child’s father. Adams v. Adams, 456 S.W.2d 222 (Tex.Civ.App.—Houston [1st Dist.], 1970, no writ history); Gravley v. Gravley, 353 S.W.2d 333 (Tex.Civ.App.—Dallas, 1961, writ dism’d). While the presumption of legitimacy is very strong, it can be rebutted. Davis v. Davis, 521 S.W.2d 603 (Tex.1975).

A child can have only two parents whose rights are recognized in law, a father and a mother. On sufficient proof that the husband of a child’s mother is not the child’s biological father, the biological father will be recognized as the parent of the child, and the husband of the child’s mother will no longer have parental rights. Paragraph (b) of Section 16.03 of the Family Code does not prevent consideration of the petition for adoption with which we are concerned in this case. There was a decree terminating the parent-child relationship as to each living parent of the child. At that time appellant had not established in any manner the fact that he was the biological parent of the child.

In this suit appellant is not seeking custody of the child except as incident to the status of an adoptive parent. The question of whether he is the biological father of the child, and as such entitled to the custody of the child is not in issue in this case. The court was required to consider his petition for adoption, and the evidence introduced in support thereof, just as it would in the case of one not claiming to be a biological father. The court entertained the petition, heard the evidence, and determined that the best interests of the child would not be served by allowing the adoption. Appellant has not attacked this finding, which required the entry of a judgment denying the adoption.

Appellant has assigned no error requiring reversal of this cause. The constitutional question, which appellant attempts to raise, does not affect the disposition of this case, and, therefore, no opinion is expressed thereon.

The judgment is affirmed.


author: McCLOUD, Chief Justice.

text:
    The STATE of Texas, Appellant, v. MONEX INTERNATIONAL, LIMITED, d/b/a Pacific Coast Coin Exchange, Appellee.
    No. 4770.
    Court of Civil Appeals of Texas, Eastland.
    Aug. 29, 1975.
    Rehearing Denied Oct. 10, 1975.

      David W. Pace, Asst. Atty. Gen., Austin, for appellant.
    Patrick E. Higginbotham, Coke & Coke, Dallas, for appellee.
   McCLOUD, Chief Justice.

The State of Texas sued to enjoin Monex International, Ltd., d/b/a, Pacific Coast Coin Exchange from selling securities alleging that Pacific had not complied with the registration requirements of the Texas Securities Act. Tex.Rev.Civ.Stat.Ann. Article 581-1 through 581-89.

In a nonjury trial the court denied the injunction and concluded that Pacific does not sell securities within the meaning of the Texas Securities Act.

The State has appealed. We affirm.

Our disposition requires only a brief discussion of the facts.

Pacific deals primarily in “bags” of United States silver coins. Each bag consists of pre-1965 U.S. Coins (before clad coins, with non-silver centers, were introduced) having a face value of $1,000. A bag of coins contains approximately 720 troy ounces of silver. At the time of trial the silver content of a bag of coins was worth approximately $3,000. Pacific sells bags of coins either on a cash or margin credit basis. A cash purchaser paying the full purchase price may take immediate delivery. A margin purchaser is entitled to delivery upon payment of the balance of the purchase price plus accrued charges. Pacific’s president testified approximately 90 percent of Pacific’s customers purchase on a “margin account” basis. Customers purchasing on margin are required to make a deposit which is approximately 35 percent of the “base” or purchase price. The margin deposit is placed in Pacific’s general account and used for the operation of the company. The court found that to cover or hedge its customer’s margin purchases of silver coins Pacific purchased as its assets, either contracts for future or forward delivery of silver coins, or bags of silver coins. The court further found that Pacific’s widest variance from a flat position (100% hedge) has never exceeded 3 percent. A buyer on margin, with Pacific’s consent, can sell his “coins” (as characterized by Pacific) or his “account balance” (as characterized by the State) back to Pacific at the then base price. The majority of Pacific’s sales are liquidated without delivery of any coins. Pacific does not guarantee to repurchase a customer’s “coins” or “account balance”, but has always repurchased when requested.

The State contends Pacific’s “margin account” investment plan constitutes an “investment contract” and is thus a security under the rule announced in Securities and Exchange Commission v. W. J. Howey Co., 328 U.S. 293, 66 S.Ct. 1100, 90 L.Ed. 1244 (1946). We do not reach this point.

While the instant appeal was pending, Congress amended the Commodity Exchange Act, 7 U.S.C.A. §§ l-17b, and enacted the Commodity Futures Trading Commission Act of 1974 which was approved October 23,1974 and became effective April 21, 1975. P.L. 93-463, 88 Stat. 1389, 1 U.S.Code Cong, and Admin.News, p. 1589 (1974).

7 U.S.C.A. § 2 (April 1975 Supp. p. 2) now provides:

“ . . . ‘commodity’ shall mean . and all other goods and articles, except onions as provided in section 13-1 of this title, and all services, rights, and interests in which contracts for future delivery are presently or in the future dealt in: Provided, That the Commission shall have exclusive jurisdiction with respect to . transactions subject to regulation by the Commission pursuant to section 15a of this title: And provided further, That, except as hereinabove provided, nothing contained in this section shall (i) supersede or limit the jurisdiction at any time conferred on the Securities and Exchange Commission or other regulatory authorities under the laws of the United States or of any State, or (ii) restrict the Securities and Exchange Commission and such other authorities from carrying out their duties and responsibilities in accordance with such laws. Nothing in this section shall supersede or limit the jurisdiction conferred on courts of the United States or any State.” (Emphasis added)

Section 15a provides:

“(a) No person shall offer to enter into, enter into, or confirm the execution of any transaction for the delivery of silver bullion, gold bullion, or bulk silver coins or bulk gold coins, pursuant to a standardized contract commonly known to the trade as a margin account, margin contract, leverage account, or leverage contract contrary to any rule, regulation, or order of the Commodity Futures Trading Commission designed to insure the financial solvency of the transaction or prevent manipulation or fraud.” (Emphasis added)

Before the 1974 amendment 7 U.S.C.A. §§ 6b and 6c designated certain acts as unlawful. Section 6c also provided:

“Nothing in this section or section 6b of this title shall be construed to impair any State law applicable to any transaction enumerated or described in such sections.”

The above quoted provision was deleted from the Commodity Futures Trading Commission Act of 1974. See 7 U.S.C.A. § 6c (February 1975, Supp. p. 1).

We think it is clear that the newly • established Commodity Futures Trading Commission now has exclusive jurisdiction to regulate Pacific’s margin account sales. Hines v. Davidowitz, 312 U.S. 52, 61 S.Ct. 399, 85 L.Ed. 581 (1940); Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 67 S.Ct. 1146, 91 L.Ed. 1447 (R 1946); See also: Conference Report — Commodity Futures Trading Commission Act of 1974, S.Rep.No.93-1194, 93rd Cong. 2nd Series 35-36, 3 U.S.Code Cong, and Admin.News, p. 5897.

The State argues that Section 412 of the Commodity Futures Trading Commission Act of 1974 expressly exempts from coverage under the Act all proceedings pending prior to enactment. We disagree.

Section 412 provides:

“Pending proceedings under existing law shall not be abated by reason of any provision of this Act but shall be disposed of pursuant to the applicable provisions of the Commodity Exchange Act, as amended, in effect prior to the effective date of the Act.”

We hold that Section 412 pertains to matters pending under the Commodity Exchange Act before the 1974 amendment. Here, the State seeks to enjoin future conduct on the part of Pacific under the Texas Securities Act. Section 412 is not applicable.

We have considered all points of error and all are overruled. The judgment of the trial court is affirmed.


author: KLINGEMAN, Justice.

text:
    Velma L. HEYWARD, Appellant, v. REPUBLIC NATIONAL LIFE INSURANCE COMPANY, Appellee.
    No. 15442.
    Court of Civil Appeals of Texas, San Antonio.
    Sept. 10, 1975.
    Rehearing Denied Oct. 1, 1975.

      Oliver S. Heard, Jr., San Antonio, Thomas S. Goggan, III, Austin, for appellant.
    Earle Cobb, Jr., Cobb, Thurmond & Bain, Inc., San Antonio, for appellee.
   KLINGEMAN, Justice.

This is a suit for accidental death benefits under a group life insurance policy. Trial was to a jury. Plaintiff, Velma L. Hey-ward, appeals from an instructed verdict that she take nothing against defendant, Republic National Life Insurance Company, entered by the trial court at the conclusion of plaintiff’s evidence. Plaintiff is the beneficiary under such policy which covered her husband, Bennie T. Heyward, who was an employee of the City of San Antonio at and before his death. Bennie T. Heyward was shot to death September 23, 1973.

The policy here involved provided life insurance coverage based upon the annual salary of the employee and also, accidental death insurance in the amount of $12,000 under an accidental death rider. It is undisputed that the life insurance benefits were paid to plaintiff by defendant, and that defendant had refused to pay the accidental death benefits.

The pertinent portions of the policy here involved are summarized as follows:

ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE

“If a Person, while insured under this Section of the Group Policy sustains an injury effected solely through external, violent and accidental means and as a result thereof, directly and independently of all other causes, suffers a loss specified below within ninety days following the date of the injury, the Company, subject to all provisions of the Group Policy, will pay (a) the Principal Sum for a loss of life; .

LIMITATIONS APPLICABLE TO ACCIDENTAL DEATH AND DISMEMBERMENT INSURANCE.

Benefits shall not be payable for any loss to which a contributing cause is
(a) self-inflicted injury or self-destruction while sane or insane; or .
(e) participation in or as the result of the commission of a felonious act.”

By one point of error, plaintiff complains that the trial court erred in granting defendant’s motion for instructed verdict at the conclusion of plaintiff’s evidence, and in entering a judgment that plaintiff take nothing because plaintiff’s evidence was sufficient to establish a prima facie case for recovery under the policy.

By counterpoints defendant asserts that the trial court correctly granted defendant’s motion for instructed verdict at the conclusion of plaintiff’s evidence because: (a) there was no evidence proving that death was effected solely through accidental means; (b) the evidence was undisputed that a contributing cause of death was the result of the commission of a felonious act; (c) the plaintiff failed to show by competent evidence Bennie Heyward sustained an injury “ ‘effected solely through external, violent and accidental means and as a result thereof, directly and independently of all other causes,’ Heyward died.”

An examination of the entire record reveals the following evidence: (a) the insurance policy, the pertinent portions of which have been heretofore summarized; (b) a certificate of death of Heyward stating that he died on September 23, 1973, and that the immediate cause of his death was a gunshot wound to the heart; (c) a medical examiner’s report made by Dr. James I. Duff, pathologist, who performed the autopsy, stating: (1) the cause and means of Heyward’s death was “multiple gunshot wounds of the chest and back with wounds of the heart, liver, right kidney, and right adrenal; . . . The manner is homicide.” (2) that Heyward was reportedly shot at his home address at 311 Vine Street at approximately 1:00 a. m. on September 23, 1973; (3) the autopsy report describes in some detail an external and internal examination, describing five bullet wounds and their locations; that there were also numerous lacerations made by a sharp object over the forehead, left face, ear and right eye; that the lacerations have sharp edges and suggest entry by knife; that there were also two deep 12 inch lacerations in the back; (4) the report concludes that Bennie Heyward died of gunshot wounds to the chest and back with wounds to the heart, liver, right kidney and right adrenal and that the manner is homicide; (d) Dr. James I. Duff, a pathologist, testified that he performed an autopsy on Heyward on September 23, 1973, and that he prepared the report above summarized; that he found five gunshot wounds in the body; and that Hey-ward actually died from loss of blood. He further testified that in his examination he recovered a single 357 Magnum bullet. He also testified that in addition to the gunshot wounds he found some lacerations that could have been caused by a knife. He testified that the manner of death was homicide and that Heyward was shot by another person. He excluded the possibility that Heyward shot himself, and he ruled out suicide, (e) John R. Kaznowski testified that he is administrative assistant to the personnel director of the City of San Antonio and that on September 23, 1973, Bennie Heyward was covered by a policy of insurance by Group Policy No. 12212 and Certificate No. 3363. (f) Portions of depositions of James Edda Anderson and Oscar M. Anderson were introduced into evidence. They both testified that they lived at 311 Vine Street, but they both refused to answer any other questions on the grounds that any answer that they might give might tend to incriminate them, (g) Velma L. Heyward testified that she was the plaintiff in the case and that she was married to Bennie Heyward; that at the time of the death of Bennie Heyward she made a claim for insurance benefits; that she received the $3,000 basic life insurance benefits but that she did not ever receive any payments under the accidental death provision. (h) Rev. Antone Dykes testified that he was an ordained minister, and that he was acquainted with Bennie Heyward during his life-time and that his reputation for being a law-abiding citizen and a peaceful person was good.

This is an appeal from an instructed verdict. The courts of this state have repeatedly held that it is error to instruct a verdict where the evidence raises any material issue. In passing upon the question of authority of the trial court to instruct a verdict, the evidence must be considered most favorably in behalf of the party against whom the verdict is instructed. A pre-emptory instruction is warranted only where the evidence is such that no other verdict should be rendered. If there is any conflicting evidence in the record of probative nature, a determination of the issue is for the jury. Air Conditioning v. Harrison-Wilson-Pearson, 151 Tex. 635, 253 S.W.2d 422 (1952); White v. White, 141 Tex. 328, 172 S.W.2d 295 (1943); 3 McDonald, Texas Civil Practice, Section 11.28.2 (1970). If such evidence is of sufficient force that reasonable minds might differ as to the ultimate conclusion to be reached, the case should be submitted to the jury. Reed v. Hester, 44 S.W.2d 1107 (Tex.Comm’n App. 1932, holding approved); Culkin v. Nieman-Marcus Company, 354 S.W.2d 397 (Tex.Civ.App.—Fort Worth 1962, writ ref’d); Devereaux v. Smith, 213 S.W.2d 170 (Tex.Civ.App.—Waco 1948, writ ref’d n. r. e.).

Under the pleadings and the applicable authorities, the burden of proof was on plaintiff to prove that the insured’s death resulted solely by accidental means; that it did not result from self-inflicted injury or self-destruction, and did not result from Heyward’s participation in or as a result of the commission of a felonious act. Plaintiff asserts that she met such burden and that when she rested her case, she had introduced sufficient evidence, coupled with such presumptions as are recognized by law to support her claim. Defendant argues that there is no way five gunshot wounds from a revolver and numerous cuts with a knife could constitute a death effected solely by “accidental means”; that under the evidence the death was either suicide, murder or justifiable homicide, and that Heyward was probably participating in a felonious act; that if an insured is intentionally killed, it cannot be an accident. We disagree.

The test of whether death is accidental is to be determined from the viewpoint of the insured and not from the viewpoint of the one who did the killing. Releford v. Reserve Life Insurance Company, 154 Tex. 228, 276 S.W.2d 517 (1955); Great American Insurance Company v. Sumner, 464 S.W.2d 212 (Tex.Civ.App.—Tyler 1971, writ ref’d n. r. e.). Ordinarily a death from an unprovoked homicide is a death resulting from accidental means within the terms of a life insurance policy. American National Insurance Company v. Garrison, 97 S.W.2d 534 (Tex.Civ.App.—Eastland 1936, . writ dism’d); National Life and Accident Insurance Company v. Hodge, 244 S.W. 863 (Tex.Civ.App.—Texarkana 1922, writ dism’d).

The rule seems to be settled that although an insured is intentionally killed or injured by another person, the death or injury is deemed to have been caused by an accident or through accidental means, where it was neither foreseen, expected nor anticipated by the insured. Anno: 49 A.L. R.3d 676, Section 3, Accident Insurance-Intentional Injury (citing numerous cases, including a great many Texas cases); Hanna v. Rio Grande National Life Insurance Company, 181 S.W.2d 908 (Tex.Civ.App.—Dallas 1944, writ ref’d).

An important query before us is how much evidence is required before the question of accidental death, and negation of the commission of a felonious act, must go to the jury. In the case before us, Hey-ward, the insured, was killed and his lips are sealed. The only purported eyewitnesses to the killing both refused to testify on the grounds of possible self-incrimination. The testimony establishes, and defendant does not dispute, that Heyward’s death did not result from a self-inflicted injury or self-destruction. Defendant also concedes, and the evidence establishes, that the death resulted from shooting by another and that such death was from external and violent means. There is testimony that Heyward was a peaceful, law-abiding man. There is no evidence whatsoever that Heyward was the aggressor in the incident in which he was killed, or that he provoked the difficulty.

In cases such as these, there are certain well-recognized presumptions. There is a presumption against suicide or self-destruction; there is also a presumption that the decedent was not engaged in the commission of a crime at the time of his death. The rule is set forth in Mutual Life Insurance Company v. Sargent, 51 F.2d 4 (5th Cir.) 1931, as follows: “Upon the matter of proof it is the law, though there are one or two authorities contra, that while the burden is upon plaintiff in cases of this kind to prove death resulting from external, violent and accidental means, proof without more that insured was killed by another raises the presumption that death was accidental, and makes a prima facie case in the absence of evidence to the contrary.” See Anno: 12 A.L.R.2d 1264, Proof of death or injury from external and violent means as supporting presumption or inference of death by accidental means within policy of insurance; Great Southern Life Insurance Company v. Watson, 343 S.W.2d 921 (Tex.Civ.App.—Amarillo 1961, writ ref’d n. r. e.); 1 C.J. 495; Fort Worth Mut. Benev. Ass’n v. Jennings, 283 S.W. 910 (Tex.Civ.App.—Eastland 1926, no writ); Massachusetts Bonding and Insurance Company v. Santee, 62 F.2d 724 (9th Cir.) 1933; Mutual Life Insurance Company v. Sargent, supra; Aetna Life Insurance Company v. Hagemyer, 53 F.2d 636 (5th. Cir.) 1931, cert. denied, 285 U.S. 542, 52 S.Ct. 314, 76 L.Ed. 934, 1932; Smith v. Mutual Life Insurance Company of New York, 31 F.2d 280, cert. denied, 279 U.S. 868, 49 S.Ct. 482, 73 L.Ed. 1005,1929; Gong v. Firemens Insurance Company, 202 Cal. App.2d 686, 21 Cal.Rptr. 110 (1962); Preferred Accident Insurance Company v. Fielding, 35 Colo. 19, 83 P. 1013 (1905); 12 A.L.R.2d 1264; 5 A.L.R.3d 10 at 76.

A case directly in point and involving similar facts and circumstances is Massachusetts Bonding and Insurance Company v. Santee, supra. This was a suit to recover the proceeds of a $7,500 accident insurance policy issued by appellant to Santee. The policy insured “ ‘against bodily injury sustained during the life of this policy directly and independently of all other causes through accidental means.’ ” The death of the insured was caused by gunshot wounds inflicted about an hour previous to his death by a revolver fired by W. B. Mahan. Mahan and his wife were the only witnesses to the killing and both refused to testify in regard to the shooting on the ground that their testimony might tend to incriminate them. There was no evidence, therefore, regarding the circumstances of the killing. It was conceded that the injuries which caused the death were external and violent and the issue was whether death occurred “through accidental means.” The court, in upholding a directed verdict for Santee, held that while the burden is upon plaintiff in cases of this kind to prove death resulted from external, violent and accidental means, that proof, without more that insured was killed by another person raises the presumption that the death was accidental and makes out a prima facie case under the accident policy.

A Texas case in point is Aetna Life Insurance Company v. Hagemyer, supra. This was a suit upon the double indemnity provision in a life insurance policy in which the insured’s death was at the hands of another. The beneficiary contended and the insurer denied that the death of the insured “ ‘resulted directly and independently of all other causes from bodily injuries effected solely through external, violent and accidental means.’ ” The only eyewitness to the killing was the slayer, Wiley Page, a nephew of the insured, who testified that he shot in self-defense and to repel his uncle’s deadly assault upon him. The insurance company requested a directed verdict which was denied by the trial court. The jury found the death to be accidental. On appeal, the insurance company contended that the trial court erred in refusing to grant an instructed verdict because:- (1) the testimony of Wiley Page standing uneontested by the testimony of any other witness must, as a matter of law, be accepted as true, and (2) if this is not so, and the self-exculpatory testimony of Page be rejected, the insurer was still entitled to its instructed verdict, because, without Page’s testimony, there was no sufficient explanation of the circumstances of the death to bring the killing within the terms of the policy. The appellate court, in rejecting such contention, said:

“Appellant cannot stand on either of these contentions. Appellees’ evidence, standing alone, made a prima facie case of accidental killing, (citations omitted) This prima facie case the • appellant did indeed rebut by the testimony of Wiley Page that he killed in self-defense, if this testimony had been accepted as true. The jury had a right, however, to examine that testimony in the light both of Page’s interest in excúlpating himself from blame, and of the discrediting and contradictory circumstances which the evidence afforded, and to accept or reject it in whole or in part as it in whole or in part commended itself to them as true.” (citations omitted)

Appellee also argues that if a person is intentionally killed by another, he died while participating in or as the result of the commission of a felonious act, and any recovery under the policy is barred by the exclusion in the policy. We do not agree. That the slayer is participating in or committing a felonious act is not enough; in order for such exclusion to be applicable, the insured must be participating in or committing a felonious act. The fact that the insured is murdered by another does not bar a recovery under the policy exclusion.

Under the evidence in the record, aided by the presumptions which the law avails to deceased, a jury could have reasonably concluded that the death was accidental within the terms and provisions of the policy. Reasonable minds could have differed as to whether or not Heyward’s death occurred as the result of participation in or the commission of a felonious act. The trial court erred in granting an instructed verdict. The judgment is reversed and remanded to the trial court for a new trial.

      . A recent Texas case, Great American Reserve Insurance Company v. Sumner, supra, involved a suit for recovery of the proceeds of an insurance policy insuring against accidental death. The insured was killed while allegedly engaged in an act of sexual intercourse with the assailant’s wife. The basic question was whether or not the insured died as the result of an accident. The trial court entered judgment for the beneficiary, which was affirmed by the appellate court, stating:
      “Thus when the evidence is viewed in a light most favorable to the finding, the killing of deceased cannot be said to be the natural and probable consequence of the means which produced it. There is nothing in the crime of adultery, although a violation of the law of the land and a great moral wrong, which in its essence is calculated to produce the death of the adulterer. Under some circumstances it may be the occasion of the death of the adulterer, but his death is not the natural and legitimate consequence of the adultery itself . . . we do not believe it can be said that the deceased should have reasonably anticipated such violent consequence by reason of his conduct.”