author: O’QUINN, Justice.

text:
    Bob BULLOCK, Comptroller of Public Accounts, et al., Appellants, v. ELECTRO-SCIENCE INVESTORS, INC., et al., Appellees.
    No. 12340.
    Court of Civil Appeals of Texas, Austin.
    Feb. 18, 1976.
    John L. Hill, Atty. Gen., Gordon C. Cass, Asst. Atty. Gen., Austin, for appellants.
    Richard L. Jackson, Johnson, Bromberg, Leeds & Riggs, Dallas, for appellees.
   O’QUINN, Justice.

Electro-Science Investors, Inc., and three other interested corporations brought this suit in July of 1974 to recover $6,779.64 in corporate franchise taxes paid to the State of Texas under protest.

This appeal is from the third of a series of judgments, beginning with the first judgment in district court entered July 10, 1968. Judgment in 1968 was entered after consolidation in trial court of three cases involving identical issues, heard by the court without a jury.

In that action Electro-Science and the other appellants in this appeal sought recovery of $97,820.86 plus interest, and the trial court awarded judgment for the taxpayers, and directed refund of the taxes paid under protest. (441 S.W.2d 249, post)

On appeal from that judgment this Court reversed the judgment of the district court and entered judgment that the taxpayers take nothing. Calvert et al. v. Capital Southwest Corporation et al., 441 S.W.2d 247 (Tex.Civ.App., Austin 1969, writ ref. n. r. e., app. dism’d, 397 U.S. 321, 90 S.Ct. 1120, 25 L.Ed.2d 336).

Prior to consolidation of the causes and entry of judgment in July of 1968 Electro-Science and its associates, in Cause No. 127,416, moved to sever from other aspects of the case certain issues pertaining to two specified tax periods. Plaintiffs contended that (1) in one period the Comptroller had employed a wrong method of computation resulting in an excess payment of $9,842.79 and (2) in the other period an overpayment had been made in the sum of $6,743.70.

The trial court ordered these issues severed for later trial in Cause No. 127,416A, and in the judgment of 1968 affirmed its order of severance, after directing the Comptroller “to issue and deliver . warrants ... to cover the refunds from the Suspense Account of the State Treasury in the amount of $97,820.86” to the Electro-Science group.

In Cause No. 127,146A, the severed action, the corporate taxpayers moved, in August of 1973, for summary judgment “as prayed for in their pleadings,” and the State also moved for summary judgment. The trial court, on November 9, 1973, denied the State’s motion and granted the motion of Electro-Science and awarded judgment for $9,842.79, the sum claimed by the taxpayers to be due them by reason of a wrong calculation by the Comptroller.

For reasons not disclosed by the record or by the briefs filed on appeal, the issue as to overpayment in a different tax period, in the amount of $6,743.70, was not presented to the trial court and the judgment did not purport to deal with this sum. Judgment for $9,842.79 was affirmed by this Court in 1974. Calvert et al. v. Electro-Science Investors, Inc. et al., 509 S.W.2d 700 (Tex.Civ.App., Austin, no writ).

Electro-Science and its allied companies brought this separate action, as already observed, in July of 1974 to recover the sum of $6,779.64. The sum ordered severed in 1968 was $6,743.70. The trial court entered judgment in April of 1975 awarding Elec-tro-Science the sum of $6,743.70.

It appears undisputed that the entire amount of taxes paid under protest, and sued for in the earliest action filed by Elec-tro-Science, was $107,663.65, and that the sum of $9,842.79 recovered by the taxpayers in the second case (509 S.W.2d 700), is precisely the difference between the sum originally sued for and the figure of $97,820.86, as to which, by judgment of this Court, the taxpayers were denied any recovery. (441 S.W.2d 247) It follows that the sum of $6,743.70 awarded by the trial court in the cause now on appeal was included in the sum of $97,820.86 in the first appeal.

The State contends that because the amount of money ($6,743.70) severed from the original cause was not' separated from the funds in the main suit, but allowed to remain in the judgment in that case for $97,820.86, the judgment in that action disposed of the lesser sum and it is controlled by the judgment this Court rendered denying Electro-Science and associates recovery of $97,820.86. The State admits, “Apparently, it was an oversight on the part of all parties involved, the resulting effect being that all legal process attempted in the severed cause of action (No. 127,416A) as to the said sum of $6,743.70, as well as the pleadings and judgment in this cause of action is without force or effect.”

The State points out that the sum of $6,743.70, included in judgment of this Court in 1969, has been transferred pursuant to statute to the general revenue of the State. The State contends that the Comptroller has no funds from which to pay the instant judgment for $6,743.70.

Electro-Science brought this suit pursuant to provisions of Article 1.05 (Title 122A, Taxation-General, vol. 20A, V.A.T.S.) “for the recovery of sums of money heretofore paid by Plaintiff under protest as Corporate Franchise Taxes, penalty and interest under the Act.” In its petition, filed July 15, 1974, Electro-Science alleged:

(a) “. . . during the tax periods for 1962 and 1963, the Plaintiffs have overpaid franchise taxes due to the State . in the amount of ($6,779.64). This overpayment has been acknowledged and admitted by representatives of the State . . . and of the Comptroller’s Office, and, in fact, refund of such amount has been promised by representatives of those offices to representatives of the Plaintiff.”
(b) “. . . the Defendants have now taken the position that such monies will not be paid in spite of their undisputed liability for the payment of such, and although numerous demands have been made on behalf of Plaintiffs that the admittedly overpaid sums due be refunded to them, they have failed and refused and continue to fail and refuse to pay such at the time of the filing of this suit.”

Article 1.05 provides that upon payment of taxes accompanied by written protest, “. . . the taxpayer shall have ninety (90) days from said date within which to

file suit for the recovery thereof in any court of competent jurisdiction in Travis County . . . and none other.” The statute requires that suit be brought against the official collecting the tax, in this instance the Comptroller, and the State Treasurer and the Attorney General.

Electro-Science sued the proper officials but filed this suit in 1974, more than ninety days after the “tax periods of 1962 and 1963” when the tax presumably was paid under protest. This suit is not connected with, nor is it a continuation of, the original suit in which judgment was entered in July of 1968. That cause, and the severed portion, have been disposed of finally, and no part of the original suit remains to be litigated. This cause is a separate action brought to recover taxes on the express ground that representatives of the State have made admissions of liability and promised to make a refund, apart from any proceeding authorized by Article 1.05 to recover taxes'paid under protest.

In Article 1.05 the Legislature provided a special method to enable taxpayers who question validity of a tax to bring suit against the State in an effort to recover taxes paid under protest. Cobb v. Harrington, 144 Tex. 360, 190 S.W.2d 709, 713 (1945), construing similar provisions in Article 7057b, V.A.T.S. The Act, which requires the protested tax monies to be held in suspense until suit is finished, meanwhile completely subject to judgment of the courts, provides valid means by which the taxpayer who prevails in court may recover both taxes and interest. Rogers v. Daniel Oil and Royalty Co., 130 Tex. 386, 110 S.W.2d 891, 894 (1937).

The State may not be sued without its consent, and consent may be obtained only through action of the Legislature, either by general law, or by resolution or bill in specific cases. State v. Isbell, 127 Tex. 399, 94 S.W.2d 423 (Tex.Com.App.1936, opinion adopted). Since the Legislature by passage of Article 1.05 created a right not existing at common law and prescribed a remedy to enforce the right, the courts may act only in the manner provided by the statute which created the right. Union Central Life Insurance Co. v. Mann, 138 Tex. 242, 158 S.W.2d 477, 481 (1941). Elec-tro-Science has demonstrated no authority, and claims none, to bring this suit against the State, except such consent of the State as may be found in Article 1.05. This suit was not filed within ninety days from the date on which the taxes were paid under protest, as required by the statute, and the trial court was without jurisdiction to entertain the suit. Stelter v. Calvert, 456 S.W.2d 202 (Tex.Civ.App., Austin 1970, no writ).

For the reasons stated, the judgment of the trial court is reversed, and the cause is dismissed.

Reversed and Cause Dismissed.

      . Capital Southwest Corp. v. Calvert et al. (No. 128,252), Electro-Science Investors, Inc. v. Calvert et al. (No. 127,416), and Texas Capital Corporation v. Calvert et al. (No. 127,415) were consolidated and heard by the court as Cause No. 128,252.


source: Caselaw Access Project

author: PHILLIPS, Chief Justice.

license: Public Domain

text:
    Henry OTT et al., Appellants, v. Lillian B. CUNNINGHAM et al., Appellees.
    No. 12390.
    Court of Civil Appeals of Texas, Austin.
    Feb. 18, 1976.
    Robert E. Jenkins, Jr., Kershaw & Jenkins, Bastrop, James G. Boyle, Boyle & Yeager, Austin, for appellants.
    James T. Odiorne, Bastrop, for appellees.
   PHILLIPS, Chief Justice.

Appellants brought this suit against ap-pellees in trespass to try title over a boundary dispute concerning a tract of land of approximately 2.4 acres. The suit presented three principal issues, namely, limitation title, conveyance of land by parol as an exception to the statute of frauds, and, lastly, damages. The case was tried before the court after which judgment was rendered for appellees, the court holding that the parties orally agreed to the construction of a new fence between their two properties and that it would now be inequitable to remove that fence.

Appellants are before us on a number of points of error which present questions as to the sufficiency of evidence to sustain the court’s judgment; as to a parol conveyance of the land in question, the question of possible improvements having been erected on the land by appellees and finally, but no less important, the question of whether title had been matured by the appellees through their adverse possession of the land in question.

However, we do not reach these points of error, for we find that we must sustain appellants’ point of error that the court erred in failing to file findings of fact and conclusions of law. Consequently, we reverse the judgment and remand the case for a new trial.

Final judgment was entered on June 18, 1975. Appellants filed their first request for findings of fact and conclusions of law on June 26, 1975. Appellants then filed their second request for findings of fact and conclusions of law on July 22, 1975. No findings of fact and conclusions of law were ever filed by the court. Rules 296, 297, 299, Tex.R.Civ.P.

Rule 296, Tex.R.Civ.P., states that upon trial by the court, and, at the request of either party, filed within ten days from rendition of final judgment or order overruling motion for new trial, the judge shall state in writing the conclusions of fact found by him separately from the conclusions of law. In Wagner v. Riske, 142 Tex. 337, 178 S.W.2d 117 (1944), the Supreme Court held that failure of the trial court to file findings of fact and conclusions of law in compliance with Rule 296 constituted reversible error, where the complaining party complied with the requirements of the rule in an effort to secure such filing. The court further held that in such cases injury is presumed unless the contrary appears. The record before us is silent as to what evidence the court found to be material to the case or upon what evidence it based its judgment. Thus a heavy burden has been placed upon the appellants in their effort to reverse the judgment. The record affirmatively shows that appellants have suffered injury by the court’s failure to comply with the rule.

Since the judge who tried this cause has retired from the bench and is not available to correct the record by filing findings of fact and conclusions of law, as permitted under Rule 434, Texas Rules of Civil Procedure, we reverse the judgment and remand the cause for new trial.


author: BARROW, Chief Justice.

text:
    Charles Edward NICHOLS, Appellant, v. INTERNATIONAL HARVESTER CREDIT CORPORATION, Appellee.
    No. 15512.
    Court of Civil Appeals of Texas, San Antonio.
    Feb. 18, 1976.

      Robert M. Bandy, Tyler, for appellant.
    Richard F. Halter, San Antonio, for ap-pellee.
   BARROW, Chief Justice.

Appellant, a resident of Anderson County, has perfected his appeal from an order overruling his plea of privilege in appellee’s suit against three guarantors of four notes signed by Metro-Mix, Inc. Appellee relies on Subdivision 4, of Article 1995, Tex.Rev. Civ.Stat.Ann., to maintain venue in Bexar County as to appellant.

The hearing was held before the .court. Findings of fact were filed wherein the court found: Metro-Mix, Inc. entered into four retail installment contracts with appel-lee in 1973; written guarantees of payment of these contracts were signed by appellant, a resident of Anderson County, as well as Clinton Weilbacher and James E. Engle-man, residents of Bexar County; Metro-Mix was adjudged bankrupt on October 23, 1974, and the sum of $24,502.07 remains unpaid on said installment contracts. The trial court concluded that the appellee had proved a cause of action against the two resident defendants of Bexar County and that appellee had alleged, and in fact proved, a joint cause of action against appellant and the two Bexar County residents. The court therefore concluded that venue was sustainable against appellant under Subdivision 4, Article 1995.

Appellant complains of the findings of fact and the conclusion that venue was sustainable under Subdivision 4 by several points of error. He urges that appellee did not prove a cause of action against any of the guarantors in that there was no competent evidence that Metro-Mix, Inc. was bankrupt and, in any event, the guarantors had been released by appellee.

There was introduced into evidence without objection an official notice to creditors which originated from the United States District Court for the Western District of Texas. It was signed by Judge Bert W. Thompson, Bankruptcy Judge, and recited that Metro-Mix, Inc. had been adjudged a bankrupt on a petition filed by it on October 23, 1974. This instrument was properly admissible under Article 3731a, Section 2, Tex.Rev.Civ.Stat.Ann., which provides in part:

Any written instrument which is permitted or required by law to be made, filed, kept or recorded . . . by an officer or clerk of the United States . or by his deputy or employee . shall, so far as relevant, be admitted in the courts of this State as evidence of the matter stated therein .

The trial court’s finding that Metro-Mix, Inc. was adjudged a bankrupt is fully supported by the evidence. This bankruptcy matured the guarantors’ obligations and permitted suit against them without joinder of Metro-Mix, Inc. as a party-defendant. Rose v. Allied Finance Company of Oak Forest, 487 S.W.2d 861 (Tex.Civ.App.—Waco 1972, no writ); Spillyards v. Ferris Brick Company, 390 S.W.2d 837 (Tex.Civ. App.—Waco 1965, no writ); Brooks v. American National Bank of Beaumont, 103 S.W.2d 246 (Tex.Civ.App.—Beaumont 1937, writ dism’d).

The evidence shows that Joe F. Morales, one of the four guarantors, was released from all liability, and appellant urges that this release had the effect of releasing all guarantors. It is seen that appellant did not affirmatively plead release as required by Rule 94, Tex.R.Civ.P. In any event, the effect of such release is an affirmative defense which was not in issue at the hearing of the plea of privilege. Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91 (1935); 1 McDonald, Texas Civil Practice, § 4.10.2(11), p. 434 (1965 rev.).

Reversible error is not shown by appellant’s complaint of the erroneous finding by the trial court that appellee’s home office is in Dallas, Texas, in lieu of Chicago, Illinois.

The trial court did not err in concluding from the evidence on this hearing that venue was properly sustainable in Be-xar County against appellant under Subdivision 4 of Article 1995.

The judgment is affirmed.

      . The facts required to sustain venue under Subdivision 4 of Article 1995 are: (1) one defendant resides in the county of suit; (2) the party asserting his privilege is at least a proper party to the claim against the resident defendant; and (3) the plaintiff has a bona fide claim against the resident defendant. Cage v. Guerra, 511 S.W.2d 397 (Tex.Civ.App.—San Antonio 1974, no writ); 1 McDonald, Texas Civil Practice, § 4.10.2(11), p. 434 (1965 rev.).


author: RALEIGH BROWN, Justice.

text:
    BRIERCROFT SAVINGS & LOAN ASSOCIATION, Appellant, v. FOSTER FINANCIAL CORPORATION, Appellee.
    No. 4861.
    Court of Civil Appeals of Texas, Eastland.
    Feb. 19, 1976.
    Rehearing Denied March 11, 1976.

      Edward R. Smith and Robert Don Collier, Lubbock, Dean Carlton, Dallas, for appellant.
    Edward J. Kolb, Dallas, for appellee.
   RALEIGH BROWN, Justice.

Foster Financial Corporation sued Brier-croft Savings and Loan Association for contractual damages allegedly sustained as a result of Briercroft’s failure to fund a loan after making a commitment to William Lee Folse. Foster made an interim loan of $225,000 to Lee Folse Properties, corporate nominee of William Lee Folse. It alleged the loan was based on a conditional loan commitment letter from Briercroft to Folse; .that before making the loan it communicated with Briercroft and received certain writings concerning the commitment letter. Following a jury verdict, the trial court entered judgment for Foster for $225,000 plus interest. Briercroft appeals. We reverse and render.

Briercroft argues the trial court erred in denying its motion for an instructed verdict because Foster failed to establish a claim of right against Briercroft or any duty from Briercroft to Foster. We agree.

Foster states in its brief:

“This suit arose out of the breach of a written agreement between Briercroft, the permanent lender, and Foster, the interim lender, which Briercroft breached after Foster had made an interim loan, to the borrower, in reliance on the agreement, which interim loan has not been paid, thus resulting in substantial damages to Foster for which Foster sued Briercroft.”

Foster argues it is entitled to recover either contractually on the commitment letter and other writings or as a third party beneficiary or on the theory of promissory estoppel.

Briercroft issued to William Lee Folse a first lien mortgage loan commitment letter agreeing to make a loan of $225,000 to either William Lee Folse or his corporate nominee. The loan was to be secured by a tract of land in Garland, Texas. William Lee Folse, President of Lee Folse Properties, Inc., accepted the commitment, which included the provision, “Any interim or construction financing required and the cost thereof shall be your sole responsibility.”

Folse gave a copy of the commitment letter to W. S. McCarver, Vice President of Foster, and requested an interim, twelve month loan of $225,000 from Foster. McCarver contacted Briercroft by telephone, made certain inquiries concerning the commitment letter, and requested certain matters be put in writing. A letter and telegram, having the same language, were forwarded to Foster as requested. The writings provided:

"August 3, 1973
Foster Financial Corporation
P.0. Box 171
Fort Worth, Texas 76101
Attn: Bill McCarver
Gentlemen:
On July 12, 1973, over my signature, Briercroft Savings and Loan Association made a loan commitment to William Lee Folse, 1500 LTV Tower, Dallas, Texas in the amount of $225,000.00.
That commitment has been accepted by Mr. Folse, the fees have been paid and all conditions are In full force.
We have accepted the appraisal report furnished us and the commitment Is fully operative.
We have no intentions of funding the loan prior to May 1, 1974 but the commitment is a full twelve months from July 26, 1973.
We will endeavor to make this transaction acceptable to your Institution.
Very truly yours,
BRIERCROFT SAVINGS & LOAN ASSN.
Sid A. Lowery, Jr."

Following the receipt of the telegram, Foster made the loan to Lee Folse Properties, Inc.

Thereafter, Briercroft refused to make the loan to Lee Folse Properties, Inc. It contends the conditions of its commitment were not met. Lee Folse Properties, Inc. has not repaid the interim loan to Foster, and neither William Lee Folse nor Lee Folse Properties, Inc. are parties to the instant suit.

The liability of Briercroft to Foster on the loan commitment letter issued to William Lee Folse is controlled by the holding in Republic Nat. Bank of Dallas v. National Bankers Life Ins. Co., 427 S.W.2d 76 (Tex. Civ.App.—Dallas 1968, writ ref. n. r. e.). The court considering a situation very similar to that presented by the instant case said:

“It is an elementary rule of law that privity of contract is an essential element of recovery in an action based on contractual theory. Thus generally in order to maintain an action to recover damages flowing from the breach of a written agreement it is ordinarily a necessary prerequisite that there be a privity existing between the party damaged and the party sought to be held liable for the repudiation of the agreement. Gehl Bros. Mfg. Co. v. Price’s Producers, Inc., 319 S.W.2d 955 (Tex.Civ.App., El Paso 1958); 13 Tex.Jr.2d, Contracts, § 367, p. 643; 17A C.J.S. Contracts § 518, p. 940.
A well defined exception to the general rule thus stated is that one who is not privy to the written agreement may demonstrate satisfactorily that the contract was actually made for his benefit and that the contracting parties intended that he benefit by it so that he becomes a third-party beneficiary and eligible to bring an action on such agreement. 13 Tex.Jur.2d, Contracts, § 352, pp. 628-629; 17A C.J.S. Contracts § 519(1), p. 947, et seq.”
“Parties are presumed to contract for themselves and it follows that a contract will not be construed as having been made for the benefit of a third person unless it clearly appears that such was the intention of the contracting parties. Citizens Nat. Bank v. Texas & P. Ry. Co., 136 Tex. 333, 150 S.W.2d 1003 (1941); Calame v. Prudential Ins. Co. of America, 423 S.W.2d 940 (Tex.Civ.App., Waco 1968).”

In the instant case, it has been stipulated that Foster was not a party privy to the commitment letter. The unambiguous terms of the letter provide that any interim financing required would be the sole responsibility of Folse. Such language prohibits a construction that the letter was intended for the benefit of third parties as to interim financing. Foster, therefore, could not recover on a contractual theory nor as a third party beneficiary of the commitment letter.

The jury answered two of the twenty-one special issues submitted as follows:

“SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence that on or about August 3, 1973 Briercroft Savings & Loan Association, through S. A. Lowery, Jr., agreed in writing with Foster Financial Corporation that Briercroft Savings & Loan Association would protect an interim loan of Foster Financial Corporation to Lee Folse Properties, Inc., in the sum of $225,000.00 by honoring the Savings & Loan commitment letter of July 12, 1973 (Plaintiff’s Exhibit 1)?
Answer ‘Yes’ or ‘No’.
ANSWER: Yes.”
“SPECIAL ISSUE NO. 7
Do you find from a preponderance of the evidence that on or about August 3, 1973, Briercroft Savings & Loan Association’s vice president, S. A. Lowery, Jr., agreed with Foster Financial Corporation’s officer that Briercroft Savings <& Loan Association would assume payment, as its own debt, to the extent of $225,-000.00 of interim financing indebtedness of Lee Folse Properties, Inc. to Foster Financial Corporation?
Answer ‘Yes’ or ‘No’.
ANSWER: No.”

The only written documents, other than Briercroft’s commitment letter to Folse, were the identical telegram and letter sent by Briercroft to Foster at the request of Foster. Briercroft argues the telegram and letter cannot be interpreted as any evidence Briercroft agreed-in writing to protect an interim loan of Foster to Folse Properties. We agree.

There is no assertion by either party that the writings are ambiguous. The court in Myers v. Gulf Coast Minerals Management Corporation, 861 S.W.2d 193 (Tex.1962) stated:

“ . . . It is elementary that if there is no ambiguity, the construction of the written instrument is a question of law for the court. See Turner v. Montgomery, Tex.Com.App., 293 S.W. 815; North v. North, Tex.Civ.App., 2 S.W.2d 481, 483; Brown v. Payne, 142 Tex. 102, 176 S.W.2d 306, 308.”

See also City of Pinehurst v. Spooner Addition Water Company, 432 S.W.2d 515 (Tex.1968).

The court in determining the intention of the parties apply the rule stated in Parker Chiropractic Research Foundation v. Fairmont Dallas Hotel Company, 500 S.W.2d 196 (Tex.Civ.App.—Dallas 1973, no writ):

“Where the contract is unambiguous the court will give effect to the intention of the parties as expressed or as is apparent in the writing. In the usual case, the instrument alone will be deemed to express the intention of the parties for it is objective, not subjective, intent that controls. Woods v. Sims, 154 Tex. 59, 273 S.W.2d 617 (1954); 4 Williston on Contracts § 610; Restatement of the Law of Contracts § 230;
The parties to an instrument intend every clause of the contract to have some effect and in some measure to evidence their agreement. Restatement of the Law of Contracts § 230;
In construing a contract the court is to take the wording of the instrument and consider the same in the light of the surrounding circumstances and then apply the pertinent rules of construction thereto to settle the meaning of the contract. Spence & Howe Construction Co. v. Gulf Oil Co., 365 S.W.2d 631 (Tex.Sup.1963); City of Pinehurst v. Spooner Addition Water Co., 432 S.W.2d 515 (Tex.Sup.1968).”

The sentence in the telegram and letter, “We will endeavor to make this transaction acceptable to your institution” cannot be interpreted as evidence of an agreement by Briercroft to protect Foster by honoring Briercroft’s commitment to Folse. The words are not evidence of any present agreement between Briercroft and Foster. Nothing in that sentence, nor any other statement in the letter or telegram, indicates that Briercroft was undertaking any present obligation to Foster.

The sentence, at most, indicates an agreement to make an agreement in the future and such writings are insufficient to be an enforceable obligation because as stated in Parker Chiropractic, supra:

“An agreement to make a future contract must be definite and certain upon all the subjects to be embraced in such future agreement. Thus, to be enforceable, a contract to enter into a future contract must specify all its material and essential terms, and leave none to be agreed upon as a result of future negotiations. Where a preliminary contract leaves certain terms to be agreed upon for the purpose of a final contract, there can be no implication of what the parties will agree upon. Radford v. McNeny, 129 Tex. 568, 104 S.W.2d 472 (1937); Page & Wirtz Construction Co. v. Van Doran Bri-Tico Co., 432 S.W.2d 731 (Tex.Civ.App., Amarillo, 1968, writ ref’d n. r. e.); Friedrich v. Moke, 296 S.W.2d 565 (Tex.Civ.App., San Antonio, 1956, writ ref’d n. r. e.).”

Nothing in the letter or telegram discloses the terms and conditions of any agreement between Briercroft and Foster, it therefore, fails as an enforceable contract to enter a future contract.

The writings being unambiguous and not creating a present obligation of Briercroft to Foster nor being sufficiently definite and certain to be enforceable as an agreement to make a future contract, Briercroft has no duty to Foster under the writings.

We do not agree with Foster’s argument that the judgment should be upheld under the doctrine of promissory estoppel.

This doctrine is defensive in nature. A promise must be proved before promissory estoppel may be applied. The court in

“Moore” Burger, Inc. v. Phillips Petroleum Company, 492 S.W.2d 934 (Tex.1972) said:
“Promissory estoppel is a defensive plea; it is a plea in confession and avoidance. We so held in Wheeler v. White, 898 S.W.2d 93, 96 (Tex.1965), when we said:
‘This (promissory estoppel) does not create a contract where none existed before, but only prevents a party from insisting upon his strict legal rights when it would be unjust to allow him to enforce them. . . . The function of the doctrine of promissory es-toppel is, under our view, defensive in that it estops a promisor from denying the enforceability of the promise.’ ”

The promise relied upon by Poster in support of its promissory estoppel theory is the written agreement inquired about in Special Issue No. 1. We have held that such writing as a matter of law does not constitute a promise to protect the interim loan made by Poster. Poster neither pleaded nor proved any promise other than the alleged promise made in writing.

Poster’s reliance on the doctrine of promissory estoppel to uphold the judgment must fail, as stated by the court in Southland Life Ins. Co. v. Vela, 147 Tex. 478, 217 S.W.2d 660 (1949):

. . An estoppel is defensive in character. It does not create a cause of action. Its function is to preserve rights, and not to bring into being a cause of action. Washington National Insurance Co. v. Craddock, 130 Tex. 251, 109 S.W.2d 165,113 A.L.R. 854; Massachusetts Bonding & Insurance Co. v. Dallas Steam L. & D. Works, Tex.Civ.App., 85 S.W.2d 937, writ refused.”

We overrule the cross-point of Foster that error was committed in granting Briercroft’s second requested extension of time in which to file the statement of facts.

Briercroft’s motion showed diligence in attempting to obtain the statement of facts. The failure to prepare the statement sooner was the press of official business by the court reporter. Good cause for the second extension of time to file the statement of facts was shown. Anzaldua v. Richardson, 279 S.W.2d 169 (Tex.Civ.App.—San Antonio 1955, writ ref. n. r. e.); Hudgens v. Texas Casualty Insurance Company, 465 S.W.2d 832 (Tex.Civ.App.—Amarillo 1971, writ ref. n. r. e.).

The judgment of the trial court is reversed and rendered.


author: McCLOUD, Chief Justice.

text:
    RANGER INSURANCE COMPANY, Appellant, v. MUSTANG AVIATION, INC., Appellee.
    No. 4858.
    Court of Civil Appeals of Texas, Eastland.
    Feb. 19, 1976.
    Rehearing Denied March 11, 1976.

      John H. Martin, Thompson, Knight, Simmons & Bullion, Dallas, for appellant.
    Robert C. Johnson, Jr., Grady, Johnson, Smith & Blakeley, Dallas, for appellee.
   McCLOUD, Chief Justice.

Plaintiff, Ranger Insurance Company, sued defendant, Mustang Aviation, Inc., seeking a declaratory judgment. Defendant answered and then filed a motion to dismiss for want of jurisdiction which was granted. Ranger Insurance Company has appealed. We affirm in part and reverse and remand in part.

Plaintiff alleged it had issued a policy of insurance to defendant covering certain designated aircraft. The policy was attached to and made a part of plaintiff’s petition. Plaintiff alleged that on September 21, 1973, an aircraft owned and operated by Bromley Corporation crashed in the State of Louisiana killing the pilot and six passengers; that two separate lawsuits “(Merritt, et al. v. Mustang Aviation, Inc., No. 74-858-W.D.La., Shreveport Div. and Croce, et al. v. Mustang Aviation, Inc., No. CA-3-74-843-B-N.D.Tex., Dallas Div.)” had been filed on behalf of the six passengers against Bromley and Mustang Aviation; that the plaintiffs in the two lawsuits alleged in their pleadings that prior to the accident in question Mustang Aviation entered into an agreement with Variety Theater International, Inc., whereby Mustang Aviation promised to provide one of its airplanes and pilots to transport, the decedents to various locations, and that as a result of a subsequent contract between Mustang Aviation and Bromley, Mustang became liable for the acts of Bromley.

In the instant suit, Ranger Insurance Company pleaded its policy of insurance covered only specifically numbered and designated aircraft, aircraft newly acquired by the named insured, and substitute aircraft used in place of aircraft owned by the named insured which were withdrawn from normal use temporarily due to breakdown, repair, servicing, loss or destruction. Plaintiff further alleged that the “Exclusions” section of the policy states that the policy does not apply:

“to any liability assumed by the Insured under any contract or agreement or to any loss or damage to the aircraft for which the Insured has assumed the liability of others.”

In the Paragraph IV of its petition, plaintiff alleged:

“. . . that there is clearly no coverage for the aircraft in question under the terms of the above-described insurance policy and that Plaintiff Ranger Insurance Company therefore has no duty to defend the above-described lawsuits which have been instituted against Mustang Aviation, Incorporated, or any other lawsuits which may arise out of this occurrence . . . ”

It is apparent from plaintiff’s petition it sought a declaratory judgment that it had no duty to defend the two pending lawsuits filed against Mustang, or any other lawsuit which might arise out of the occurrence, or pay any judgment rendered as a result of any suit arising out of the September 21, 1973, crash in Louisiana.

Defendant’s motion to dismiss plaintiffs petition for want of jurisdiction alleged that plaintiff’s suit seeking a declaratory judgment that plaintiff had no obligation to pay any judgment rendered as a result of the “Federal Court” actions brought against Mustang, did not present a justicia-ble issue. Defendant also alleged that no justiciable issue existed as to whether defendant had an obligation to defend Mustang Aviation “in the suits now pending against Defendant in the Federal Courts styled and docketed as mentioned in Plaintiff’s Original Petition for Declaratory Judgment.”

The trial court was correct in dismissing for want of jurisdiction that part of plaintiff’s claim seeking a determination that it had no obligation to pay any judgment rendered as a result of the two pending lawsuits or any other lawsuits arising out of the occurrence. To this extent plaintiff sought a purely advisory opinion which the court had no jurisdiction to render. Firemen’s Ins. Co. of Newark, New Jersey v. Burch, 442 S.W.2d 331 (Tex.1968). Plaintiff does not appeal this portion of the court’s order of dismissal. Also, the court had no jurisdiction to determine plaintiff’s obligation to defend “any action” resulting from the September 21, 1973, crash other than the two pending lawsuits described in plaintiff’s petition.

Defendant contends that as to plaintiff’s obligation to defend the two pending suits, plaintiff is asking the court to pass upon a hypothetical matter since the complaints in the two “Federal Courts” could be amended. We disagree. Plaintiff alleged that its insured, Mustang Aviation, Inc. had been sued in two separate suits. It alleged that under the existing petitions in those specific lawsuits it had no duty to defend. Plaintiff alleged a justiciable controversy. Fort Worth Lloyds v. Garza, 527 S.W.2d 195 (Tex.Civ.App.—Corpus Christi 1975, writ ref. n. r. e.).

The court in Burch, supra, clearly distinguished between the court’s jurisdiction to determine the duty to defend as opposed to determining ultimate liability. The court held that the duty to defend presented a justiciable issue.

Defendant argues the trial court was correct in dismissing plaintiff’s petition because in the prayer plaintiff specifically sought only a determination that it had no obligation to “defend any action” brought against defendant arising out of the occurrence. We think it is clear plaintiff sought a determination of its duty to defend the two pending lawsuits. Defendant’s motion to dismiss was directed to the two pending “Federal lawsuits.” The prayer seeking a determination of plaintiff’s duty to defend any action included a request that the court determine plaintiff’s duty to defend the two pending cases which were specifically pleaded.

Defendant also argues the order of dismissal was proper because the matter is moot. We disagree. Defendant alleged in its answer that plaintiff had agreed to and had undertaken the defense of the two pending suits. The trial court found that plaintiff, “under reservation of rights agreement,” had agreed to defend Mustang in the two “Federal lawsuits” and had employed an attorney to defend Mustang. The record reflects that no evidence was introduced at the hearing to dismiss and there is no proof of any nature in the record concerning the defense of the two pending suits. The record consists of the transcript which includes copies of plaintiff’s original petition, defendant’s answer, defendant’s motion to dismiss, order of dismissal, and findings of fact and conclusions of law. Plaintiff states in its brief, which is not controverted, that it had been permitted to present evidence at a trial on the merits, it would have shown that in the reservation of rights and non-waiver agreements, defendant and plaintiff expressly agreed that plaintiff retained the right to institute at any time after the execution of the non-waiver agreement a declaratory judgment suit to determine the rights of the parties under the contract of insurance. The record does not disclose that the matter is moot.

That portion of the order dismissing plaintiff’s suit seeking a determination of plaintiff’s duty to defend the two pending cases is reversed and remanded. In all other respects, the judgment of the trial court is affirmed.

RALEIGH BROWN, J., not participating.


author: DUNAGAN, Chief Justice.

text:
    ENGINEERED PLASTICS, INC., Appellant, v. Ray M. WOOLBRIGHT et ux., Appellees,
    No. 910.
    Court of Civil Appeals of Texas, Tyler.
    Feb. 19, 1976.

      Randolph Tower, Clemens, Weiss, Spencer & Welmaker, San Antonio, for appellant.
    Richard J. Karam, King, Joseph, Baucum & Karam, San Antonio, for appellees.
   DUNAGAN, Chief Justice.

This is a suit for conversion. This suit was instituted by appellees, Ray M. Wool-bright and wife (plaintiffs in the trial be-loyr), against the appellant, Engineered Plastics, Inc., for the conversion of a swimming pool heater and diving board in a wilful, malicious and wanton manner. The appellees sought damages for such conversion in the sum of $679.80, exemplary damages in the sum of $3,720.20 and the sum of $500 for damages allegedly caused to the sprinkler system by the appellant’s installation thereof. The total damages sought were $4,900. Appellant answered by generally denying the conversion and damages to the sprinkler system and by filing a cross action against appellees alleging an indebtedness due and owing by appellees to appellant for the installation of a gas line to the pool heater.

Trial was before the court without the aid of a jury. Judgment was rendered against the appellant and in favor of appel-lees for $650 actual damages and $500 exemplary damages. From this judgment appellant has appealed. The judgment denied appellant recovery on its cross action, from which there was no appeal.

The trial court made and filed its findings of fact and conclusions of law. The trial court found, among other things, that (a) appellees entered into a contract with appellant for the installation of a swimming pool on appellees’ residential property with attachments and equipment which included a pool heater and diving board for a stated consideration; (b) after the installation of said swimming pool with attachments and equipment, the appellees performed their obligation under the contract by paying appellant the stated consideration therefor and became title owners to all improvements so placed on their property; (c) thereafter appellant demanded of appellees monies over and above the original contract price for installation of gas lines to the pool heater; (d) appellees denied further liability to appellant and appellant was advised by letter to direct all communications to appellees’ attorneys; (e) upon receipt of said letter appellant directed its employees to go upon appellees’ property and disconnect the pool heater and diving board and take said items, all without the consent or permission of appellees; (f) that written demand was made upon appellant to immediately reinstall the items taken, which demand was refused; (g) that the diving board and pool heater are in appellant’s custody and dominion; (h) that appellant’s action “in taking the pool heater and diving board without consent, and its refusal to return the same after proper demand was made, constitute conversion”; (i) the market value of the items so converted at the place and time of conversion was $650; (j) the conversion of said items was “wilful, malicious and in wanton disregard” of ap-pellees’ rights; and (k) “as a result of said wilful, malicious and wanton conduct” ap-pellees “are entitled to recover $500 in exemplary damages from” appellant.

The court’s conclusions of law were that the conversion was in a wanton, wilful and malicious manner, and the appellees were entitled to recover the sum of $650 actual damages and $500 punitive damages.

Appellant brings forward three points of error. In the first two points appellant asserts that the court erred in awarding actual damages in the amount of $650 because there was no evidence or insufficient evidence of the market value of the items at the time and place of conversion to support the award of such damages.

In determining whether the trial court’s findings are supported by any evidence of probative value, we will give credence only to the evidence favorable to the findings and will disregard all evidence to the contrary. Waters v. Waters, 498 S.W.2d 236, 240 (Tex.Civ.App.-Tyler 1973, writ ref’d n. r. e.). We will examine the entire record in passing upon the insufficiency of the evidence. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951).

Appellee, Ray M. Woolbright, testified that the replacement cost of the swimming pool heater and diving board to the best of his recollection was $670; that he replaced the items about one week after the conversion. Mr. Woolbright was the only witness for the appellees to give testimony concerning the replacement cost of the converted items. Witness Ray Woolbright was not shown to be acquainted with the market value of the property at the place and time of conversion. No effort was made to so qualify him.

The law is well established that in cases of conversion of property, the establishment of the market value of the property at the place and on the day of conversion is essential to a recovery. A witness called to testify as to such value, must, as a prerequisite to the admission of his testimony, show that he was acquainted with the market value of the property at such time and place. Ada Oil Company v. Logan, 447 S.W.2d 205, 210 (Tex.Civ.App.-Houston, 14th Dist., 1969, n. w. h.); Callihan v. Fort Worth Well Machinery & Supply Company, 88 S.W.2d 1057, 1059-60 (Tex.Civ.App.-Fort Worth 1935, writ dism’d); Marshall v. White, 41 S.W.2d 87 (Tex.Civ.App.-Austin 1931, writ dism’d); Waldrop v. Goltzman, 202 S.W. 335 (Tex.Civ.App.-Dallas 1918, n. w. h.); Lincoln v. Packard, 25 Tex.Civ.App. 22, 60 S.W. 682 (1900 n. w. h.); Reef v. Hamblen, 47 S.W.2d 375 (Tex.Civ.App.-Dallas 1932, writ ref’d); 14 Tex.Jur.2d, Conversion, secs. 24 and 84.

We find no evidence in the record as to the market value of the pool heater or diving board. Mr. Woolbright testified only as to the price he paid for a heater and diving board to replace the items converted. Appellees made no attempt to prove the market value of the items here in question at the time of conversion. As a matter of fact, appellees did not attempt to prove market value of the said items as of any time. Moreover, Mr. Woolbright did not know the exact purchase price of the pool heater and diving board. The bill for the purchase of these two items included the purchase of another item not related to the replacement item. He was not sure of the price of the unrelated item. He said he thought he paid $670 for the two replacement items. This amounts to approximation. Ada Oil Company v. Logan, supra.

Appellees contend that the testimony of Mr. Willard B. Posson, President of Engineered Plastics, Inc., appellant, was a “judicial admission” that the price of the heater installed would be approximately $600. Mr. Posson gave no testimony remotely related to the diving board. It was not established whether the price of $600 placed on the pool heater by Mr. Posson was the current price or at time of the conversion. He gave the following testimony:

“Q. And, then, you sell it to the client installed?
“A. Yes.
“Q. For, approximately, how much?
“A. Approximately $600.00. And this, then, my cost include the picking of the — the picking it up, the placing of the heater on location, which means putting down a slab, and leveling the slab, and the purchase of special plumbing equipment to do it. It takes copper, and it takes special fittings to — by special, I mean, other than what we would normally use without a heater. ⅜ * *
“Q. So, would it be economically feasible for you, also, to pay for the installation of gas lines?
“A. No, sir. It certainly wouldn’t; not at $600.00.”

The cost of a pool heater as testified to by Mr. Posson includes significant installation work, masonry work in pouring and leveling a concrete slab for placement of a heater, and connection of the heater into the system with the additional expense of special fixtures to be installed. Since the only claim by appellees for damages was for removal of the heater and diving board, it is a reasonable assumption that the cement slab and fixtures remained in place undamaged. Therefore, these expenses of installation were not involved in the purchase of the replacement heater by the appellees. The figure of $600 stated by Posson included the installation cost and would not represent the cost of the replacement of the pool heater by the appellees.

It is true that the testimony of Mr. Woolbright and Mr. Posson concerning the value of the items converted was not objected to. It is the law in this State that even if incompetent testimony had been received without objection, such incompetent testimony could not be considered on appeal in determining the sufficiency of the evidence. The State of Texas v. Wilson, 439 S.W.2d 134, 139 (Tex.Civ.App.-Tyler 1969, n. w. h.) and the cases therein cited.

We find no evidence to support the court’s finding that “(t)he market value of the pool heater and diving board at the place and time of conversion was $650.” Appellant’s point of error No. 1 is sustained. Ada Oil Co. v. Logan, supra. The trial court’s judgment is reversed. We are of the opinion, however, that the evidence was not fully developed and that a retrial would be in the interest of justice. We therefore remand this cause rather than render judgment for appellant. Jackson v. Hall, 147 Tex. 245, 214 S.W.2d 458 (1948); Lanford v. Smith, 128 Tex. 373, 99 S.W.2d 593 (1936).

We have not discussed or passed upon appellant’s point relating to the insufficiency of the evidence to support the court’s finding as to the market value of the two items here in question, but if this point should be reached, we would hold that the evidence is insufficient to support such finding.

In view of our disposition of this ease, it is unnecessary to discuss or pass upon appellant’s point of error No. 3 in which he complains of the award by the trial court of exemplary damages because of the failure of appellees to prove actual damages.

The trial court’s judgment is reversed and cause is remanded for another trial.


author: McDONALD, Chief Justice.

text:
    Bill RIDDELL, Appellant, v. Myrtle MAYS, Appellee.
    No. 5531.
    Court of Civil Appeals of Texas, Waco.
    Feb. 19, 1976.
    Rehearing Denied March 18, 1976.
    McCracken, Smith, Shields & Taylor, William H. Shields, Leddie C. Taylor, Carroll-ton, for appellant.
    Touchstone, Bernays & Johnston, Ben Admire, Dallas, for appellee.
   OPINION

McDONALD, Chief Justice.

This is an appeal by plaintiff Riddell from instructed verdict that he take nothing in his suit against defendant Mays for negligently running into his parked wrecker vehicle.

Plaintiff sued defendant alleging defendant was driving northward on Broadway in Carrollton, when her vehicle went out of control and collided with defendant’s parked wrecker vehicle. Plaintiff alleged acts of negligence on defendant’s part, and prayed for $2640. damages for loss of revenue from the use of the wrecker for 30 days during which time he was unable to use the wrecker or a replacement.

Defendant answered by denial that she was guilty of any act of negligence; that she lost consciousness just before the collision; and that the accident was solely the result of an unavoidable accident.

Trial was to a jury. After plaintiff rested defendant moved for instructed verdict on the ground that the evidence showed the plaintiff’s wrecker was not repaired, but was a total loss, and was replaced, and that plaintiff cannot recover damages for loss of use to a replaced vehicle as a matter of law.

The trial court granted such motion for instructed verdict and rendered judgment plaintiff take nothing.

Plaintiff appeals on 1 point contending the trial court erred in granting defendant’s motion for instructed verdict because:

“A. Material issues of fact were raised by the plaintiff’s evidence of negligence, proximate cause and damages based on loss of use.
“B. The general rule that a plaintiff is not entitled to recover damages for loss of use of an unrepairable vehicle has no application in this case”.

There is evidence that defendant, a 75-year old woman, was driving down the street when she ran into defendant’s parked wrecker vehicle, damaging it. She testified she suddenly lost consciousness just before the collision.

Plaintiff testified as to the damage to his wrecker vehicle; that it was repairable if he would wait 6 months to get parts; that he could and did replace the vehicle in 30 days.

Plaintiff prayed only for damages for loss of use of the vehicle for the 30 days he was out of the use of a wrecker vehicle.

The general rule is if a chattel is partially destroyed and can be repaired, the owner may recover not only the cost of repairs, but the reasonable value of the loss of the use of the chattel while it is being repaired. But, when the chattel is totally destroyed, the measure of damages is the difference in the market value immediately before and immediately after injury, and no additional recovery can be had for loss of use of the chattel while it is being replaced. Cogbill v. Martin, CCA (Waco, Tex.Civ.App.) NRE, 308 S.W.2d 269; Pasadena State Bank v. Isaac, S.Ct., 149 Tex. 47, 228 S.W.2d 127; Kansas City Southern Railway Co. v. Frederick, CCA (Beaumont, Tex.Civ.App.) NRE, 276 S.W.2d 332; Export Ins. Co. v. Herrera, CCA (Corpus Christi, Tex.Civ.App.) NRE, 426 S.W.2d 895.

The reason for not allowing damages for loss of use when the chattel is totally destroyed is because such damages are included as a part of the award for total loss viz: the difference in the market value immediately before and immediately after the injury. See King v. McGuff, S.Ct., 149 Tex. 432, 234 S.W.2d 403; Exports Ins. Co. v. Herrera, supra.

In the instant case plaintiff did not seek any damages for the difference in value before and after injury to his vehicle. He sought only damages for loss of use while he was replacing such vehicle. In effect plaintiff was treating the vehicle as repairable (which he testified that it was), but not seeking damages for the repairs, and seeking only his damages for loss of use during a period which was 5 months less time than repairs would have taken.

See also Reinarz v. Griner, CCA (Austin, Tex.Civ.App.) NWH, 401 S.W.2d 274.

Plaintiff’s point and contentions are sustained. The trial court erred in rendering instructed verdict that plaintiff take nothing.

Reversed and Remanded.


text:
    M. Browning COMBS et al., Appellants, v. TEXAS STATE TEACHERS ASSOCIATION et al., Appellees.
    No. 12383.
    Court of Civil Appeals of Texas, Austin.
    Feb. 25, 1976.
    Rehearing Denied March 17, 1976.

      Jack E. Brady, Brady, Drake & Wilson, Dallas, for appellants.
    Gaynor Kendall, Kendall, Randle, Finch & Osborn, Austin, for appellees.
   PHILLIPS, Chief Justice.

This is an appeal by M. Browning Combs and other members of the Texas State Teachers Association from an interlocutory order of the district court of Travis County denying their application for a temporary injunction. We affirm this judgment.

The Texas State Teachers Association, a non-profit Texas corporation, is a voluntary association of Texas teachers and school-related personnel.

The temporary injunction was requested in a suit brought by appellants against Texas State Teachers Association and its current officers seeking declaratory relief to prevent recognition and implementation of a 1975 amendment to the Association’s constitution that had been approved by the Association’s House of Delegates and ratified by a majority vote of the membership. This amendment made membership in the National Education Association an eligibility requirement for individual membership in the Texas State Teachers Association. Appellants contend that the 1975 amendment was so similar to an amendment that had been submitted to and rejected by the Association’s membership in 1974, that the submission of the 1975 amendment was in contravention of Sections 3 and 4 of Article XIV of the Texas State Teachers Association’s constitution, which provides that an amendment defeated in a referendum election, as provided for by Article XIV, may not be resubmitted sooner than two years after its rejection.

Appellants’ point of error, which we overrule, states that the trial court abused its discretion in refusing to grant a temporary injunction to enjoin the defendants from enforcing the proposed 1975 amendment to the Association’s constitution that made membership in the National Education Association an eligibility requirement for individual membership in Texas State Teachers Association.

In our opinion, the trial court was correct in its conclusion. We hold that the case is controlled by this Court’s decision in Dallas Athletic Club Protective Comm. v. Dallas Athletic Club, 407 S.W.2d 849 (Tex.Civ.App.1966, writ ref. n. r. e.). There suit was brought allegedly for the purpose of stopping the diversion of certain funds and actions in violation of the bylaws by the board members of the Athletic Club. Citing Brotherhood of Railroad Trainmen v. Price, 108 S.W.2d 239 (Tex.Civ.App.1937, writ dism’d), we held that courts are not disposed to interfere with the internal management of a voluntary association, that the right of such an organization to interpret its own organic agreements, its laws and regulations, after they are made and adopted, is not inferior to its right to make and adopt them, and a member, by becoming such, subjects himself, within legal limits, to his organization’s power to administer, as well as to its power to make its rules. Hoey v. San Antonio Real Estate Board, 297 S.W.2d 214 (Tex.Civ.App.1956, no writ); Gaines v. Farmer, 55 Tex.Civ.App. 601, 119 S.W. 874 (Tex.Civ.App.1909, writ dism’d).

The record discloses that the point in controversy is by no means self-evident. Indeed, the governing body of the Association had sought a legal opinion from its attorney as to the propriety of its action. The attorney advised this body that they were within the bylaws in holding the questioned election. Appellees plausibly argue the legality of its actions in this respect. By their voluntary assent to the rules of the Association, appellants have bound themselves to abide by all lawful limitations imposed by Association rules, and the courts will not interfere with the reasonable interpretation placed by the Association on those rules. Brotherhood of Railroad Trainmen v. Price, supra; 7 C.J.S. Associations § 11; Cline v. Insurance Exchange of Houston, 140 Tex. 175, 166 S.W.2d 677 (1942).

Exceptions to this rule exist when a governing body has substituted legislation for interpretation or has transgressed the bounds of reason, common sense, fairness, or has contravened public policy or the law of the land in such interpretation or administration. Hoey, supra. Such is not the case here. Appellants’ cases to the contrary are not in point.

We affirm the judgment of the trial court.

Affirmed.

      . Appellants cite: Masonic Grand Chapter of Order of Eastern Star v. Sweatt, 329 S.W.2d 334 (Tex.Civ.App.1959, writ ref. n. r. e.); American Institute of Real Estate Appraisers v. Hawk, 436 S.W.2d 359 (Tex.Civ.App.1968, no writ); Lundine v. McKinney, 183 S.W.2d 265 (Tex.Civ.App.1944, no writ); Post No. 581, American Legion, Department of Texas v. Department of Texas, American Legion, 290 S.W.2d 712 (Tex.Civ.App.1956, no writ).


author: DANIEL, Justice.

text:
    W. Thomas BOLTON, Petitioner, v. Alton COATS et al., Respondents.
    No. B-4951.
    Supreme Court of Texas.
    Nov. 26, 1975.
    Rehearing Denied Jan. 7, 1976.

      Bankhead & Davis, Carthage, Powers & Rose, John E. Powers, Austin, Joseph P. Witherspoon, Austin, for petitioner.
    Shank, Irwin, Conant, Williamson & Gre-velle, Ralph Shank, Dallas, Cantey, Hanger, Gooch, Cravens & Munn, M. H. Carter Bur-dette, Fort Worth, Long, Strong, Jackson & Parker, Crawford Parker, Jr., Carthage, Baker & Botts, William C. Slusser, Houston, LaSalle & Baker, K. Baker, Carthage, Jack B. Strong, Longview, Clyde Brown, Monroe, La., for respondents.
   DANIEL, Justice.

This is an appeal from a summary judgment against the plaintiff, W. Thomas Bolton, the assignor of certain oil and gas leases, in a suit which he filed for breach of contract and damages against his assignees. Bolton, who had reserved an overriding royalty on the assigned leases, alleged that the defendant assignee, Alton Coats, and others holding under Coats, were liable in damages for failure to perform express and implied covenants of the assignment. The defendant respondents will be referred to as “Coats” or “assignees” unless otherwise noted.

On one of the leases Coats drilled a well known as the No. 1 Cornelius Evans, which was classified by the Texas Railroad Commission as a gas well. This lease and the other Bolton leases relevant to this controversy were unitized, as permitted by Bolton’s assignment to Coats, to form a gas production unit of 673.70 acres known as the Coats et al. “F” Unit (Mitchell) in what is referred to by Coats as the Bethany Field and by Bolton as the Bethany and the Carthage Fields in Panola County. Bolton alleges that the Evans well penetrated three separate productive sands: (1) the Lower Petit, (2) Upper Travis Peak (Sabine sand), and (3) the Lower Travis Peak (Burnett sand).

Bolton’s pleadings attack the Railroad Commission’s classification of the Evans well as a gas well in the Burnett sand, alleging that in addition to the gas produced from the Lower Petit and Sabine sands, the well was capable of and had actually produced oil in paying quantities from the Burnett sand; that Coats wrongfully concealed this oil production from Bolton and the Commission; that he fraudulently caused the Railroad Commission to classify the Evans well as a gas well in the Travis Peak formation rather than as a dual reservoir of gas in the Sabine sand and crude oil in the Burnett sand; and that because of such wrongful conduct Bolton suffered a loss of income which he would have received from a proper classification and production of oil from the Evans well.

The court of civil appeals affirmed the trial court’s summary judgment against Bolton on the grounds that, after seeking and failing to obtain reclassification of the Evans well by the Railroad Commission, he did not appeal the Commission’s decision in Travis County as provided by law, and that the present action constitutes an impermissible collateral attack on the Railroad Commission’s order. Tex.Civ.App., 514 S.W.2d 482. If the allegations summarized above were all of Bolton’s pleaded cause of action we would agree with the conclusion reached by the court of civil appeals. In addition, however, Bolton had other pleadings for damages which are separate from his attack upon the Railroad Commission’s order and on which the defendants did not show the absence of a genuine issue as to material facts or that they were otherwise entitled to summary judgment as a matter of law. Therefore, we reverse the judgments of the courts below and remand the cause for trial on the allegations hereinafter discussed.

Among such other pleadings are allegations by Bolton that Coats actually produced from the Evans well large quantities of crude oil (at least 25,532 barrels up to 1960) and distillate on which Bolton has not been paid the overriding royalty to which he is entitled under his assignment. In this connection he also seeks an accounting. A lessee or assignee who produces oil contrary to law or commission order is liable to the royalty owner for his share of what is actually, although illegally, produced. Ortiz Oil Co. v. Geyer, 138 Tex. 373, 159 S.W.2d 494 (1942). The Railroad Commission’s classification of the well as a gas well in the Travis Peak formation (including the Burnett sand) means that crude oil in excess of one barrel per 100,000 cubic feet of gas should not be produced therefrom. It does not conclusively establish that a greater amount of oil was not in fact produced. Therefore, the order is not a bar to Bolton’s cause of action for his share of any oil which actually was produced and for which he has not been paid, nor to his plea for an accounting.

By other allegations Bolton asserted that much of the Burnett sand under the 673 acres was an oil bearing formation and that the oil was being drained therefrom by oil wells on adjacent lands, some of which wells were being operated by Coats and other assignees holding under Coats, thus depriving Bolton of the value of his overriding royalty on the oil being drained away; that in addition to field rules for gas wells limiting the drilling of one gas well on each 640 acres (plus 10% tolerance), there are separate field rules applicable to oil wells which permit the drilling of one well for oil on each 80 acres (plus 10% tolerance); that a prudent operator would have sought a permit and profitably drilled at least five oil wells to the Burnett oil sand on the 673 acres; and that Coats breached his implied covenant to protect the leasehold from drainage.

Unless the assignment provides to the contrary, the assignee of an oil and gas lease impliedly covenants to protect the premises against drainage when the assign- or reserves an overriding royalty. Phillips Petroleum Co. v. Taylor, 115 F.2d 726 (5th Cir. 1940). The analogy between implied covenants in mineral leases and those in mineral lease assignments is demonstrated in Cole Petroleum Co. v. United States Gas and Oil Co., 121 Tex. 59, 41 S.W.2d 414 (1931). See also Merrill, Covenants Implied In Oil and Gas Leases, (2nd Ed., 1940) 416-418, and 3 Summers, The Law of Oil and Gas, (2nd Ed., 1958) 652-659. Bolton is entitled to the benefit of the implied covenant under his assignments if his allegations are found to be true concerning drainage and the protection therefrom which would have been afforded by a reasonably prudent operator under the same or similar circumstances. Coats and the other defendants did not negate these allegations in the manner required for summary judgment under Rule 166-A. Although unnecessary under the circumstances, Bolton offered depositions and affidavits which clearly raise fact issues concerning the allegations. The court of civil appeals recognized that a fact issue was raised as to whether “the Burnett sand of the Travis Peak, was in fact, an oil bearing reservoir,” but it disposed of the issue as follows:

“. . . While plaintiff’s summary judgment proof is sufficient to raise an issue thereon, any such proof and any such finding by the District Court of Pa-nola County would be in direct conflict with the finding of the Railroad Commission.”

The “finding” referred to by the court of civil appeals was inferred from the Railroad Commission’s refusal to reclassify the Burnett sand of the Travis Peak formation as an oil reservoir under the Evans well. This classification, although limited to the Evans well, was viewed by the court of civil appeals as “tantamount to a finding that the Burnett sand in the Travis Peak was not capable of producing more than one barrel of oil to every 100,000 feet of gas” throughout the entire 673 acres. We disagree. The order and permissible inferences therefrom are not so broad or conclusive. The Evans well is located in the southern half of the 673 acres. The record indicates that there are oil wells producing from the Burnett sand on tracts adjacent to the 673 acres on the north and northwest. Bolton’s affidavits and depositions of experts assert that much of the Burnett sand under the 673 acres is laden with crude oil; that the Railroad Commission has established applicable field rules for oil production from this sand on a spacing of one well to 80 acres; that the oil wells drilled to this sand on adjacent tracts to the north and northwest are draining substantial quantities of oil from beneath the 673 acres; and that a reasonably prudent operator could and would seek permits and profitably drill wells to the Burnett oil sand on the 673 acres.

We do not consider the Railroad Commission’s order classifying the Evans well as a gas well in the Burnett sand as tantamount to a finding that there are no separate oil productive horizons or segments of the Burnett sand anywhere underneath the Bolton-Mitchell 673 acres. In no event does the order shield Coats and his assignees from damages due to drainage of oil from the Burnett sand by wells on adjacent leases if it is found that a reasonably prudent operator would have sought a permit to drill protective off-set wells on the 673 acres.

It has been recognized that numerous “fields” (one for each physically separate productive stratum) can lie under a single well, lease, or unit. Benz-Stoddard v. Aluminum Company of America, 368 S.W.2d 94 (Tex.1963); Railroad Commission v. Shell Oil Company, 380 S.W.2d 556 (Tex.1964). ■ Article 6008 recognizes the possibility of a gas well and an oil well producing from different horizons of the same sand at different subsurface locations. Thus, it is entirely possible for the Evans well in the Burnett sand to continue to qualify for classification as a gas well while a well drilled on the north 80 acres of the 673 acres might be classified as an oil well. See Sec. 2(d), Article 6008. This explains the possibility of separate field rules and spacings for oil wells and gas wells being applicable to the 673 acres as alleged by Bolton.

Whatever may be the result when the trier of facts hears all of the evidence of the parties with reference to plaintiff Bolton’s allegations and the defendants’ answers, we hold that a summary judgment was improper on the pleadings, affidavits and depositions which were before the trial court. The movants for a summary judgment have the burden under Rule 166-A of showing that there is no genuine issue as to any material fact and that they are entitled to judgment as a matter of law. Adam Dante Corporation v. Sharpe, 483 S.W.2d 452 (Tex.1972); Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.1970). As heretofore indicated, the defendant mov-ants in this case made no such showing with respect to plaintiff Bolton’s allegations as to payments due for oil actually produced and damages due on account of failure to protect against drainage.

Accordingly, the judgments of the courts below are reversed and the cause is remanded for trial in accordance with this opinion.

      . Railroad Commission classification of a completed well as a gas well or an oil well relates to the gas-oil ratio of past production or tests of the well. Article 6008, Sec. 2(d)(b), V.A.T.S., defines the term “gas well” as any well “which produces more than one hundred thousand (100,000) cubic feet of natural gas to each barrel of crude petroleum oil from the same producing horizon.” Art. 6008, Sec. 2(e) reads: “The term ‘oil well’ is any well which produces one (1) barrel or more of crude petroleum oil to each one hundred thousand (100,000) cubic feet of natural gas.”

      . All references to Rules are to Texas Rules of Civil Procedure, and statutory references are to Vernon’s Annotated Texas Civil Statutes.


author: STEAKLEY, Justice.

text:
    John L. WALL, Petitioner, v. EAST TEXAS TEACHERS CREDIT UNION, Respondent.
    No. B-5512.
    Supreme Court of Texas.
    Feb. 11, 1976.
    Rehearing Denied March 17, 1976.

      Bankhead & Davis, Tom Bankhead, Carthage, for petitioner.
    Whitehead & Beckworth, R. L. Whitehead, Jr., Longview, for respondent.
   STEAKLEY, Justice.

This is a suit on a promissory note instituted by East Texas Teachers Credit Union against John L. Wall. The note called for usurious interest on its face and there have been no payments of principal or interest. The judgment of the trial court for the Credit Union was modified by the Court of Civil Appeals “to provide that” the Credit Union “do have and recover of and from the appellant John L. Wall the sum of $20,-803.48, less a forfeit of $1,814.94 being twice the amount of interest contracted for, leaving a balance of $18,988.54, together with interest on $18,988.54 from September 15, 1971 to October 17, 1974, at the rate of one percent per month on the unpaid balance, being $7,015.56, and together with attorney’s fees in the sum of $2,722.00 . . . .” 526 S.W.2d 148. We granted writ of error upon application of John L. Wall, the obligor, and also upon application of the Credit Union. We disagree in several respects with the courts below.

The controlling statutes are these. Art. 5069-1.02 provides:

Except as otherwise fixed by law, the maximum rate of interest shall be ten percent per annum. A greater rate of interest than ten percent per annum unless otherwise authorized by law shall be deemed usurious.

Art. 2461-7.01 Purpose, terms, and interest rate

If made in accordance with rules and regulations promulgated by the commissioner, a credit union may make loans to members for such purposes and on such security and terms as the credit committee, credit manager, or loan officer approves, at rates of interest not exceeding one percent per month on the unpaid monthly balance.

Art. 5069-1.06, Subsection (1) provides:

Any person who contracts for, charges or receives interest which is greater than the amount authorized by this Subtitle, shall forfeit to the obligor twice the amount of interest contracted for, charged or received, and reasonable attorney fees fixed by the court provided that there shall be no penalty for a violation which results from an accidental and bona fide error.

The note provided as follows:

"Note No. 22724 Account No. 3329-99
$19.896.01 May 7.1911
For Value Received, I/We jointly and severally, promise to pay to the EAST TEXAS TEACHERS CREDIT UNION Credit Union, or order, at LONGVIEW. TEXAS the sum of Nineteen hundred eight hundred ninety-six_and 01/100 Dollars, payable in 1 installments of Seven thousand_and No/100 Dollars, and 1 installment of Seven thousand_and No/100 Dollars
1 at $6,803.48 due September 15, 1971
(X) which includes principal and interest
( ) plus Interest
on the unpaid balances at the rate of One percent per month,-both before and after maturity, the Installments to be paid (X) monthly ( ) semi-monthly ( ) weekly ( ) bi-weekly beginning June 15. 1971_ Collateral: Shares. 170 head mixed cattle_
*»####*#
SIGNATURE OF SIGNATURE OF MAKER ADDRESS WITNESSES AND COMAKERS
X John I. Wall"

The note is ineptly drawn but its terms can reasonably be determined. There is first the matter of its principal stated in figures as $19,896.01 but in the body as “Nineteen hundred eight hundred ninety-six and 01/100 Dollars.” Wall argues ambiguity between the figures and the words of the note and that this calls for a construction in his favor to reach a principal sum of $2,796.01, i. e., $1900 plus $896.01. We are in agreement with the Court of Civil Appeals for the reasons there stated that the principal of the note was in the sum of $19,896.01.

There is then the recitation that the note is “payable in one installment of Seven thousand — and No/100 Dollars, and one installment of Seven thousand_and No/100 Dollars, one at $6,803.48 due September 15, 1971,” but with no statement of the date on which the first two installments are payable. The later checking of the box “ . . . the installments to be paid (X) monthly . . . beginning June 15, 1971” indicates that the first installment is payable June 15, 1971, the second on July 15, 1971, with the final installment “due September 15, 1971,” as previously recited.

That the recited installment payments included interest before the maturity date of each installment is established by the check in the box “(X) which includes principal and interest” immediately succeeding the installment recitation, together with a comparison of the principal with the total of the three installments. It is not disputed that the note by its terms requires the payment of usurious interest subjecting the Credit Union to the penalty provided in Subsection (1) of Art. 5069-1.06, quoted above.

There then follows the unchecked box “( ) plus interest on the unpaid balances at the rate of one percent per month, both before and after maturity . . . .” It is evident that this was an intentional omission. As stated above, the recited installments included principal and interest before the maturity date of each installment and an additional interest of one percent per month before maturity of each installment would therefore be inconsistent with the other terms of the note and would not be a fair or reasonable construction of the intention of the parties. Moreover, a construction of the note to this effect, i. e., as not calling for additional usurious interest of one percent per month before maturity on the previously recited amounts due in installment payments which included principal and usurious interest, comports with the established rule in Texas of not finding usury if the language of the contract, taken as a whole, is fairly susceptible of that construction. See Walker v. Temple Trust Company, 124 Tex. 575, 80 S.W.2d 935 (1935) and Imperial Corp. of America v. Frenchman’s Creek Corp., 453 F.2d 1338 (5th Cir. 1972). Under this construction the note carries no provision for interest after maturity thus invoking the rule of General American Life Ins. Co. v. Hamor, 95 S.W.2d 975 (Tex.Civ.App.1936, writ ref’d), where, as here, a usurious transaction was disclosed on the face of the instruments. The Court sustained the contention that the holder was entitled to recover at the legal rate of six percent per annum on the balance of the debt unpaid. See to the same effect, Deming Inv. Co. v. Clark, 89 S.W.2d 853 (Tex. Civ.App.1935, no writ). It was reasoned that the statutory provision for interest became applicable since the agreement of the parties was usurious and they had not agreed upon a specified rate of interest. The Credit Union is accordingly entitled to recover interest on the sum payable after it became due pursuant to Art. 5069-1.03 which provides:

1.03 Legal rate applicable
When no specified rate of interest is agreed upon by the parties, interest at the rate of six percent per annum shall be allowed on all written contracts ascertaining the sum payable, from and after the time when the sum is due and payable;

We further disagree with the Court of Civil Appeals in the award of usurious interest against which the statutory forfeit was applied. Under Subsection (1) of Art. 5069-1.06, quoted above, the statutory penalty is twice the amount of usurious interest contracted for, charged or received. The judgment of the Court of Civil Appeals allowed a recovery against Wall, the obligor, of the principal of the note and of the usurious interest before maturity called for by its terms, less the statutory forfeit of twice the amount of the usurious interest. We are of the view that this is contrary to the statute. A penalty of twice the amount of usurious interest contracted for is not effected if Wall, the obli-gor, is required to pay the usurious interest. In such event the forfeit in his favor is not twice the interest contracted for, but only once. Unquestionably, the terms of the statute demonstrate the legislative purpose that as to interest a usurious contract is unenforceable.

Now to the application for writ of error of the Credit Union. It contends for an affirmance of the judgment of the trial court for the full amount of principal, interest and attorney’s fees upon two claims. It says that the penalties for usury under the statute are recoverable only by independent action or counterclaim, and may not be recovered by defensive credit or offset. We are in agreement with the ruling of the Court of Civil Appeals against this contention for the reasons there stated.

Secondly, the Credit Union argues that “the Court of Civil Appeals failed to take into account that the trial court impliedly found that usurious interest charged by the Credit Union was the result of an accidental and bona fide error,” thus excusing it from the statutory penalty under Subsection (1) of Art. 5069-1.06.

There is no basis in the record for an implied finding to this effect. There was no claim by the Credit Union in the trial court that its charging of usurious interest was the result of accidental and bona fide error. The Credit Union declared on the note, a copy of which was attached to and made a part of its petition, for an unpaid balance of $26,717.51. Wall answered by general denial and specially alleged, but without verification by affidavit, that “plaintiff’s suit is based upon an instrument which would constitute an illegal loan under the laws of the State of Texas and in violation of the statutes of the State and is accordingly unenforceable against the defendant.” There were no further pleadings by the Credit Union. Trial was to the court and the Credit Union introduced the note in evidence. It offered no evidence, as it had not pleaded, that the terms of the note requiring the payment of usurious interest resulted from accidental and bona fide error.

Finally, and for the first time in its post-submission brief, and in event of a reversal of the judgment of the Court of Civil Appeals, the Credit Union seeks a remand of the cause in the interest of justice for determination in the trial court of the issue of whether it contracted for usurious interest as the result of an accidental or bona fide error. The Credit Union asserts the justice of this disposition upon the claim that it was not given an opportunity to present this defense because Wall did not verify his pleadings as required by Tex.R.Civ.P. 93(7); and that Wall did not assert that the contract sued upon was usurious until the filing of his brief as appellant in the Court of Civil Appeals. The Credit Union charges that it had no way of knowing that it had made a mistake in contracting for usurious interest, and that the tactics of Wall “sandbagged” the trial court.

We have noted earlier the trial posture of the parties; also that the note upon which the Credit Union declared, and of which it was the author, discloses on its face that it required the payment of unenforceable usurious interest. So this was a matter that appeared of record and in the face of Wall’s pleading that the note constituted an illegal loan, we are unable to conclude that either the Credit Union or the trial court were yet without notice or were reasonably unmindful of the assertion of the usury defense. We also note that while it is acknowledged by the Credit Union that this defense was expressly claimed by Wall in his brief as appellant in the Court of Civil Appeals, the Credit Union did not in its brief as appellee assert or claim its right to a remand in the interest of justice for the reasons it asserts here.

The judgments of the trial court and of the Court of Civil Appeals are reversed. The cause is remanded to the trial court for the entry of judgment in favor of the Credit Union for the principal amount of the note, less a forfeit of twice the amount of usurious interest contracted for before maturity, plus interest at the rate of six percent per annum on the sums payable after becoming due; and for a determination by the trial court of the amount of attorney’s fees for which Wall is additionally liable.

      . References are as carried in Vernon’s Texas Civil Statutes.


author: DENTON, Justice.

text:
    Donald F. NOBLES et al., Petitioners, v. Charles MARCUS et al., Respondents.
    No. B-5441.
    Supreme Court of Texas.
    Feb. 25, 1976.

      Davis & Davis, Fred E. Davis, Austin, for petitioners.
    Wynne, Jaffe & Tinsley, Morris I. Jaffe and James S. Pleasant, Green, Gilmore, Crutcher, Rothpletz & Burke, John Plath Green, Geary, Brice, Barron & Stahl, Joseph W. Geary, Dallas, for respondents.
   DENTON, Justice.

Donald F. Nobles and Dean Davis brought this suit to set aside a deed and to foreclose a judgment lien. The plaintiffs had obtained a default judgment against defendant Macoa, Inc. in the amount of $60,228.31 for unpaid attorneys’ fees plus $20,000 in collection costs. Seeking to enforce that judgment lien against property that Macoa had previously conveyed to other defendants in the present cause, the plaintiffs filed this action. Based on affidavits and depositions the trial court rendered a take-nothing summary judgment against the plaintiffs. The court of civil appeals affirmed, holding that the plaintiffs had failed to plead all of the elements necessary to establish a cause of action for fraudulent conveyance. Tex.Civ.App., 524 S.W.2d 367. We affirm the judgments of the courts below.

Macoa, Inc., a corporation, owned property in Dallas, Texas known as the Alpha-Welch Warehouse. On September 8, 1971 Charles Marcus, purporting to act as Vice-President of Macoa, executed a warranty deed conveying the warehouse to Robert S. Folsom, Claude R. McClennahan, Jr., and David M. Sherer. The sale of the Alpha-Welch Warehouse was closed on September 14, 1971 at the Hexter-Fair Title Company which provided the title insurance policy for the transaction. At the closing, a certificate that alleged to be a copy of the minutes of a directors meeting of Macoa, Inc. was presented to Hexter-Fair. This certificate was purportedly signed and sworn to by the Assistant Secretary of the corporation and was presented to Hexter-Fair as evidence that Marcus was Vice-President of Macoa, Inc., and that the board of directors had authorized him to'sign the conveyance. Based upon this certificate Hexter-Fair issued its title policy to the purchasers, defendants Folsom, McClennahan and Sherer.

In October 1972 a suit was filed against Macoa, Inc., by the plaintiffs in this cause, to recover for personal services rendered. Upon Maeoa’s failure to answer in that suit a default judgment was rendered for the plaintiffs in excess of $80,000. Seeking to affix a judgment lien the plaintiffs filed this action in January of 1973 against Marcus, Folsom, McClennahan, Sherer, Hexter-Fair Title and others. The purpose of the instant suit was to set aside the deed executed by Marcus because of alleged forgery and fraud in connection with the conveyance of the Alpha-Welch Warehouse. The plaintiffs did not, however, plead or ask for relief because of a fraudulent conveyance.

The trial court granted the defendants’ motion for a summary judgment. The plaintiffs appealed to the court of civil appeals and contended that the deed was a forgery as a matter of law and that material questions of fact existed as to Marcus’ lack of authority and as to whether the deed had been ratified by the corporation. The court of civil appeals held that the plaintiffs had no standing to bring the present suit because there had been neither pleadings nor proof that there had been a fraudulent conveyance that was a fraud upon them. Therefore, the court of civil appeals never reached the questions of forgery, authorization or ratification.

The court of civil appeals erred in basing its opinion on cases grounded on fraudulent conveyances. A fraudulent conveyance is a transfer made by a debtor with the intent to hinder, delay, or defraud his creditors by placing the debtor’s property beyond the creditors’ reach. Fraudulent conveyance requires a technical pleading that relies on specific allegations, including one that alleges the transfer to have been a fraud against the rights of the creditors; it is in addition to, and separate from, an action for fraud. Tex.Bus.Comm.Code Ann. § 24.02. The law is well settled in Texas that if a creditor pleads such conveyance that he may maintain an action “to vacate a fraudulant conveyance of his debtor’s land.” Eckert v. Wendel, 120 Tex. 618, 40 S.W.2d 796, 797 (1931). The plaintiffs here, however, have not pleaded that they were entitled to relief because of a fraudulent conveyance wherein they were the defrauded party; rather their pleading was based upon an alleged fraud committed against Macoa. Therefore it was error for the court of civil appeals to hold that the plaintiffs lacked standing for not pleading that the conveyance was fraudulent as to them as is required for a fraudulent conveyance action when fraudulent conveyance was not in issue.

Nobles and Dean contend before us that the conveyance executed by Marcus was a forgery and therefore was void as a matter of law. The claim is that Marcus’ signature as Vice-President of Macoa, when he was not in fact an officer of that corporation, amounted to a forgery of the deed. The evidence shows that there is some dispute over whether Marcus’ action was later ratified by Macoa. There is, however, no doubt that at the time Marcus executed the deed that he had not been properly elected to the position of vice-president or properly authorized to make such a conveyance. Marcus was orally authorized by Lionel 0. Birke-land, President of Macoa, to sign the conveyance as vice-president. Marcus was not, however, duly elected to that position by the Macoa Board of Directors as required by the corporate bylaws. In addition, the corporate resolution presented to Hexter-Fair to prove that Marcus had authority to make the conveyance was not the result of a board of directors meeting as it was represented to be. The evidence shows that a board meeting was never held on this matter and that Birkeland acted on his own in authorizing Marcus to sign as vice-president. This certificate was prepared and sworn to, at Birkeland’s request, by an employee of Macoa who was not an assistant secretary of the corporation as was recited therein.

The question before us is whether Marcus’ signing his own name to the instrument, but under a false power, causes the deed to be a forgery. In Ramirez v. Bell, 298 S.W. 924 (Tex.Civ.App.—Austin, July 1927, writ ref’d.) the court defined forgery as follows:

Forgery, at common law, was the making or altering of a written instrument “purporting to be the act of another.” 26 CJ 898.

Forgery was also similarly, but in a broader manner, defined in Smith v. Dawson, 234 S.W. 690 (Tex.Civ.App.—San Antonio 1921, n. w. h.).

Forgery is the making without authority of a false instrument in writing, purporting to be the act of another, in such manner that the false instrument so made would, if true, have created, increased, diminished, discharged, or defeated any pecuniary obligation. The instrument must appear on its face to be, or must in fact be, one which, if true, would possess some legal validity, or be legally capable of effecting a fraud. Scott v. State, 40 Tex.Cr.R. 105, 48 S.W. 523.

Both of these cases stress that to be a forgery the signing must be by one who purports to act as another. “Another,” as used in these definitions, includes all other persons, real or fictitious, except the person engaged in the forgery.

Therefore, one who signs his true name, and does not represent himself to be someone else of the same name, does not commit a forgery because his act does not purport to be that of another. United Pacific Ins. Co. v. Idaho First Nat. Bank, 378 F.2d 62 (9th Cir. 1967); State Bank of Poplar Bluff v. Maryland Casualty Co., 289 F.2d 544 (8th Cir. 1961); Gulf Oil Corp. v. Cantrell, 387 S.W.2d 416 (Tex.Civ.App.—Beaumont 1965, dism.). This rule is clearly distinguishable from the holding in Olsen v. Grelle, 228 S.W. 927 (Tex.Comm’n App.1921, judmnt. adopted). In that case the court held that a deed was a forgery, even though signed by only one co-tenant with his true name, because he signed the conveyance under a forged power of attorney. In the instant case Marcus did not sign the conveyance under any such forged power but merely signed his own name as vice-president when he had no actual authority to do so.

The rule is also clear that one who signs his true name, purporting to act as the agent of another, has not committed a forgery. In 37 C.J.S. Forgery § 8, at p. 38, we find the following:

An agent may commit forgery by signing an instrument in disobedience of his instructions or in improper exercise of authority, but one who executes an instrument purporting on its face to be executed by him as an agent, when in fact he has no authority to execute such instrument, is not guilty of forgery.

The reason for this rule is plain. The fraud in such a case is not committed, as is required for a forgery, by inducing the belief that the instrument was executed by someone other than by the agent himself. Rather the fraud is committed, if at all, by inducing confidence in an agency which does not exist. While the alleged agent may be culpable for his fraud he has not committed a forgery. Gilbert v. United States, 370 U.S. 650, 82 S.Ct. 1399, 8 L.Ed.2d 750 (1962); Torrance Nat. Bank v. Aetna Casualty & Surety Co., 150 F.Supp. 638 (S.D.Cal.1957) aff’d 251 F.2d 666 (9th Cir. 1958). Marcus’ signing of the deed conveying the Alpha-Weleh Warehouse was not forgery. Marcus may be guilty of falsely representing the power under which he executed the instrument but he did not represent his act to be that of another.

In the alternative the plaintiffs also pleaded that Marcus executed the conveyance without authority and/or because the conveyance was made without any valuable consideration. The plaintiffs, however, pleaded both of these acts as frauds upon the corporation and not as fraud upon their own rights as creditors.

Deeds procured by fraud are voidable only, not void, at the election of the grantor. It is settled that such a deed is valid and represents prima facie evidence of title until there has been a successful suit to set it aside. Meiners v. Texas Osage Coop erative Royalty Pool, 309 S.W.2d 898 (Tex.Civ.App.—El Paso 1958, writ ref’d n. r. e.); Whalen v. Richardson, 353 S.W.2d 941 (Tex.Civ.App.—Amarillo 1962, n. w. h.). To the same effect is Deaton v. Rush, 113 Tex. 176, 252 S.W. 1025 (1923), wherein this court stated that:

A deed obtained by fraud is not void but voidable only. As between the original parties Rush’s title is prima facie good, and it could only be avoided by a suit and a decree annulling and canceling the deed.

It is a fundamental rule of law that only the person whose primary legal right has been breached may seek redress for an injury. In American Nat. Ins. Co. v. Hicks, 35 S.W.2d 128 (Com.App.1931, judgm. adopted), a right of action was defined as follows:

The right to maintain an action depends upon the existence of what is termed a cause of action, which involves the combination of a right on the part of the plaintiff and a violation of such right by defendant.

Without breach of a legal right belonging to the plaintiff no cause of action can accrue to his benefit. A suit to set aside a deed obtained by fraud can only be maintained by the defrauded party. Smith v. Carter, 45 S.W.2d 398 (Tex.Civ.App.—Texarkana 1932, writ dism’d); Meiners v. Texas Osage Cooperative Royalty Pool, supra. A party who was not defrauded by the conveyance has not suffered an invasion of a legal right and therefore does not have standing to bring suit based on that fraud.

The plaintiffs here are not the defrauded party but are creditors of the alleged defrauded party. Any cause of action which may have been created can only be asserted by Macoa, Inc. and does not accrue to the benefit of the plaintiffs. The plaintiffs lack standing to bring the present action, not because they incompletely pleaded the-elements of a fraudulent conveyance but because they pleaded fraud, and under those pleadings they were not the defrauded party.

Accordingly, the judgments of the trial court and the court of civil appeals are affirmed.

GREENHILL, C. J., not sitting.