author: O’QUINN, Justice.

text:
    Kirk MICHAUX et al., d/b/a Treehouse Apartments, Appellants, v. Ann KOEBIG et al., Appellees.
    No. 12572.
    Court of Civil Appeals of Texas, Austin.
    Aug. 10, 1977.
    Rehearing Denied Sept. 7, 1977.

      Duane F. Emmert, McGinnis, Loehridge & Kilgore, Austin, for appellants.
    Andrew Gary, Morgan & Gary, San Marcos, for appellees.
   O’QUINN, Justice.

Appellees, who were plaintiffs below, brought this lawsuit in January of 1975 as former tenants of the Treehouse Apartments in San Marcos, complaining that in August of 1974 they were wrongfully excluded from their apartment by an implied threat of criminal complaint and that their security deposits, in the sum of $90, were wrongfully withheld by the landlords.

The tenants sought judgment for $237 representing one month’s rent, plus $300 as triple the security deposits and $100 statutory penalty, together with damages in the sum of $250 plus $750 as attorney’s fees, a total of about $1,640.

The cause was tried before the district court without a jury in June of 1976, after which the court rendered judgment for the tenants in the sum of $1,326, consisting of $90 for security deposits, $270 as a sum treble the deposits, $100 as statutory penalty, $116 for unused rents, and $750 as attorney’s fees. The landlords have appealed and bring seven points of error under which they deny wrongful eviction of the tenants, refute the claims of willful exclusion or threat of criminal prosecution, and deny willful withholding of the security deposits.

We will reverse the judgment of the trial court and render judgment that the tenants take nothing by their suit and direct appellants to return the amount of the tenants’ deposits, in the sum of $90, which the landlords tendered without success after learning the forwarding address of the tenants.

The trial court filed no findings of fact and conclusions of law and none was requested. We examine the record under the established rule that an appellate court must affirm the judgment of the trial court if it can be upheld on any legal theory that finds support in the evidence. Seaman v. Seaman, 425 S.W.2d 339, 341 (Tex.1968); Longhorn Flying Club, Inc. v. Dragoo, 464 S.W.2d 189, 191-2 (Tex.Civ.App. Austin 1971, writ ref’d n.r.e.); In Interest of Stuart, 544 S.W.2d 821, 824 (Tex.Civ.App. Tyler 1976, writ ref’d n.r.e.); Poteet v. Winter Garden Production Credit Ass’n, 546 S.W.2d 650, 652 (Tex.Civ.App. El Paso 1977, writ ref’d n.r.e.).

The facts giving rise to this action are that in late summer of 1974 the appellee tenants were asked to vacate their apartment. The following note from the manager of the apartment complex was placed on appellees’ apartment door: “Because of disorderly conduct in and on a public place, according to Penal Code 4201 of the Revised Civil [sic] Statute of Texas, you are asked to vacate the premises within three (3) days.”

The request to vacate apparently was the result of the tenants’ failure repeatedly to abide by the landlords’ parking policy and regulations, as to assigned parking spaces for tenants only, and the result of a verbal argument in the parking area between one of the appellees and the manager of the apartment complex, growing out of parking violations by the tenants.

In response to the written request, the tenants vacated the apartment without protest and in accord with notice from the apartment manager. The vacated apartment was left in an appropriately proper condition to warrant return of the security deposits of $90, which at the time of suit some four months later, had not been returned as a security deposit.

The tenants left no official written notice of their forwarding address, as required by statute. It is the contention of appellee tenants that the printed addresses on their rental checks were sufficient written notice of the forwarding addresses for refund of the security deposit to be a landlord obligation.

The applicable statute is Tex.Rev.Civ. Stat.Ann. art. 5236e, see. 2(a), sec. 4(a), sec. 4(c), sec. 6(a) (1973).

Section 2(a) reads:

“Security deposits must be refunded by the landlord to the tenant within 30 days after the tenant surrenders the premises. A tenant shall give advance notice of surrender as may be required by the rental agreement. However, advance notice may not be a condition for refund unless the requirement of advance notice is underlined or printed in conspicuous, bold print in the rental agreement.” (Emphasis supplied)

Section 4(a) reads:

“A landlord who in bad faith retains a security deposit in violation of this Act is liable for $100 plus treble the amount of that portion of the deposit which was wrongfully withheld from the tenant, and shall be liable for reasonable attorneys fees in a lawsuit to recover the security deposit.”

Section 4(e) reads:

“In any court action brought by a tenant under this Act, the landlord bears the burden of proving that his retention of the security deposit or any portion thereof was reasonable. In this court action the landlord is not liable for the penalty, treble damages, or attorneys fees referred to in Subsections (a) and (b) of this section unless the landlord is found to have acted in bad faith. Failure to return a security deposit within 30 days or failure to provide a written description and itemization of deductions within 30 days is prima facie evidence and a presumption that the landlord acted in bad faith.” (Emphasis supplied)

Section 6(a) reads:

“The tenant shall furnish the landlord with a written copy of the tenant’s forwarding address for purposes of security deposit refunding. A tenant’s right to security deposit refund and description of damages and charges is never forfeited for mere failure to furnish a forwarding address to the landlord. Notwithstanding any other provision of this Act, a landlord is not obligated to return the security deposit or furnish a written description of damages and charges until the tenant has furnished the forwarding address.” (Emphasis supplied)

The statute makes clear that a written copy of the tenant’s forwarding address is to be furnished to the landlord “for purposes of security deposit refunding.” Until this obligation is met by the tenant, the landlord is under no obligation to refund the security deposit.

Since Article 5236e provides for award of attorney’s fees, it is penal in nature. Such statutory provisions allowing for collection of attorney’s fees are in derogation of the common law and must be subject to strict construction. Van Zandt v. Fort Worth Press, 359 S.W.2d 893 (Tex.1962); Knebel v. Capital National Bank in Austin, 518 S.W.2d 795 (Tex.1974); King Optical v. Automatic Data Processing of Dallas, Inc., 542 S.W.2d 213 (Tex.Civ.App. Waco 1976, writ ref’d n.r.e.).

The printed address on a check given for rent is not sufficient compliance to discharge the tenant’s initial obligation as set out in the statute. This obligation must be met before the obligation shifts to the landlord. A rental check is tendered the landlord for the purpose of paying rent, not to provide a written copy of a forwarding address “for purposes of security deposit refunding.”

In addition, it is obvious that rental checks are not retained by landlords as permanent business records but instead are deposited in a bank for payment, and eventually are returned to the tenants at the conclusion of the negotiable instrument process.

The tenants did not discharge their obligation. The landlords were not, therefore, under the statutory obligation to return the security deposit. The landlords met their burden of proof as required by statute indicating that the retention of the security deposit was reasonable.

The landlords, being under no obligation to return the security deposit until furnished by the tenants with a written copy of the forwarding address, did not retain the security deposit in bad faith. The landlords had no liability to appellees for the penalty, treble damages, or attorney’s fees awarded under Tex.Rev.Civ.Stat.Ann. art. 5236e, see. 4(a) (1973) in the judgment rendered by the trial court.

We agree with appellants’ contentions that as landlords they did not act in bad faith in withholding the security deposit; that since the evidence indicated the tenants failed to discharge their statutory obligation, the landlord appellants rebutted the statutory presumption of bad faith; and that since the landlord appellants were not in violation of the security deposits provisions of Article 5236e, assessment of statutory treble damages and penalty was error.

Appellants raise additional points under which they claim that the tenants were neither willfully excluded nor threatened with criminal prosecution. Appellees alleged each of these contentions in the original trial petition.

The “willful exclusion of tenant” is described in Tex.Rev.Civ.Stat.Ann. art. 5236c, sec. 2 (1973):

“It shall be unlawful for a landlord or his agent to willfully exclude a tenant from the tenant’s premises in any manner except by judicial process. Willful exclusion shall mean preventing the tenant from entering into the premises with intent to deprive the tenant of such entry. Provided, however, a landlord or his agent shall not be prevented from removing the contents of the premises when the tenant has abandoned the premises or from changing door locks when the tenant’s rentals are in fact delinquent in whole or in part. When such door lock is changed under such circumstances, a written notice shall be left on the tenant’s front door describing where the new key may be obtained at any hour and describing the name of the individual who will provide the tenant with such key; and such key shall be provided regardless of whether the tenant pays any delinquent rentals.” (Emphasis supplied)

If there had been a willful exclusion of the tenants as detailed in Article 5236c, section 4 of the statute provides:

“Upon violation of this Article by the landlord or his agent, the tenant may recover possession or terminate the rental agreement; and, in either case, the tenant may recover actual damages, plus one month’s rent, plus reasonable attorneys fees, less any delinquent rentals or other sums for which the tenant is liable.”

The canon of strict construction should be applied. It is noted that:

“Much lip-service, of course, has been given to the canon that a statute which imposes a penalty should be ‘strictly’ construed. Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895 (Tex.1962). But this canon is simply a guide to be used when resort to it furthers the legislative purpose. The cardinal rule of construction which, significantly, has been expressly adopted by the legislature, is that ‘the court shall look diligently for the intention of the Legislature, keeping in view at all times the old law, the evil and the remedy. Tex.Rev.Civ.Stat.Ann. art. 10(6) (1969).’ ” O. R. Mitchell Motors, Inc. v. Bell, 528 S.W.2d 856, 859 (Tex.Civ.App. San Antonio 1975, writ ref’d n.r.e.).

The purpose of Article 5236c is to deprive landlords of certain self-help devices. See Wallenstein, Property, 28 Sw. L.J. 27, 59 (1974).

Article 5236c is concerned with actual physical denial of a tenant’s right of entry, as particularly exemplified by the changing of door locks, or constructive denial of entry or physical use of an apartment by interruption of utility service as prohibited by Article 5236c, sec. (1) (1973).

In the present case there was no physical exclusion. The landlords’ only act was to post on the appellees’ door a request that they vacate the premises.

It is noted that section 9 of the tenants’ apartment rental contract reads:

“RULES AND REGULATIONS. Resident, his family, and guests will comply with all written rules and regulations furnished to the resident(s). Owner reserves the right to control the method, manner, and time of parking in parking spaces . . . Resident agrees that the conduct of himself, his family, and guests shall never be disorderly, boisterous or unlawful; and shall not disturb the rights, comforts, or conveniences of other persons in the apartment complex. . . .”

There is evidence that tenant appellees on occasion violated the rules and regulations concerning “parking in parking spaces.” There is evidence that the tenants were on occasion disorderly.

Section 16 of the apartment rental contract provides in part:

“DEFAULT BY RESIDENT. . . . if resident or the other occupants or guests of his apartment materially and/or repeatedly violate this contract or applicable state and local laws . then owner or owner’s representative may terminate resident’s right of occupancy by giving resident at least three days’ notice in writing . . .”

The record does not disclose willful exclusion of the tenants from their apartment by the landlord. There was only a written notice of the termination of the residents’ rights of occupancy.

In the trial court judgment all the sums of money awarded dealt with the remedies of Article 5236e concerning bad faith retention of security deposits, except the award of $116.00 for unused rents. There was no award of “actual damages, plus one month’s rent, plus reasonable attorneys fees, less any delinquent rentals or other sums for which the tenant is liable,” as provided for in Article 5236c, sec. 4.

From the judgment itself we conclude that the sums awarded appellees were not based on willful exclusion.

Though appellants assign error in a finding that the landlords threatened the tenants with criminal prosecution, the record and the judgment reflect no such finding by the trial court. As stated earlier, the notice posted on tenants’ door stated that “Because of disorderly conduct in and on a public place, according to Penal Code 42.01 of the Revised Civil [sic] Statutes of Texas, you are asked to vacate the premises within three (3) days.”

Beyond the obvious confusion of penal and civil statutes, the reference to “Penal Code 42.01” in the written notice is not in the context a threat of criminal prosecution, but rather is a definitional reference to the meaning of “disorderly conduct” as defined in the statute.

Termination of occupancy rights was not based on violation of the criminal statute but on violation of section 9 of the rental contract as provided for by section 16 of the rental contract.

It appears that the written notice of termination of occupancy rights should have made reference to the apartment rental contract. Failure to do so, however, did not convert a definitional reference to a penal statute into a threat of criminal prosecution.

The record shows that the apartment manager referred to 42.01 of the Penal Code because it was set out in the “Texas Apartment Association Redbook,” which is in the record as an exhibit. There was testimony by the apartment manager that she was following “Redbook” procedures.

The point of error concerning constructive eviction is important only in determining under what theory the award of $116.00 for unused rents was reached. Appellants contend the trial court committed error in finding the landlords liable for constructive eviction. There is nothing in the trial court judgment to indicate that there was a finding of liability for constructive eviction, except the award of the $116.00 for unused rents. We conclude that constructive eviction did not occur. In Texas the general requirements for constructive eviction have been set out in Stillman v. Youmans, 266 S.W.2d 913 (Tex.Civ.App. Galveston 1954, no writ), and in Richker v. Georgandis, 323 S.W.2d 90, 95-96 (Tex.Civ.App. Houston 1959, writ ref’d n.r.e.).

The requirements, stated in Rich-ker, are repeated:

“. . . 1. An intention on the part of the landlord that the tenant shall no longer enjoy the premises, which intention may be inferred from the circumstances proven; 2. A material act by the landlord or those acting for him or with his permission that substantially interferes with the use and enjoyment of the premises for the purpose for which they are let; 3. The act must permanently deprive the tenant of the use and enjoyment of the premises; and 4. The tenant must abandon the premises within a reasonable time after the commission of the act.” [Also see 35 Tex.Jur.2d Landlord and Tenant, sec. 69 (1962); Note, 7 Baylor L.Rev. 456 (1955); Jackson, Constructive Eviction of a Tenant, 13 Baylor L.Rev. 62 (1961)].

Under the facts in the present case the tenants moved out without protest following the posting of the notice requesting them to vacate. Beyond the towing away of cars improperly parked under the regulations of the apartment complex, there were no harassing incidents interfering with the peaceful possession of the premises by the tenants, and there was no disturbance of the tenants’ enjoyment or beneficial use of the premises. Mere notice to quit, followed by peaceful vacation of the premises, is not sufficient to constitute a claim of constructive eviction. Rust v. Eastex Oil Company, Inc., 511 S.W.2d 358, 361 (Tex.Civ.App. Texarkana 1974, no writ), quoting 49 Am.Jur.2d Landlord & Tenant, Sec. 305 (1970); Edwards v. Blissard, 440 S.W.2d 427, 431-132 (Tex.Civ.App. Texarkana 1969, writ ref’d n.r.e.); Weissberger v. Brown-Bellows-Smith, Inc., 289 S.W.2d 813, 817 (Tex.Civ.App. Galveston 1956, writ ref’d n.r.e.); also see Jackson, Constructive Eviction of a Tenant, 13 Baylor L.Rev. 62, 67 (1961).

There is authority for the position that damages are not recoverable by the tenants when the lease is terminated for failure of the tenants to comply with the written agreement of rental. Long v. Carter, 455 S.W.2d 818 (Tex.Civ.App. Texarkana 1970, writ ref’d n.r.e.). There is evidence indicating that the tenants had been in violation of at least one and possibly two of the rules and regulations set out in section 9 of the rental contract. Section 16 of the same rental contract provided that such a violation could result in the termination of the residents’ right of occupancy.

A second problem is to determine on what basis or evidence $116.00 for unused rents was arrived at by the court. The sum represents approximately one-half of a monthly rental. We have difficulty in ascertaining the exact basis the trial court used to reach this damage determination.

Appellants suggest in their brief that the $116.00 damages must have been based on liability for wrongful eviction by threat of criminal prosecution. We have already determined that there was no willful exclusion as described by Article 5236c.

Appellants also state that the $116.00 unused rents award must have been based on a common law tort or contract theory.

Appellees in their brief state, “The award by the district court of $116.00 as ‘unused rents’ appears to be an assessment of the actual damages of tenants.”

In their original petition appellees sought as damages $237.00 for one month’s rent. We find no evidence in the record to support the award of $116.00 for unused rents, either through exhibit or testimony.

The tenants were asked to vacate on August 31, 1974, and they moved on September 1 or September 2, 1974. There is no testimony as to unused rent and no exhibit of any check representing prior payment of rent for September. The trial judge appears to have determined damages simply as approximately two weeks’ rental.

We find no evidence upon which to base such award of the $116.00 for unused rents.

We find no express authority for return of the security deposits in addition to statutory damages authorized by Article 5236e, section 4(a). Appellants tendered the security deposits after suit was filed, but the tenants, on advice of counsel, refused the tender apparently to avoid contention the tender was in full settlement of the cause of action. Appellants concede that the statute provides for return of the deposit itself, and they raise no point of error on this matter of statutory construction. We conclude that as a matter of equity the amount of the deposits should be returned to the tenants by the landlords.

The judgment of the trial court is reversed. We render judgment that appellees take nothing by their suit and direct that appellants return to appellees the full amount of the security deposits in the sum of $90.

Reversed and Rendered.

      . Appellees are Ann Koebig and Liz Ennis; appellants, defendants below, are Kirk Michaux and Don Weedon, doing business as Treehouse Apartments, located on LBJ Street in San Marcos. The record indicates that at the time of appeal the apartment complex was under new ownership.


source: Caselaw Access Project

author: SHANNON, Justice.

license: Public Domain

text:
    The TEXAS YOUTH COUNCIL, Appellant, v. The STATE of Texas, Appellee.
    No. 12596.
    Court of Civil Appeals of Texas, Austin.
    Aug. 10, 1977.

      Robert F. Salter, Texas Youth Council, Austin, for appellant.
    Jed I. Oliver, Juvenile Court Staff Atty., Austin, for appellee.
   SHANNON, Justice.

This appeal concerns the construction of Tex.Rev.Civ.Stat.Ann. art. 5143d, § 30 (1971). Appellant is the Texas Youth Council.

The juvenile court of Travis County committed David Ramirez to the care, custody, and control of the Texas Youth Council on August 16, 1976. Thereafter, the Youth Council administratively determined that pursuant to Art. 5143d, § 30, Ramirez was feeble-minded and returned Ramirez to the juvenile court of Travis County “for appropriate disposition.”

On September 10,1976, the juvenile court staff attorney for Travis County filed a motion with the juvenile court requesting that the court require Ramirez and the Executive Director of the Texas Youth Council to appear and the Executive Director to show cause why the Youth Council should not accept Ramirez and provide Ramirez with “. . .a program of constructive training aimed at rehabilitation and reestablishment.”

The Youth Council filed no answer to the show cause motion, but the Executive Director appeared with counsel at the hearing. At the hearing the Youth Council called Robert Burl Cavin, a psychologist at the Youth Council’s reception center in Brownwood, and Joseph S. Kugler, a psychiatrist retained by the Youth Council. Cavin testified that based upon the results of tests administered to Ramirez at the reception center, Ramirez had a “full-scale IQ of 55.” Dr. Kugler testified that Ramirez was mentally retarded. The Youth Council by administrative rule has determined, for purposes of § 30, that “a full-scale I.Q. score of 59 or below shall be used in conjunction with other clinical criteria in the determination of mental retardation.”

The juvenile court staff attorney called David R. Poole, a psychologist, who testified that Ramirez’s scores on the tests indicated a “full-scale IQ of 71.”

After the hearing, the juvenile court entered an order remanding Ramirez to the care, custody, and control of the Texas Youth Council.

The Council attacks the juvenile court’s order by three points of error. The Council argues under its first and second points that pursuant to Art. 5143d § 30, its administrative determination that a delinquent child is mentally ill or feeble-minded is final. As a result, so argues the Council, the juvenile court was without jurisdiction in the show cause proceeding to consider and determine whether or not Ramirez was feeble-minded. We do not agree.

Article 5143d § 30 provides in pertinent part as follows:

“Sec. 30. Whenever the Youth Council finds that any delinquent child committed to it is mentally ill, feeble-minded or an epileptic, the Youth Council shall have the power to return such child to the court of original jurisdiction for appropriate disposition or shall have the power to request the court in the county in which the training school is located to take such action as the condition of the child requires.”

Section 30 recognizes that delinquent children may be, or later may become, mentally ill or feeble-minded. In that event, and if the Council is of the opinion that the child is mentally ill or feeble-minded, § 30 empowers the Council to return the child to the committing court “for appropriate action” or to request the court in the county in which the training school is located to take such action as the condition of the child requires. “Appropriate action” of the committing court or of the court in the county of the training school necessarily entails an inquiry into the mental health of the child. If after hearing and from the evidence the court determines that the child is mentally ill or feeble-minded, an appropriate judgment should be entered pursuant to Art. 5547-1, et seq., or Art. 3871b. If after hearing, however, the court is of the opinion from the evidence that the child is not mentally ill or feeble-minded, then the court is empowered to order the child returned to the care, custody and control of the Youth Council.

Because the Youth Council does not claim error in this particular, we express no opinion concerning the propriety of the show cause procedure employed by the juvenile court staff attorney in this cause to determine the mental condition of Ramirez. In this connection, we refer the parties to Tex. Family Code Ann. § 55.02 and § 55.03 (1975).

The Council’s third point of error is that the court erred “. . .in holding that appellant could not administratively find D. R. to be retarded without prior judicial approval.” The juvenile court’s order did recite “. . . that the Texas Youth Council has caused the child’s return to the committing county without fulfilling its Article 5143d mandate in that said child was declared to be mentally retarded within the prohibited area of the Statute by an administrative determination alone and without first submitting such matter for judicial determination to this Court or other Court of competent jurisdiction.”

Contrary to the recitation in the juvenile court’s order, Art. 5143d does not contemplate that the Youth Council first submit the matter of the mental condition of the child to the courts before making its administrative decision. Under the statute, the administrative determination that the child is mentally ill or feeble-minded is a condition precedent to the return of the child by the Council to the committing court or to the court in the county in which the training school is located. As written previously, the court, after hearing and taking evidence, then determines the mental condition of the child and enters the appropriate order. The recitation in the juvenile court’s order, though erroneous, is not basis for reversal of the order.

The judgment is affirmed.


text:
    C. Daniel HURLBUT, Appellant, v. STATE BOARD OF INSURANCE, Appellee.
    No. 12598.
    Court of Civil Appeals of Texas, Austin.
    Aug. 10, 1977.

      Randy Martin, James A. Moore, Houston, for appellant.
    John L. Hill, Atty. Gen., Catherine A. Brown, Asst. Atty. Gen., Austin, for appel-lee.
   SHANNON, Justice.

This is a license revocation case. After hearing, the State Board of Insurance entered an order revoking the agent’s license of C. Daniel Hurlbut. Hurlbut filed an appeal from the Board’s order in the district court of Travis County. The district court sustained the Board’s special exception and entered an order dismissing Hurlbut’s cause of action for want of jurisdiction. We will affirm the judgment of the district court.

The parties agree that Tex.Rev.Civ.Stat. Ann. art. 6252-13a (1976), usually termed the Administrative Procedure and Texas Register Act, governed the appeal from the Board to the district court. The pertinent provisions in that act relating to appeals from administrative orders are set out below:

“Sec. 16(c) A decision is final, in the absence of a timely motion for rehearing
* * * * * *
“(e) Except as provided in Subsection (c) of this section [not applicable], a motion for rehearing is a prerequisite to an appeal. A motion for rehearing must be filed within 15 days after the date of rendition of a final decision or order.
.” (Emphasis added).

Hurlbut never filed a motion for rehearing with the Board. Because the filing of a motion for rehearing is a prerequisite to an appeal of the Board’s order to the courts, under Art. 6252-13a, the district court properly sustained the Board’s special exception and dismissed Hurlbut’s cause of action for want of jurisdiction. Texas State Board of Pharmacy v. Kittman, 550 S.W.2d 104 (Tex.Civ.App.1977, no writ). Upon determination that it had no jurisdiction of the appeal, the district court, of course, could not consider Hurlbut’s complaints concerning the deficiencies of the Board’s order.

The judgment is affirmed.


author: PRESLAR, Chief Justice.

text:
    George CHATMAN, Appellant, v. TEXAS EMPLOYERS INSURANCE ASSOCIATION, Appellee.
    No. 6630.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 10, 1977.
    Rehearing Denied Sept. 7, 1977.

      Law Offices of Pat Maloney, Inc., Pat Maloney, Scott Rackey, San Antonio, for appellant.
    Groce, Locke & Hebdon, Charles L. Smith, Thomas H. Crofts, Jr., San Antonio, for appellee.
   OPINION

PRESLAR, Chief Justice.

In this workmen’s compensation case, the claimant is appealing from a take nothing judgment. The issues on appeal involve the jury’s failure to find that the claimant was injured in the course of his employment, that his permanent disability was of short duration, and that there was no permanent partial incapacity. We affirm the judgment of the trial Court.

As to each of the three issues mentioned above, Appellant raises “no evidence” points of error. This presents the question of the legal sufficiency of the evidence which we review under the well known rules as set out in Garza v. Alviar, 395 S.W.2d 821 (Tex.1965). Calvert, “ ‘No Evidence’ and ‘Insufficient Evidence,’ ” 38 Tex.L.Rev. 361 (1960). In addition to the legal sufficiency points of error, Appellant has points of error as to the factual sufficiency of the evidence in regard to each of the three issues involved.

With respect to the fact questions of “against the great weight and preponderance of the evidence,” including any contention that the evidence is “factually insufficient,” we must review and consider the evidence in its entirety. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). The Plaintiff’s injuries arose out of an altercation with his crew foreman, and the jury found in response to Issue No. 2 that his injury was not sustained in the course of employment. In connection with the issue, the jury was instructed:

“ ‘INJURY IN THE COURSE OF EMPLOYMENT’ means any injury having to do with and originating in the work, business, trade, or profession of the employer, received by an employee while engaged in or about the furtherance of the affairs or business of its employer, whether upon the employer’s premises or elsewhere.
“In connection with the above and foregoing definition of ‘Injury in the Course of Employment’ you are further instructed that the term shall not include an injury caused by the employee’s willful intention to unlawfully injure some other person.”

Tex.Rev.Civ.Stat.Ann. art. 8309, Sec. 1, provides that the term “injury sustained in the course of employment,” as used in the Act, shall not include an injury caused by the employee’s wilful intention to unlawfully injure some other person. Appellee defended on the basis of this provision of the Statute, and the Court’s above quoted instruction tracking the Statute was to enable the jury to determine that question. The evidence as to the altercation between Appellant and his foreman, Carmona, is in dispute. Appellant was working as a roofer and was engaged in scraping gravel from the roof of the Menger Hotel in preparation of reroofing it. His version is that Carmo-na injured him when he protested being blamed for piling gravel on a weak area of the Menger roof. That lead to some pushing and shoving between the two men, but Carmona testified that that initial disagreement had been abandoned; but later, while he was getting a drink, the Appellant attacked him with a coke bottle and Appellant’s injuries resulted from his protecting himself from that attack. This evidence which we have summarized was detailed by the parties, and the jury apparently believed that the Appellant’s injury was caused by his wilful intention to unlawfully injure Carmona. There is some evidence to support the finding, and the finding is not against the great weight and preponderance of the evidence.

Appellant relies on the rule announced in Texas Indemnity Ins. Co. v. Cheely, 232 S.W.2d 124 (Tex.Civ.App.—Amarillo 1950, writ ref’d). It was there held that where an employee is injured in a personal difficulty arising over the manner in which the work of the employer is being done, although the difficulty itself is not a part of the work of the employee, the injured employee is entitled to compensation under the Texas Workmen’s Compensation Law. That rule has no application to the case at bar, for the jury was not given the benefit of it. They were not so instructed and were not making their decision based on such law. Appellant’s assignment of error in this Court is not that the charge was erroneous; rather, his contention is that the evidence is insufficient to support the jury’s finding thereunder. The charge was submitted without objection and the jury has found, and the evidence supports that finding.

By Issue No. 3B, the jury found that Appellant’s total disability terminated 5½ months after the injury, and by Issue No. 4, it found that the injury was not a producing cause of any partial incapacity. The points of error that these findings are against the great weight and preponderance of the evidence cannot be sustained. Appellant alleged fractured ribs and injuries to his back. There is evidence that the ribs healed satisfactorily; that by December 19th following the October injury, the Plaintiff’s rib injuries were healed. Appellant had a long history of back trouble, and the evidence concerning it and its possible aggravation by the October injury is lengthy. The Appellant’s doctor at one point testified that such aggravation lasted possibly “a few weeks;” that such aggravation lasted for “a while;” and the pain may have lasted for “quite some time.” Appellant’s doctor testified that he should not now do manual labor, but that his condition was such that he should not have been doing manual labor prior to the October incident. He and a radiologist both testified that x-rays taken before and after the incident revealed no differences, except for the fractured ribs. Appellant’s doctor declined to give an opinion that the injury of October, 1974, was a producing cause of permanent total incapacity. And, medical evidence is lacking that Appellant’s total incapacity endured beyond the April 12, 1975, date found by the jury. The medical evidence is somewhat lengthy; we have examined it all, but it would add nothing to the jurisprudence of this State to recite it here. Suffice it to say that from a review under the rules announced, we conclude that the jury’s answers to questions 3B and 4 are supported by some evidence and are not against the great weight and preponderance of the evidence.

The judgment of the trial Court is affirmed.


author: STEPHEN F. PRESLAR, Chief Justice.

text:
    Ignacio PENA, Appellant, v. SOUTHERN PACIFIC TRANSPORTATION COMPANY, Appellee.
    No. 6621.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 10, 1977.
    Rehearing Denied Sept. 7, 1977.

      Downman, Jones & Granger, David Q. Haag, Houston, for appellant.
    Matthews, Nowlin, Macfarlane & Barrett, Howard P. Newton, San Antonio, for appel-lee.
   OPINION

STEPHEN F. PRESLAR, Chief Justice.

Appellant, Ignacio Pena, filed this action pursuant to the Federal Employers’ Liability Act, 45 U.S.C. See. 51, seeking to recover damages for alleged injuries sustained in the course of his employment. The trial Court granted Defendant/Appellee’s motion for summary judgment. We affirm.

Appellant suffered injuries in the course of his employment, in December, 1974, while he was lifting heavy concrete blocks. He suffered a hernia which was surgically repaired; thereafter, in return for a gross sum settlement of $3,676.94, on March 27, 1975, he executed a contractual release of all claims against his employer arising out of the occurrence of December, 1974. In 1975, he filed this suit alleging that the injury of December, 1974, caused a hernia and damage to his back. Appellee filed its motion for summary judgment attaching the release and supporting affidavits. Following the granting of summary judgment for Appellee, Appellant filed a motion for new trial in which, for the first time, he alleged that the release was a result of mutual mistake.

This case is governed by Texas law of procedure and by federal substantive law; therefore, the validity of the release and the defenses to its validity are governed by federal law. Dice v. Akron, Canton & Youngstown Railroad Company, 342 U.S. 359, 72 S.Ct. 312, 96 L.Ed. 398 (1952).

Tex.R.Civ.P. 166-A provides that a summary judgment shall be rendered if it is shown that there is no genuine issue as to any material fact, and that the moving party is entitled to a judgment as a matter of law. Great American Reserve Insurance Company v. San Antonio Plumbing Supply Company, 391 S.W.2d 41 (Tex.1965). The release, executed by Appellant, is complete and comprehensive, and there is no question but that its effect is to foreclose any recovery by Appellant. Before the Court, with its supporting affidavits, it was a valid defense to this cause of action. This cast the burden on Appellant to plead and establish such facts as would render it invalid. Ellis v. Woods, 453 S.W.2d 509 (Tex.Civ.App.—El Paso 1970, no writ). Appellee having presented evidence negating any disputed issue of material fact, the burden of going forward with the evidence to show a disputed fact rested on Appellant. Bingham v. Gibson Products Company, Inc. of Odessa, 464 S.W.2d 713 (Tex.Civ.App.—El Paso 1971, writ ref’d n.r.e.). In an attempt to meet his burden, Appellant filed an affidavit which we have determined to be of no effect because it does not meet the requirements of Tex.R.Civ.P. 166-A.

The affidavit was not sworn to as prescribed by Rule 166-A. It was simply acknowledged, i.e., the notary certified that Appellant “executed the same for the purposes and consideration therein expressed.” It thus runs afoul of the holding of our Supreme Court in Perkins v. Crittenden, 462 S.W.2d 565 (1970). There it was held that a jurat is not the same as an acknowledgment for the purposes of summary judgment under Rule 166-A, and that the instrument was not an affidavit for purposes of the Rule, the Court saying:

“An acknowledgment (that an instrument was executed for the purposes therein expressed) does not purport to be a certification that the person acknowledging it swears to the truth of the matter set out. It does not, at least within the spirit of Rule 166-A, constitute an ‘affidavit’ so as to constitute a ‘sworn or certified’ copy.”

The Court cited with approval the same holding by the Austin Court of Civil Appeals in Crockett v. Sampson, 439 S.W.2d 355 (1969, no writ). It also distinguished its holding from that in Youngstown Sheet & Tube Co. v. Penn, 363 S.W.2d 230 (Tex.1962), where it held that purely formal deficiencies in an affidavit raised for the first time on appeal were waived where no exception was taken and there was no genuine issue of fact. It noted that in Youngstown the instrument was defective in certain respects and was subject to special exception, but that it was sworn to, it was an affidavit, and was subject to correction, while the instrument before it was not an affidavit at all within the definition of the Statute and did not constitute summary judgment proof. The instrument of the Appellant in the case before us is not an affidavit and is not competent summary judgment evidence. Therefore, the Appellant presented no summary judgment evidence to contradict the validity of the release.

The judgment of the trial Court is affirmed.


text:
    Maria Carson NAPIER, Appellant, v. Harold NAPIER, Appellee.
    No. 6619.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 10, 1977.

      Peter Torres, Jr., San Antonio, for appellant.
    Don W. King, Jr., San Antonio, for appel-lee.
   OPINION

STEPHEN F. PRESLAR, Chief Justice.

This appeal from a judgment of divorce questions that part of the judgment which found that Appellee was the father of the child born to the Appellant prior to their marriage. We affirm the judgment of the trial Court.

The minor child was born August 7, 1970, and the parties were married in November of 1975. The judgment appealed from is the second judgment entered in the cause. The appellant brought the suit for divorce and alleged that there were no children of the marriage. Appellee filed no answer to this petition, and on July 7,1976, judgment was entered granting the divorce and containing a finding that no children were born of the marriage. Appellee filed a motion for new trial alleging that due to mistake of fact and error of counsel, no findings were made with regard to the minor child born to the Appellant and Appellee prior to the marriage of the parties. It was further alleged that there was currently pending a voluntary legitimation proceeding under Chapter 13 of the Texas Family Code wherein Appellee, Harold Napier, is seeking to voluntarily establish himself as the legitimate father of the child. It was further alleged that in view of the marriage of the parties subsequent to the birth of the child, this issue should have been before the divorce Court. A new trial was granted on July 28th setting aside the judgment in its entirety and ordering the matter retried on August 10th. On that date, a trial was had and the issue fully litigated as to the paternity of the child, and the judgment of that date is the one here appealed from.

By her first point of error, Appellant says that there are no pleadings, no evidence, and insufficient evidence to support the finding that the minor was the child of the parties.

We are of the opinion that the sufficiency of the pleadings does not present reversible error. First, for the reason that the motion for new trial set forth the matter to be litigated, and she thereafter appeared and fully litigated the issue with no objection to the status of the pleadings and no objection to the evidence offered. In fact, in the trial from which this appeal is taken, in presenting her case in chief, it was brought out that her counsel had told her that the previous judgment had been set aside and a new trial granted which involved the minor child. She then testified that she had the child prior to her marriage and its birth certificate was introduced with only her name on it as a parent. She testified that she went with the Appellee before they were married; had sexual relations with him; that he accepted the child as his own; that she was a registered nurse and knew when the child should have been conceived and that during the month that it should have been conceived, she had sexual relations with the Appellee but she also had sexual relations with other men; and that she did not know whether the Appellee was the father of her child or not. All of this evidence was presented by Appellant in her case in chief under questioning of Appellant by her counsel on direct examination. Thereafter, Appellee presented evidence on the issue without any objection by Appellant. Clearly, any insufficiency in the pleadings are waived.

There are two statutory provisions of our law which cover the situation presented here. Tex.Prob.Code Ann. Sec. 42 in part provides:

“ * * * Where a man, having by a woman a child or children shall after-wards intermarry with such woman, such child or children shall thereby be legitimated and made capable of inheriting his estate. * * * ”

We are unable to agree with Appellant’s construction of that Statute to mean that it legitimizes for purposes of inheritance only. The use of the word “and” makes the provision read that it does both, it legitimizes and provides for inheritance. Scott v. State, 501 S.W.2d 96 (1973), is a case by the Court of Criminal Appeals of Texas in which inheritance was not involved; under this Section 42, the one who married the mother after the birth of the child was held to be the father of the child and he was prosecuted for wilful neglect to provide for the support of the child.

Section 12.02 of the Texas Family Code, as amended in 1975, provides:

“A child is the legitimate child of his father if the child is born or conceived before or during the marriage of his father and mother.”

It has been held that this Statute is not to be given its literal meaning in determining whether the husband was the father of the child or not. Young v. Young, 545 S.W.2d 551 (Tex.Civ.App.—Houston [1st Dist.] 1976, writ dism’d). We agree with that interpretation of the Statute, and as applied to this case, it would mean that the fact of the child being born before marriage and the fact of marriage would not alone make Appellee the father.

Appellant has not separately stated her “no evidence” and “insufficient evidence” points and has briefed them together, but we will consider them, and in doing so we have followed the well established rules as to determination of the legal sufficiency and the factual sufficiency of the evidence. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1951); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965). There is substantial evidence admitted to show that Appellee is the natural father: the blood tests, though inconclusive, show that Appellee could be the father; a photograph of the child and Appellee together show a likeness or resemblance of the two; there was testimony by various witnesses that the Appellant had referred to Appellee as the father of her child; and there was evidence by both parties as to sexual relations nine months before the child was born. The evidence supports the trial Court’s finding that Appellee is the father of Appellant’s child.

Appellant also urges that the trial Court abused its discretion in granting Ap-pellee a new trial. An order granting a new trial is not appealable. Plummer v. Van Arsdell, 117 Tex. 200, 299 S.W. 869 (Tex.Com.App.1927, opinion adopted). Tex. R.Civ.P. 320 provides that new trials may be granted for good cause. As concerns the grounds for the new trial, the Court is not restricted to those grounds set out in the motion, but may grant a new trial on its own motion and does not have to give its reasons for granting a new trial. Brown v. American Finance Co., 432 S.W.2d 564 (Tex.Civ.App.—Dallas 1968, writ ref’d n. r. e.). Discretion of the trial Court in granting or denying a new trial should not be disturbed on appeal except for manifest abuse of discretion. Neunhoffer v. State, 440 S.W.2d 395 (Tex.Civ.App. —San Antonio 1969, writ ref’d n. r. e.). Appellant has not shown such a manifest abuse of discretion.

The judgment of the trial Court is affirmed.


author: OSBORN, Justice.

text:
    PROCHEMCO, INC., Appellant, v. CLAJON GAS CO. and West Texas Gas, Inc., Appellees.
    No. 6606.
    Court of Civil Appeals of Texas, El Paso.
    Aug. 10, 1977.

      Shafer, Gilliland, Davis, Bunton & McCol-lum, Inc., Lucius D. Bunton, Odessa, for appellant.
    Bullock, Scott & Neisig, Tom R. Scott, Russell W. Neisig, Midland, for appellees.
   OPINION

OSBORN, Justice.

This is a declaratory judgment and injunction suit filed to determine the validity of an option in a Gas Sales Contract covering irrigated farmland in Pecos County. The case was tried to the Court on an agreed statement of facts, pursuant to Tex. R.Civ.P. 263. The trial Court refused to extend the contract under the terms of the option and entered judgment for Appellees. We reverse and remand the case to the trial Court for entry of a judgment for the Appellant.

On August 17, 1970, Coyanosa Land & Cattle Company, a wholly owned subsidiary of Prochemco, Inc., owned the surface of 1,673 acres of farmland in Pecos County. On that date, Coyanosa entered into a Gas Sales Contract with Clajon Gas Co., under the terms of which Coyanosa agreed for itself, its heirs and assigns:

“ * * * to purchase natural gas from Company, for utilization as the total power requirements (particularly, but without limitation, for the operation of internal combustion engines) necessary for the lifting of water for use in the irrigation of the following described land in Pecos County, Texas * *

The agreement provides that the terms of the contract are and shall be deemed covenants running with the described land and shall extend to all wells utilized in irrigating said land. Gas was sold at a price of 30$ per mcf for a term of five years beginning August 1, 1970.

The contract granted to Prochemco, but not to its assigns or successors, the option to extend the contract for an additional five years at a price of 34$ per mcf with notice of exercise of the option to be given 90 days prior to August 1, 1975. Such notice was given by Prochemco.

In May, 1974, Coyanosa conveyed a 99% interest in the land in question to G. Merwyn Eiland. At the same time, Coya-nosa executed a bill of sale to convey all of its interest in any personal property on the land to Eiland. Coyanosa also assigned to Eiland an Operating Agreement and Lease Contract with its tenant, Mike Burkholder. On July 19, 1974, Prochemco quitclaimed to Eiland all of its right, title and interest in the Pecos County land. Coyanosa Land & Cattle Company was voluntarily dissolved on July 2, 1975, having made no further transfers of any interest in the land in question.

In reply to the letter exercising the option, Clajon replied that since Prochemco’s subsidiary had conveyed a 99% interest in the land, the option could not be exercised by Prochemco. This suit resulted.

The Appellant presents a single point of error complaining of the trial Court’s failure to recognize the option and extend the contract for an additional five years. Appellant urges that since the option, which was not assignable, was personal to Pro-chemco, it could exercise the option even though its subsidiary had sold a 99% interest in the land covered by the gas contract. Appellees contend that the rights of Pro-chemco were assigned with the land and that there could be no strict compliance with the terms of the option by one not owning an interest in the land.

There is no contention by either party that the contract is ambiguous. The general rule of contracts is that where the contract is unambiguous, the Courts will give effect to the intention of the parties as expressed in the writing. City of Pinehurst v. Spooner Addition Water Company, 432 S.W.2d 515 (Tex.1968).

“The chief consideration in deciding whether a covenant runs with the land is whether it is so related to the land as to enhance its value and confer a benefit upon it * * 20 Am.Jur.2d Covenants, Conditions, etc. Sec. 37, p. 607 (1965). One of the types of contracts that may run with the land is one to furnish gas. 20 Am. Jur.2d Covenants, Conditions, etc., Sec. 38, p. 608 (1965); Slife v. Kundtz Properties, Inc., 40 Ohio App.2d 179, 318 N.E.2d 557 (1974); Alderson v. Empire Natural Gas Co., 116 Kan. 501, 227 P. 347 (1924); Harbert v. Hope Natural Gas Co., 76 W.Va. 207, 84 S.E. 770 (1915). It is obvious that it was the intention of the parties to this Gas Sales Contract that the covenant to buy and sell natural gas for irrigation purposes be one running with the land, and they expressly so stated in the gas contract. We hold that the contract did, as the parties intended, create a covenant running with the land and when Eiland purchased all but one percent of the land, the contract right (to purchase gas for utilization as the total power requirements for the lifting of water for use in the irrigation of the land), which was assignable, passed with the land.

But as to the option, it must be remembered that it was not assignable. At the time the option was given, Prochemco had no title to the land, record title being in Coyanosa. Thus, the option was personal to one who was not even a party to the contract and had no record title to the land. It is recognized that “by the express terms of the option the right may be made personal to one to whom it is given.” Williston on Contracts, See. 415, p. 73 (3rd ed. 1960). Williston on Sales, Vol. 1, Sec. 10-7, p. 431 (4th ed. 1973), notes that “the parties to an irrevocable option may specifically provide that the right to exercise that option is a personal one and nonassignable.” In Fulton v. Messenger, 61 W.Va. 477, 56 S.E. 830 (1907), the Court said:

“ * * * An optional contract, giving the right to purchase property within a certain time, and upon certain conditions, is often a valuable right; but, under the authorities cited, it is a personal privilege, limited to the optionee, where there is no provision for its assignment. * * *”

Following a Texas Supreme Court decision, the Supreme Court of Iowa in Myers v. J. J. Stone & Son, 128 Iowa 10, 102 N.W. 507 (1905), recognized the right of parties to a contract to determine the personal nature of an option in a lease agreement. The Court said:

“ * * * In its very nature an option is subject to such limitations as the owner may impose. He may make its exercise dependent upon the performance of conditions precedent contained in the same contract, as of a lease; or, for reasons appearing sufficient to himself, he may restrict the privilege of buying to a single individual. The right to discriminate between purchasers freely is one of the attributes of private ownership of property, and the reasons which lead to it are not the proper subjects of judicial inquiry. They inhere in the right to freedom of contract. * * * But in the instant case the very nature of the option obviated the possibility of its transfer to another. It was granted to the lessee named, but to no other person, and this necessarily excluded all others, and constituted it merely a personal privilege, which was no more assignable than rights arising out of contracts involving relations of personal confidence. See Menger v. Ward, 87 Tex. 622, 30 S.W. 853; Hosford v. Metcalf, 113 Iowa 240, 84 N.W. 1054.”

If Prochemco could exercise an option when “X” owns the land, should it not be able to do likewise when “Y” owns the land? If we are to assume that the parties intended that the option clause had some meaning and purpose when inserted into the gas contract, and we are to give effect to all the clauses within the four corners of the instrument, we must conclude that the bargain as originally struck gave Proehem-co a valid option at the time the contract was made in August, 1970, when Coyanosa owned the land. Since, the option was unassignable, it could be exercised only by Prochemco. If it could be exercised when the land was owned by Coyanosa, and Pro-chemco had no record title to the land, should it not be exercisable when Eiland owned record title and Prochemco apparently had a one percent interest in the land? If one concludes that the option could not be exercised in 1975 when Prochemco owned only a one percent interest, what was intended when the option was given in 1970 at a time when Prochemco had no ownership in the land?

We conclude that Prochemco properly exercised a personal option which it retained even after its subsidiary sold the land described in the Gas Sales Contract. To reach any other result, we must conclude that when the parties agreed in 1970 upon an assignable contract, they in fact meant that an option was given only if the contract was assigned to Prochemco. The parties did not so restrict the assignment of the contract, and we may not now add such a restriction.

Prochemco is entitled to a declaratory judgment in its favor. We reverse the judgment of the trial Court and remand the case to the trial Court for the entry of a declaratory judgment in favor of Prochem-co in accordance with this opinion.


author: AKIN, Justice.

text:
    UNITED SERVICE AGENCIES, Appellant, v. CONTINENTAL CASUALTY COMPANY, Appellee.
    No. 19233.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 10, 1977.

      Waggoner Carr, Chris D. Harsdorff, Austin, for appellant.
    William N. Hamilton, Vial, Hamilton, Koch, Tubb, Knox & Stradley, Dallas, for appellee.
   AKIN, Justice.

United Service Agencies sued Continental Casualty Company for fraudulently inducing its entrance into an agency contract and for wrongfully terminating the contract. After Continental answered, United filed a motion for nonsuit. On the same day that United filed the motion for nonsuit, Continental filed a counterclaim seeking a declaratory judgment declaring the contract between the parties to be valid, including Continental’s right to termination of the contract, and damages for United’s failure to pay over a premium made to it as agent for Continental as required by the contract. The trial court granted United’s motion for nonsuit, but retained jurisdiction over the counterclaim. Subsequently, a partial summary judgment was granted declaring that the contract was terminated pursuant to its termination provision and, after a trial the court rendered judgment for $1,033 against United on the counterclaim for damages. United appeals from the award of damages. We affirm.

The Nonsuit

United asserts that the trial court abused its discretion by refusing to dismiss Continental’s counterclaim, which was filed subsequent to a motion for nonsuit on the original claim. Essentially, United argues that since the counterclaim was filed after Continental learned of its opponent’s intention to move for nonsuit, the claim was filed in bad faith and should have been dismissed. We cannot agree. The right to nonsuit becomes absolute only after a motion for nonsuit is filed and brought to the attention of the court and opposing counsel; each of these conditions must be satisfied before the counterclaim is filed in order to force dismissal of the counterclaim as well as the original cause of action. Loomis Land & Cattle Co. v. Diversified Mortgage Investors, 583 S.W.2d 420, 423 (Tex.Civ.App.—Tyler 1976, writ ref’d n. r. e.); Cape Oil Co. v. Williams, 427 S.W.2d 122, 125-26 (Tex.Civ.App.—Tyler 1968, no writ); Towell v. Towell, 164 S.W. 23 (Tex.Civ.App.—Dallas 1914, no writ). Insofar as this record reflects, the motion for nonsuit was not brought to the attention of the court until November 29, 1976, twenty-five days after the counterclaim was filed on November 4, 1976. Thus, the record shows that the right to nonsuit became absolute only after the counterclaim was filed; therefore, the trial court’s retention of jurisdiction over the counterclaim was proper.

Alternatively, United Services argues that even if the filing of the counterclaim was filed in time, it should still have been dismissed because it was filed in “bad faith.” In this respect, United asserts that Continental Casualty’s exploitation of the notice of nonsuit in order to preserve jurisdiction of its counterclaim is tantamount to “bad faith.” We cannot agree. Although there is a requirement that a nonsuit be filed in good faith, McCormick v. Hines, 498 S.W.2d 58, 64 (Tex.Civ.App.—Corpus Christi 1973, writ dism’d); J. A. Walsh & Co. v. R. B. Butler, Inc., 260 S.W.2d 889 (Tex.Civ.App.—Waco) writ ref’d w. o. j. per curiam, 152 Tex. 601, 262 S.W.2d 952 (1953), there is no similar rule applicable to the filing of counterclaims. If a claim is filed in bad faith, such as for harassment, the proper remedy is to defend the action on the merits, and to counterclaim for an injunction against the filing of further harassing suits. Renfroe v. Johnson, 142 Tex. 251, 177 S.W.2d 600, 602 (1944). Thus, the remedy for the bad faith filing of a suit is final adjudication on the merits of the claim, and not an avoidance of the issue by dismissal without prejudice. The same rule, in our opinion, applies to counterclaims. Of course, if United had made no further appearance after filing its motion for nonsuit, service of process on the counterclaim would have been required, and the action would then have proceeded as if Continental had filed an original action. Consequently, bad faith even if established, would not be ground for dismissal.

The Counterclaim

The chain of circumstances underlying Continental’s counterclaim began on June 1, 1974. On that date, United entered into an agency contract with Continental whereby it was authorized to sell and service insurance policies issued by Continental. Under this agreement, United was obligated to pay over the full amount of all renewal premiums it received to Continental, which in turn would pay the agency a commission on the collected premiums. After the contract was executed, Mrs. Annie V. Wall purchased hospitalization insurance with Continental through a subagent of United. The renewal date for the insurance was June 1, 1975, and the renewal premium was $837.11. Before the renewal date, however, Mrs. Wall forwarded a check, dated May 20, 1975, for $1,033.46. The check bore the notation “one year hospital insurance.”

According to the counterclaim, United breached the agency contract by failing to pay this money over to Continental. United contends, however, that it was not obligated to forward the payment because the May 20 check actually represented the payment of a premium on a life insurance policy issued to Mrs. Wall by a different company. The premium due under the life insurance policy was $1,033.46, the exact amount of the May 20 check. Under these facts, United argues that the rendition of judgment for Continental was against the great weight and preponderance of the evidence. We disagree. Since no findings of fact and conclusions of law were filed by the trial court, we must presume that the trial court found all facts necessary to support its judgment, if these presumed findings are supported by some probative evidence and are not so against the preponderance of the evidence as to be manifestly wrong. Seaman v. Seaman, 425 S.W.2d 339 (Tex.1968); Johnson v. Buck, 540 S.W.2d 393, 397 (Tex.Civ.App.—Corpus Christi 1976, no writ). In the present case, there is ample evidence to support a finding that the May 20 check was a renewal premium on the hospitalization policies issued by Continental, rather than a life insurance premium. Mrs. Wall’s hospitalization policies with Continental were due for renewal on June 1, 1975, and prior to the renewal date, Mrs. Wall tendered her check for $1,033.46. The check bore the notation “one year hospital insurance.” At trial, Jack Caldwell, a partner in United, testified that the application for life insurance, to which he contended the check applied, was actually dated August 20, 1975, three months after the check was drawn. Upon further examination, he testified that the life insurance application could not possibly have accompanied the check; in addition, Caldwell was unable to reasonably explain how the May 20 check could have been a premium on a life insurance application which was dated three months after the check had been paid. We conclude, therefore, that the trial court’s presumed finding in support of its judgment was amply supported by evidence.

United also argues that since the check and life insurance application were part of the same transaction, the life insurance application should control any conflict between the instruments. We cannot agree because we do not accept the assumption that the two instruments were part of the same transaction. The trial court rejected this assumption when it rendered judgment for Continental. To render judgment for Continental, the trial court necessarily had to find that the check was not a part of the life insurance transaction, but rather related only to the hospitalization policies issued by Continental. This finding is supported by the evidence, supra.

Modification of the Judgment

As its final assignment of error, United contends that since the renewal premium on the hospitalization policies was $837.11, the trial court erred in rendering judgment for $1,033, the actual amount paid by Mrs. Wall. United urges us to modify the trial court’s judgment and render judgment for $837.11. We cannot accept this argument. Since Continental is liable to the insured, Mrs. Wall, for any refund regardless of whether the agent actually remits the overpayments, United was obligated under its contract to remit to Continental the entire sum received from Mrs. Wall. The agency agreement reads: “All premiums, other than first premiums, shall be remitted to the company in gross on day received.” [emphasis added]. As we read this language, the agent is required to remit the full amount of premiums received for the insurer’s account, and he has no discretion to withhold remittances because of overpayment by the insured. The general rule is that while an insurance broker acts for the insured in making the application and procuring the policy, he acts for the insurer in delivering the policy and in collecting and remitting premiums. Foundation Reserve Ins. Co. v. Wesson, 447 S.W.2d 436, 438 (Tex.Civ.App.—Dallas 1969, writ ref’d); East Texas Fire Ins. Co. v. Brown, 82 Tex. 631, 18 S.W. 713, 715 (1891); 3 COUCH ON INSURANCE 2d, §§ 25:92-95 (1960). Accordingly, in a suit against an insurance company for the refund of unearned premiums, the company is liable despite its agent’s failure to remit the unearned premiums. Stuyvesant Ins. Co. v. D. C. Herndon & Co., 73 S.W.2d 543, 544 (Tex.Civ.App.—Austin 1934, no writ); see Foundation Reserve Ins. Co. v. Wesson, supra at 438-39. Since the insurer is liable for the refund, it follows that the agent cannot defend against the insurer’s claim merely on the ground that the insured has a paramount right to the unearned premium. See Restatement (Second) of Agency, § 417 (1958); Seavey, Law of Agency, § 161 (1964); 1 Mecham on Agency, § 1331 (2d ed. 1914).

Affirmed.


author: ROBERTSON, Justice.

text:
    MOTIOGRAPH, INC., Appellant, v. W. D. MATTHEWS, Appellee.
    No. 19242.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 10, 1977.
    Rehearing Denied Sept. 8, 1977.
    Lanny E. Perkins, Fiedler & Fortescue, Dallas, for appellant.
    Earl Bentley, Dallas, for appellee.
   ROBERTSON, Justice.

W. D. Matthews sued his employer, Moti-ograph, Inc., seeking damages for the breach of an employment contract. When Motiograph failed to answer the suit, the district court, after a hearing, rendered a default judgment for Matthews in the sum of $24,186, together with $3,500 in attorney’s fees. Subsequently Motiograph moved to have the judgment set aside; however, the motion was overruled, and Motiograph now appeals. We affirm.

The basic question on this appeal is whether Motiograph demonstrated sufficient grounds to justify vacation of the default judgment. Our particular concern is whether Motiograph has alleged facts to support its lack of conscious indifference or intentional disregard with sufficient specificity. Setting up a meritorious defense and showing that the plaintiff will not be prejudiced if the judgment is vacated are, standing alone, insufficient grounds for setting aside a default judgment; the defendant must also allege and prove facts showing that its failure to answer before judgment was not intentional or the result of conscious indifference on its part. Ivy v. Carrell, 407 S.W.2d 212, 213 (Tex.1966); Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 393, 133 S.W.2d 124, 126 (1939); City of San Antonio v. Garcia, 243 S.W.2d 252 (Tex.Civ.App.—San Antonio 1951, writ ref’d). A default judgment cannot be vacated upon general allegations or conclusions. Cf. Ivy v. Carrell, supra at 214 (general allegations regarding meritorious defense held insufficient; motion must set forth facts which would constitute a defense). Rather, the defendant must specify facts which, if true, would thoroughly demonstrate the inadvertence of its failure to respond. Martin v. Ventura, 493 S.W.2d 336, 338 (Tex.Civ.App.—Tyler 1973, no writ); Harris v. Lebow, 363 S.W.2d 184, 186 (Tex.Civ.App. - Dallas 1962, writ ref’d n. r. e.).

In its motion, Motiograph alleged the following:

There was no negligence or lack of diligence on the part of Defendant in permitting Default Judgment to be entered. Service of Plaintiff’s Petition was had upon one of the employees, not upon any officer of Defendant, and said citation and petition was inadvertently misplaced by said employee and was never delivered to any officer of Defendant. Immediately upon receiving notice of the entry of the said Default Judgment, Defendant retained the undersigned attorney and made this Motion to Set Aside Default Judgment.

In our view, these statements are merely conclusory and do not set forth sufficiently specific facts from which the trial court or this court can determine whether the conscious indifference standard has been met. The assertion that the citation was “inadvertently misplaced” after service upon Mo-tiograph’s employee merely summarizes an undisclosed chain of events which purportedly excuse Motiograph’s unresponsiveness. Likewise, the affidavit attached to the motion merely recites that the motion’s allegations are “true and correct” and does not set forth any explanatory facts. Furthermore, there is no record that defendant tendered evidence regarding the particular facts surrounding service and the alleged loss of citation at any hearing on the motion. Under these circumstances, we hold that Motiograph has not shown itself entitled to vacation of the default judgment.

Accordingly, the judgment of the district court is affirmed.


author: HALL, Justice.

text:
    Benny R. GONZALES, Appellant, v. AMERICAN GENERAL LEASING & FINANCING CORPORATION, Appellee.
    No. 5769.
    Court of Civil Appeals of Texas, Waco.
    Aug. 11, 1977.

      Delmar L. Cain and Thomas S. Goggan, Goggan & Cain, Austin, for appellant.
    Joe W. Redden, Jr., Fulbright & Jawor-ski, Houston, for appellee.
   HALL, Justice.

American General Leasing & Financing Corp. brought this suit against Benny R. Gonzales on a promissory note executed by defendant in the principal sum of $60,444.38 payable to River City Machinery Co. in monthly installments. The note was secured by a security agreement listing a Case Model W26B Loader as collateral. Plaintiff pleaded that the note and security agreement were assigned to it by River City Machinery Co. for valuable consideration; that at all material times it was holder and owner of the note and security agreement; that defendant defaulted in payment of the note; that, following its particularized compliance with the provisions of the security agreement the collateral was sold at public auction and the proceeds of the sale were credited to the note; and that after demand defendant refused to pay the principal balance of $23,551.65 remaining due on the note. Plaintiff prayed for the balance due, and for interest and attorneys’ fees provided for in the note.

Defendant answered with a general denial. Plaintiff moved for summary judgment, which was granted. Defendant appeals.

Plaintiff supported its motion for summary judgment with the affidavit of its president, Van Williams, and exhibits attached to the affidavit. Under the pleadings, these memoranda establish plaintiff’s right to the judgment rendered as a matter of law.

In the affidavit, Williams identified the exhibits he attached as records made and kept by plaintiff in the regular course of its business. These included the note, the security agreement, the assignment of the note and security agreement to plaintiff, plaintiff’s notice to defendant of his default on the note, plaintiff’s notice to defendant of intent to accelerate the payments due under the note and sell the collateral at public auction, plaintiff’s notice to defendant that it had accelerated the note; and plaintiff’s demand to defendant for payment of the deficiency balance due on the note. Immediately after identifying these exhibits as plaintiff’s business records, Williams stated “that in making this Affidavit he has relied upon his own personal knowledge of the transactions between [plaintiff], River City Machinery Co., and [defendant], and upon his review of the business records of [plaintiff], and that each and every fact set forth herein is true and correct.”

In his first two points of error, defendant asserts that Williams’s statement in the affidavit that his testimony is based “upon his review of plaintiff’s business records” necessarily refers “to business records of the company generally” which are not a part of the record and therefore establish that the affidavit is based upon hearsay. We disagree. In context, the reference in question is plainly made only to the business records which were proved up by the witness in the paragraphs immediately preceding the reference.

In his remaining two points of error, defendant contends the summary judgment record fails to establish that plaintiff is the owner or holder of the note. He bases this contention on the fact that the assignment of the note is executed by “RIVER CITY MACHINERY CO., By [signed] Russell Cartwright,” without identifying Cartwright’s capacity with the company or his authority. This contention is overruled.

As we have said, defendant answered only with a general denial. Rule 93, Vernon’s Tex.Rules Civ.Proc., provides in part as follows:

“A pleading setting up any of the following matters, unless the truth of such matters appear of record, shall be verified by affidavit.
“(i) A denial of the genuineness of the indorsement or assignment of a written instrument upon which suit is brought by an indorsee or assignee, and in the absence of such a sworn plea, the indorsement or assignment thereof shall be held as fully proved.”

The judgment is affirmed.


author: GUITTARD, Chief Justice.

text:
    Frances W. O’BRIEN v. Dan GIBBS et al.
    No. 19386.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 11, 1977.
    Jack B. Cowley, Carter, Jones, Magee, Rudberg, Moss & Mayes, Dallas, for appellant.
    Reagan M. Martin, Dallas, for appellees.
   GUITTARD, Chief Justice.

In this original mandamus proceeding our principal question is whether a divorced wife may perfect an appeal from a divorce decree by filing an affidavit of inability to pay or give security for the costs on appeal under rule 355 of the Texas Rules of Civil Procedure when the decree has allotted to her property that is clearly greater in value than the amount of the expected costs. The trial court sustained a contest of the affidavit, and the writ is sought to require the court to set aside that order and overrule the contest. We hold that the court did not abuse its discretion in sustaining the contest.

Petitioner contends that she should not be required to resort to any of the property allotted to her in the decree, whether it was formerly community property or her separate property, because by so accepting the benefits of the decree she would preclude herself from appealing under Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002, 1004 (1950). Although the evidence at the contest hearing is not before us, the decree with its attachments contains a detailed listing of the property, both community and separate, and strongly indicates that regardless of the ultimate disposition of specific property, the value of petitioner’s interest will substantially exceed the amount of any costs that might be adjudged against her. Accordingly, we hold that the use of her interest to secure payment of the costs would not constitute a voluntary acceptance of the benefits of the divorce judgment. McCartney v. Mead, 541 S.W.2d 202, 205-06 (Tex.Civ.App.-Houston [1st Dist.] 1976, no writ); and see Haggard v. Haggard, 550 S.W.2d 374, 376 (Tex.Civ.App.-Dallas 1977, no writ).

Petitioner’s counsel does not assert that petitioner was unable to obtain the necessary sureties on the bond for costs on the faith of her interest in the property. Rather, counsel argues that petitioner is unable to raise the cash deposit required by the district clerk and the court reporter before they will prepare and deliver the transcript and statement of facts. We need not consider what remedy would be available to petitioner if after filing a bond to secure the costs, the clerk and reporter should still demand a cash deposit. There is authority that these officials cannot insist on cash in advance when the appeal bond is sufficient to cover preparation of the record. McCartney v. Mead, supra at 205; City of Ingleside v. Johnson, 537 S.W.2d 145, 152 (Tex.Civ.App.-Corpus Christi 1976, no writ). Consequently, their prospective refusal to prepare and deliver the record without an advance deposit of cash would not excuse petitioner from filing a bond to secure the costs, if she can do so.

On the record before us and under the test laid down by the supreme court in King v. Payne, 156 Tex. 105, 292 S.W.2d 331, 336 (1956), we hold that the petition for writ of mandamus fails to establish abuse of discretion by the trial court in sustaining the contest.

Mandamus denied.


text:
    FIRST NATIONAL BANK OF PLANO, Texas, Appellant, v. The STATE of Texas and National Whirlpool Bath, Inc., et al., Appellees.
    No. 19260.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 12, 1977.

      Bill Boyd, John R. Stooksberry, Boyd, Yeigel & Gay, Inc., McKinney, for appellant.
    Bill Flanary, Asst. Atty. Gen., Austin, Philip Palmer, Jr., Dallas, for appellees.
   GUITTARD, Chief Justice.

In this receivership proceeding initiated by the State, the bank appeals from the trial court’s refusal to set aside an ex parte order requiring it to turn over to the receiver certain funds deposited in several accounts in the names of the defendants. We hold that the court erred in issuing such an order without notice and hearing.

The suit was filed by the attorney general on behalf of the State against National Whirlpool Bath, Inc. and Doyle Mitchell and wife, Bobbie Mitchell, alleging violation of the Deceptive Trade Practices-Consumer Protection Act, Tex.Bus. & Comm.Code Ann. § 17.47 (Vernon Supp.1976). The petition alleges that the individual defendants have used the designation “National Dura-foam Corporation” in their business and have represented that National Durafoam Corporation is a division of National Whirlpool Bath, Inc., when, in fact, it was simply an assumed name under which the individual defendants operated. The petition prays for immediate injunctive relief and also for immediate appointment, without notice, of “a temporary receiver to preserve the assets, property and records of the Defendant Corporation and its Assumed Named Companies.” The bank was not named as a party or even mentioned in the petition.

On the day the petition was filed, the court signed an order appointing Zack Mason temporary receiver and empowering him to take possession of all property, records, and assets of the defendants. The receiver immediately filed his oath and bond. Hearing on the petition for temporary injunction and temporary receivership was set for February 18, 1977.

On February 16, 1977, eight days after the petition was filed, the State filed an ex parte motion alleging that the receiver had attempted to take possession of certain funds in possession of defendants on deposit with the bank, but that the bank had failed and refused to turn over these funds to the receiver and that such refusal constituted wrongful interference with the receiver’s attempts to comply with the court’s order. Without any notice or hearing, and without even any pleading naming the bank as a party to the suit, the court immediately issued an order requiring the bank to turn over to the receiver all funds deposited in the accounts of the defendants and in the name of “National Durafoam Corporation.”

According to the receiver’s testimony in the record before us, after his appointment he went to the bank, presented a copy of his order of appointment, and requested that the bank deliver the funds on deposit in the names of the defendants. At first, the bank president said that the funds would be paid, but he later advised that the bank would offset these accounts against a loan held by the bank. After the court issued the order of February 16, the receiver again went to the bank and demanded the funds. The bank then complied with the order and delivered to the receiver three cashier’s checks, aggregating $8,969.74, representing funds deposited in the name of National Durafoam Corporation, and another check for $576.37, representing funds deposited in the name of National Whirlpool Bath, Inc.

On February 17 the bank filed a petition in intervention alleging that defendant Doyle Mitchell was indebted to it on a past-due promissory note in the amount of $11,-500, that Mitchell had checking accounts with the bank under the assumed name of National Durafoam Corporation in which there was a balance aggregating $8,969.74, and that on February 10 the bank had exercised its right to offset this indebtedness against the funds deposited in the checking accounts and, consequently, had refused to deliver these funds to the receiver until ordered to do so by the court. The petition in intervention further alleged that the bank had complied with the court’s order, but prayed that the court vacate that order because it was a prohibited summary proceeding without notice and because the receiver was entitled to take only such property of Mitchell as Mitchell himself was entitled to receive at that time.

At the hearing on February 18, the bank appeared and presented its petition in intervention and also offered oral testimony. It called as a witness defendant Doyle Mitchell, who testified that “National Durafoam Corporation” was not a corporation, but was an assumed name used by a partnership composed of himself and one Stenburg. He acknowledged that National Durafoam had been held out to be a division of National Whirlpool Bath, Inc., but said that National Whirlpool had no interest in National Durafoam and no connection with it except that the partnership had used National Whirlpool’s bank reference to get started.

At the hearing on February 18, the assistant attorney general stated to the court that on the day before the defendant National Whirlpool had filed a petition in bankruptcy in the United States District Court in Dallas, that a receiver had been appointed by the bankruptcy court, but that the referee in bankruptcy had lifted the stay of the state court proceeding to permit the state to continue with the injunction proceeding. The answer of National Whirlpool alleges that it had instituted a proceeding for an arrangement under chapter XI of the National Bankruptcy Act. None of the papers in the bankruptcy proceeding, however, were introduced into evidence, and there is no evidence that the individual defendants were in bankruptcy. The receiver testified that he had deposited the funds claimed by the bank in a trusteeship account and had not turned them over to anyone else, but he understood that he was expected to turn them over to the bankruptcy court. He testified also concerning his services as receiver and the time he had spent performing his duties.

At the conclusion of the hearing, the judge granted a temporary injunction against all defendants pursuant to a stipulation by the parties, and he denied the bank’s motion to vacate. The court discharged the receiver, but allowed him a fee of $4,500 from the funds in his possession. An order was signed accordingly, from which the bank has taken this appeal.

The bank’s only point of error is that the trial court erred in failing to vacate its order of February 16, 1977, because the bank had no notice of the motion seeking the order and was not a party to the suit. This point is sustained. The law is well settled that a receiver cannot through summary proceedings take into custody property found in the possession of persons claiming adversely. The receiver has no greater right than the person whose property he has been appointed to receive, and if he desires to obtain possession of property in the hands of a stranger to the suit, he must either make that person a party or file a separate action against him. Ex parte Renfro, 115 Tex. 82, 273 S.W. 813, 814 (1925). The Renfro decision has been followed and reaffirmed by the supreme court in Ex parte Britton, 127 Tex. 85, 92 S.W.2d 224, 227 (1936), and in Ex parte Harvill, 415 S.W .2d 174, 176 (Tex.1967). In Harvill, the court declared that a third party who was summarily ordered to surrender possession of property to the receiver had not been given due process of law in determining his right of possession.

If the bank had made no claim to these funds, a different question might be presented. The record shows, however, that the bank did have a claim to the funds and that this claim has not been adjudicated. Consequently, the trial court erred in issuing the ex parte order of February 16 summarily requiring the bank to pay the funds over to the receiver, and when the bank intervened and asserted its claim to the funds, the court erred in not vacating that order and directing that the funds be restored to the bank until seizure by due process.

The attorney general contends that the rule announced in Renfro does not apply because by filing the petition in intervention, the bank made itself a party and waived lack of notice. We cannot agree. It is true that the bank made itself a party at the time of filing its intervention and is in no position to contend that it is not bound by any order made after that time. Its intervention, however, does not preclude it from complaining of any order affecting its interest made ex parte before it became a party. The attorney general’s position is extraordinary. Without attempting a justification of the ex parte proceeding, which would be difficult in view of Renfro and the other authorities unequivocally condemning such procedure, he argues, in effect, that the bank cannot come into court and assert its right to notice and hearing without waiving such rights. If this argument is correct, then the bank is faced with the difficult choice of waiving its rights or ignoring the ex parte order and seeking relief from any contempt proceeding against its officers by habeas corpus, as did the rela-tors in Renfro and the other cases above cited. We see no justification for the courts to deal so harshly with a third party who has not been charged with any wrong. The bank’s compliance with the ex parte order was certainly not voluntary and, therefore, cannot be considered to be a waiver. Neither did it waive those rights by its intervention. The bank’s officers should be commended rather than penalized for obeying the court’s ex parte order and then proceeding in an orderly manner to seek vacation of the order and restoration of the bank’s former position.

The defendants Mitchell and National Whirlpool have filed a brief in which they assert that this appeal is moot, except with respect to the $4,500 fee allowed to the receiver, because the funds in question have already been paid over by the receiver to a receiver appointed by the bankruptcy court and that no dispute exists between the bank and the trial court’s receiver concerning the fee. They also contend that the trial judge no longer has power to control the funds because the bankruptcy court has exclusive jurisdiction over the debtor’s assets.

We are not persuaded that the appeal is moot. In the first place, we have nothing before us but an unsupported assertion in the brief that the funds had been paid over to the bankruptcy court. No affidavit or other evidence has been presented to support the statement that the funds are in the custody of the bankruptcy court. Indeed, there is no actual proof in the present record that any bankruptcy proceedings are pending, although the assistant attorney general did make such a representation to the trial court.

In the second place, if we assume that bankruptcy proceedings are pending, the only bankruptcy of which we have any suggestion in this record is that of defendant National Whirlpool, which has filed a petition for an arrangement under chapter XI of the Bankruptcy Act. The corporate defendant so alleged in its answer. There is no suggestion in the record that the individual defendants, Doyle and Bobbie Mitchell, have filed a bankruptcy petition or that any bankruptcy proceedings have been filed against them. Apparently it is undisputed that “National Durafoam Corporation” has no connection with National Whirlpool other than that Doyle Mitchell is an officer of National Whirlpool and also is the owner or part-owner of the enterprise known as National Durafoam. The attorney general’s petition affirmatively alleges that National Durafoam is not, as represented, a division of National Whirlpool, but only an assumed name under which the individual defendants operate. Consequently, we cannot assume that the bankruptcy petition filed by National Whirlpool also subjects the assets of National Durafoam to the jurisdiction of the bankruptcy court. Of the funds paid over by the bank to the receiver, only the sum of $576.37 had been on deposit in the name of National Whirlpool, and that sum is not in controversy since the bank does not request its return. The funds in controversy are the $8,969.74 which had been deposited in the name of National Durafoam. We have no evidence before us that those funds are in the jurisdiction of the bankruptcy court. Consequently, we do not regard the present appeal as moot.

In the third place, that portion of the funds which has been applied to the receiver’s fee is still within the court’s power, regardless of any bankruptcy proceeding. Although the bank makes no complaint of the amount of the receiver’s fee, we do not interpret the bank’s brief as conceding that the funds which it claims to be beyond the control of the receiver may be summarily seized and applied to payment of the receiver’s fee. We do not think they can be so applied without first determining whether or not they are subject to the control of the receiver. Accordingly, on further proceedings in this cause, the trial court is directed to make that determination before it decides whether such funds should be applied to the fee allowed.

The order of the trial court refusing to vacate the ex parte order of February 16, 1977, is reversed, and the cause is remanded to the trial court with instructions to vacate the order of February 16 and to restore the funds to the bank insofar as the court and its receiver have the power to do so, pending final adjudication of the bank’s claim or pending seizure of such funds by due process of law.


text:
    Frank McGEHEE, Individually and as Trustee, Appellant, v. RICHARDSON SAVINGS AND LOAN ASSOCIATION et al., Appellees.
    No. 5712.
    Court of Civil Appeals of Texas, Waco.
    Aug. 18, 1977.
    Rehearing Denied Sept. 8, 1977.

      G. Leroy Street, Geary, Stahl, Koons, Rohde & Spencer, P. C., Dallas, for appellant.
    Henry D. Akin, Akin, Gump, Hauer & Feld, Dallas, for appellees.
   HALL, Justice.

We hold in this case that after the plaintiff’s petition has been stripped of every asserted cause of action by special exceptions, a take-nothing judgment may not properly be rendered against the plaintiff.

Frank B. McGehee executed a deed of trust on certain property to secure a promissory note made by him payable to Richardson Savings And Loan. After McGehee allegedly defaulted on the note the property was sold to Richardson Savings And Loan at a sale held under the deed of trust by a substitute trustee known as 5.11 Corporation. McGehee brought this suit “Individually and as Trustee” (without identifying the latter capacity) against Richardson Savings And Loan and 5.11 Corporation pleading that the note was usurious, that the sale under the deed of trust was irregular in several particulars, and that defendant Savings And Loan had violated the terms of the deed of trust in certain ways causing him damages in the amount of $150,000.00. He prayed “that said Deed of Trust be cancelled and held for naught because of usury, or, in the alternative, that said sale by said Substitute Trustee be declared null and void and of no force and effect; that Plaintiff recover from the defendant Savings And Loan Association the sum of $150,000.00 because of its breach of the terms of the said Deed of Trust,” and for general relief.

Defendants answered with eight special exceptions leveled at plaintiff’s pleadings, a general denial, a special denial that the substitute trustee’s sale under the deed of trust was irregular, and affirmatively pleaded detailed facts showing that the sale was regular. Later, defendants filed a motion for summary judgment supported by an affidavit and attached exhibits.

The special exceptions, which we need not detail, were all sustained. They effectively eliminated the essential allegations of every cause pleaded by plaintiff.

After plaintiff refused to amend within what the court determined to be reasonable time for doing so, defendants’ motion for summary judgment was granted and judgment was rendered that plaintiff take nothing. He appeals.

Although summary judgment proceedings are not conventional trials, their purpose is to dispose of causes of action pleaded by plaintiffs and cross-claimants. Rule 166 — A, Vernon’s Tex.Rules Civ.Proc.; Richards v. Allen, 402 S.W.2d 158, 160 (Tex.Sup. 1966). When the summary judgment in question was rendered, plaintiff’s petition was bare of any stated cause of action. There was nothing in plaintiff’s pleading upon which the court could base a take-nothing judgment.

If a plaintiff’s petition does not state a cause of action after special exceptions are sustained, and he refuses to amend, the proper order to be made in the case is an order dismissing plaintiff’s suit. Texas Department of Corrections v. Herring, 513 S.W.2d 6, 10 (Tex.Sup.1974).

Under the record before us, the take-nothing summary judgment was improper. It is reversed and this cause is remanded to the trial court.

Of the eight special exceptions urged by defendant, only number five was good. Nevertheless, plaintiff’s petition was un-sworn and not supported by attached exhibits, the essential allegations in it were exceedingly skimpy, and it was accordingly vulnerable to proper exceptions. Plaintiff needs to replead, and he should be given an additional, set time in which to do so.

Reversed and remanded.