author: DRAUGHN, Justice.

text:
    SHINTECH INCORPORATED, Appellant, v. GROUP CONSTRUCTORS, INC., Appellee.
    No. A14-82-552CV.
    Court of Appeals of Texas, Houston (14th Dist.).
    Jan. 31, 1985.
    Rehearing Denied Feb. 28, 1985.

      George E. Bowles, Robert T. Mowrey, Locke, Purnell, Boren, Laney & Neely, Dallas, John R. Gilbert, Gilbert & Gilbert, An-gleton, for appellant.
    David J. White, Robert L. Meyers, III, Jones, Day, Reavis & Pogue, Dallas, Wiley Thomas, Angleton, for appellee.
    Before J. CURTISS BROWN, C.J., and CANNON and DRAUGHN, JJ.
   OPINION

DRAUGHN, Justice.

On appellee’s motion for rehearing, the Court’s opinion issued on November 8,1984 is withdrawn and the following is substituted therefor. Appellant’s motion for rehearing is overruled.

Appellee, Group Constructors, Inc., as prime contractor, filed suit against appellant and owner, Shintech Inc., for breach of a construction contract and alternatively for recovery under quantum meruit. A nonjury trial resulted in judgment for Group Constructors, Inc. against Shintech for $483,400.28 with prejudgment interest of $33,771.79 plus attorney’s fees.

Appellant, Shintech, raises points of error relating to the following matters: 1) interpretation of the contract; 2) whether Shintech breached the contract; 3) whether appellee had a right to recover under quantum meruit; 4) whether there existed a mutual mistake; 5) whether Shintech made misrepresentations to appellee; 6) whether the parties abandoned the construction contract; and 7) the amount of damages which were awarded to appellee. Shintech also contends that the trial erred in its failure to find in favor of its affirmative defenses which include failure of condition precedent, assumption of risk, waiver, estoppel, and payment. We affirm the judgment of the trial court.

In 1979, appellant contracted with H.B. Zachry Company for expansion of its polyvinyl chloride (PVC) plant. Zachry was responsible for performing all work on the expansion project, including the mechanical construction and the electrical and instrumental work. The contract was on a cost-plus basis which meant that appellant, as owner, was to pay all costs incurred by Zachry plus a fee.

During the summer of 1980, appellant determined that the expense of Zachry’s work was exceeding the initial projection and decided to obtain bids for the remainder of the work. On August 27, 1980, appellee, Group Constructors, Inc., submitted a bid proposal to furnish all labor, construction services, and supplies necessary to construct mechanical or piping work on the plant expansion project for the lump sum price of $1,119,478. After discussions of the bid and contemplated work, appellant issued a letter of intent on September 19, 1980. This was signed by ap-pellee. Appellee was required to begin work on September 22, 1980. The formal contract, which stated it was entered into on September 19, 1980, was not actually signed by the parties until December 2, 1980. Under the agreement appellant was to furnish materials for appellee's work.

Appellee brought suit against appellant for damages allegedly caused by appellant’s interference with the efficiency of its work. Appellant allegedly interfered in the following ways: 1) appellant failed to timely and continuously furnish material for use by appellee; 2) appellant furnished materials for installation which were erroneously prefabricated by the previous contractor, Zachry; 3) appellant made excessive design errors, changes, and extra work orders; 4) appellant constructively accelerated appellee’s work by delaying it through the acts mentioned above while refusing to extend the work schedule; and 5) appellant accelerated work through imposition of an additional swing shift. Appellee contends that appellant assumed liability for the damages resulting from these acts on the basis of Attachment A, paragraph 4 of the contract which provides:

4. A construction schedule will be established as early as feasible in the project which will be reviewed and approved by the client. Upsets of this schedule caused by acts of the client or those over which he controls causing undue expense on the Contractor shall be for the Owner’s account, (emphasis added)

We also recognize that a contractor is entitled to recover damages from an owner for losses due to delay and hindrance of its work if it proves: (1) that its work was delayed or hindered, (2) that it suffered damages because of the delay or hindrance, and (3) that the owner was responsible for the act or omission which caused the delay or hindrance. City of Houston v. R.F. Ball Construction Co., 570 S.W.2d 75, 77 (Tex.Civ.App. — Houston [14th Dist.] 1978, writ ref’d n.r.e.). The trial court determined that appellee was entitled to $438,-400.28 as compensation for the loss in efficiency caused by appellant.

Appellant challenges the legal and factual sufficiency of the evidence to support the trial court’s findings that it committed each of the above mentioned acts and that each of these acts caused damage to appellee through loss of efficiency. Appellee, as plaintiff, had the burden of proof on each of these findings. In considering legal insufficiency points of error the court will consider only the evidence tending to support the finding, viewing it in the most favorable light in support of the finding, giving effect to all reasonable inferences that may be drawn therefrom, and disregarding all conflicting evidence. If upon such review the court finds there is a complete absence of evidence of probative force to support the finding, or there exists only a scintilla of evidence to support it, the point must be sustained. Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex.1965). In considering factual insufficiency points of error, the court examines the whole record to determine not only that there is some evidence to support the finding, but also to determine whether considering all the evidence, the finding is not manifestly unjust. If it is so weak that the finding is manifestly unjust the court will sustain the point. Burnett v. Motyka, 610 S.W.2d 735 (Tex. 1980); In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660 (1952).

We first review appellant’s points of error related to the trial court’s findings that:

1) Appellant represented that it had substantially all the materials on hand and that they would be furnished to appellee on a continuous basis.
2) On September 18, 1980, appellant sent appellee a letter, which advised appel-lee to give two weeks advance notice for unfabricated piping material to be furnished by appellant.
3) By reason of the expedited construction schedule desired by appellant and the need for immediate installation work to begin for such a schedule to be possible, appellant waived any requirement of two weeks advance notice for appellant’s filling of material requisitions during the early period of the construction and until October 15, 1980.
4) Appellant substantially and repeatedly failed to furnish material to appellee on a continuous basis and/or within 14 days of requisitioning, which hindered and interfered with the ability of ap-pellee to perform its work with reasonable efficiency and caused loss of productivity and extra work for appel-lee.

In point of error eleven appellant contends that the trial court erred in rendering judgment for appellee because, as a matter of law, all provisions of the agreement can be reconciled and harmonized so as to make appellant liable for only its willful acts which upset appellee’s work schedule. Appellant asserts that Article XII of the contract exculpates it from liability for damages caused by its delay in furnishing materials so long as the delay is not intentional.

ARTICLE XII. Materials Furnished by Owner or Agent

12.01 Responsibility — All materials, supplies, equipment, labor, services or any other things required for the performance of the work are to be furnished by CONTRACTOR unless the specifications otherwise expressly provide. In case the specifications expressly provide that any materials, supplies, equipment, labor, services or any other things shall be furnished by other than CONTRACTOR, then OWNER shall use reasonable efforts to have same furnished at the time required by CONTRACTOR but OWNER shall not be responsible for any delay in the furnishing thereof When requested by CONTRACTOR, OWNER shall furnish CONTRACTOR with all available information it may have as to location, availability, delivery date and other data on all OWNER furnished materials, supplies, equipment, labor, services, or other things, (emphasis added)

This article appears to be in conflict with Paragraph 4 of Attachment A of the contract which states that upsets of the construction schedule caused by acts of appellant or those which he controls causing undue expense to appellee shall be for appellant’s account. Attachment A, paragraph 11, states that in the event of discrepancies between the Lump Sum or Unit Price Construction Contract dated September 19,1980 and attachment A, then attachment A will take precedence. Thus if a conflict does exist between paragraph 4 of attachment A and Article XII, the exculpatory part of Article XII is rendered ineffective.

Appellant asserts that attachment A and Article XII can be harmonized if the “acts of the client” language of paragraph 4, attachment A is interpreted to mean willful, intentional acts. Appellant contends that if .the language is interpreted in this way, appellant is liable only for willfully or intentionally upsetting appellee’s schedule.

We agree that under paragraph 4, attachment A, that appellant is liable for only intentional acts causing delay. But we reject appellant’s illogical conclusion that the paragraph means that appellant is only liable if it intends the act to cause delay. The obvious meaning of paragraph 4, attachment A is that if appellant intentionally does an act and that act causes delay in appellee’s schedule, then appellant is liable for the resulting damages. Whether appellant intended its acts to cause delay is irrelevant. The paragraph does not limit liability to acts intended to cause delay; it imposes liability on all acts causing delay whatever their intended result.

We believe that the intention of the parties in Article XII was to exculpate appellant from all liability for delays in the furnishing of materials. The United States Court of Claims in Grant Construction Co. v. Burns, 93 Idaho 408, 443 P.2d 1005 (1968) interpreted a provision in a government construction contract with almost the identical language as contained in Article XII. The contract considered in Grant stated:

Article 12. Materials Furnished by Owner or Agent.
No materials, supplies, equipment, labor, services or any other things required for the performance of the work hereunder are to be furnished by the Owner or Agent, unless the specifications otherwise expressly provide. In case the specifications expressly provide that any materials, supplies, equipment, labor, services or any other things shall be furnished by the Owner or Agent, the Owner or Agent, as the case may be, shall use reasonable efforts to furnish the same when required by the Contractor, but neither the Owner nor the Agent shall be responsible for any delay in the furnishing thereof, (emphasis added)

The court held that the article was intended to relieve the government from all .liability for delays caused by it, at least in the absence of fraudulent or malicious or arbitrary conduct. Id. at 246.

We recognize that under the rules of contract construction that an interpretation that enforces one contract term by completely nullifying another must be rejected unless the two clauses irreconcilably conflict. Mercer v. Hardy, 444 S.W.2d 593 (Tex.1969). Paragraph 4, attachment A imposes liability for acts by appellant causing upsets in appellee’s schedule. Article XII exculpates appellant from liability for delays in the furnishing of materials which obviously could cause upsets in appellee’s schedule. We can find no reasonable interpretation of paragraph 4, attachment A and Article XII which will reconcile the conflict between them. As paragraph 11, attachment A provides that attachment A takes precedence over the rest of the contract if there is a discrepancy, we hold that the exculpatory portion of Article XII is void. Appellant’s point of error eleven is overruled.

Points of error twelve and thirteen are directly related to point of error eleven and are overruled as well.

Appellant’s points of error one, two, seven, eight, nine, and ten are all related to whether the evidence is legally and factually sufficient to support the trial court’s finding that appellant caused upsets to appellee’s work schedule. As stated earlier, appellant was liable under paragraph 4, attachment A for the damages resulting from the upsets caused by it. We have reviewed the record and find ample evidence to support the trial court’s finding. The evidence shows that appellant upset appellee’s work schedule by excessive design errors, extra work orders, prefabrication errors, and through imposition of an additional swing work shift. Also appellant failed to brief and argue these points of error. It is well settled that points of error are required to be supported by argument and authorities under Rule 418(e) of the Texas Rules of Civil Procedure, and if not supported, the points are waived. Ozuna v. Dyer Fruit Box Manufacturing Co., 606 S.W.2d 334, 337 (Tex.Civ.App. — Tyler 1980, no writ); Burgess v. Sylvester, 143 Tex. 25, 182 S.W.2d 358, 360 (1944).

Appellant’s points of error five and six challenge the legal and factual sufficiency of the evidence to support the trial court’s finding that appellant's requiring appellee to work overtime was in violation of the agreement. Appellant has also failed to brief and argue these points of error and has therefore waived them.

Appellant’s points of error sixteen through twenty-five challenge the trial court’s findings which entitled appellee to an alternative recovery in quantum meruit. The trial court impliedly found that a valid contract existed between the parties which covered all the services rendered by appel-lee when it awarded appellee $483,400.28, as damages for breach of contract. This implied finding is supported by the record. The right to recover in quantum meruit is based upon a promise implied by law to pay for beneficial services rendered and knowingly accepted. Davidson v. Clearman, 391 S.W.2d 48 (Tex.1965). If a valid express contract covering the subject matter exists there can be no recovery on a contract implied in law. Woodard v. Southwest States, Inc., 384 S.W.2d 674 (Tex. 1964). It was improper for the trial court to award appellee recovery for its losses under two opposing theories of recovery which are based upon contradictory findings of fact. In view of our holding that appellee is entitled to recover its proven losses under its breach of contract action, there is no need for us to review appellant’s points of error related to the trial court’s award of recovery under quantum meruit.

Appellant’s points of error thirty and thirty-one contend that the trial court erred in rendering judgment for appellee because appellee failed to comply with the written notice requirements under the agreement and did not fulfill the conditions precedent for claiming breach of contract. We have found that appellant breached the contract in ways unrelated to the notice requirements in the contract. When an owner breaches a construction contract, it relinquishes its contractual procedural rights concerning change orders and claims for additional costs. North Harris County Junior College District v. Fleetwood Construction Co., 604 S.W.2d 247, 254 (Tex.Civ.App. — Houston [14th Dist.] 1980, writ ref’d n.r.e.); City of Baytown v. Bayshore Constructors, Inc., 615 S.W.2d 792, 793-794 (Tex.Civ.App. — Houston [1st Dist.] 1980, no writ). Points of error thirty and thirty-one are overruled.

Appellant’s points of error thirty-two and thirty-three contend that the trial court erred in rendering judgment for appellee, because appellee assumed the risk for the delays and hindrances for which appellant has been held liable. Appellant asserts that appellee assumed this risk under paragraph 1.02 of the Agreement which states in part:

.... Having fully acquainted itself with the work, the site of the work, its surroundings and all risk in connection therewith, the CONTRACTOR assumes full and complete responsibility for completing the work for the compensation and within the time provided in Paragraph 1.03.

This provision must be interpreted consistently with paragraph 4 of Attachment A of the Agreement which states that appellant shall be liable for causing upsets in appellee’s work schedule. In paragraph 1.02, appellee agreed to complete the work for the agreed compensation. Part of the compensation due appel-lee under the Agreement are expenses which result from upsets of its work schedule caused by appellant. Appellee did not assume the risk for actions of appellant which upset its schedule. More specifically, we reject appellant’s contention that appellee assumed the risk of defective specifications. We find no evidence that appel-lee had knowledge of defective specifications prior to beginning its work. Where the contract is silent on the subject, there is an implied warranty that the plans and specifications for a construction job are accurate and sufficient for the purpose in view. Newell v. Mosley, 469 S.W.2d 481, 483 (Tex.Civ.App — Tyler 1971, writ ref’d n.r.e.). Points of error thirty-two and thirty-three are overruled.

Appellant contends in points of error thirty-four and thirty-five that appel-lee waived its claims against appellant. Appellant cites Rupp v. Mountain States Telephone and Telegraph Co., 606 P.2d 1189 (Utah 1980), for the proposition that if the owner breaches the contract and the contractor agrees to modify the contract by change order for reimbursement, it has waived the breach. This principle has no application to this controversy where the damages sought by appellee are for upsets to its schedule caused by excessive change orders by appellant. Appellee has not waived its right to recover under paragraph 4, attachment A of the Agreement by accepting compensation for change orders. The changes and extra work clauses of the Agreement do not cover impact costs resulting from appellant’s hindrance of efficient work. See Board of Regents of the University of Texas v. S & G Construction Co., 529 S.W.2d 90, 96 (Tex.Civ.App.— Austin 1975, writ ref’d n.r.e.). Points of error thirty-four and thirty-five are overruled.

Appellant contends in points of error thirty-six and thirty-seven that appellee is estopped under the contract and by its actions from asserting its claims against appellant. Appellant asserts that appellee is estopped because its claim against appellant conflicts with its contractual representation in paragraph 1.02 of the Agreement. Hawn v. Hawn, 574 S.W.2d 883, 886 (Tex. Civ.App. — Eastland 1978, writ ref d n.r.e.). As discussed earlier under points of error thirty-two and thirty-three, there is no conflict between paragraph 1.02 and appellee’s recovery under paragraph 4, Attachment A.

Appellant also asserts that appel-lee is estopped because it continued to obtain benefits under the change order provision of the agreement. Appellant’s acceptance of compensation under the change order provision does not deny appellant its contractual right to seek compensation for impact costs of change orders under paragraph 4, Attachment A. We see no inconsistency in appellee’s seeking both compensation for services under the change order provision and compensation for its impact costs under paragraph 4, attachment A. Points of error thirty-six and thirty-seven are overruled.

Appellant’s points of error thirty-eight and thirty-nine which contend that appellant has fully paid appellee are overruled, since we have held that appellant is liable for impact costs of the upsets caused to appellee’s schedule and appellee has not been paid for these costs.

Appellant contends in points of error twenty-six and twenty-seven that the evidence is legally and factually insufficient to support the trial court’s finding that appellant’s acts caused appellee damages of $483,400.28. In this case the evidence presented by appellee and appellant on the issue of damages was extensive. There were many conflicts and contradictions between the evidence presented by the parties. Each party vigorously attacked the reliability of the other’s evidence. Our function as an appellate court is not to judge the credibility and weight to be given the evidence nor to resolve conflicts in the evidence. This is the province of the trial judge when he is acting as the trier of fact. The findings of the trial judge may not be disregarded by an appellate court if the record discloses evidence of probative value which, with inferences reasonably drawn therefrom, supports the finding. Although this appellate court may have reached a different conclusion than that of the trial judge, we cannot substitute our judgment if the trial judge’s finding is supported by probative evidence. Johnson v. Buck, 540 S.W.2d 393, 411-412 (Tex.Civ. App. — Corpus Christi 1976, writ ref’d n.r. e.).

The amount of damages determined by the trial court is supported by both legally and factually sufficient probative evidence. Appellee presented two primary witnesses to prove the amount of damages. These witnesses explained in detail the basis and method by which they calculated the damages caused by appellant. Mr. Barnes concluded that appellee’s total damages were $1,021,455.27. Mr. Myers concluded that the total damages were $919,326.06. These conclusions have some support in the record. In view of this evidence, we cannot say that the trial court’s finding of $483,400.28 of damages is unsupported or manifestly unjust.

Appellant presented evidence that the total losses incurred by appellee in the course of the work was $483,400.28. Because the trial court awarded damages in this amount, appellant argues that the trial court impliedly found that appellant caused the entire loss experienced by appel-lee. Appellant asserts that such a finding is clearly wrong, because there is substantial evidence that this loss was caused in part by factors other than acts of appellant. We reject appellant’s argument for two reasons. First, appellee presented evidence that its losses greatly exceeded $483,400.28. Second, appellee presented evidence which refuted appellant’s evidence that factors other than appellant’s actions were responsible for appellee’s losses. It was within the discretion of the trial judge to give credibility to appellee’s evidence over that of appellant. Johnson v. Buck, supra.

We hold that the evidence is both factually and legally sufficient to support the trial court’s finding of damages. Points of error twenty-six and twenty-seven are overruled. Points of error twenty-eight and twenty-nine, which assert either as a matter of law or by the great weight and preponderance of the evidence that appel-lee was responsible for all its own losses, are overruled as well.

Appellant’s third and fourth points of error contend that the evidence is legally insufficient or in the alternative, factually insufficient, to support the trial court’s finding that appellant substantially and repeatedly failed to furnish material to appel-lee in accordance with the agreement. Before we review the sufficiency of the evidence, it is first necessary to determine appellant’s obligations to furnish materials under the contract. Only then can it be determined whether appellant breached the contract by the manner in which it furnished materials.

On September 18, 1980, the day prior to appellee’s signing of the letter of intent, appellant issued a letter which later became part of the contract, and which required appellee to give appellant notice two weeks in advance of the time materials would be needed. Thus appellant was obligated to furnish materials within two weeks of the requisition date. The furnishing of materials later than two weeks constituted a delay for which appellant was liable for any resulting damages.

The trial court, however, found that appellant waived the two weeks advance notice requirement until October 15, 1980. On October 15, 1980, about three weeks after appellee began work, an agent of appellant issued a memorandum to appellee which stated:

During the past two (2) weeks since Shintech assumed the operation of the warehouse, we have tried to issue material immediately on request in order to get enough material issued for all contractors to work.
It is at the point now we find it is impossible to continue to issue material on a crash basis.
In accordance with the contract agreement, all contractors are to request material two (2) weeks in advance of need date. We will do our best to expedite the material requests in an orderly manner so all work can proceed on schedule.

The trial court found that appellant discontinued its waiver through this memorandum.

Waiver has been defined as an intentional relinquishment of a known right or intentional conduct inconsistent with claiming it. United States Fidelity and Guaranty Co. v. Bimco Iron and Metal Corp., 464 S.W.2d 353, 357 (Tex.1971). The doctrine of waiver is not applicable in this case. Appellant never relinquished a right against appellee. It simply gave performance beyond that which was required by contract for a limited time. Under the contract, appellant was obligated to furnish materials within two weeks of notice by appellee. Appellee attempted to make appellant’s obligation more onerous by insisting on materials immediately upon notice. The fact that appellant was willing to exceed its obligation by furnishing materials on demand so that the construction schedule could be expedited does not alter appellant’s contractual obligation. The doctrine of waiver involves the relinquishment of a known right against another party; it does not operate to create a new contractual obligation. The doctrine of waiver is defensive in nature. It cannot be used to create liability where it does not otherwise exist. Jones v. Texas Gulf Sulfur Co., 397 S.W.2d 304 (Tex.Civ.App. — Houston [1st Dist.] 1965, writ ref’d n.r.e.). Thus, the trial court erred in finding that appellant waived the two-weeks notice provision until October 15, 1980.

However, we have reviewed the record and find evidence to support the trial court’s finding that appellant failed in certain instances to furnish material within two weeks of notice. The trial court correctly found that appellant breached the contract by not furnishing materials within the required time. Therefore, appellant’s third and fourth points of error must be overruled.

Although the trial court erred in its application of the doctrine of waiver, appellant has not carried his burden to show that this error probably did cause the rendition of an improper judgment. Thus, such error does not require a reversal of the judgment. Dennis v. Hulse, 362 S.W.2d 308, 309 (Tex.1962). A review of the record demonstrates that it is improbable that this error caused the rendition of an improper judgment. This is shown by the fact that even if the evidence of damages resulting to appellee from the late furnishing of materials during the period prior to October 15, 1980, is disregarded, the evidence of damages resulting from other breaches by appellant is more than adequate to support the amount of damages found by the trial court.

Having found no reversible error we affirm the judgment of the trial court in all respects.


source: Caselaw Access Project

author: BROOKSHIRE, Justice. BURGESS, Justice,

license: Public Domain

text:
    O. Dean COUCH, Jr. D/B/A Couch Mortgage Company, Appellant, v. The STATE of Texas, Appellee.
    No. 09-84-345 CV.
    Court of Appeals of Texas, Beaumont.
    Jan. 31, 1985.
    Rehearing Denied Feb. 20, 1985.
    Joe H. Reynolds, Reynolds, Allen & Cook, Houston, for appellant.
    Alvin K. James, Asst. Atty. Gen., Highway Div., Houston, for appellee.
   OPINION ON MOTION TO RECONSIDER

ORDER DISMISSING APPEAL

BROOKSHIRE, Justice.

On September 6, 1983, Appellant withdrew from the trial court registry the sum of $568,657.00 which was the total amount of the award of the Special Commissioners in this condemnation proceeding.

On June 4, 1984, in accordance with the verdict of the jury, the State was ordered to pay an additional $51,369.00 plus interest thereon from September 1, 1983, until paid. This order was signed by Honorable Ellis A. Oualline, Jr., Judge, County Court at Law # 1, Montgomery County.

Thereafter, on July 10, 1984, the State deposited into the court’s registry the sum of $55,829.48 which included interest to date and which sum represented the total, full and complete satisfaction of the judgment. This deposit by the State was approved by Judge Oualline.

Eight days later the Appellant moved to withdraw the entire $55,829.48. The trial judge immediately ordered the county clerk to issue and deliver a check payable to 0. Dean Couch, Jr., d/b/a Couch Mortgage Company, for the total amount. The attorney of record for the Appellant acknowledged receipt of a check in the total amount payable to the Appellant. The receipt is dated July 27, 1984. Thereafter, the said check was cashed and negotiated and “credited to the account of the within named payee, The Woodlands National Bank, The Woodlands, Texas”.

The correct general rule, we perceive, is set out in Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002 (Tex.1950). At 1004, the court wrote:

“A litigant cannot treat a judgment as both right and wrong, and if he has voluntarily accepted the benefits of a judgment, he cannot afterward prosecute an appeal therefrom. That is the general rule which appears to be universally recognized. It was announced by this court in the early case of Matlow v. Cox, 25 Tex. 578. The rule is based on the principle of estoppel. It, however, is subject to the exception that ‘ * * * where the reversal of a judgment cannot possibly affect an appellant’s right to the benefit secured under a judgment, then an appeal may be taken, * * *.’ 2 Am.Jur., Appeal and Error, Sec. 215. Numerous authorities, approaching the exception from a slightly different angle, define it, in effect, in this language [language]: Where an appellant accepts only that which appellee concedes, or is bound to concede, to be due him under the judgment he is not estopped to prosecute an appeal which involves only his right to a further recovery.”

Our case is remarkably similar to Latimer v. State, 328 S.W.2d 242 (Tex.Civ. App. — Beaumont 1959, writ ref’d n.r.e.) After citing and following Carle, supra, the civil appeals court wrote:

“The case at bar is within the rule but not within the exception. Appellants have no legal assurance that upon another trial they would be awarded as much as was awarded by the judgment from which the appeal was taken. Appellee has never conceded and is not bound to concede that it is intrinsically indebted to appellants for as much as was awarded by the judgment....”

We find and hold that Latimer, supra, is dispositive of this appeal. We overrule the motion to reconsider order dismissing appeal. We dismiss this appeal as of January 31, 1985.

DISMISSED.

BURGESS, Justice,

dissenting.

I respectfully dissent and would re-instate the appeal. The majority perceives the correct general rule to be set out in Carle v. Carle, 149 Tex. 469, 234 S.W.2d 1002 (Tex.1950). I agree, but would hold the exception includes the instant case. The language setting out the exception: “Where an appellant accepts only that which the appellee concedes, (emphasis added) or is bound to concede, to be due him under the judgment he is not estopped to prosecute an appeal which involves only his right to a further recovery.”

In this case, the State had taken possession of Couch’s property, filed no motion for new trial, and deposited the amount of the judgment into the registry of the court. Couch filed his motion for new trial on June 26, 1984 and his motion to withdraw funds on July 18, 1984. Both of these instruments put the State on notice he was not satisfied with the jury’s award. Couch then filed his cost bond on August 29,1982, thus perfecting an appeal. The State had until September 2, 1982 to perfect their appeal, Tex.R. Civ.P. 356. This they did not do, but filed a motion to dismiss Couch’s appeal on October 17, 1984. The State’s motion was granted by this court, without oral submission or written opinion, on November 1, 1984. I would hold the actions of the State, in this case, constituted a concession that Couch was due at least the amount under the jury’s award and thus the exception set out in Carle, supra, would apply.

Were the facts not such, i.e., an exception under Carle, supra, I would reach the same result. Unlike my prior brethren in Latimer v. State, 328 S.W.2d 242 (Tex.Civ. App. — Beaumont 1959, writ ref’d n.r.e.), I believe there is an “inconsistency in holding that one may accept or appropriate the amount awarded by the commissioners, but not the amount awarded by county court judgment, without jeopardizing one’s right of appeal.” In each instance, a particular forum has decided the amount of compensation due the landholder. In each instance, the landholder may seek further relief, if dissatisfied. To hold the landholder may accept the benefits at one stage and still proceed, while he may not accept the benefits at the next stage (if he wants to proceed), particularly if the State has dispossessed the landowner, is, in my humble opinion, inconsistent. Not only is this position inconsistent, it is unreasonable and arbitrary, thus violative of the United States and Texas Constitutions.

This dissent is respectfully submitted.


author: BROOKSHIRE, Justice.

text:
    ALLIED SUPPLIER & ERECTION, INC., et al., Appellants, v. A. BALDWIN & COMPANY, INC., Appellee.
    No. 09-83-171 CV.
    Court of Appeals of Texas, Beaumont.
    Feb. 7, 1985.

      Jesse L. English, Harry S. Long & Associate, Beaumont, for appellants.
    Thomas E. Konuiszy, Orgain, Bell & Tucker, Beaumont, for appellee.
   OPINION

BROOKSHIRE, Justice.

This appeal is from a judgment rendered after a bench trial. Appellee, A. Baldwin & Company, Inc. (Baldwin), plaintiff below, filed suit on two promissory installment notes based on valuable consideration and dated July 5, 1979, and October 20, 1980. The defendants were Allied Supplier and Erection, Inc. (Allied), William C. Key and Chris Maida. Recovery was sought for a 10% attorney’s fee as provided for in the promissory notes. Recovery was additionally sought against Key and Maida based on documents entitled “Absolute Guaranty of Payment of Promissory Note”.

Appellee’s trial pleadings alleged that on July 5, 1979, Allied was indebted to Baldwin on an open account as a result of the sale and delivery of goods, materials and supplies which were delivered but not paid for. On July 5, 1979, Allied executed and delivered to Baldwin a promissory note in the amount of $211,343.23; that promissory note was given in payment of an antecedent debt. Appellee also pleaded the note of October 20, 1980, for $169,817.15, plus interest, as a restructure of the repayment terms of the July 5, 1979, note. The reason alleged for the restructuring was that Allied “became unable to pay the monthly payments of Ten Thousand and No/100 ($10,000.00) plus interest”. Baldwin also pleaded the personal guarantee of the payment of the indebtedness by Key and Maida. At the time of the trial the Appellee demanded $149,817.15, plus interest, attorney’s fees and costs of court.

The Appellants’ major defense and counter-claim was that the promissory notes sued on were usurious. Appellants admitted making some payments on the July 5, 1979, note and also admitted that, being unable to make other payments, they requested a restructuring of the payment terms. Appellants also pleaded that, as part of the consideration of this transaction, Key and Maida each executed and delivered a guaranty of payment of the promissory note in the sum of $169,817.15.

In their appeal, Appellants advance three points of error; one, the trial court erred in finding that the July 5, 1979, and October 20, 1980, notes were not usurious on their face; two, the trial court erred in finding that the October 20, 1980, and July 5, 1979, notes do not provide for interest exceeding twice the amount permitted by law; and, three, the trial court erred in finding that Key and Maida are liable on their guaranty agreements.

The July, 1979, note provided “with interest on the unpaid balance at the rate of thirteen and one quarter percent (13V4%) per annum, said principal and interest payable in installments as follows.... ” The October, 1980, note provided “with interest on the unpaid balance at the rate of 2% above the highest prime rate posted in the ‘Money Rates Section’ of the Wall Street Journal on the last publishing day of the month prior to the due date of each installment. ...”

At the threshold, we think it is important and we stress that both the notes provided:

“If any monthly installment becomes delinquent or is not timely paid, each such installment shall be subject to a late charge in the amount of five percent (5%) of the monthly installment. (Emphasis added)

In his findings of fact, the trial judge found that the late charge provision in the notes applied only to individual installment payments as they, were to come due over the term of .the indebtedness and not to the entire unpaid principal amount due after acceleration. Further, he found that after the acceleration of the note, no monthly installments were due or payable but only the total unpaid principal was due, owing and payable. In further findings, the trial jurist determined that the late charge provision in the two notes did not apply to the accelerated principal debt; no late charges were ever paid by the Defendants; no late charges were ever collected by the Plaintiff; and no late charges were ever applied to the Defendants’ account with the Plaintiff. We agree. Ample probative evidence sustains the court’s findings of fact and conclusions of law.

THE 1979 NOTE

We believe that the notes were not on their face usurious. In American Century Mortgage Investors v. Regional

“Usury is a matter of intention. Unless the loan papers show on their face an intention to charge interest at a greater rate than permitted by law, the burden is on the party pleading usury to show the existence of some agreement, device, or subterfuge to charge usury and that both parties had that purpose in contemplation. Griffin v. Stewart, 348 S.W.2d 800, 803 (Tex.Civ.App. — Amarillo 1961, no writ); Shipman v. Wright, 3 S.W.2d 519, 521 (Tex.Civ.App. — Dallas 1928, writ ref’d) and see Mays v. Pierce, 154 Tex. 489, 281 S.W.2d 79, 82 (1955). Even though the borrower intended to pay more interest than permitted by law, the transaction is not usurious unless the lender also supposed and intended it to be so. Abilene Christian College v. Wright, 1 S.W.2d 720, 723 (Tex.Civ.App. —El Paso 1927, writ ref’d)....”

TEX.REV. CIV.STAT.ANN. Art. 1302-2.-09 (Vernon 1980), in relevant part, provides:

“Notwithstanding any other provision of law, corporations, domestic or foreign, may agree to and stipulate for any rate of interest as such corporation may determine, not to exceed one and one-half percent (1½%) per month, on any bond, note, debt, contract or other obligation of such corporation under which the original principal amount is Five Thousand Dollars ($5,000) or more, or on any series ... or on any extension or renewal thereof, and in such instances, the claim or defense of usury by such corporation, its successors, guarantors, assigns or anyone ... is prohibited_” (Emphasis added)

The parties agree that 1½% per month would amount to an 18% annual rate. We find that 13¼%, as provided for in the 1979 note, including an additional 5% of the monthly installment late charge even as interest on the late monthly installment, would not, under our record, exceed the 18% maximum rate provided for under Art. 1302-2.09.

Calculations on the 1979 note (as contended by Baldwin with certain corrections) are as follows:

Original principal amount....$211,343.23 Statutory maximum interest 1.5% per month or

rate.18% per year

Penalty for late installment payment—if determined to be interest (court held it is 5% of the installment

not interest).payment

13¼% per annum or the rate of 1.10 per Contracted interest as set month, actually

out in the 1979 note.1.104166667

$211,343.23 x 1.5%

Maximum non-usurious per month =

interest under the statute....$3,170.15 per month $211,343.23 x 1.10% per month =

$2,333.58 per month; Contracted interest as actually, $2,324.77

provided for in the 1979 noteper month

$10,000.00 principal + $2,333.58 interest, (which we believe is incorrect by approximately $8.00 or $9.00)

Amount of payment_= $12,333.58

$12,333.58 x 5% =

5% late payment, figured at_$616.68

$2,333.58 + $616.68 = $2,950.27 (we be-

Interest plus late payment—lieve $2,950.26) Comparison of statutory maximum interest and interest contracted for; maximum statutory interest

at 1.5% per month.$3,170.15

Actual interest contracted

for in 1979 note.-2,950.27

219.88

We do not hold that the 5% late penalty is an interest charge; we hold to the contrary, that it is not an interest charge.

THE 1980 NOTE

No fixed rate of interest is provided for in the 1980 note. The 1980 note is written with a variable or floating interest rate at 2% above prime. The 1980 note is not usurious because, to make the note usurious, it must be shown that it is usurious on its face. American Century Mortgage Investors v. Regional Center, Ltd., supra.

Examining the note on its four corners and carefully examining it on its face, it cannot be determined that the note is usurious. When one of the Appellants was questioned on the 1980 note and was requested to determine the correct interest rate he answered, in substance, that he could not ascertain that figure without referring to the Wall Street Journal.

Exhibit “C”, attached to the Appellants’ trial pleadings, clearly demonstrates that the prime rate quoted in the Wall Street Journal (dated October 31, 1980) was 14.5% which, adding 2%, equals 16.5%. It is glaringly clear that the 1980 note was not factually or on its face usurious when made. The party pleading usury must show the existence of some agreement, device or subterfuge and that both parties contemplated, at the time of the making of the note, that the note was usurious. See RepublicBank Dallas, N.A. v. Shook, 653 S.W.2d 278 (Tex.1983); Franklin Offices, Inc. v. Harding, 579 S.W.2d 254 (Tex.Civ. App.—Dallas 1979, no writ). See and compare Shipman v. Wright, 3 S.W.2d 519 (Tex.Civ.App.—Dallas 1928, writ ref’d). The trial judge held to the contrary.

Since the 1980 note was not usurious on its face, Appellants had the burden to show that it was used as a means to circumvent the usury law; this they failed to do. Indeed, there are exhibits and verbal evidence in the record that lucidly indicate and demonstrate that Appellee never charged or collected more than the statutory permissible rate of interest. Appellants failed to show a subterfuge used to circumvent or thwart the usury law.

Our law looks to the substance of the transaction to determine whether a note is usurious. RepublicBank Dallas, N.A. v. Shook, supra; Commercial Securities Co. v. REA, 130 Tex. 11, 105 S.W.2d 872 (1937); Independent Lumber Company v. Gulf State Bank, 299 S.W. 939 (Tex. Civ.App.—Galveston, 1927, writ ref’d). Points of error one and two are overruled.

“THE ABSOLUTE GUARANTY”

The question of the “Guarantors” on the “Absolute Guaranty of Payment of Promissory Note” must be decided against the Appellants. Each individual appellant became a guarantor under a separate, written instrument. In their individual capacities they styled themselves as “Guarantors”, jointly, severally and unconditionally, guaranteeing payment to A. Baldwin & Company, Inc., on the notes.

Art. 1302-2.09 provides that corporations may agree to a rate of interest not to exceed 1V2% per month or 18% per year on any note, debt or contract of such corporation under which the original principal amount is $5,000 or more, or on any extension or renewal thereof, “and in such instances, the claim or defense of usury by such corporation, its successors, guarantors, assigns or anyone on its behalf is prohibited,....” (Emphasis added) We conclude Art. 1302-209 governs with paramountcy the “Absolute Guaranty” issue.

Usury is a defense personal to the debtor, one that a guarantor may not interpose. See Arndt v. National Supply Co., 633 S.W.2d 919 (Tex.App. — Houston [14th Dist.] 1982, writ ref d n.r.e.). See Universal Metals and Machinery, Inc. v. Bohart, 539 S.W.2d 874 (Tex.1976); Loomis Land and Cattle Company v. Diversified Mortgage Investors, 533 S.W.2d 420 (Tex.Civ. App. — Tyler 1976, writ ref’d n.r.e.); Houston Furniture Distributors, Inc. v. Bank of Woodlake, N.A., 562 S.W.2d 880 (Tex. Civ.App. — Houston [1st Dist.] 1978, no writ). See also Ryan Mortgage Investors v. Lehmann, 544 S.W.2d 456 (Tex.Civ.App. —Beaumont 1976, writ dism’d). In Ryan Mortgage Investors, supra, the court held that the guarantors could not avail themselves of the claim of usury, holding, in substance, that an absolute guarantor is prohibited from prosecuting an action to recover a usury penalty.

These notes resulted from the purchase of pipe used in highway construction. Baldwin is not a banker or money lender. See Rimco Enterprises, Inc. v. Texas Electric Service Company, 599 S.W.2d 362 (Tex.Civ.App. — Fort Worth 1980, writ ref d n.r.e.). These notes did not arise out of the use of money as such. It would appear to us, on balance, that Baldwin was trying to “get its hat back”.

TEX.REV. CIV.STAT.ANN. Art. 5069-1.-06 Sec. (1) (Vernon Pamph.Supp.1985), entitled “Penalties”, provides that there shall be no penalty for any violation which results from an accidental and bona fide error. The bona fide error question was decided for Appellee.

The notes and absolute guarantees in this case were not made for a purely personal and necessitous purpose; nor were they made to hide a purely personal loan. Allied, a corporation, was not used as a device to conceal a usurious transaction. The legislative intent, in enacting Art. 1302-2.09, was to accomodate an “ ‘urgent need to establish the authority of certain corporations to borrow money’ ”. Republic-Bank Dallas, N.A., supra, at 281. Since the effective date of Art. 1302-2.09, “Texas cases have held that an individual guarantor may not bring a claim of usury when he guarantees a corporate note.” Repub-licBank Dallas, N.A., supra, at 281. We sanguinely hold that these notes and guarantees were made in the furtherance of a corporate enterprise.

The trial court found, inter alia, that any amount by which interest plus late charges, over the life of the note, is in excess of the amount allowed by law, is de minimus', that the acceleration clause of each note does not express the true intent of the parties and resulted from bona fide error; that the acceleration clause of each note does not express the true agreement and understanding of the parties, and was inserted as a result of a mutual mistake; and, the court concluded, there is no single contingency which would result in usurious interest contracted for under either the 1979 note or the 1980 note. Point of error three is overruled.

Under the findings of fact and conclusions of law, supported by sufficient evidence, made below, we must affirm the judgment and allow the $1,200.00 attorney’s fee for the appeal to this court.

AFFIRMED.


author: GUILLOT, Justice. CARVER, Justice,

text:
    B.J. KIRBY, Robert E. Hogan, Taylor B. Almon, Charles R. Hoover, Phil Clemente and Ben Sierad, Appellants, v. B.W. CRUCE, Jr., David C. Cole, Mesquite Investment Corporation and Hexter-Fair Title Company, Appellees.
    No. 05-82-01211-CV.
    Court of Appeals of Texas, Dallas.
    Feb. 13, 1985.
    Rehearing Denied March 30, 1985.

      Kevin Cook, Arthur Blanchard, Dallas, for appellants.
    Whitley Sessions, Stephen Maris, Bill Boyd, B.W. Cruce, Jr., Charles Michael Gray, Dallas, for appellees.
    Before CARVER, GUILLOT and STEWART JJ.

      . Justice Stewart participated in this opinion, although she resigned from the court before the opinion was issued. Issuance date, after her resignation, is due to the inter-court circulation requirements of this court’s local rules.

   GUILLOT, Justice.

We withdraw our previous opinion, grant appellants’ motion for rehearing, affirm the judgment of the trial court in part, reverse the judgment of the trial court in part, and render judgment in favor of appellants against appellees B.W. Cruce, Jr. and Mesquite Investment Corporation.

Appellants, plaintiffs below, brought suit charging B.W. Cruce, Jr., David C. Cole (who was dismissed on appeal), Melvin G. Price, and Hexter-Fair Title Company with civil conspiracy, misrepresentation, and breach of fiduciary duties. The trial was to a jury which found that B.W. Cruce, Jr. and Melvin G. Price formed a conspiracy to defraud appellants and other members of the Hickcox-Castle joint venture and that both David C. Cole and Mesquite Investment Corporation (MIC), knowing the intent and purpose of the conspiracy, willingly participated in it. The jury also found that B.W. Cruce, Jr. and David C. Cole breached their fiduciary duty to plaintiffs as joint venturers and that B.W. Cruce, Jr. breached his fiduciary duty to plaintiffs as trustee of the Hickcox-Castle joint venture.

The trial court entered a take nothing judgment in favor of Hexter-Fair Title Company against plaintiffs based on the jury’s verdict and a take nothing judgment for Cruce, Cole, and MIC against plaintiffs notwithstanding the verdict. Appellee Cole has been dismissed and appellee MIC failed to file a brief. Melvin G. Price is not a party to the appeal.

In their first point of error, appellants contend that the trial court erred in entering a judgment notwithstanding the verdict because there is sufficient evidence that Cruce and Price formed a conspiracy to defraud plaintiffs and that both Cole and MIC, knowing the intent and purpose of the conspiracy, willingly participated in it.

It is well established in Texas that persons who agree with one another to defraud may be held jointly and severally liable as conspirators for the resulting damage. Schlumberger Well Surveying Corp. v. Nortex Oil and Gas Corp., 435 S.W.2d 854, 857 (Tex.1968). “The agreement need not be formal, the understanding may be a tacit one and it is not essential that each conspirator have knowledge of the details of the conspiracy.” Bourland v. State, 528 S.W.2d 350, 354 (Tex.Civ.App. — Austin 1975, writ ref’d n.r. e.). Furthermore, because civil conspiracies to defraud are conceived in secrecy and executed in such a manner as to avoid detection and exposure, a civil conspiracy need not be shown by direct evidence and is ordinarily established by circumstantial evidence. International Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 581-82 (Tex.1963).

Cruce testified that he met with Price in the latter part of May, 1972 and agreed to help Price form a joint venture to acquire land in eastern Dallas County near the location of a highway not yet known to the public. Together they schemed to secretly profit from the potential investors that Price assembled to finance the cost of acquiring the venture properties.

To obtain the secret profit, Cruce and Price represented to the investors that the venture properties cost more than they did. Cruce and Cole also created additional subordinate liens on the properties. For their efforts, Price obtained a cost-free ten percent interest in the joint venture, approximately $110,000.00 of subordinate lien notes, a $10,000.00 finder’s fee, and $23,-000.00 in cash from Cruce and Cole. Cruce and Cole split a twenty-four percent interest in the joint venture and purchased $110,000.00 worth of subordinate lien notes for approximately $24,000.00 which was paid to Price.

The June 29, 1972, letter from Price to Cruce confirms that Cruce was to prepare a joint venture agreement whereby seventy-five percent of the participation by others was to cover all the cash required to close the venture properties and still leave a $10,000.00 “finder’s fee” to be paid to Price. The letter establishes that Cruce and Price had no intention of paying their pro rata shares of the cost required to close the purchase of the venture properties.

The evidence further discloses that Cruce prepared false purchaser closing statements containing false purchase prices, increased cash disbursements, and additional subordinate liens for each and every one of the venture properties. Cruce and Cole distributed these false statements to plaintiffs in an effort to induce them to sign the joint venture.

When Cruce and Cole failed to pay their pro rata share of the expenses, the Mesquite Bank filed a lawsuit against the joint venture. During the trial, Cruce admitted helping Price make the various false misrepresentations. Cruce attempted to justify his conduct on the basis that he was acting as Price’s attorney and trustee and therefore could not disclose the scheme. In Texas, the law is clear that an attorney may be held liable as a coconspirator if the “evidence supports a reasonable inference that [the attorney] had actual knowledge that the practice of [his clients] had a capacity to deceive, and that those practices were done for the purpose of acquiring property or money of others, and that [the attorney] intended to participate therein and to share in the gains so desired.” Bourland, 528 S.W.2d at 355 (bracketed words substituted).

Although Cruce contends he was acting solely at Price’s direction and was ignorant of any conspiracy to defraud, there is no evidence that Price paid Cruce even $1.00 for “legal services” rendered. Moreover, the evidence is clear that Cruce had knowledge that both his and Price’s representation had a capacity to deceive the plaintiffs, that those practices were done for the purpose of acquiring money from the plaintiffs to obtain a secret profit

in the joint venture, and that Cruce intended to participate in these secret profits,

After hearing and seeing all of the evidence, the jury did not accept Cole’s claim that he never heard anything about this scheme until after the lawsuit was filed. Although Cole had previously signed the joint venture agreement and represented that he had acquired a five percent interest in the Hickcox-Castle joint venture, Cole and Cruce paid nothing to accomplish the closings of the venture properties. All of their contributions were directed to Price. If there is any doubt as to Cole’s knowledge of and participation in the conspiracy, it should be extinguished by the Speed Memo from Cruce to “Gator” Cole dated January 29, 1973 which states:

Gator-we own 23% of the Hickcox-Castle

Joint Venture. Cost of the purchase was

|24,192.91. $10,000.00 borrowed from

Boyce-Cruce.

Pretty good.

MIC’s knowledge and participation in the conspiracy by and through its president and secretary-treasurer, Cruce and Cole, respectively, is also supported by the evidence. MIC received the interest payments on four of the subordinate lien notes and forwarded them to Cruce-Cole Enterprises. Cruce and Cole owned over fifty percent of the shares of MIC. It is well established that a corporation may be held liable for the fraudulent acts of its officers and directors. Peerless Fire Ins. Co. v. Reveire, 188 S.W. 254, 256 (Tex.Civ. App. — Austin 1916, writ dism’d).

Accordingly, there is evidence to support the jury’s findings that Cruce and Price formed a conspiracy to defraud the plaintiffs. There is also evidence that Cole and MIC, knowing the intent and purpose of the conspiracy, willingly participated in it. We sustain appellants’ first point of error.

In points of error 2, 3, 4, 5, 8, 9, 10, and 11, appellants contend that the trial court erred in entering a judgment notwithstanding the verdict because there is sufficient evidence that (as trustee of the Hickcox-Castle joint venture) Cruce breached his fiduciary duty to plaintiffs as joint ventur-ers.

As a joint venturer, Cruce owed plaintiffs a fiduciary duty of “utmost good faith and scrupulous honesty” and had a corresponding obligation to “make good faith disclosures of all facts relevant to the transaction.” Warner v. Winn, 145 Tex. 302, 197 S.W.2d 338 (1946); Griffin v. Reilly, 275 S.W. 242 (Tex.Civ.App. — Amarillo 1925, no writ); Russell v. Truitt, 554 S.W.2d 948 (Tex.Civ.App. — Fort Worth 1977, writ ref’d n.r.e.). Moreover, as managing partner of the Hickcox-Castle joint venture, Cruce owed his co-partners one of the highest fiduciary duties recognized in the law.

Cruce did not fulfill his fiduciary obligations either as a joint venturer or as the manager/trustee of the joint venture. (Cruce disbursed $19,300.00 of the funds placed on deposit in the Hexter-Fair escrow account to Price knowing that Price had not contributed his pro rata share of the cash required to close the venture properties.) Cruce, Cole, and Price claimed that Price’s net contribution to the joint venture was thirty-four percent. The cost of one percent interest in the joint venture as prepared by Cruce was approximately $3,800.00. Therefore, the pro rata contribution required to acquire a thirty-four percent interest in the joint venture would have been approximately $129,200.00. Price’s contribution to the joint venture came to a total of $14,360.54.

The evidence also established that the actual total purchase price of the venture properties was at least $300,000.00 less than the total purchase price represented to appellants in the false closing statements and in the individual recaps, both of which were distributed to the appellants at the December 1972 meeting of the joint venturers. It is uncontroverted that, during the course of the trial, Cruce admitted that he never disclosed these facts to the appellants.

It is well established in Texas that the mere failure of Cruce to disclose to appellants all aspects of their inducement in the transaction is in itself a breach of his fiduciary duty to appellants as joint ventur-ers. Kinzbach Tool Co., Inc. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 513-14 (1942). The jury finding that Cruce breached his fiduciary duty to plaintiffs is supported by sufficient evidence. We sustain points of error 2, 3, 4, 5, 8, 9, 10, and 11.

In points of error 6 and 7, appellants contend that the trial court erred in entering a judgment notwithstanding the verdict because there is sufficient evidence that Cruce and Price made false representations to appellants. The evidence is undisputed that Cruce signed, and Price distributed, copies of the Agreements to Participate to appellants. These written representations were repeated orally to all of the appellants by Price. Subsequently, the plaintiffs paid Cruce the sums represented by this agreement to be the cost of closing their pro rata shares of the venture properties. Due to the fiduciary relation between Cruce and the appellants, the appellants were under no obligation to inquire as to the truth of these representations. Courseview, Inc. v. Phillips Petroleum Co., 158 Tex. 397, 312 S.W.2d 197 (1957).

The joint venture agreement, presented to the plaintiffs for their approval, reiterated the following representation:

Initial contributions. The joint venturers acknowledge that each joint venturer has contributed to the joint venture the sums set opposite the name of each joint ven-turer on exhibit “A.”

Cruce and Price never paid their pro rata shares of the costs required to close the venture properties. Moreover, it is clear from the letter of June 29,1972, that Cruce and Price intended for those holding seventy-five percent interest in the joint venture to pay one-hundred percent of the costs of closing the venture properties.

The evidence supports the contention that Cruce made false and misleading written representations which appellants relied upon to their detriment. Because Cruce and Price were acting conspiratorially, the jury’s findings that they perpetrated a fraud upon the appellants are supported by the evidence and we sustain appellants’ points of error 6 and 7.

In points of error 12, 13, 14, and 15, appellants contend the trial court erred in entering a judgment notwithstanding the verdict because there is sufficient evidence to support the jury’s findings of damages. The jury found that each plaintiff suffered the following amounts of damages as a result of the breach by Cruce and Cole of their fiduciary duty owed to appellants as joint venturers:

Kirby $174,000.00

Hogan 91,000.00

Almon 66,000.00

Hoover 66,000.00

Clemente 41,000.00

Sierad 41,000.00

The jury also found that these damages resulted from appellants’ reliance upon the appellees’ fraudulent representation. Consequently, appellants are entitled to restitution for the full amount of their contributions. Watson v. Limited Partners of WCKT, LTD, 570 S.W.2d 179, 182 (Tex.Civ. App. — Austin 1978, writ ref'd n.r.e.). Furthermore, Cole and MIC (as co-conspirators and participants with Cruce in the breach of his fiduciary duty to plaintiffs) are jointly and severally liable for these contributions, even though Cruce and Hexter-Fair were the only defendants who actually received plaintiffs’ contributions. Kinzbach, 160 S.W.2d at 514.

It is the settled law of this state that where a third party knowingly participates in the breach of a fiduciary, such third party becomes a joint tortfeasor with the fiduciary and is liable as such.

Kinzbach, 160 S.W.2d at 514.

The evidence is clear that Cruce, Cole, and Price used appellants’ money to gain a thirty-four percent cost-free interest in the joint venture and took over $210,-000.00 in cash by creating notes secured by subordinate liens on each of the venture properties. Consequently, the jury’s finding of exemplary damages is supported by the evidence and we find it not to be excessive in relation to the actual damages.

Exemplary damages may be assessed against parties who have breached their duties as fiduciaries by attempting to obtain a secret profit for themselves. Holloway, 368 S.W.2d at 583-84. As the court stated in Russell, which involved somewhat similar facts, “The issue is not whether defendants intended to injure the joint ven-turers but whether they intended to gain an additional benefit for themselves.” Russell, 554 S.W.2d at 955.

The jury’s findings that Cruce, Cole, and Price entered into an agreement to defraud the appellants to obtain a secret profit and that Cruce’s and Price’s fraudulent representations proximately caused plaintiffs to lose the total amount of their contributions is supported by the evidence. The jury reasonably inferred that the same fraudulent representations which induced the investors to contribute the cash to close the venture properties also induced them to contribute their pro rata share of the assessments which was lost when Cruce and Cole, refusing to pay their pro rata shares, caused the joint venture to default. We sustain points of error 12, 13, 14, and 15.

In points of error 16, 17, and 18, appellants contend that the trial court erred in overruling plaintiffs’ motion for judgment and in entering a take nothing judgment in favor of Hexter-Fair Title Company. Appellants assert that Hexter-Fair is vicariously liable for the actions of B.W. Cruce, Jr. that were within the scope of his duties and authority as an escrow officer of Hex-ter-Fair. Appellants further argue that the evidence, as a matter of law, conclusively proves that Cruce was acting within the scope of his duties and authority as an escrow officer of Hexter-Fair in improperly disbursing the funds deposited by plaintiffs in the Hexter-Fair escrow account and that such actions vicariously constitute a breach of Hexter-Fair’s fiduciary duty to appellants. In this case, the jury found that Cruce was acting as an agent for Price at the time Cruce presented the purchaser’s closing statements to appellants. The jury also found that Hexter-Fair breached no fiduciary duty, if any existed, to appellants.

Appellants contend there was no evidence to sustain the jury’s finding that Cruce was not acting within the scope of his authority as escrow officer of Hexter-Fair when he prepared and delivered the second set of closing statements to the appellants. In evaluating appellants’ no-evidence point, we may consider only the evidence and inferences which tend to support the trial court’s deemed finding and must disregard all evidence and inferences to the contrary. Roark v. Allen, 633 S.W.2d 804, 809 (Tex.1982).

The record is replete with evidence that Cruce acted inconsistently with his duties as an escrow officer for Hexter-Fair and, in fact, acted for his own benefit and for the benefit of Price in preparing the second set of closing statements. The evidence further reveals that Cruce misrepresented to each of the appellants that their earnest money would be returned if one-hundred percent participation in the joint venture was not obtained; that each of appellants had been defrauded as a result of those misrepresentations; and that Cruce failed to disclose this information while acting as an agent for Price. The evidence supports the jury findings that at the time Cruce obtained any knowledge of the misdeeds of Price or Cole, he was acting as agent for Price and not for Hexter-Fair. The credibility of the witnesses and the weight to be given to their testimony are matters within the sole discretion of the jury; an appellate court does not have such authority. Cusack v. Cusack, 491 S.W.2d 714, 720 (Tex.Civ.App.—-Corpus Christi 1973). The jury believed from the evidence that Cruce was acting as the agent of Price at all times material to this law suit.

There was ample evidence and numerous jury findings that Price and Cruce had conspired and colluded to cheat the appellants. Since the collusion was between Cruce and Price and since Price was the principal for whom Cruce was acting at all material times, Hexter-Fair cannot be bound by the knowledge obtained by Cruce as agent for Price. Mays v. First State Bank of Keller, 247 S.W. 845 (Tex.Comm’n App.1928, holding approved).

As a general rule, so long as the agent acts within the scope of his employment, in good faith, and for the interest of his principal, the agent is presumed to have disclosed all facts that came to his knowledge. Mays, 247 S.W. at 846. The exception to this rule is that the agent’s knowledge is not imputed to the principal when the agent engages in fraudulent conduct, as the jury found Cruce did in this case. Mays, 247 S.W. at 846.

Because Cruce was acting as a special agent for Hexter-Fair for the limited purpose of closing real estate transactions, any actions taken by him in establishing the joint venture were outside the scope of his authority; therefore the loss must be borne by Price, the principal for whom Cruce was acting. Additionally, “the knowledge of an agent is not imputed to the principal under circumstances where the agent does not acquire his knowledge in the transaction of his principal’s business.” Taylor v. Taylor, 88 Tex. 47, 29 S.W. 1057 (1895). Under the law and the facts of this case, Cruce’s knowledge, acquired while working as an agent for Price, cannot be imputed to Hexter-Fair to form the basis for vicarious liability.

Appellant contends that because Cruce was acting for Hexter-Fair when he improperly disbursed funds from the escrow account, Hexter-Fair is liable for Cruce’s fraud. Because we hold that Cruce’s authority as special agent for Hexter-Fair was limited to closing the real estate transaction and that the knowledge acquired by Cruce while working as an agent for Price cannot be imputed to Hexter-Fair, we overrule points of error sixteen, seventeen, and eighteen.

It would be well to comment on the dissent. While no one would tolerate, much less praise, the lack of morality on behalf of the former County Commissioner, Price, we are nevertheless bound by the law, under the facts of this case, to address only those issues which have been pleaded. The law in Texas clearly establishes that unless the contract, which is the subject of the suit, is illegal on its face or can be shown to be so by evidence that proves the contract, its illegality must be pleaded. After Hours Inc. v. Sherrard, 456 S.W.2d 227 (Tex.Civ.App. — Austin 1970), rev’d on other grounds, 464 S.W.2d 87 (Tex.1971). Unlike the dissent, we have not looked beyond the contract sued upon or the evidence by which the contract is proved. We have followed the clear precedent that illegality is an affirmative defense which must be pleaded or it is waived. TEX.R.CIV.P. 94 (Vernon 1979); City of Galveston v. O’Mara, 146 S.W.2d 416, 420 (Tex.Civ.App. —Galveston 1940), affd, 138 Tex. 16, 155 S.W.2d 912 (1941). An appellate court is not authorized to address an issue in the absence of a properly assigned point of error unless the error is fundamental. TEX.R.CIV.P. 451 (Vernon 1979); Newman v. King, 433 S.W.2d 420 (Tex.1968). In order to have fundamental error, the record must show that the trial court lacked jurisdiction or that the public interest, as declared in the statutes or Constitution of Texas, is directly and adversely affected. Pirtle v. Gregory, 629 S.W.2d 919 (Tex.1982). The record must affirmatively and conclusively disclose such error. Cain v. Zurich Insurance Co., 426 S.W.2d 575 (Tex.Civ.App. — Dallas 1968, no writ). Thus, if examination of the statement of facts is required, no question of fundamental error is presented. Cain, 426 S.W.2d at 575; Lane v. Fair Stores, Inc., 150 Tex. 566, 243 S.W.2d 683 (1951).

The appellants are not suing Price for breach of his agreement to supply insider information. In that situation, we would agree that the illegality of the contract would appear on its face and that the Court could sua spohte refuse to enforce it. The underlying contracts in this case are the Agreement to Participate in the Hickcox-Castle Property/Joint Venture and the Joint Venture Agreement itself. The dissent does not contend that either of these agreements is illegal or that illegality appears from the evidence necessary to prove them. Instead, the illegality, if any, depends on extraneous facts, discovered, if at all, by the examination of the statement of facts.

The trial court’s take nothing judgment in favor of Hexter-Fair Title Company is affirmed. The trial court’s take-nothing judgment in favor B.W. Cruce, Jr. and Mesquite Investment Corporation is reversed and we render judgment for appellants in the amounts of the jury award. Therefore, it is ordered that each of the appellants recover the following amounts of actual damages from appellees B.W. Cruce, Jr. and Mesquite Investment Corporation (MIC), jointly and severally:

B.J. Kirby $174,000.00

Robert E. Hogan 91,000.00

Taylor B. Almon 66,000.00

Charles R. Hoover 66,000.00

Phil Clemente 41,000.00

Ben Sierad 41,000.00

It is further ordered that appellants recover the following amounts of exemplary damages from Cruce, Cole and MIC:

CRUCE MIC

Kirby $181,628.58 $45,407.10

Hogan 94,984.56 23,747.40

Almon 68,893.53 17,223.35

Hoover 68,893.53 17,223.35

Clemente 42,797.50 10,699.37

Sierad 42,797.50 10,699.37

It is further ordered that appellants recover their costs of this appeal from appel-lees Cruce and MIC, jointly and severally. It is ordered that appellee Hexter-Fair recover its costs of this appeal from appellants.

CARVER, J., dissents.

CARVER, Justice,

Dissenting.

I adhere to the original unanimous panel opinion holding that, since all the asserted rights of the parties grew out of their common scheme to use Price’s inside information as county commissioner regarding the location of a new highway to speculate in lands lying under, or adjacent to, the new highway before the owners, or the public, learned the same information known to Price, the parties’ scheme was contrary to public policy and that this court should not adjudicate, but should dismiss, a dispute between the schemers.

Since my brethren, on motion for rehearing, have determined to adjudicate the schemers’ dispute, as well as keep silent in their new opinion as to the violation of public policy shouted from this record, I adopt our original opinion, in its entirety but with minor grammatical changes, as my dissent.

B.J. Kirby, Robert E. Hogan, Taylor B. Almon, Charles R. Hoover, Phil Clemente, and Ben Sierad appeal: (1) a judgment, notwithstanding the verdict of the jury, in favor of B.W. Cruce, Jr., David C. Cole, and Mesquite Investment Corporation; and (2) a judgment on the verdict in favor of Hexter-Fair Title Company. Since the rights, if any, of the appealing parties necessarily rest upon their speculation in property on the basis of information obtained from a public servant (accessible to him only because of his office but not accessible to the public), contrary to the public policy of our state, neither the trial court, nor this court, may properly lend itself to the realization of any such claimed right, but should leave such parties in whatever position they have placed themselves. Consequently, I would hold that the trial court erred by adjudicating the suit rather than dismissing it. I would reverse the judgment of the trial court and render a judgment of dismissal.

The record reflects that Dallas County District 2 Commissioner Mel Price initiated a scheme to profit personally from his official knowledge (knowledge not yet known to the public) of the location of a new loop highway through eastern Dallas County by acquiring land both on and adjacent to the right-of-way at a price not yet affected by knowledge of the loop in the owners of the property or knowledge of the loop by competing purchasers.

Price recruited the present appealing parties to share in this scheme, which is evidenced by two exhibits placed in the record by them. The first exhibit was a handwritten letter of Mel Price dated June 21, 1972, which we reproduce as Appendix 1. The second exhibit was an “Agreement to Participate in the Hickox-Castle Property Joint Venture” proposed by “B.W. Cruce Jr., Trustee, for Mel Price” and “approved and agreed to” by individual signatures for a stated percentage by each of the appealing parties, which we reproduce as Appendix 2. The appealing parties also introduced testimony describing a meeting of Price, his trustee Cruce, and all the recruited members of the scheme as follows:

Q All right, did Mr. Price participate in that meeting?
A Mr. Cruce conducted the meeting.
Q Okay, did Mr. Price have anything to say during that meeting that you recall?
A Yes, sir.
Q Could you tell us what that was?
A It was primarily that the land was — the proposed Loop 9 was going to go through the middle of it; even if the alternate route was picked by the highway department it would still be very close to this property which would enhance it whether it went through the property or not, but it was primarily a discussion of the potential of the property and how good it was, and we were going to sell this thing at a profit. It was a get-together meeting more than anything.

It is our duty to determine whether the agreement of the parties to initiate and carry out their scheme was in violation of public policy despite the absence of a pleading in the trial court by any party raising the issue. In After Hours, Inc. v. Sher-rard, 456 S.W.2d 227, 228 (Tex.Civ.App.— Austin 1970), rev’d on other grounds, 464 S.W.2d 87 (Tex.1971), it was held that the illegality of the parties’ agreement (tested by its object) may be raised at any stage of the proceedings, or may be raised by the appellate court sua sponte. Pleading of

illegality is not required, and the parties may not waive the issue, because the issue is not for their benefit but for the public good. Westwood v. Continental Can Co., 80 F.2d 494 (5th Cir.1935). The actual existence of, or degree of, injury to the public is not material; whether the tendency of the agreement is injurious to the public good is the main question. Hazelwood v. Mandrell Industries Co., 596 S.W.2d 204, 206 (Tex.Civ.App. — Houston [1st Dist.] 1980, writ ref’d n.r.e.). An agreement whose tendency, or object, is to produce a breach of duty of one who stands in a fiduciary relationship is illegal, void, and against public policy because it is the policy of the law to secure fidelity of those holding positions of trust and confidence; or, stated another way, agreements tending to cause unfaithful conduct by fiduciaries are illegal because they are, in effect, agreements to wrong or defraud the persons whose interests the fiduciaries have in charge. Dial v. Martin, 37 S.W.2d 166, 188 (Tex.Civ.App. — Amarillo 1931), rev’d on other grounds, 57 S.W.2d 75 (Tex. Comm.App.1933, judgmt adopted).

There can be no dispute that public officers, including a county commissioner, are fiduciaries to the public whose interest they have in charge. It cannot be said that a commissioner, Mel Price, served the public in using information coming to him by virtue of his office, to speculate in land under, or adjacent to, the new loop highway, especially when some of that same “public” would be selling the land with an inferior bargaining position; or when other members of that same “public” would be uninformed competitors; or when other members of that same “public” could, subsequently, only buy the land from a speculator who acquired it on “insider” information. Our Legislature codified (from prior court decisions) this type of breach of a public servant’s fiduciary duty to the public by condemning it as a crime in the passage of TEX.PENAL CODE ANN. § 39.03 (Vernon 1974), which provided:

(a) A public servant commits an offense if, in reliance on information to which he has access in his official capacity and which has not been made public, he:
(1) acquires or aids another to acquire a pecuniary interest in any property, transaction, or enterprise that may be affected by the information; or
(2) speculates or aids another to speculate on the basis of the information.
(b) An offense under this section is a Class A misdemeanor.

The Practice Commentary accompanying this section provides, in part, that:

This offense is new to Texas law, but it is analogous to several statutes in the prior law forbidding disclosure of certain insider information, Penal Code arts. 144, 145, 426, and prohibiting a state official from buying claims against the state, art. 868.
The fiscal integrity of the state may be undermined if public servants are permitted to profit from confidential information acquired by virtue of their position. Enrichment of insiders will also disadvantage citizens who deal with the insiders in ignorance, and the temptation to profiteer may motivate public servants to delay, slant, or even falsify information concerning governmental transactions.

However, the Legislature was not the first to recognize, or to condemn, a public servant’s similar breach of duty because Penal Code § 39.03 merely codified existing public policy and added the criminal penalty. In DeLeon v. White, 9 Tex. 598 (1853), Justice Lipscomb held a land title in a minor, granted by a commissioner who was the minor’s father, was void as obtained in violation of public policy. DeLeon held that the vice lay in attempting, faithfully, to serve two masters simultaneously. De-Leon stated that it relied upon “Mr. Justice Storey” quoting: “It may be correctly said with reference to Christian morality that no man can serve two masters whose interests are in conflict’ (emphasis added) (citing “Storey on Agency Sec. 210”). While it was in the public’s interest (as the master of Mel Price) to have Price locate the new loop highway to best serve the public and to acquire for the public a right-of-way therefor at the most reasonable price, it was the desire for personal gain (as a different master of Mel Price) that led to Price’s scheme, for himself and others, to locate the new loop, and to acquire property through which it passed, for private profit. I would find that the public service due from Mel Price was incompatible with his private profit scheme and that such scheme was violative of public policy so as to deny access to the courts to resolve disputes between the schemers.

Similarly in Flanikin v. Fokes, 15 Tex. 180 (1855), Steel was a land commissioner and contracted with Fokes to clear title to her headright certificate for a one-half interest. Flanikin, as assignee of Steel, filed suit to enforce the agreement. The court, relying specifically upon the principles discussed in DeLeon, supra, held that the commissioner’s private interest so displaced the public’s interest as to make invalid and unenforceable the agreement as a matter of public policy. Likewise, I would hold that, as evidenced by the testimony quoted and the documents attached as appendices 1 and 2, the private interest of Mel Price, and the appealing parties he recruited to his scheme, so displaced the public’s interest with which Price was charged to further, that their scheme violated public policy.

The most obvious parallel in its facts and its holding is found in Wills v. Abbey, 27 Tex. 202 (1863), wherein a deputy surveyor located a certificate for a league and labor of land and sought to enforce an agreement for ½ thereof for his efforts. Justice Bell, for the court, held that:

Public policy required that the officers chosen to locate and survey the public lands should not be permitted to speculate in them, or to acquire interests in them, which would present to such officers the temptation to take advantage of the information which their official positions enabled them to acquire, to the detriment of the holders of certifi cates generally (Flanikan v. Fokes, 15 Tex. 180; DeLeon v. White, 9 Tex. 598). (emphasis added).

27 Tex. at 204. Likewise, I would hold that public policy requires that county commissioner Mel Price, being chosen to locate a new loop highway, should not be permitted to speculate in thq lands lying under or adjacent thereto because he would be, and was, tempted (along with those he recruited to share in the temptation) to take advantage of information which Price’s official position enabled him (and them) to acquire, to the detriment of the public.

I would reverse the judgment of the trial court only because it denied relief to the appealing parties rather than dismissing their suit as one upon which the court could not act. Anaya v. Jacaman, 505 S.W.2d 952 (Tex.Civ.App. — San Antonio 1974, no writ). I would dismiss the claims of the appealing parties, but the officers of the court whose costs are unsatisfied should be awarded such unpaid costs from the appealing parties and their surety.

APPENDIX II

EXHIBIT H-l

AGREEMENT TO PARTICIPATE IN THE HICKOX-CASTLE PROPERTY/JOINT VENTURE

B.W. CRUCE, JR., as Trustee is forming a joint venture to acquire approximately 253.-762 acres of land in the Castle, Hickox, Rowlett and Merritt Roads area in Dallas County, Texas, within the municipal boun-dries of Rowlett, Texas. This property is presently owned by six different owners.

B.W. CRUCE, JR., Trustee, for MEL PRICE, has negotiated a contract for the purchase of the venture property. The total purchase price would be approximately One Million Eight Thousand Seven Hundred Two Dollars and thirty-six/100 ($1,008,702.36) payable as follows. $241,-000.00 in cash at the time of closing and notes for $771,108.26. All interest is at 7V2 %. Down payment of approximately $241,-000.00 leaves $3,405.90 remaining to be used to pay attorney’s fees, closing costs, survey costs, title company expenses and to establish a bank account, to be held in trust by the Trustee, to be used as an operating bank account to pay any expenses as they occur, such as engineering fees, taxes, etc. Proper pre-payment privileges and release clauses will be obtained in final contract. Note schedule attached.

The purchase contract generally conforms to standard title company contracts of sale. The Seller is required to furnish an Owner’s Title Policy of Insurance and title would be placed in B.W. CRUCE, JR., Trustee.

Your ownership would be an interest of 25 percent (referred to as “your pro-rata share”) in the joint venture upon it’s formation, in consideration of the following: (1) a cash contribution by you to the joint venture in an amount equal to your pro rata share of the cash required in closing of the purchase of the venture property, shall be paid to B.W. CRUCE, JR., Trustee, as escrow agent, upon execution of this instrument by you, receipt of which is hereby acknowledged, for $1,000.00, the balance of which will be due on five (5) day notice by B.W. CRUCE, JR., on the date of closing, B.W. CRUCE, JR., will transfer all funds deposited with him as escrow agent under the terms of this instrument, to the account of the joint venture or shall expend the same on behalf of the joint venture pursuant to written instructions from the joint venture to do so: (2) on or before closing, you would be required to sign notes in the total amount of approximately $771,108.26 made payable to the various owners of the 6 tracts involved. (3) B.W. CRUCE, JR., shall be the Trustee for the joint venture and shall be responsible for the management of the property.

Any expense incurred by B.W. CRUCE, JR., Trustee on behalf of this joint venture, such as legal fees, accounting fees or engineering fees, shall be charged to the joint venture: (4) cash required for closing will be $241,000.00 of which your pro-rata share shall be $_

Some of this property is presently zoned residential but it is anticipated that better zoning can be obtained if and when it is applied for. All properties are near anticipated route of Loop 9.* Utilities serve (or are financed to serve) these properties.

If, within a reasonable length of time, B.W. CRUCE, JR., Trustee, is unable to obtain commitments for participation in the joint venture on the basis set forth in this instrument for one hundred (100) percent interest in the joint venture, or if he is unable to complete the valid contract, then he will notify you in writing of this, returning with the notice, the amount of your earnest money deposited and neither party shall have any further obligation or liability hereunder. In the event you should default in the performance of any obligation to be performed by you hereunder, B.W. CRUCE, JR., Trustee for other parties in the joint venture, may, at their option, retain the earnest money deposited by you and terminate your right to participate in the joint venture or pursue any other legal remedies, either at law or in equity, which they may have by reason of your default.

If the foregoing represents your understanding of our agreement, please so indicate by signing the copy of the instrument and returning same together with your check payable to B.W. CRUCE, JR., Trustee in the amount of $1,000.00

Yours Very Truly,

/s/ B.W. Cruce, Jr.

B.W. Cruce, Jr., Trustee

Attorney for Mel Price

APPROVED AND AGREED TO:

This 27 day of June, 1972.

By: B.J. Kirby