EX PARTE CHARLES V. AND VICTOR J. LAROCCA
No. A-5401
Supreme Court of Texas
October 12, 1955
282 S.W.2d 700 | 154 Tex. 618
It follows that the judgments below are affirmed.
Opinion delivered July 27, 1955.
George M. Sonfield, Keith, Mehaffy & McNicholas and Quen- tin Keith, all of Beaumont, for respondents.
MR. CHIEF JUSTICE HICKMAN delivered the opinion of the Court.
By this original proceding Charles V. and Victor J. LaRocca, hereinafter referred to as Charles and Victor, seek release from the restraint of a judgment of a District Court in Jeffer- son County adjudging them to be in contempt of that court.
On July 11th of this year we granted a temporary writ under authority of which relators were released on bail pending a hearing of the application on its merits. The case was sub- mitted on briefs and oral argument on July 20, and on July 27, just before adjournment of the court for its summer vaca- tion, it entered an order remanding the relators to the custody of the Sheriff of Jefferson County and providing that no motion for rehearing would be entertained. In view of the press of matters for disposition at that time it was determined that an opinion could not be prepared prior to adjournment, and the order accordingly recited that an opinion would be filed later. This is written in compliance with that order and will be filed as the opinion of the court.
Prior to the institution of the present litigation Charles
was engaged in the business of selling gasoline and lubricating
oil at wholesale in Jefferson County. On January 30, 1952, he
entered into a contract with Howard-Reed Oil Company, Inc.,
a business competitor, by the terms of which he sold to it all
of his interest in the business, including certain equipment, to-
gether with the good will of the business. As part consideration
for the sale he agreed “not to engage in the character of busi-
ness in which I am now engaged in Jefferson County, Texas,
for a period of 5 years from the first day of February, 1952
either by establishing a new business or a department of an
existing business or in any other manner whether directly or
Howard-Reed then sought to have the District Court ad- judge both Charles and Victor to be in contempt of that court. Victor, who was not a party to the injunction suit, applied to the Court of Civil Appeals for leave to file a petition for writ of prohibition. His petition was granted and the writ of pro- hibition issued. On May 21, 1955, Howard-Reed was granted permission by the Court of Civil Appeals to dismiss its motion seeking to have Charles and Victor punished for contempt for violation of the temporary injunction. On June 15, thereafter, Howard-Reed filed its second amended original petition in the District Court seeking to have both Charles and Victor adjudged in contempt for violating the temporary injunction by acts done after May 21, 1955. Notice to show cause was duly served upon both Charles and Victor, and upon a trial of the motion for contempt the District Court, on July 8, entered an order holding both Charles and Victor in contempt of court for violation of the temporary injunction, fixing the punishment of Charles at a fine of $100.00 and confinement in jail for two days and that of Victor at a fine of $50.00 and confinement in jail for twenty- four hours. That is the order under attack in this proceeding. It contained this recital:
“The Court here and now, upon the testimony adduced upon the trial of this cause, from observing the conduct and demeanor
of the witnesses, and from all of the facts offered in evidence finds that the said defendants, and each of them, with the pur- pose in mind, did conspire to thwart the order of this Court dated June 8, 1954, and to do by indirection through Victor J. LaRocca the very things which this Court had forbidden the said Charles V. LaRocca to do; and the Court here and now finds from the credible testimony that the allegations of con- tempt as set forth in the affidavit filed by the plaintiff have been established beyond a reasonable doubt, and that the said defendants, and each of them, are guilty of contempt of this Court by willfully violating said temporary injunction and should be punished therefor.”
It is not contended that the trial court did not have juris- diction of the parties and the subject matter of the suit. Neither is the regularity of the procedural steps in the contempt pro- ceedings questioned. The sole question for decision is whether there was any evidence offered at the trial upon which the trial judge could base the conclusions above quoted. If not, relators have been denied due process of law and the contempt order was and is void. Ex parte Helms, 152 Texas 480, 259 S.W. 2d 184; Ex parte Morris, 147 Texas 140, 215 S.W. 2d 598.
This brings us to a consideration of the testimony on which the trial judge based his conclusion that the relators conspired to thwart the court‘s order and to do indirectly through Victor what the court had enjoined Charles from doing. That testimony may be briefly summarized as follows:
The suit for temporary injunction was tried on June 7, 1954,
and at the conclusion of the evidence the court granted the in-
junction. On the following day, June 8, the order granting the
writ was formally entered. On the night of June 7 Charles first
discussed the injunction with Victor. At that time Victor was
employed as production manager of the Seven-Up Bottling
Works in Beaumont at a salary of $85.00 a week, which position
he had held for several years. He had had no experience in sell-
ing gasoline and oils at wholesale. The next day, June 9, Charles
went to Houston, where he conferred with officials of Ada Oil
Company. On that occasion the jobber contract which he had
with hte company was cancelled and his account was settled.
Upon returning from Houston that evening about seven or
eight o‘clock, Charles went to Victor‘s home. Victor testified that
he and Charles did not come to any specific agreement on the
evening of June 9, and that he knew for the first time what
the deal was when an attorney employed by Charles told him
At that meeting the bank made a loan of $8,000.00 to Victor.
The note was made payable in seventy-six days and was signed,
“Jefferson Oil Company by Victor J. LaRocca.” At that time
Victor had not established a credit line at the bank and had no
money. He testified that he could not borrow $8,000.00 at the
bank by himself without Charles’ signature. Nothing on the
face of the note indicated that Charles was bound, but he was
in fact bound because of his signing a written instrument
guaranteeing the payment of the note. On the faith of that
guarantee the loan was made. Gardner, the Vice President of
the bank, testified that the customary procedure for a person
endorsing a note was to have him place his signature on the
back of the note, and that requiring a person to guarantee a
note by a separate instrument was an unusual procedure by
The deal was financed in the following manner: Victor paid Charles $3,000.00 cash out of the $8,000.00 loan and gave his unsecured promissory note to Charles for the balance due, pay- able in thirty-four monthly installments of $100.00 each and one installment of $98.50. The last payment was due on Feb- ruary 10, 1957, nine days after the expiration date of the in- junction. The note was to bear no interest until after maturity.
Charles leased the plant to Victor together with personal property used in connection with the business. Rent was pay- able in monthly installments of $200.00. The lease was personal to Victor and subletting was prohibited. The term of the lease was two years, seven months, and sixteen days, expiring on the expiration date of the injunction.
In cases too numerous to be cited in this opinion this court has declared the rule to be that a proceeding of this na- ture constiutes a collateral attack upon the judgment of the trial court, and in order for the contempt judgment to be sub- ject to such an attack it must be absolutely void. We have no authority to evaluate facts. As we stated in Ex parte Fisher, 146 Texas 328, 206 S.W. 2d 1000, “We may consider the facts only for the purpose of determining whether they constitute acts sufficient to confer jurisdiction upon the court to make the par- ticular order.” And, as held in Ex parte Tyler, 152 Texas 602, 261 S.W. 2d 833, the fact that a judgment may be erroneous does not render it void. If it should be granted that the trial court drew an incorrect conclusion from this testimony, that fact would not make the judgment void. It can be declared void by this court if, and only if, the testimony constituted no evidence at all. In our opinion the least that can be said concerning the testimony above pointed out is that it constituted some evi- dence of the guilt of relators. We need go no further than that.
During the oral submission of this case the point was raised
As pointed out in the beginning of this opinion, an order was entered July 27 remanding relators to the Sheriff of Jeffer- son County, and this opinion is filed to disclose grounds on which that order was based.
Opinion filed October 12, 1955.
MR. JUSTICE SMITH dissenting.
In this original habeas corpus proceeding we granted the writ and released the relators, Charles V. and Victor J. LaRocca, on bail from the custody of the Sheriff of Jefferson County, Texas, in view of doubts as to whether their commitment for constructive contempt of the District Court of that County was sustained by any evidence. Briefs have been submitted and oral argument has been heard.
I respectfully dissent from the opinion of the majority. I am firmly convinced that the adjudication of contempt is void because there was no evidence of probative force introduced at the hearing to sustain the charge of contempt. It is the duty of this Court to review the evidence, and if it shows, as a matter of law, i.e., conclusively establishes that the contempt charge is not sustained, it naturally follows that the adjudication is void and the relators should be released from custody. Ex Parte H. G. White, 154 Texas 126, 274 S.W. 2d 542; Ex Parte Helms, 152 Texas 480, 259 S.W. 2d 184.
On January 30, 1952 the Howard-Reed Oil Company, Inc.
and relator, Charles V. LaRocca, entered into a contract where-
by the former purchased from the latter all of his right, title
and interest and claim in and to that certain business known
as “Charles V. LaRocca Distributing Company.” The contract
contained an agreement not to engage in the same character of
business in the following language: “And I, the said Charles
V. LaRocca, hereby bind and obligate myself as a part of the
consideration hereof, not to engage in the character of business
in which I am now engaged in Jefferson County, Texas, for a
The relator, Victor J. LaRocca, was not a party to any of these instruments; in fact, he had had no contractual relation- ship with either the relator, Charles V. La Rocca or the Howard- Reed Oil Company, Inc., so far as this matter was concerned until about June 9, 1954. Howard-Reed operated the “bulk plant” for a few months and then closed it and moved to a new location.
In February, 1954, Howard-Reed and Charles V. LaRocca. entered into an agreement by the terms of which Charles ac- cepted $2,550.00 cash for the release and cancellation of the lease and the obligation of Howard-Reed to pay the balance of $5,100.00 then due and owing under the terms of said lease. On May 1, 1954, Charles entered into a contract with the Ada Oil Company to distribute the petroleum products of the Phillips Petroleum Company in Beaumont, and he began selling Phillips products on May 2, 1954. On May 12, 1954, Howard-Reed filed suit against Charles alleging a violation of the covenant not to engage in the same character of busines and prayed for an injunction. The defendant, by way of answer, alleged that since Howard-Reed had surrendered the premises, it no longer was operating the business and the restrictive covenant ceased to be effective, and on appeal from an order granting the injunc- tion, presented two points of error, as follows:
“First Point of Error
“The restrictive covenant “Not to engage in the character of Business in which I am now Engaged in Jefferson County, Texas,” for a period of five years, contained in Plaintiff‘s Bill of Sale to Defendant, Covering a Business And Its Goodwill, Lo- cated at 855 Crockett Street, Beaumont, Texas, Ceased to be
Effective After Defendant Surrendered Said Premises to Plain- tiff; and the Trial Court Erred in Enforcing Said Restrictive Covenant by Temporary Injunction.’ “Second Point of Error.
“The Trial Court Erred in Construing the Restrictive Cov- enant, “Not to Engage in the Character of Business in which I am Now Engaged in Jefferson County, Texas” to Include the Wholesale Distribution of all Brands of Petroleum Products.” LaRocca v. Howard-Reed Oil Company, Inc., Texas Civ. App., 277 S.W. 2d 769, 772.”
I point this out for the reason that Howard-Reed seems to contend that the appeal was a part of a scheme to get around the effect of the injunction. The injunction was entered on June 7, 1954, and Charles was “temporarily enjoined and restrained from in any manner, whether directly or indirectly, engaging in the business of distributing at wholesale gasoline and lu- bricating oils within the limits of Jefferson County, Texas * * *” On June 9, 1954, and before the defendant, Charles, had per- fected his appeal from the order granting the injunction, and at a time when Charles was the legal owner of the premises in- volved, and further at a time when no injunction had been granted which would have the legal effect of preventing a lease of the premises, Charles entered into negotiations with his brother, Victor, which culminated in the execution of a lease covering said property on June 10, 1954, the term of the lease being for two years, seven months and 16 days, which was the remainder of the five year term granted in the original lease between Charles and Howard-Reed.
On May 10, 1955, Howard-Reed filed its First Amended Original Petition making Victor a party to the original suit filed on May 12, 1954, and on June 13, 1955, a Second Amended Original Petition was filed alleging, in part, that the transaction between Charles and Victor was “colorable, fraudulent, and simulated, for the sole purpose of thwarting the order of this court and enabling the said Charles to engage in business not- withstanding the injunction previously issued * * *; that the said Victor is in truth and in fact only the alter ego and suc- cessor of the said Charles, and an agent, servant and employee of the said Charles.”
It is generally recognized that whether contempt proceed-
ings grow out of civil or criminal proceedings, they are some-
what criminal in nature and the procedure therein should there-
Respondent contends that the following circumstances estab- lish that the transaction between Charles and Victor was a fraud and a subterfuge: (1) the fact that Charles and Victor are brothers; (2) the fact that Charles leased to Victor his gasoline bulk storage plant and truck; (3) the fact that Charles sold his inventory of gasoline and lubricating oils to his brother, Victor; (4) the fact that Victor borrowed $8,000.00 from the First National Bank; (5) the fact that Charles issued a letter of guaranty of payment of the loan; (6) the fact that Charles appealed from the order granting the temporary injunction; (7) the fact that Victor employed a public accountant to aid and assist him in setting up his business; (8) the fact that Victor agreed to pay $200.00 per month rental for the lease; (9) the fact that the lawyer who had represented Charles in the prior litigation prepared the papers at the request of Charles.
The relator, Charles, admittedly executed the lease to his brother, but the injunction did not and could not enjoin him from leasing his gasoline bulk storage plant and truck to his brother. The relator, Charles, admittedly sold his inventory of gasolines and lubricating oils on hand at his bulk storage plant to his brother, Victor, but again the injunction did not prohibit him from doing so. Neither did the injunction prohibit and en- join him from acting as a guarantor of his brother‘s note at the bank. It is true that relator, Charles, perfected an appeal to the Court of Civil Appeals from the order granting the in- junction. Due process of law guaranteed him this valuable right and Charles cannot be charged with fraud and subter- fuge and bad faith merely because he executed his right and privilege under the Constitution and laws of the State in which he resides.
Respondent, Howard-Reed, contends that the above circum-
stances prove that the transaction between the two brothers
It is my contention that the facts relied upon by respondent amount to no more than a mere suspicion and the circumstances relied upon by respondent were entirely lacking in probative force to establish the ultimate fact; i.e., that the relators were guilty of a fraud and subterfuge and therefore of a constructive contempt. No safe conclusion can be deduced from circumstan- tial evidence if it be left reasonable to suppose that the circum- stances themselves are not proven. Wroth v. Norton, 33 Texas 192; Kansas City Southern Ry. Co. v. Carter, Texas Civ. App., 166 S.W. 115, no writ history; Texas Pacific Coal & Oil Co. v. Wells, 151 S.W. 927, affirmed, 140 Texas 2, 164 S.W. 2d 660; Aetna Ins. Co. v. English, Texas Civ. App., 204 S.W. 2d 850, no writ history; Wright v. Dabbs, 220 S.W. 2d 681, wr. ref., n.r.e.; Perren v. Baker Hotel of Dallas, Texas Civ. App., 228 S.W. 2d 311, 317, no writ history.
I think the following quotation from the case of Perren v. Baker Hotel of Dallas, supra, demonstrates that there is no evi- dence to sustain the court‘s judgment of contempt.
“* * * We think the circumstances in evidence in this case are equally as consistent with the contention that no lifetime lease contract was made as they are with the contention that such a contract was made. Where circumstances are equally con- sistent with the existence and nonexistence of an ultimate fact sought to be established, such circumstances are wanting in probative force as any evidence tending to establish the existence of the ultimate fact. 17 T. J. p. 909, Sec. 409; Kansas City Southern R. Co. v. Carter, Texas Civ. App., 166 S.W. 115; Stewart v. Miller, Texas Civ. App., 271 S.W. 311 (er. ref.); Green v. Texas & P. Ry. Co., 125 Texas 168, 81 S.W. 2d 669; Aetna Ins. Co. v. English, Texas Civ. App., 204 S.W. 2d 850.” (Emphasis added)
As is said in Aetna Ins. Co. v. English, supra:
“The accepted rule applicable to circumstantial evidence is
set out in 17 Texas Jurisprudence 908, Section 409, in this lan-
guage: ‘To establish a fact by circumstantial evidence, the cir-
cumstances relied on must have probative force sufficient to
I contend that the facts relied upon by respondent not only
fail to establish the ultimate fact sought to be proved, but also
such circumstances amount in law to no evidence and, therefore,
do not sustain relator‘s commitment for contempt. The evidence
in this case conclusively shows that Charles obeyed the injunc-
tion of June 7, 1954 by first securing a cancellation of his con-
tract with the Ada Oil Company and then entering into negotia-
tions with his brother which resulted in a bona fide lease of the
premises and a sale of the oil and gasoline supplies for a valu-
able consideration. A representative of the bank testified to facts
which reveal that there was nothing secretive about the trans-
action. Victor signed a note for $8,000.00. The bank did not re-
fuse the extension of credit to Victor. When asked about this,
he stated that the policy of the bank was to require a financial
statement, and that he could not say that he would not extend
credit to Victor. The bank knew Charles and agreed to accept
his letter of guaranty in lieu of securing a financial statement
from Victor. Victor executed the note and has reduced the in-
debtedness to the bank to approximately $5,000.00. He has
met his monthly lease payments of $200.00, which sum, taking
into consideration the fact that an oil truck was leased in addi-
tion to the property involved in the lease agreement with
Howard-Reed, was not in excess of the lease payments provided
for in that lease. The representative of the bank testified that
after the loan had been made, the attorney for respondent ap-
proached him during business hours in the bank and made in-
quiry as to the loan. True to business requirements and in order
not to reveal transactions between the bank and its clients, the
bank desired approval of Victor or his attorney. Pursuant to
such ethical requirements, the bank called the attorney for Vic-
tor and that attorney readily informed the bank that it was at
liberty to disclose the entire transaction to the respondent to
the extent of giving to the respondent a photostat of all instru-
ments which had been executed in connection with the loan. The
bank then proceeded to comply with the privilege granted. There
was no delay. The attorney secured all the information he de-
Respondent cites
The order for, and the writ of injunction cannot be extended
by construction beyond its terms. To do so in this case would
deprive the parties of due process. Charles would be compelled
to allow his property to remain unused and of no value to him
until January 1, 1957. In the meantime the tanks would con-
The only point in this case is whether or not the relators contemptuously disobeyed the order of June 7, 1954, by entering into the agreement on June 10, 1954, by the terms of which Victor leased the property and purchased the gasoline and oil supplies in the manner set out above.
Respondent cites the case of Rodman v. Rogers, 109 F. 2d 520 (6th Circuit) wherein it was held that “when one suc- ceeds to the interest of another against whom an injunction has issued and has knowledge of the terms of the injunction, he is as much bound by it as was the other against whom it was is- sued.”
This well recognized rule has no application here, because the act of the relators in consummating the deal on June 10, 1954 was not prohibited by the terms of the injunction of June 7, 1954. This case has not been tried on its merits. The injunc- tion order contains the following: “Provided, however, that should there be no trial upon the merits of this cause prior to January 31, 1957, the restrain herein ordered (against Charles) shall cease and terminate.”
Respondent by its first and second amended original peti-
tions, in lieu of praying for an injunction, and in the alternative
for a declaratory judgment establishing and declaring that the
agreement not to compete contained in said contract was valid
and binding, as in its original petition, alleged a cause of
action for damages against both relators, and prayed that both
be held in contempt for violating the terms of the injunction of
June 7, 1954. Respondent further alleged in its second amended
original petition the facts showing the lease and sale from
Charles to Victor, and further alleged that “the said Charles,
in violation of his restrictive covenant, did distribute gasoline
and oil in Jefferson County, Texas, until restrained by this
Court‘s order; that immediately after the granting of said in-
This issue has not been tried except by way of contempt proceedings. It seems to me that the respondent is asking this Court to go beyond its power and by judicial decree without a trial, sanction and lend its aid to the unauthorized act of re- spondent in attempting to adjudicate the rights of the parties by contempt rather than by a trial of the rights of the parties as reflected by the pleadings.
It is significant that respondent did not pray for a temporary injunction based on its pleadings in its Second Amended Origin- al Petition as it did in its original petition, but asked that upon final hearing the temporary injunction of June 7, 1954 be made permanent.
Respondent has elected to stand upon the original injunction rather than to try the issues raised by the pleadings in its last petition. Since there is no evidence to sustain relator‘s com- mitment for contempt, and since the respondent relies solely on the acts of the relator after June 7, 1954, which do not, as a matter of law, show a violation of said order, I conclude that the relators should be discharged from custody.
Opinion delivered October 12, 1955.
