OPINION
Appellant, the husband/respondent in this suit, appeals from that portion of the divorce decree dividing the community property, awarding attorney’s fees, and issuing a permanent injunction. He challenges the trial court’s findings of fact and conclusions of law relating to these items. The divorce, conservatorship, and child support issues were settled between the parties and approved by the court. Appellant asserts four points of error.
Appellant’s first point of error attacks the legal and factual sufficiency of the evidence to support the trial court’s Conclusion of Law No. 1 that the division of community property was just, fair and equitable.
The court found, in its Conclusion of Law No. 1, as follows:
At the time of the dissolution of the marriage, neither party was possessed of any separate property, and all property of which the parties were possessed or which they owned or otherwise had an interest was community property. The evidence is sufficient as a matter of law to justify and sustain the division of the parties’ community estate and the respective awards in and to the same, as is reflectedby the “Final Decree of Divorce” signed by the Court on July 2,1982, and further that the said respective awards constitute a just, fair and equitable division of the parties’ community estate in light of the approximate 18 years of marriage, the joint efforts of the parties in bringing about the growth of the community business, Morgan Machine Shop, Inc., the respective responsibilities of conservator-ship, and the disparity between the earning capabilities of the parties, now and in the future.
Appellant’s no evidence (legal insufficiency) contention was not properly preserved for review since he made no prejudgment objections or motions on this claim.
Commercial Insurance Company of Newark, New Jersey
v.
Puente,
Appellant argues that the trial court erred by placing an excessive valuation on the couple’s business, Morgan Machine Shop, Inc. The court’s determination of the values and liabilities as to the remainder of the marital estate, all of which was community property, was primarily based upon stipulations of the parties and is not contested. The fairness of the property division turns upon the soundness of the court’s Finding of Fact No. 19, which reads:
With regard to the value, and more particularly, the “operating” value of the community business known as Morgan Machine Shop, Inc., having considered the equipment, the various exhibits offered by Petitioner and admitted into evidence, and particularly Petitioner’s exhibits 2 through 10 and 24, the testimony of the certified public accountant, Greg Frazier, admitted into evidence without objection, the Court finds that Morgan Machine Shop Inc., has an overall value of at least $450,000.00.
The appellant’s complaints regarding this finding center around the competency of the testimony of the appellee’s expert witness, a certified public accountant who stated that, in his opinion, the fair market value of the business was $567,000.00.
Appellant’s allegation that the expert’s testimony should have been excluded because the witness lacked the necessary qualifications to testify to the value of the machine shop is without merit. The qualification of a witness to testify is a matter to be determined by the court, subject to review only upon a showing of abuse of discretion.
Hodges v. State,
Appellant particularly asserts that the expert lacked the ability to properly determine the value of a machine shop, the bulk of whose business is derived from the oil and gas industry. The witness’s testimo
Appellant also claims the expert’s testimony was not “factually sufficient” to support his conclusion that the fair market value of Morgan Machine Shop, Inc., was $567,000. More specifically, he objects that the accountant determined the fair market value by the use of speculative, conjectural, and unorthodox procedures and did not try to establish a market value for the business as of the date of trial, but rather sought to use an income capitalization test based on nine-month-old data. Appellant further complains that certain “adjustments” and “further cash flow” predictions were not justified or explained as procedures customarily and usually relied on by experts in the field.
The machine shop valued by the expert is housed in two buildings, owned by the parties’ holding company, at 14434 and 14450 Chrisman in Houston, Texas. The business entity, known as Morgan Machine Shop, Inc., was incorporated in 1976 and is wholly owned by the husband and wife. The accountant’s testimony concerned only the fair market value of this operation. He testified that he based his valuation upon the company’s income tax returns for fiscal years ending September 30, 1977 through 1981, and upon unaudited financial statements prepared by Starr Thrower & Company, Certified Public Accountants, for the 1978 through 1982 fiscal years. He was informed by a representative of Starr Thrower & Company that those were the most recent statements available. On redirect examination the expert witness reaffirmed that the figures used in his analysis were derived from these records provided by the appellant and his accountants.
This court takes judicial notice that income tax returns and financial statements are the kind of records generally relied upon by accountants in analyzing the worth of a business. Also, appellant’s claim that the expert’s opinion was premised on hearsay is without merit since all the information was furnished to the C.P.A. by the appellant.
With regard to the age of the documents used, the expert based his calculations upon the latest figures available; the trial was in June of 1982, before the end of the company’s 1982 fiscal year. The accountant conceded that he had no idea of the financial status of the company on the day of trial. The currency or lack thereof of the data upon which his opinion was based is a factor bearing upon the weight to be given to his testimony. Further, the record shows a finding by the court that appellant not only resisted motions for production and for the appointment of an appraiser but also refused to permit appellee’s attorney to photograph the land, buildings, and equipment of Morgan Machine Shop, Inc. This refusal necessitated a motion for contempt and a court order before such discovery was permitted by appellant. Appellant cannot now prevail by a claim of prejudice from the use of old data when he obstructed appellee’s attempts to obtain any data at all.
As to the method by which he obtained an operating value for the shop, the accountant testified that the income tax returns, which were prepared on a cash basis, were inadequate to give him a “picture of the company’s performance” since not all the essential information was contained therein. For this reason, he also examined the accrual basis financial reports. The figures from these tax returns and statements were listed by him on a chart and referred to throughout the expert’s testimony.
The accountant then evaluated the earnings history and historical growth rate and explained the steps by which he capitalized the annual earnings on an after-tax basis. Concluding that the shop generated a pretax cash flow of $119,961 for 1981, he determined the after-tax cash flow by assuming
“Fair market value” was defined by this court in
Wendlandt v. Wendlandt,
the amount that a willing buyer ... would pay to a willing seller, who desires to sell, but is under no obligation to sell, (citing authority).
This standard or test presupposes an existing, established market. Id.
While it is true that the accountant never testified specifically that he took this standard into consideration, it is obvious that he did consider the standard. The whole purpose of his analysis by income capitalization was to arrive at the amount of money a willing investor today would pay for Morgan Machine Shop, Inc. This total of $567,-000 was, in his opinion, what a willing buyer would pay a willing seller in order to gain a 15% return on his investment.
Appellant also objects that the expert witness offered no evidence of market value in the vicinity of the shop and made no attempt to establish a market for the business as of the date of trial. With regard to the latter, the witness presupposed a market as of September 30, 1981, the last day for which he had records, and he testified to that effect. The appraisal here involved the worth of an operating business rather than real estate. Comparable sales within the area, if available, would have been of minimal help in estimating the worth of this particular machine shop. This court ha3 recognized the income approach as one of three approved methods of appraising the market value of property and has even upheld this approach when applied to vacant, unimproved land in order to ascertain its income-producing potential.
City of Houston v. West,
Appellant cites
Stone v. Lawyers Title Insurance Corporation,
Appellant further complains that the expert’s opinion was partly based upon the assumption that all accounts receivable would be paid. This supposition was a reasonable one since, as the accountant testified on cross-examination, no substantial amount of bad debt was reflected on the tax returns he examined. The conservativeness of his estimate as to the amount appellant might continue to withdraw for himself as salary (a necessary estimate in order to reach an after-tax cash flow number) is borne out by the corporate income tax forms for 1979 and 1980, where appellant reported compensation to himself of $49,763 and $36,550 respectively.
As appellant claims, the expert testimony did not include a statement of the tangible net worth of the shop’s assets. We note also that, although the record indicates that the accountant made some determination of net worth and listed it on his chart, he does not appear to have taken net worth into account in arriving at his estimate of fair market value.
Appellant notes the trial court’s error in considering Petitioner’s Exhibit No. 24 as evidence in placing a value on the business when such exhibit was never offered or received in evidence. Exhibit No. 24 was a chart prepared by the accountant showing the method and the figures he employed in arriving at a fair market value for the shop. Most of the numbers listed on Exhibit No. 24 came from Exhibits 2 through 10, which were in evidence. Those numbers remaining were conservative predictions — adjustment figures and tax estimates — previously mentioned.
In short, the expert’s opinion, as shown by this record, may be optimistic in view of the slump in the oil industry, upon which most of appellant’s business depends, but the opinion is grounded on accepted accounting principles and facts in evidence. The Texas Supreme Court stated in
Lewis v. Southmore Savings Association,
In a non-jury case such as this, the trial court is the judge of the credibility of the witnesses and the weight to be given their testimony.
Ogle v. Enterprises Limited Co., Inc.,
The total estate of the parties, consisting of four tracts of real estate valued at $223,-000, the machine shop valued at $450,000, cash of $21,300, life insurance of $3,000, and other items of personal property, was worth more than $700,000. Total community liabilities, as stipulated, equal $132,901, leaving a net estate of about $568,000.
The appellee received, as her portion of the estate, the home valued at $43,000; a judgment against her husband in the amount of $145,000, payable $1,000 per
By his second point of error, appellant asserts that the trial court erred in awarding $50,000 as a reasonable and necessary fee to appellee’s attorney, Mr. Percy Foreman, in that (1) his name does not appear in appellee’s petition for divorce, such that the judgment thus fails to conform to the pleadings; and alternatively, (2) the evidence in support of the award of a fee to Mr. Foreman is insufficient. By his third point of error, appellant claims the evidence is insufficient to show that a judgment against appellant in favor of Mr. Foreman in the amount of $50,000 was a just, fair and equitable allocation of the community estate, considering the condition and needs of the parties in the circumstances.
The trial court’s decree orders appellant to pay Mr. Foreman immediately the sum of $8,005.31 in cash from his checking account at North Harris County Bank and to pay the $41,994.68 balance within thirty days of the signing of the decree, or pay interest thereon at the rate of 9%, with Mr. Foreman authorized to seek a writ of execution. Appellee’s first amended original petition includes the following paragraph:
It was necessary to secure the services of WILLIAM F. FERGUSON, a licensed attorney, to prepare and prosecute this suit. Respondent should be ordered to pay a reasonable attorney’s fee, and judgment should be rendered in favor of this attorney and against Respondent.
The prayer for relief in the same petition includes the following:
Petitioner prays that the Petitioner’s attorney be awarded a judgment against Respondent for reasonable attorney’s fees. Petitioner prays for general relief.
Appellant cites Rule 301 of the Texas Rules of Civil Procedure and several court decisions for the proposition that a trial court may not grant relief which is not supported by the pleadings. Thus, he asserts, that portion of the judgment granting fees to Mr. Foreman is void since appel-lee’s trial petition named her prior attorney, Mr. Ferguson, as the attorney in whose behalf a reasonable attorney’s fee was sought. The inclusion in appellee’s petition of a paragraph specifically requesting attorney’s fees and the prayer for general relief were each sufficient to sustain the award. In fact, a prayer for general relief would alone have sufficed to authorize the award of attorney’s fees directly to the attorney.
Goldberg v. Goldberg,
Factors to be considered by the fact finder in determining the reasonableness of the fee awarded to Mr. Foreman are those set out in
Braswell v. Braswell,
(1) the time and labor involved;
(2) the nature and complexities of the case;
(3) the amount of money or the value of the property or interest involved;
(4) the extent of the responsibilities assumed by the attorney;
(5) whether other employment is lost by the attorney because of the undertaking;
(6) the benefits resulting to the client from the services;
(7) the contingency or certainty of compensation; and
(8) whether the employment is casual or for an established or constant client.
See Treadway v. Treadway,
The reasonableness of attorney’s fees is a fact question which must be supported by competent evidence.
Great American Reserve Insurance Co. v. Britton,
Thirteen of the trial court’s thirty-nine detailed findings of facts (Numbers 2 through 14), and one of the trial court’s five conclusions of law (Number 5), relate to the award and reasonableness of attorney’s fee. The court found that, overall, Foreman dedicated approximately 1,000 hours toward the case in preparation of pleadings and orders, consultation with the appellee and other witnesses, briefing, time in court, and directing the efforts of Lewis Dickson, his associate, who spent hundreds of hours in preparation for the litigation and actual time in court.
Appellant did not challenge any of these findings or any of the trial court’s conclusions of law at the time of filing by request for additions or amendments. Tex.R.Civ.R. 298. Moreover, review of the record reveals sufficient evidence to support the contested findings. Appellant’s second point of error is overruled.
With regard to appellant’s third point of error, the evidence is also sufficient to support the court’s judgment for attorney’s fees in favor of Mr. Foreman against appellant as a just, fair and equitable allocation of the community property.
In a divorce suit, the court has equitable power to award to either spouse attorney’s fees as part of the just and fair division of the marital estate. Tex.Fam. Code Ann. § 3.63 (Vernon Supp.1982);
Carle v. Carle,
By his Conclusion of Law No. 5, the trial judge held as follows:
5. The award of attorney’s fees to Percy Foreman in the amount of $50,000 was a reasonable and necessary fee in Harris County, Texas, for the services rendered by the said Percy Foreman on behalf of the Petitioner herein. And further, that the same was a just, fair and equitable allocation of the community estate of the parties when considering the condition and needs of the parties and all of the surrounding circumstances.
The court’s Finding of Fact No. 20, unchallenged by appellant, reads:
20. The court finds that Respondent, JAMES ALBERT MORGAN, is a skilled and experienced machinist, whose exposure to business and the management ofa corporate entity will ensure continuing financial prosperity, and that the financial earning ability of Respondent, JAMES ALBERT MORGAN, far exceeds that of Petitioner, SHARON KAY MORGAN, now and in the future.
As stated under the discussion of the first point of error, appellant received more than half of the community estate. The financial standing of the parties and their disparate earning capacities are among the factors to be considered in awarding attorney’s fees.
Mills v. Mills,
Appellant’s fourth point of error asserts abuse of discretion by the trial court in entering a permanent injunction against appellant when no request for such relief was pled and no proof in support of injunc-tive relief was offered.
Among the properties awarded to appellant in the divorce decree were the parties’ corporation, known as Morgan Holding Properties, Inc., which held title to the real property deeded by the couple to that corporation; the business entity known as Morgan Machine Shop, Inc.; and the corporate checking account. To equalize the awards to the spouses, the decree grants to appellee, in addition to the homestead and certain other property and attorney’s fees, a judgment against appellant for $145,000, to be paid in monthly installments of $1,000 for 145 months and secured by a judgment lien on the assets of Morgan Machine Shop, Inc., and all real property, including improvements thereon. The decree specifically enjoins appellant
from doing any act, or causing, or permitting or allowing any act to encumber such properties, specifically, the real property heretofore awarded to Respondent, as well as the commercial building located thereon, the assets of Morgan Machine Shop, Inc., including all equipment and machines of Morgan Machine Shop, Inc., and all accounts receivable, other than they are now encumbered or in any way lessening the present security interest of Petitioner therein, including any corporate transfer or stock transfer of any nature whatsoever.
The effect of this injunction is to prohibit appellant from using any of his business property as collateral for a period of twelve years and to require that he operate solely with cash on hand.
Since the judgment had the effect of creating a debt against appellant, contempt proceedings would not be available as a remedy if the appellant were to refuse to pay the installments when due.
Ex parte Weatherly,
The appellant did not ask for in-junctive relief in her first amended original petition but did pray for general relief. The fact she did not plead by verified petition would not, in itself, show abuse of discretion in granting such relief. A divorce court has authority under Section 3.63 of the Family Code (Vernon Supp.1982) to construe pleadings more liberally than in other civil cases.
Lindsey v. Lindsey,
There is no question that a trial court may issue an injunctive order, under
While a district court has constitutional and statutory authority to issue writs of injunction, Tex. Const, art. V., § 8; Tex.R.Civ.Pro. 693; Tex.Rev.Civ.Stat.Ann. art. 4642 (Vernon 1940), in general, a
permanent
injunction must not grant relief which is not prayed for, nor be more comprehensive or restrictive than justified by the pleadings, the evidence, and the usages of equity. 6 L. Lowe,
Remedies
§ 244 (Texas Practice 1973). Unless there is specific statutory authorization for a writ of injunction, a showing of an absence of an adequate remedy at law is usually essential.
Id.
at § 113;
Durant Milling Co. v. Hall,
We find no statutory authority for the issuance of this permanent injunction and no evidence in the record showing that appellee, armed with the judgment lien granted in the decree, does not have an adequate remedy at law. Accordingly, we conclude that the court did abuse its discretion in issuing this permanent injunction. Appellant’s fourth point of error is sustained, and that paragraph of the decree which enjoins appellant from encumbering the property awarded him is ordered stricken.
The judgment is affirmed as modified.
