Ruby Kless Sondock

This case arose from a contract for the sale of an insurance adjusting business that included a covenant not to compete valued at $5,000. After the buyer paid two installments and the seller briefly violated the covenant before ceasing competition, the buyer refused the final $33,500 payment and sought to be excused from it while also claiming damages. The trial court and court of appeals ruled for the buyer by excusing the final payment, but the Texas Supreme Court reversed, holding that the covenant was an independent promise whose breach could be compensated by damages rather than excusing performance, and that the buyer had waived any right to rescind by retaining the business assets and treating the contract as ongoing. The court rendered judgment for the seller to recover the final installment offset by the $1,200 in proven damages, with no attorneys' fees awarded to either party.

business & regulatoryprocedure

This case involved home buyers who sued a builder-vendor under the Texas Deceptive Trade Practices Act after discovering a substantial sag in the roof of their newly constructed house, alleging breach of implied warranties that the house was built in a good workmanlike manner and was merchantable. The trial court and court of appeals awarded damages to the buyers, but the Texas Supreme Court reversed those judgments and rendered a take-nothing judgment for the builder. The Court held that the implied warranty of fitness recognized in Humber v. Morton can be waived by contract and that the promissory note's language stating there were "no ... warranties, express or implied, in addition to said written instruments" was sufficiently clear and unambiguous to effect such a waiver. The majority reasoned that parties are bound by the terms of contracts they sign absent fraud, drawing on precedent from warranty disclaimers in other commercial contexts.

propertybusiness & regulatory

This case involved a claim for wrongful foreclosure brought by borrowers Springwood Shopping Center and Truitt V. Lively against lender University Savings Association after a foreclosure sale on property securing a loan. The trial court granted summary judgment for the lender, the court of appeals reversed, and the Texas Supreme Court reversed the appeals court to affirm the trial court's judgment. The dispute centered on a deed of trust provision requiring recordation of a substitute trustee's appointment before a foreclosure sale; here the appointment was recorded two days after the sale, though the borrowers had received actual notice of the substitution, acceleration, and sale details, and conceded no resulting harm or prejudice. The court held that strict compliance with deed-of-trust terms is generally required, but under these facts the actual notice received by the borrowers prevented the late recordation from rendering the foreclosure wrongful or affecting the sale's legality and fairness.

propertyproceduretorts & liability

The case involved a dispute over competing term royalty deeds to the same mineral interests, in which Starkey sought a declaration that Peveto's fifteen-year royalty interest had expired and that Starkey's subsequent "top" deed was valid. The Texas Supreme Court reversed the lower courts and held that the deed to Starkey was void. The court reasoned that the deed's clause making the grant effective only upon expiration of Peveto's prior determinable fee created a springing executory interest that might not vest within the period required by the Rule against Perpetuities, as the prior interest could continue indefinitely. The court further held that Peveto's interest had terminated at the end of its primary term because the royalty deed lacked a shut-in royalty clause and shut-in payments under the related lease did not qualify as production in paying quantities.

property

This case was a negligence suit brought by Eva Osuna against Southern Pacific Railroad after her car struck a train at a rural crossing on U.S. Highway 183 where the automatic flashing warning lights were malfunctioning. The trial court granted summary judgment for the railroad, finding the warnings adequate as a matter of law, and the court of appeals affirmed. The Supreme Court reversed and remanded, holding that fact issues remained as to whether the railroad was negligent in failing to maintain the signals it had voluntarily installed and whether that negligence proximately caused the collision, even if the crossing was not extra-hazardous.

torts & liabilityprocedure