Plaintiff-appellant, Sam Bloom Advertising Agency, and appellee, Kenneth L. Brush, doing business as Rose City Nursery, entered into an oral agreement whereby appellant would conduct certain advertising on behalf of appellee's rose nursery business. A portion of the charges made by appellant were paid by appellee. Suit was brought by appellant to recover $9,430.12 which appellant alleged to be the reasonable worth of the services performed but not paid for. Certain jury findings (among others) were made to the effect that the reasonable value of appellant's services (not paid for) was $4,715.06, that the parties had agreed that plaintiff would be paid for its services only out of income and profits from the enterprise, that the 1953 mail order enterprise of defendant resulted in a loss and that there were no profits available from said enterprise to pay plaintiff the balance of his claimed account. The court entered a judgment that plaintiff take nothing, overruled plaintiff's amended motion for new trial, and plaintiff advertising agency has appealed.
By its first point appellant contends that the trial court erred in admitting hearsay evidence from the witness John Stephens, president of a Tyler bank, in regard to a telephone conversation Mr. Stephens had with someone who called him (who apparently showed some knowledge of Brush's negotiations with reference to the advertising matter) and wanted to know about Mr. Brush's financial ability, etc., and wherein Mr. Stephens advised such person that he considered Brush honest, "but if he entered into the contract, the advertising contract would have to pay the indebtedness because we could not advance him any more money because he already owed us." Stephens could not identify the calling party. Brush testified that at this same time he had urged Bloom to call Stephens with respect to this matter and that Bloom advised him (while he was in Dallas conducting his negotiations with Bloom) that Stephens had been contacted. Mrs. Brush, wife of appellee, who was present at the negotiations in Dallas, testified to the effect that she and her husband asked Bloom if he had contacted Stephens, and "he said that he hadn't; that his banker, or somebody, was trying
Bloom denied calling Stephens. He was asked: "Did you have your banker call him?" and answered as follows: "I did not call him. From the best of my memory, best of memory, the only contact was the one that Dick Johnson had, but I could not —I did not personally call him." There is further testimony to the effect that Dick Johnson, an employee of Bloom, later went to Tyler to see Stephens and received from Stephens virtually the identical information that was related in the telephone conversation in question.
In Colbert v. Dallas Joint Stock Land Bank, Tex.Com.App., 136 Tex. 268, 150 S.W.2d 771, 775, it is stated:
It is our opinion that the sufficiency of the identification of the person calling Stephens being Bloom, Bloom's banker, or someone from his office representing him, in view of the facts and circumstances outlined above and other circumstances in the record, was a question of fact for the jury, and that question was decided favorably to appellee by virtue of the jury's findings. Appellant's first point is overruled.
Appellant contends by its sixth and seventh points that there was no admissible evidence to support jury finding No. 5 that plaintiff was only to be paid out of the profits of the enterprise and that the evidence was insufficient to support such finding.
Testimony which would probably tend to support the verdict of the jury comes from Brush and his wife, from the circumstances of Brush's financial situation made known to Bloom by Brush at the time of the alleged agreement, and Brush's insistence that Bloom verify this condition from Brush's banker before Brush would enter the agreement, from the testimony of banker Stephens with reference to Brush's financial condition and with reference to the controversial telephone conversation related above. There are also probably other circumstances and inferences from the testimony of Brush, his wife and Dick Johnson, employee of Bloom, who checked up on Brush's financial condition, which would probably tend to support the finding in question to some extent. Bloom vigorously denied any agreement that he was to be paid only out of profits. Brush at one place in the early part of his testimony testified
We quote from the testimony of Mrs. Brush as follows:
The testimony further reveals that Brush never denied (to Bloom or to Bloom's attorney) owing the account in question until the suit was filed. We quote from Mr. Brush's testimony as follows:
Brush denied the account when his deposition was taken after suit had been filed. Mr. Brush's explanation for not denying the account until suit was filed was to the effect that he was in financial straits, with all his property pledged to the bank and his business in such condition that he could not stand a lawsuit, that he would rather have paid the account than to have a lawsuit because he felt sure that a lawsuit would mean bankruptcy for him. Mrs. Brush testified to a similar effect. At another place in his testimony with reference to the account Brush stated: "I will say I didn't admit it and I didn't deny it."
We are inclined to the view that there is some evidence to support jury finding No. 5. Appellant's sixth point is overruled.
However, in view of the recitals above quoted from the testimony of appellee Brush and his wife, and after carefully considering the matter it is our best judgment that the evidence in this case is insufficient to support jury finding No. 5. Appellant's seventh point is sustained.
Appellant contends by its second point that the trial court erred in admitting in evidence the audit statement of the witness Don Cowan and in permitting him to testify thereto, over appellant's objections.
Don Cowan was called as a witness by appellee Brush. The manner in which the audit report was admitted in evidence, and the objections made thereto, are revealed by the record as follows:
The exhibit in question purports to show an income of $77,773.32, expenses of $78,249.10, and a loss of $475.78.
Appellant in its reply brief states: "The jury during its deliberation, called for the exhibit in question, namely Cowan's report." Appellee filed later a supplemental brief which does not question the above statement made by appellant.
Mr. Brush testified that Mr. Don Cowan had "kept his books" and referred to him as "his auditor" and also referred to him as an accountant. Mr. Cowan testified as above that he had "kept Mr. Brush's records" since May, 1952. He also answered "Yes" to the question above quoted with reference to the exhibit in question, as follows: "Was this statement you have handed me made up from the books and records of Mr. Brush that were kept—that you have examined from time to time?" And Mr. Cowan (as shown by his testimony hereinbefore quoted) testified that the statement (audit exhibit) was a correct statement of income and expenses for the retail mail-order operations from January 1, "53" to June 30 "53", with a qualification hereinbefore quoted in his testimony. He did not thus testify that the original books of accounts themselves were correctly kept. We have carefully searched the entire record and we have been unable to find any testimony from any source that the original books of accounts of Brush were correctly kept.
We quote further from Mr. Cowan's testimony as follows:
In McCormick & Ray, Texas Law of Evidence, Sec. 557, p. 709, it is
Appellee contends that the audit statement was admissible because appellant failed to object to it on the ground that it was secondary evidence and not the best evidence and also contends that it was inferable from the record that the books and accounts were voluminous, and that under the exception and rule stated in the case of Shelby County v. O'Banion, Tex.Civ.App., 188 S.W.2d 195, and other cases cited by appellee, the audit and testimony of the auditor was admissible. The rule with respect to summaries and tabulations is terstly stated in 17 Tex.Jur., Sec. 202, pp. 509-510, in part, as follows:
In 17 Tex.Jur., Sec. 201, pp. 507-508, it is stated:
The audit report in question was clearly secondary evidence. The original books of accounts were not introduced in evidence and no reason was given for their non-production. There was no direct testimony that they were volumious; however, appellee argues that this might be reasonably inferred from the length of plaintiff-appellant's account shown in the record. However, appellant objected to the introduction of the audit report because the proper predicate for its introduction had not been laid. It is just as necessary in introducing secondary evidence (whenever secondary evidence may become admissible) of the contents of books of account that the same predicate be laid as would have been required had the books themselves been offered. In Caldwell v. McGarvey, Tex.Civ. App., 285 S.W. 859, 861, error dismissed, it is stated:
We have carefully searched the entire record and find no testimony that such original books of account were correctly kept. In fact, the qualifying evidence with respect to the books of accounts of Brush is rather meager and we have reached the further conclusion that the evidence in this case does not sufficiently show that the other requirements stated in Stark v. Burkitt, supra, were made in order to make admissible in evidence either the books of accounts themselves (which were not offered) or the secondary evidence audit statement in question over the objection of appellant to the effect that the proper predicate had not been laid for the introduction of such audit report. Appellant's second point is sustained. We are of the further opinion that the error in question constitutes reversible error for the reasons hereinafter stated.
Appellee contends that the audit statement in question was not the only evidence showing a loss; that there was the direct testimony of Brush and Cowan (unobjected to) when they had a discussion with Bloom in July 1953, wherein Bloom admitted that they told him there was a loss and appellee contends that this evidence is cumulative evidence sufficient to support the jury's answers to issues 3 and 6 (issues with reference to whether a profit or loss was sustained) even in the absence of the audit exhibit in question and that therefore reversible error was not shown by the introduction in evidence of the audit report. Appellee also contends that appellant waived its objection to the audit report by his cross-examination of Cowan and further examination of Brush and Cowan concerning same.
In Bush v. Davis, Tex.Civ.App., 147 S.W.2d 888, 890, error dismissed, where a secondary evidence audit report involving voluminous transactions were admitted in evidence, and where the cause was reversed because of the objectionable nature of the contents of the audit report, the court stated:
Probably the unobjected to statement of appellee to the effect that he had a loss and had made no profits out of the enterprise (although he undoubtedly used his access to his books to determine this inasmuch as the claimed loss was small and the transactions were many) was barely sufficient to support jury findings 3 and 6. The testimony to the same effect of the witness Cowan, however, under this record is undoubtedly based on Cowan's examination or interpretation of the books of account as his other testimony indicates his lack of actual knowledge of the transactions other than from the books and accounts of Brush.
The audit account exhibit in question was permitted in evidence, the jury heard this testimony, the exhibit was an instrument authorized to be given to the jury, and an unchallenged statement in appellant's reply brief states that the jury called for the exhibit.
We have carefully examined the record and have reached the conclusion that appellant did not waive its objection to the audit report exhibit by the cross-examination and examinations referred to by appellee. See the following authorities: Cathey v. Missouri K. & T. Ry. Co. of Tex., 104 Tex. 39, 133 S.W. 417, 33 L.R.A.,N.S., 103; Dallas Ry. & Terminal Co. v. Bailey, 151 Tex. 359, 250 S.W.2d 379; Tex. Employers Ins. Ass'n v. Dillingham, Tex.Civ.App., 262 S.W.2d 748, wr. ref., n. r. e.; Tex.Emp. Ins. Ass'n v. Shiflet, Tex.Civ.App., 276 S.W.2d 942, er. ref. n. r. e.
Where the erroneous admission in evidence of the audit report exhibit in question was reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case is a question which we must determine as a matter of our judgment in the light of the record as a whole. Southwestern Greyhound Lines v. Dickson, 149 Tex. 599, 236 S.W.2d 115; Rules 434 and 503, Texas Rules of Civil Procedure.
Considering the record as a whole, considering the undoubted weight given by the jury to the audit report in question in passing on issues Nos. 3 and 6, it is our best judgment that the admission in evidence of the audit report in question over appellant's objections was in law reasonably calculated to cause and probably did cause the rendition of an improper judgment in the case.
Appellant's other points have been carefully considered and are respectfully overruled.,
The judgment of the trial court is reversed and the cause is remanded to the district court for a new trial.
Reversed and remanded.