Marshall v. Telecommunications Specialists, Inc.

• Decision Date: 21 March 1991
• Docket Number: No. 01-90-00129-CV,01-90-00129-CV
• Citation: 806 S.W.2d 904
• Parties: John MARSHALL, Individually and d/b/a The Copper Penny, Appellant, v. TELECOMMUNICATIONS SPECIALISTS, INC., Appellee. (1st Dist.)
• Court: Texas Court of Appeals

Page 904

806 S.W.2d 904

John MARSHALL, Individually and d/b/a The Copper Penny, Appellant, v. TELECOMMUNICATIONS SPECIALISTS, INC., Appellee.

No. 01-90-00129-CV.

Court of Appeals of Texas Houston (1st Dist.).

March 21, 1991.

John K. Grubb, Houston, for appellant.

John M. McDermott, Houston, for appellee.

Before DUNN, SAM BASS and MIRABAL, JJ.

OPINION

DUNN, Justice.

Appellee, Telecommunications Specialists, Inc., sued appellant, John Marshall, individually and d/b/a The Copper Penny, for anticipatory breach of a lease agreement for telephone equipment. After trial to the court, the court entered judgment in favor of appellee in the amount of $18,051.98. The trial court filed no findings of fact or conclusions of law. Appellant appeals the judgment.

On October 28, 1985, appellant and appellee entered into a written rental agreement, which, as later modified, provided appellant would lease from appellee certain telephone equipment for a period of 63 months commencing November 15, 1985. Later, appellant stopped making payments under the agreement, and appellee repossessed some of the equipment.

At trial, appellee sought to hold appellant liable for the present value of the unpaid rentals, less the reasonable value of re-renting the equipment.

In his first point of error, appellant contends that the trial court erred in allowing appellee's witness to testify to the present value of the unpaid rentals under the lease because such testimony was hearsay based on a document not admitted into evidence.

During her testimony, Mildred Davidson, appellee's collection department supervisor, referred to a document marked as exhibit four, but the document was never admitted into evidence. Davidson testified that the document reflected the calculation of the present value of the unpaid rentals on the equipment. She did not prepare the figures on the document. When appellee's counsel asked Davidson what the present value of the unpaid rentals on the equipment was, appellant's counsel objected.

Appellant's counsel took Davidson on voir dire and established:

(1) Davidson could calculate the present value of the rentals;

(2) She needed figures contained on the document to do the calculation; and

(3) She had no personal knowledge, independent of the document, of the amount of money appellant owed appellee.

Appellant's counsel reurged his objection to the testimony as based on a document not admitted in evidence, which contained hearsay based upon hearsay, and of which she had no personal knowledge. The court overruled the objection.

Davidson testified that the present value of the rentals was $18,051.98. However, on cross-examination, she admitted she could not tell the present value without looking at the document, nor could she determine what factors were used in calculating the present value. Davidson admitted she did not know what capitalization rate was used to determine the present value, but the rate used was the interest rate used at the time of the rental agreement.

Davidson testified by reading from a document. The document was a statement made by someone other than Davidson repeated by her while testifying at trial, offered in evidence to prove the truth of the matter asserted. The testimony was clearly hearsay. TEX.R.CIV.EVID. 801(d). Appellee did not attempt to introduce the document under the business records exception to the hearsay rule. We hold the trial court erred in overruling appellant's objection and permitting Davidson to testify to the present value of the unpaid rentals from the document not introduced in evidence.

We conclude this error was harmful. Davidson's testimony concerning the present value is exactly the amount of the judgment. Undoubtedly this testimony was the evidence the trial court used to determine the amount of the judgment. Thus, the trial court's error in admitting the testimony was harmful. See TEX.R.APP.P. 81(b)(1) (no judgment shall be reversed on appeal unless the appellate court finds the error committed by the trial court was reasonably calculated to cause and probably did cause rendition of an improper judgment).

We sustain appellant's first point of error.

In his second point of error, appellant contends that the trial court erred in entering judgment for appellee in the amount of $18,051.98 because no evidence supported appellee's damages.

In the absence of findings of fact or conclusions of law, an appellate court presumes the trial court made all necessary findings to support the judgment. Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex.1989); In re Estate of Johnson, 781 S.W.2d 390, 391 (Tex.App.--Houston [1st Dist.] 1989, writ denied). Implied findings of fact may be challenged by "no evidence" points just as jury findings and a trial court's findings of fact may be. Roberson, 768 S.W.2d at 281.

In determining whether there is any evidence to support the judgment and the implied findings of fact, an appellate court can only consider the evidence that is favorable to the judgment and must disregard all evidence to the contrary. Roark v. Allen, 633 S.W.2d 804, 809 (Tex.1982). If there is any evidence of probative force to support the finding, the appellate court must uphold it. Sherman v. First Nat'l Bank, 760 S.W.2d 240, 242 (Tex.1988); Glockzin v. Rhea, 760 S.W.2d 665, 666 (Tex.App.--Houston [1st Dist.] 1988, writ denied).

The case was tried on the theory of anticipatory breach of the lease. Under this theory, appellee was required to prove the present value of the remaining rentals under the lease contract, reduced by the reasonable value of re-renting the equipment. See Crabtree v. Southmark Commercial Management, 704 S.W.2d 478, 480 (Tex.App.--Houston [14th Dist.] 1986, writ ref'd n.r.e.) (landlord, who treated tenant's conduct as anticipatory breach, was limited to recover damages in the amount of the present value of the rentals that accrue under the lease reduced by the reasonable cash market value of the lease for the unexpired term); Speedee Mart, Inc. v. Stovall, 664 S.W.2d 174, 177 (Tex.App.--Amarillo 1983, no writ) (landlord, who treated tenant's conduct as anticipatory breach, can recover contractual rental reduced by amount received from new tenant). The absence of evidence to prove an element of a party's cause of action is fatal to the right of recovery, and the court should render judgment against that party. Amarillo Nat'l Bank v. Terry, 658 S.W.2d 702, 705 (Tex.App.--Amarillo 1983, no writ).

To determine the present value of the remaining rentals, the trial court must be presented with evidence of the remaining rentals. The rental agreement was introduced into evidence; it established that payments of $458.80 per month were due for 63 months commencing on November 15, 1985. However, the evidence must also establish the date of the breach, or the date appellant stopped making rental payments.

Davidson testified, while on voir dire, concerning the number of payments appellant made under the rental agreement. She testified by reading from the document marked exhibit four. She admitted she had no personal knowledge of the number of payments made by appellant:

Question: All right. Now you [Davidson] have no personal knowledge of the amount of money that Mr. Marshall [appellant] owes your company, do you? You don't have personal knowledge of how many payments he actually sent in, do you?

Answer: No. I would have--Well, yes. Here it is here. He made eight payments.

Question: I'm talking about personal knowledge, not what you see on that document, but your personal knowledge.

Answer: Well, no, not my personal knowledge.

(Emphasis added.) While Davidson stated that appellant made eight payments, she admitted that she had no personal knowledge and only testified by reading from a document not admitted in evidence.

Since we held above that Davidson's testimony was timely objected to hearsay, we are prohibited from considering it as evidence to support the trial court's judgment of $18,051.98. See Cottle v. Knapper, 571 S.W.2d 59, 62 (Tex.Civ.App.--Tyler 1978, no writ) (inadmissible testimony should not be considered on appeal in determining the sufficiency of the evidence); Texas Dep't of Pub. Safety v. Nesmith, 559 S.W.2d 443, 447 (Tex.Civ.App.--Corpus Christi 1977, no writ) (incompetent evidence, although admitted at trial, should not be considered on appeal as having any probative value).

No other evidence was introduced concerning the number of payments appellant made under the agreement or the date appellant breached the agreement.

Appellee contends that the trial court could take judicial notice of the date of the trial and find that appellant had stopped making payments on that date. Trial was held on October 9, 1989; thus, 16 payments were still due under the lease. Using the date of trial as the date of the breach, the amount of the payments due under the agreement was $7,340.80. Obviously, the trial court's judgment of $18,051.98 was not based on this evidence. We find the trial court did not find the date of the trial was the date of appellant's breach.

During his deposition, which was read into evidence, appellant admitted he had stopped making payments under the agreement. The entire deposition was not admitted into evidence. Specifically, the date of the deposition was not in evidence. Thus, the trial court could not rely on the date of the deposition as the date of the breach.

Appellee contends that the trial court could have determined that the agreement was breached on the day its petition was filed, June 26, 1987. However, the petition was not admitted in evidence. Pleadings are not proof. In addition, no other evidence established that the agreement was breached on June 26, 1987. Hence, the trial court could not have determined the date the petition was filed was the date of the breach.

The dissent asserts that proof of the date of the breach was excused because the parties stipulated to the date, and, as a...