No problems here.

begin globals
dim as Container gC
end globals

_fileMenu  = 1
_fileOpen  = 1
_textField = 2

local fn BuildMenus
apple menu "Open Text File Demo"
menu _fileMenu, 0, _enable, "File"
menu _fileMenu, _fileOpen, _enable, "Open Text File.../O"
edit menu 2
end fn

local fn BuildWindow
'~'1
dim as Rect r

SetRect( r, 0, 0, 500, 400  )
appearance window -1, "", @r, _kDocumentWindowClass,_kWindowCloseBoxAttribute

SetRect( r, 20, 20, 480, 380 )
edit field _textField, "Select a text file to open under File menu.", @r

edit field 0

window 1

end fn

local fn DoDialog
'~'1
dim as Long   ev, id

ev = dialog(0)
id = dialog(ev)

select case( ev )
case _wndClose
select( id )
case 1 : end
end select
end select

end fn

local fn DoMenu
'~'1
dim as Long   menuID, itemID
dim as FSSpec fileSpec
dim as Str255 s

menuID = menu(_menuID)
itemID = menu(_itemID)

select case( menuID )
case _fileMenu
select case( itemID )
case _fileOpen
gC = ""
long if ( files$( _FSSpecOpen, "TEXT", "Open Text File...", fileSpec ) )
open "I", 1, @fileSpec
while ( eof(1) == 0 )
line input# 1, s
gC += s + Chr$(13)
wend
close 1
edit$( _textField ) = gC
edit field 0
end if
end select
end select
menu

end fn

on dialog fn DoDialog
on menu fn DoMenu

fn BuildMenus
fn BuildWindow

do
HandleEvents
until gFBQuit