author: MASSEY, Chief Justice.

text:
    LIBERTY INSURANCE COMPANY OF TEXAS et al., Appellants, v. Arnold E. RAWLS et al., Appellees.
    No. 16339.
    Court of Civil Appeals of Texas. Fort Worth.
    June 15, 1962.
    Rehearing Denied July 13, 1962.

      Frank E. Crumley and Roswald E. Shrull, Fort Worth, for appellant Liberty Ins. Co. of Texas.
    Kelly, Morris & Walker, and Jearl Walker, Fort Worth, for appellant Allstate Ins. Co.
    Cal Estill and Fay W. Prescott, Fort Worth, for appellee Arnold E. Rawls.
    Biggers, Baker, Lloyd & Carver and Spencer Carver, Dallas, for appellee Robert L. Harrison.
    Harrison & McKnight, and John F. Harrison, Dallas, for appellee Service Fire Ins. Co. of New York.
   MASSEY, Chief Justice.

Arnold E. Rawls, while driving a Ford pickup on February 27, 1959, was involved in a collision in Tarrant County with an automobile operated by Robert L. Harrison. Rawls sustained personal injuries as the result of the collision, by reason of which he brought suit against Harrison and ultimately obtained a judgment for damages in the amount of $8,300.00. This suit will be hereinafter referred to as the damage suit.

At the time of the collision Harrison owned a 1957 Ford sedan, but he was not using the same at the time and place of the collision, and it may be treated as having been left at his home in Dallas, Texas. Under a Texas Standard Form Family Automobile policy of insurance, issued by Liberty Insurance Company of Texas, describing this 1957 Ford sedan, Harrison was listed as the “named insured”.

This policy afforded to Robert L. Harrison bodily injury liability insurance with the limits of said liability being “5 thousand dollars each person,” “10 thousand dollars each occurrence”, and property damage liability insurance to “ACV thousand dollars each occurrence”, even though said liability arose out of the use by Harrison of an automobile which he did not own. In such an event, however, the insurance so afforded was provided to be “excess insurance over any other valid and collectible insurance”.

The automobile being driven by Harrison at the time and place of the collision belonged to E. M. Moore, of Dallas County, same being a 1959 Ford Ranchero. Under a Texas Standard Form insurance policy, issued by Allstate Insurance Company, describing said automobile, with Moore listed as the “named insured”, liability insurance was provided for Moore and “any person while using the automobile * * * provided the actual use * * * js * * * with the permission of either (the named insured or his spouse).” The extent of the protection afforded thereby was “$10,000 Each Person — $20,000 Each Accident” as applied to Bodily Injury Liability, and “$5,-000 Each Accident” as applied to Property Damage Liability.

As of the time of the collision in Tarrant County with the automobile driven by Arnold Rawls, and for a considerable time prior thereto, Harrison was an employee of Horn-Williams Motor Company, an automobile sales agency and repair garage of Dallas, Texas. Harrison’s job was that of a salesman. Horn-Williams Motor Company carried what is known as a Garage Liability insurance policy with Trinity Universal Insurance Company, and this policy listed the names of the individuals, partners, doing business as the Horn-Williams Motor Company, as the “named insureds” thereunder. Said policy listed no automobiles by description of any sort, but afforded liability insurance protection to the “named insureds” to the extent of “$100,000.00 each person”, $300,000.00 each accident”, as applied to Bodily Injury Liability, and to the extent of “$25,000.00 each accident” as applied to Property Damage Liability. Operations and activities as to which the protection of the policy was provided to be afforded were that of “The ownership, maintenance or use of the premises for the purpose of an automobile sales agency, repair shop, service station, storage garage or public parking place, and all operations necessary or incidental thereto; and the ownership, maintenance or use of any automobile in connection with the above defined operations, * * *.” (Emphasis supplied.) Under the policy the “insured” thereunder included the parties who were “named insureds” and also “any * * ⅜ employee * * * while acting within the scope of his duties as such, * * (Emphasis supplied.)

We here take occasion to note that an employee of the “named insured” under a garage liability policy is also an “insured” under the same policy as to any personal liability to third persons injured as the result of an automobile collision involving a vehicle driven by such employee with a third person, provided the employee is, at the time, acting within the scope and course of his employment. Should such a third person sue the employee as the result of collision the employee would be insured by the policy whether the complaint against him asserted his agency and employment or not, and without regard to whether his employer was named as a party defendant in the same suit.

We will also take occasion at this time to note that the 1959 Ford automobile of Mr. Moore, which was the vehicle being driven by Harrison at the time of the collision, was covered by a policy of collision insurance with the Service Fire Insurance Company of New York. Under said policy, and by reason of the damage done to the Moore automobile in the collision, this company paid to Moore a little more than $1,000.00 in settlement of its contractual insurance obligation, becoming subrogated to Moore’s rights as against Harrison or any other person to the extent of the payment so made.

Under Harrison’s liability policy (with Liberty) and likewise under Moore’s liability policy (with Allstate) there was a provision which excluded protection against liability, otherwise afforded under the policy, of any person other than the “named insured” and his spouse who might use the vehicle described in the policy with the permission of the party so expressly insured if said user was a person or organization, or an agent or employee thereof, operating an automobile sales agency, repair shop, etc., with respect to any accident arising out of the operation thereof. (Emphasis supplied.)

Insurance policy provisions prescribing conditions and circumstances as to which the coverage of the policy is excluded almost inevitably have as a purpose the removal from one policy of a coverage, which is, for one reason or another, more advantageously handled in another policy. This is typified in this case. It is a garage liability policy which normally insures automobile sales agencies, repair shops, service stations, storage garages and public parking places. If pursuant to said forms of business enterprise an agent, servant or employee thereof is involved in an accident under circumstances which create a condition of actual or potential liability upon his employer, it is deemed by the insurance industry, with concurrence of the Texas Insurance Commission, that the investigation, suit defense, and retirement of the obligation to pay damages, if any, by reason of the accident should come under a garage liability policy and not under an individual or family automobile liability policy.

In the event of an accident, such as the one under consideration, it is to the interest of the employer of a driver involved in a collision (and by and through said employer likewise to the interest of said employer’s garage liability insurer) that it be determined in the event of any suit that the driver involved in the collision was not an employee of the policyholder or was not acting within the scope and course of his employment or for the benefit of the policyholder. Unless employment and agency thereunder exists the employer policyholder would stand acquitted of any liability to any third party injured as the result of the collision, and the garage liability insured likewise acquitted, without regard to the matter of whether the driver involved might be convicted of negligence and a judgment for damages entered against him.

It is the more ordinary individual or family type of automobile liability insurance policy that provides for the protection of the insured named on the face of the policy (usually the owner who pays the premium), plus like protection to any person who operates the automobile described in the policy with the permission of the named insured. In the event of a collision involving the automobile at a time when a person other than the owner is operating the same, the insurance company is immediately interested in determining whether the operator in fact had the named insured’s permission to be driving the vehicle at the time and place thereof, for if such not be the fact said operator would not be entitled to have said insurer furnish a defense to claims and/or suits arising out of the collision, or to have his liability to pay damages, if any, satisfied by the insurer.

The circumstances of the instant case were complicated by reason of the fact that not only was there a question existent as to whether Harrison in fact had the permission of Moore to be driving the latter’s autombile at the time and place of the collision, but by an additional question as to whether Harrison was acting as an agent, -servant and employee for Horn-AVilliams Motor Company, an automobile sales agency and repair garage. The individual or family type automobile liability insurance policy specifically excludes any liability under such circumstances. Such an insurance company, whose policy described the automobile involved in a collision and whose contract provided for its defense and indemnity to the operator thereof only if said operation was with the permission of the “named insured”, even though that question be ieft to be resolved, would additionally be interested in the question of whether said operator’s use of the non-owned automobile was that of an agent or servant of an automobile sales agency and repair garage acting within the scope a.nd course of his employment. If such latter question should be determined in the affirmative, and that such was the character of the use, no legitimate claim could be made against the insurer under the individual or family type policy and such insurance company would stand relieved of any contractual liability. Of course, either or both questions might present an issue of fact, determinable by factual findings or conclusions peculiarly within the province of a jury or other fact finding agency.

We have heretofore noted the fact that Rawls filed and prosecuted his damage suit to judgment against Harrison, obtaining an award of $8,300.00. It is not necessary to detail any matters relative to the facts and circumstances of the collision. For our purposes the important facts relate to the circumstances under which Harrison happened to be driving Moore’s automobile at the time of the collision, the events relative to the demands Harrison made upon various insurance companies for defense and indemnity, and the events incident to the trial of the damage suit and up until judgment therein became final.

In January of 1959, Moore purchased the Ford Ranchero from the Horn-Williams Motor Company, Harrison acting as the salesman in the transaction. The automobile developed trouble of various kinds and Moore had had occasion to take it back to Horn-Williams Motor Company on two occasions prior to the one with which we are immediately concerned. It was on February 26, 1959, that Moore brought his automobile to the Horn-Williams Motor Company for the third time. Shortly theretofore he had talked with Harrison on the telephone and Harrison had told him to “Bring in your automobile and we will get it repaired.” Upon arrival at the premises Moore contacted Harrison, and the two persons took the automobile into the service department of said motor company and discussed the trouble with the manager of the department. The service manager indicated that it might be possible that the repairs could not be completed until the following day and that Moore should wisely plan on leaving the car overnight. To this Moore agreed. It was agreed further that Moore would take and drive the “demonstrator” ordinarily used by Harrison, but belonging to Horn-Williams Motor Company, with Harrison to use the Moore automobile that night and the next morning in place of the “demonstrator”. Concerning the matter of the contemplated repairs to Moore’s automobile, Moore stated to Harrison, “I want you to test drive it and see that it is properly repaired.” One of Moore’s principal complaints was the way the automobile steered. He asked Harrison to drive it home that night after the shop personnel worked on the car and see if the car steered all right and if he found anything wrong to put it back in the shop the following morning. Evidence in the record establishes the fact that it was no part of the authority of Harrison to road test any automobile for and in behalf of the Horn-Williams Motor Company.

While there is some uncertainty as to whether the repairs to the Moore automobile were completed as of the end of the day on February 26, there does not seem to be any doubt but that it was represented to Harrison as a vehicle suitable to be driven. Except for the Moore automobile, Harrison would have had no vehicle to drive home at the end of that day, the “demonstrator” which had been assigned to him being in the hands of Moore. Harrison did take Moore’s automobile and drove it home. Afterward he decided to make a trip in the automobile up to his fishing camp in Wise County, Texas, to reach which point he traveled through Tarrant County. After having been at the camp he was on the return trip to Dallas, late in the evening, when the collision in question occurred.

After the collision, Harrison’s affairs were turned over to Mr. Spencer Carver, an attorney and personal friend. There is no question but that timely and adequate notice of the facts and circumstances of the collision was served upon all three insurance companies, — i. e., Allstate Insurance Company, as the liability carrier whose policy described the Moore automobile, Liberty Insurance Company of Texas, whose policy listed Harrison as its “named insured”, and the Trinity Universal Insurance Company, which had written the garage liability policy on the operations of the Horn-Williams Motor Company. All three companies made such investigation into the facts and circumstances as they desired.

Subsequently Rawls filed a suit, being the damage suit in question, naming as the defendant Mr. Robert L. Harrison. No defendant other than Harrison was named. Attorney Carver, acting for and in behalf of Harrison, promptly and timely served notice thereof upon all three of the aforementioned insurance companies along with a demand that a defense to the suit be furnished. None of the companies furnished any defense. The time for an answer arriving, Carver filed a plea of privilege in behalf of Harrison in order to obviate the risk of any default judgment being taken, notifying all three insurance companies thereof and again demanding that said companies furnish defense and indemnity under the policies of insurance.

On June 30, 1959, the Trinity Universal Insurance Company (which issued Horn-Williams’ garage liability policy) wrote to Carver and stated that said company did not anticipate undertaking any defense of Harrison since its investigation revealed that Harrison was entirely outside the scope of his employment and on an entirely personal mission at the time and place of the accident. On June 29, 1959, the Liberty Insurance Company of Texas (which issued the liability insurance policy on Harrison’s personal automobile) wrote to Carver and stated that since Harrison had permission of Moore to drive the Moore automobile, the adjuster for Allstate Insurance Company (which issued the policy on the Moore automobile) had agreed to defend the suit against Harrison. Allstate did not write a letter in reply; however, said company had theretofore, on April 21, 1959, written a letter to Rawls’ attorney in which it was stated by said company’s claim examiner that “I have carefully reviewed our file and do not feel there is any negligence on the part of our insured, E. M. Moore, and since this is the case, I have no other alternative than to deny your claim.” There being no actual contention to the contrary, we believe that there is no question but that Liberty and Allstate had denied liability as of the date of July 1, 1959.

Rawls’ attorneys were not unaware of the state of affairs. They decided that it might be well to join Hern-Williams Motor Company as a party defendant to their suit against Harrison, on the theory that Harrison might have been acting within the scope and course of his employment for said motor company at the time of the collision. Accordingly, they filed amended pleadings under date of November 3, 1959, and citation was served upon the Horn-Williams Motor Company the following day.

After some delays, the damage suit was specially set and came on for trial on April 25, 1960. In the period intervening between said trial and November 3, 1959, when Horn-Williams Motor Company was joined as a party defendant, the Trinity Universal Insurance Company (garage liability insurer for said defendant) entered the case in behalf of said company and for Harrison. Just before the trial, and at a time when there was not sufficient time to amend Rawls’ pleadings so as to draw new ones deleting complaints as against Horn-Williams Motor Company, Rawls and his attorneys entered into an oral contract under and by virtue of which, for a consideration, Rawls covenanted with the motor company not to sue to impose liability against it on account of injuries sustained in the collision. The parties agreed that the instruments reducing to writing the Covenant Not to Sue would be attended to at a later time. The trial judge was fully informed, and Rawls, through his attorneys, made an oral motion for continuance in order that his pleadings might be amended so as to delete therefrom any complaint of Horn-Williams Motor Company. Of course, even though Horn-Williams was deleted as a party defendant, Trinity Universal nevertheless had an obligation under its policy to defend Harrison if and in the event he was in fact an agent, servant and employee of said company, acting within the scope and course of his employment at the time of the collision. Trinity Universal chose to stand on its contention that such was not true and notified Harrison thereof and declined to furnish him any defense.

Attorney Carver, appearing for defendant Harrison (who in consequence of Rawls’ Covenant Not to Sue Horn-Williams and the constructive deletion from Rawls’ pleadings of allegations that Harrison was an agent for Horn-Williams — was “saddled” with the obligation to conduct his own defense) resisted any delay on the ground that the motion for continuance was improper even if reduced to writing. Harrison’s witnesses were present and he felt that delay would prejudice him. The court indicated that it would overrule any motion for continuance and suggested that the parties proceed, and that in the parties’ oral presentation of pleadings to the jury they omit anjr reference to the Horn-Williams Motor Company. This was accordingly done. As indicated heretofore, the verdict was for Rawls and a judgment was entered on this verdict.

Judgment in the damage suit was entered under date of May 6, 1960. On May 16, 1960, attorney Carver filed an original motion for new trial in behalf of Harrison. On June 1, 1960, Carver wrote to all three companies, Liberty, Allstate and Trinity Universal, and advised them of the outcome of the damage suit, that motion for new trial had been filed and overruled, and that he had given a notice of appeal in behalf of Harrison on May 30, 1950. He advised that Harrison was unable to go forward with the case in his own behalf, in connection with filing the requisite appeal and/or super-sedeas bond, and requested that the companies, or one of them, take charge of the appeal if all or any of them deemed it advisable to carry the case further. None of the companies acted and judgment in the damage suit became final. Rawls, through his attorneys, sought to levy an execution against Harrison, but it was returned showing that nothing was found upon which the levy could be made.

Thereafter, on November 14, 1960, Rawls filed a suit to establish liability (to Harrison and by and through Harrison to Rawls) against all three insurance companies, Liberty, Allstate and Trinity Universal. Following a jury trial, Rawls obtained a judgment against Allstate in the amount of $8,375.35, plus interest, and a judgment in the amount of $5,075.35, plus interest (as an amount within the aforesaid $8,375.35) as against Liberty, with the provision that it was to be operative only if and in the event satisfaction of the judgment as against Allstate could not be obtained. Harrison had intervened in the suit, seeking attorney’s fees as against the same defendants for defending the damage suit, and he obtained a judgment for $1,500.00 in like form, i. e., against Allstate and Liberty with provision made that satisfaction of said judgment indebtedness be first sought to be obtained from Allstate. Neither party obtained any relief as against Trinity Universal. An instructed verdict in its behalf was directed and judgment was entered acquitting such company of any liability. The theory under which the instruction was given is uncertain. We believe it immaterial, however, since by answer returned to a special issue it was found that Harrison was not acting within the course of his employment for Horn-Williams.

Both Allstate and Liberty appealed as against Rawls and Harrison. Trinity Universal is not a party on appeal. In major substance, this is the case before us.

Judgment affirmed.

We will dispose of a number of points of error presented by both Allstate and Liberty through a discussion of our conception of the insurers’ liability under the aforesaid insurance contracts under the circumstances outlined. We hold that these points of error should be and are overruled.

Allstate and Liberty make a vigorous argument that by reason of the fact that Rawls’ petition in the suit against Harrison asserted that Harrison was acting within the scope and course of his employment by an automobile sales agency and repair garage, the suit was one in which the petition on its face alleged a state of facts excluded from the policy coverage, i. e., one which it had no obligation to defend. One brief contains much language from 50 A.L.R.2d 458 et seq., Annotation: “Allegations in third person’s action against insured as determining liability insurer’s duty to defend.”

The brief quotes from § 7 of the Annotation (p. 469), “Rule that duty exists where alleged facts are within policy coverage”, as follows: “In accordance with the general principle stated above, the generally recognized doctrine is that the insurer is under a duty to defend a suit against the insured where the petition or complaint in such suit alleges a state of facts within the coverage of the policy.” Allstate further quotes from § 9 of the Annotation (p. 472), “Rule that no duty exists where alleged facts are outside policy coverage”, as follows: “It is but the corollary of the rule stated above that a liability insurance company has no duty to defend a suit brought by a third party against the insured where the petition or complaint in such suit upon its face alleges a state of facts which fails to bring the case within the coverage of the policy. Consequently the company is not required to defend if it would not be bound to indemnify the insured even though the claim! against him should prevail in that action.” Thereafter cases from many states are cited in support of the rule so stated, includin five (5) Texas cases. We are given a résumé of eight (8) Texas state court cases (including those from the Annotation) and one from the Federal Court, Fifth Circuit, which was an appeal from the Northern District of Texas.

In nothing cited by the companies do we find any holding that where there are allegations of the plaintiff’s petition in his suit against the insured (or him who contended that insurance applied) which stated a cause of action coming within the policy, —plus additional allegations which, if proved and found by the jury and made the basis for the judgment entered against the insured would take the case otit of the provisions of coverage of the policy,• — the insurance company would be relieved of its obligation to defend. It is our holding that in such an event, where the plaintiff might prevail under any theory of the case under averments of his petition, incident to which there could be established a liability upon the insured which would come within the indemnity provisions of the insurance policy, the company would have the obligation, to the extent of its liability in view of the contingency, to furnish a defense to the plaintiff’s suit.

The instant situation provides an example more illustrative of what we mean than is our statement of the rule. Here the plaintiff alleged a case, which if proven would establish a liability upon the insured within the contemplation of one or both insurance policies (Allstate and/or Liberty). Then the plaintiff went further, not alternatively or independently, but upon the additional and supplemental proposition that the insured’s negligent acts (by reason of which we would be liable) were committed by him while acting as an agent, servant and employee of an automobile sales agency and repair garage, and made said employer an additional party defendant. Under such additional and supplemental allegation, if plaintiff should establish it, he would have established the same liability against the insured and the alleged employer. In view of the establishment of the derivative liability upon his employer the insured would find himself without any insurance protection under the policies of Allstate and Liberty. Such result, “insurance-wise”, would follow because of a provision in the policies of both these companies which excluded any policy coverage because the employer’s business was that of an automobile sales agency or repair garage.

But if the plaintiff should fail in the attempt to establish the agency alleged, the defendant is demonstrated to have been entitled to the protection of one or both of the policies of Allstate and Liberty (particularly if it is never thereafter established in a suit in which necessary parties are before the court that he was in fact an agent such as the plaintiff alleged but failed to prove). The result would be the same if the plaintiff should decide to forego any attempt to prove such agency, contenting himself with proof which would entitle him to recover a judgment only against the insured. Of course, if in a subesquent suit, between the insured and the company or companies the insured contends owed him the obligation of defense and indemnity, it be determined that the former was in fact the agent of an automobile sales agency or repair garage at the time and place of the collision, — thereby would be established that it was the right of the insurance companies to deny liability and to decline to defend plaintiff’s suit. By the same token such determination of fact might establish that the insurer under an applicable garage liability policy was obligated thereunder to furnish a defense to the suit and to satisfy any judgment which might have resulted against the insured, and, if said insurer was made a party defendant, a judgment against it (rather than the other companies) would be proper.

Nearly analogous to the situation under consideration are those cases under the A.L.R.2d Annotation (50 A.L.R.2d 458 ct seq.) beginning on page 506 at § 24 “(Allegations of facts partly within and partly outside policy coverage) Rule that duty to defend exists”. There (page 507) the rule is stated to be as follows: “ ‘Where an action of an injured person is based upon various grounds which are not within the terms of the policy, and on another which is within its terms, the situation does not justify an insurance company in declining to defend.’ ” Thereafter a case by Judge Learned Hand is discussed, being Lee v. Aetna Casualty & Surety Co., 1949 (C.A.2d N.Y.), 178 F.2d 750, a case where the complaint charged liability against an insured issuing from a risk which was plainly excluded by the policy, — but also alleging a liability arising out of facts which, if proved, would represent a covered risk. Therein was contained this language: “There may be cases, however, in which that question (whether injury was within the policy) will .remain uncertain even until the end of the trial, and, if the defendant is right, the insured will be obliged to conduct the defense of a claim which it turns out the insurer has promised to pay.” Further : “It follows that, if the plaintiff’s complaint against the insured alleged facts which would have supported a recovery covered by the policy, it was the duty of the defendant (the insurance company) to undertake the defence, until it could confine the claim to a recovery that the policy did not cover.”

In the instant case Trinity Universal Insurance Company, under the garage liability policy for Horn-Williams Motor Company, had agreed with the attorneys for Rawls (shortly before the trial of the damage suit) to dismiss said Motor Company as a party defendant to the suit. The contract and agreement between them was by way of what is known as a Covenant Not to Sue. This was oral and not in writing, there being insufficient time within which the papers evidencing the contract could be prepared. The trial court was fully informed. Circumstances under which the parties proceeded to trial have heretofore been related. Neither Allstate nor Liberty was notified.

Pursuant to the dismissal (actual or constructive) of Horn-Williams Motor Company any actual obligation of Trinity Universal to continue with the defense of Harrison was not extinguished. Under its policy it had the obligation to defend Harrison if he were in fact acting within the course of his employment by Horn-Williams.

From what we have already said it should be clear that we believe the situation would not have been altered had Horn-Williams Motor Company remained in the damage suit as a party defendant, with plaintiff Rawls refraining from any attempt to establish the alleged agency. Had this been the circumstance said Motor Company would have been entitled to be dismissed as a party defendant at the conclusion of the evidence in the case.

We are treating Allstate and Liberty as having unconditionally denied liability under their policies prior to the time Rawls joined Horn-Williams Motor Company as a party defendant to his damage suit. This denial of liability constituted a waiver by each of the companies of the duty of any future compliance by Harrison with policy provisions, such as those requiring notice or delivery of suit papers. Womack v. Allstate Insurance Company, 1956, 156 Tex. 467, 296 S.W.2d 233. Pleadings in the suit for damages, in all material substance, reverted to their condition as of the time Allstate and Liberty denied liability upon the dismissal of Horn-Williams as a party defendant. Neither of these companies obtained any benefit as the .result of the subsequent change made in Rawls’ pleadings in effecting the addition of a party defendant, nor with the later deletion of the party so added. Both events occurred after liability had been denied. Therefore, the companies suffered no prejudice as result of either occurrence. They may not be heard to complain because they were given no notice of what had transpired. Harrison was not estopped to assert liability as against either Allstate or Liberty in proceeding to trial in the damage suit, or in resistance to Rawls’ motion for continuance, and he waived no contractual light against either company by having so acted.

Allstate and Liberty contend that the transaction and agreement made between plaintiff Rawls and the insurance company for Horn-Williams Motor Company legally resulted in a release of all Rawls’ claims for damages. In other words they claim that the release was to Harrison’s benefit and foreclosed any right on the part of Rawls to obtain any additional amount as damages. It is to be noted that Harrison did not so claim upon the occasion of the trial of the damage suit. The point of error •raising the contention does not include any claim for credit of the amount received as consideration for the Covenant Not to Sue upon the amount of Rawls’ judgment.

The matter of whether a transaction has the character of a release, or contrarily the character of a Covenant Not to Sue which does not extinguish the whole liability, may be a matter of fact. If it is a matter of fact, then the issue could be raised as a matter of defense. It was not raised by the defendant Harrison, who accepted it for what it was stated to be to the court, a covenant whereby Horn-Williams Motor Company was dismissed as a party against which plaintiff Rawls was attempting to impose liability. The trial proceeded and resulted in a judgment against Harrison, which judgment has become final. Harrison is bound thereby. We believe that the insurance companies’ contention in this regard comes too late and at a time when their right to raise the matter as an issue has been foreclosed.

By two points of error Allstate and Liberty contend that there was no evidence, and in the alternative an insufficiency of evidence, in relation to the answers of the jury returned to Special Issues Nos. 1, 2, 2-A, 3 and 4.

Special Issues Nos. 1 and 2 were issues upon which Rawls assumed the burden, one to establish that Harrison was not acting within the scope and course of his employment at time and place of the collision, and the other to establish that Harrison had the permission of the owner of the automobile being driven by him at the time of the collision. Special Issue No. 2-A was one on which Allstate assumed the burden and sought to establish that at the time of the accident Harrison’s operation of the non-owned automobile was a material deviation by him from the permission given to drive the automobile. Special Issue No. 3-was one upon which Harrison assumed the burden of establishing an amount as .reasonable attorney’s fee for his conduct of the defense of the damage suit brought against him by Rawls. Special Issue No. 4 was one the burden of which was cast upon Allstate and Liberty to establish that the failure of Harrison to notify them when Horn-Williams Motor Company was dismissed out of the case, and that Trinity Universal was refusing to furnish Harrison a defense to Rawls’ suit, constituted a waiver by Harrison to demand that said companies furnish any defense to said suit.

We will not discuss the contentions made other than to state that we would overrule them if severally and properly made and adequately briefed. The points of error are overruled under the provisions of Texas Rules Civ.Procedure 418, “Briefs: Contents”, as being multifarious and too general to invoke consideration on appeal.

A point of error raises the contention that Harrison was, as of the time of the collision, the agent, servant and employee of Horn-Williams Motor. Company, acting within the scope and course of his employment. The point is overruled. The question was one of fact. By answer to a special issue the fact the jury found that Harrison was not acting within the scope and course of his employment by Horn-Williams Motor Company.

A point of error presented by Allstate raises the contention that as of the time and place of the collision Harrison was not, as a matter of law, operating the Moore automobile with the permission of Moore. Another point contends that as of the time and place of the collision, as a matter of law, Harrison made a material deviation from the permission granted him by Moore to use said automobile. Both matters constitute questions of fact. By answers to special issues, the questions were resolved. The jury found that Harrison had Moore’s permission to operate the automobile and that there was no material deviation.

A point of error raises the contention that since the draft which paid Rawls and his attorneys the consideration for the Covenant Not to Sue Horn-Williams Motor Company contained the following language: “Endorsement hereof constitutes a release in full of compromise settlement of all claims for damages v. Horn-Williams Motor Co. et al and Robert L. Harrison resulting from accident occurring on above date” (2-27-59), and was endorsed and negotiated by Rawls and his attorneys, such constituted a complete release of Harrison as a matter of law, which inured to the benefit of Allstate and Liberty; and that by reason thereof Rawls has become estopped to claim damages against Harrison, and by and through Harrison against said insurance companies. Even if we err in our conclusion, heretofore stated, that Allstate and Liberty are not entitled to assert the contention, we have reached the further conclusion that the point of error should be overruled for an additional reason.

Evidence in the record discloses that the attorneys for Trinity Universal (in behalf of Horn-Williams Motor Company) mailed the Covenant Not to Sue, along with the draft in question, to Rawls’ attorneys in Fort Worth. Therefrom it is evident that the consideration recited to be paid was not to be considered as received in complete satisfaction of the claim of Rawls, and that it was particularly intended that Rawls’ suit against Harrison would continue to be prosecuted. Indeed, it is to be noted that the agreement relative to the Covenant Not to Sue was made orally, and during the very time the papers evidencing the agreement and the draft which was to furnish the consideration therefor were in the process of preparation, Rawls’ suit against Harrison was in actual progress Evidence in the -record etablishes that neither party to the Covenant Not to Sue understood it to be and considered that it was either in complete satisfaction of Rawls’ claim for damages or that it was to relieve anyone from liability other than Horn-Williams Motor Company. While it might be subject to the contention that the endorsement and negotiation of the draft, coupled with the attendant circumstances, raised an issue of fact, it could not be said that Harrison was .released as a matter of law. In this connection see 36 Tex.Jur., p. 799 “Release”, § 4, “Covenant not to Sue as Release”, 13 Tex.Jur .2d, p. 274 et seq., “Contracts”, § 116, “Construction of several instruments comprising one agreement” (10-A Tex.Jur., “Contracts”, p. 346 § 173). The point of error is overruled.

Points of error presenting the proposition that the trial court erred in overruling the motions for instructed verdict and the motions for judgment notwithstanding the verdict, filed in behalf of Allstate and Liberty, are overruled. Basis for the contentions made under these points falls within the foregoing discussion of other points, holdings upon which would necessarily control the disposition of these.

Allstate presents a point of error complaining because Spencer Carver, attorney for Harrison, testified in the presence of the jury that Allstate had negotiated with him for settlement of Harrison’s claim. The claim in question was that made by Harrison in connection with his claim against Allstate and Liberty for $1,500.00 as attorney’s fees necessarily incurred in the conduct of Harrison’s defense to Rawls’ damage suit (which Allstate and Liberty refused to defend). The following outlines the occurrence of which complaint is made:

Mr. Walker (Allstate’s counsel): "Q. Now my question was, you asked Mr. Johnston on Monday and didn’t he tell you that your request for an attorney’s fee of $1500.-00 was excessive far experienced trial lawyers in these matters?”

Mr. Carver: “A. Let me preface it with all the statements that were made, Mr. Walker.”

Mr. Walker: “Q. Now please, you can answer that question, can you not?”

Mr. Carver: “A. If the Court please, I object to a question which seeks to elicit conversations made in a proposal of compromise and settlement of a claim and to answer his question I must do so.”

Allstate, through counsel, made a motion for mistrial because of the statement. The court retired the jury to hear the motion and then recalled it and gave the following, instruction: “Ladies and Gentlemen of the Jury, I am going to instruct you that the statement made by the witness now on the witness stand in reference to a compromise and settlement is withdrawn from your consideration and' it is not before you as evidence in this case. It is withdrawn by the Court.”

The point of error is overruled. In our opinion the statement made was harmless to the interest of Allstate. Even if it should be otherwise considered the prejudice was of curable type and was removed by the instruction of the court.

A point of error presented by Liberty presents a complaint bearing upon a phase of the judgment not heretofore mentioned. It constitutes a part of the judgment appealed from by said company against Allstate and against Service Fire Insurance Company of New York, which carried a policy of collision insurance on Moore’s automobile. It seems that an intervention was filed in the suit by Rawls and Harrison against the three insurance companies, whereby Service Fire sought to recover Moore’s damages, or that part thereof which Service Fire had paid Moore. Moore’s automobile was being driven at time of the collision by Harrison. Moore’s automobile was substantially damaged as the result of the collision. It was because of this loss and damage that Service Fire made the payment to Moore. Since the statement and discussion in the record is already rather complicated by reason of so many insurance companies being involved, we believe that it will be simpler to treat the situation as though it was Moore rather than his collision carrier which is involved in the intervention. We will proceed to do so, with the comment that an examiner of the opinion who is particularly interested in this phase of the case will remember that Moore had settled his collision case and subrogated his interest (at least to the extent of the amount it paid) as against any person, firm or corporation which might be liable in damages to him.

With such in mind we will restate the proposition. Mr. Moore, with whose rights the opinion has not been concerned until this time, sustained an injury to his 1959 Ford Ranchero as the result of the collision. Harrison had been driving it at time of the collision, and was the bailee thereof. Moore’s suit was filed, by way of an intervention, in the suit for damages by Rawls against Harrison. The amount sought by reason of the damages done to the Moore automobile was $1,129.92. Claim therefor was against Harrison and/or Rawls.

Moore’s suit was filed after the time both Allstate and Liberty may be treated as having denied all liability to Harrison under and by virtue of their policies. Without respect to the propriety of Moore’s claim against either Allstate or Liberty, and foregoing any discussion thereof, we will note that when the Trinity Universal Insurance Company made a deal with Rawls to get Horn-Williams Motor Company dismissed out of the case by way of a Covenant Not to Sue, it contracted in like manner with Moore (in behalf of Horn-Williams), based upon the consideration paid to or in behalf of Moore in the amount of $300.00. We might mention that it is our opinion that there was no coverage as to Moore’s damages under the Trinity Universal policy and it very well might have been that this $300.00 came from Horn-Williams.

Before the trial of the damage suit began both Rawls and Harrison stipulated with Moore (it is to be remembered that it was actually his successor, the collision insurance company) that $900.00 would be the amount of damages to which he would be entitled in the judgment, if and in the event either Rawls or Harrison, or both, be determined to be liable for the collision. In view of the jury findings returned on the matter of responsibility for the collision the judgment decreed that inter-vener Moore recover of and from Harrison damages in the amount of $900.00.

In the later suit, by Rawls and Harrison against Allstate, Liberty and Trinity Universal, Moore intervened and sought to collect the $900.00 decreed in the damage suit judgment, but as against Liberty only. Prior to such time an execution was sought to be levied to collect the $900.00 from Harrison, and such execution had been returned with the notation made that nothing was found upon which to levy. Liberty filed an answer to Moore’s plea, in which it asserted that if and in the event there might be any liability to Moore for his damages it would be that of Allstate Insurance Company and/or Trinity Universal Insurance Company and not that of the Liberty Insurance Company. The prayer appended to said answer was only that the Moore plea of intervention be denied and that the Liberty Insurance Company “go hence without day and recover its costs, and for general and special relief.” In the judgment appealed from it was decreed that Moore (or rather his collision carrier) recover of and from Liberty Insurance Company of Texas the sum of $900.00 with interest from date of May 6, 1960.

We will attempt to correctly represent the point of error advanced by Liberty Insurance Company. It complains because the judgment was rendered against it when, in view of the findings of the jury’s verdict, the judgment should have been against the Allstate Insurance Company (as in the case of the judgment in behalf of Rawls and Harrison) as the company having primary coverage, with the liability of Liberty to attach only in the event satisfaction of the judgment could not be obtained fom Allstate, or in any event that Liberty should receive contribution from Allstate.

Disregarding any question of the propriety of the Moore judgment (by and through Harrison and because of Moore’s judgment against him) against either Allstate or Liberty, but considering it as necessarily proper against one or the other or both, we have arrived at the conclusion that the point of error should be overruled.

Liberty Insurance Company, when served with the intervention, had the right to implead Allstate as a party defendant in said plea and to lay a predicate for the right to have the court enter judgment against Allstate, as first in priority as to any liability, or for a judgment over against Allstate in the alternative. T.R.C.P. 38, “Third-Party Practice”. Not having done so, the right was waived. The right being waived, Liberty would not be entitled to any benefit from the jury findings to the effect that Harrison’s use of Moore’s automobile at time and place of the collision was within the scope of Moore’s permission that Harrison use the same. It could be only by reason of an asserted right to benefit from said finding that Liberty could make the contention it does make under the point of error. Not being possible to sustain the point of error it would accordingly be overruled. With such overruled, Liberty’s position must be considered to persist as though the point had never been presented. Under the judgment of the trial court it is Liberty Insurance Company of Texas which is liable for the $900.00 in damages to Moore, or to the Service Fire Insurance Company of New York, successor in interest thereto.

Judgment affirmed.


source: Caselaw Access Project

author: McDONALD, Chief Justice.

license: Public Domain

text:
    E. E. FARROW COMPANY, Appellant, v. UNITED STATES NATIONAL BANK OF OMAHA, Appellee.
    No. 4008.
    Court of Civil Appeals of Texas. Waco.
    June 28, 1962.
    Rehearing Denied July 19, 1962.
    Emil Corenbleth, Jay S. Fichtner, Dallas, for appellant.
    Muse, Currie & Kohen, Ralph W. Currie, Dallas, for appellee.
   McDONALD, Chief Justice.

This is an appeal from a summary judgment in favor of plaintiff Bank against defendant Farrow Company.

Elliott Mfg. Company and defendant Farrow Company entered into a written contract whereby Elliott rented to Farrow a piece of machinery called a “Hi Reach Boom,” for a period of 36 months at $310.75 per month. The contract recited that it would be assigned to plaintiff Bank, and that defendant Farrow was to make the monthly payments directly to plaintiff Bank. Such contract further provided:

“(Farrow agrees to) make all payments to said bank without offset or counterclaim whether or not any of the remedies provided for in case of default are exercised and (Farrow) zvill assert any alleged offsets or counterclaims against (Elliott) and not against said bank.”

The contract was assigned by Elliott to plaintiff Bank. Farrow made the payments for 5 months; and stopped because the machinery broke down and would not perform as warranted. The machinery was returned to Elliott. Elliott accepted the machinery, and thereafter made the payments to plaintiff Bank for 11 months and then stopped making payments; plaintiff Bank then elected to proceed against defendant Farrow, and filed suit against Farrow on the contract as assignee. Farrow answered, alleging numerous defects and failures to perform as warranted on the part of the machinery; alleged that such constituted a total failure of consideration for the execution of the lease; that plaintiff was not an innocent purchaser for value; that plaintiff’s suit was therefore subject to all “defenses” which Farrow had against Elliott; and prayed that plaintiff take nothing.

Plaintiff Bank filed motion for summary judgment, supported by affidavits, the lease, and the assignment. Defendant opposed such motion by answer and affidavits. The Trial Court granted plaintiff’s motion for summary judgment.

Defendant appeals, contending (among other things) that the Trial Court erred in granting the summary judgment because the defenses raised in the sworn pleadings were not offsets or counterclaims.

It is undisputed that defendant executed the lease, knowing it was to be assigned to the Bank, and that it specifically agreed to make payments directly to the bank “without offset or counterclaim,” and further agreed to assert “any alleged offsets or counterclaims,” against Elliott and not against the plaintiff Bank.

“Counterclaim” is generically defined “as a claim, which, if established will defeat or in some way qualify a judgment to which the plaintiff is otherwise entitled. It embraces both setoff and recoupment, and also comprehends reconvention as well as all adversary actions by the defendant in a case.” 38 Tex.Jur. p. 8; 47 Am.Jur. p. 709. The fundamental philosophy of all setoffs is that they are offered by a defendant in opposition to some money demand asserted by a plaintiff. 80 C.J.S. Set-Off and Counterclaim § 1, p. S.

We think that defendant’s contract bound defendant to make all payments stipulated to the plaintiff bank, and to assert all adversary actions against Elliott. Defendant, we think, has by its contract waived its otherwise right to take adversary action and make opposition to the plaintiff’s demands for moneys due under the contract. Defendant retained, and has in the instant case asserted successfully, the rights waived as to the bank, against Elliott.

The effect of defendant’s contention is that defendant and Elliott, in their contract, used the terms “offsets” and “counterclaims” in their restricted sense, and as applicable to defendant’s answer in the instant case. While we disagree, the contention if correct, still avails defendant nothing.

The question of whether an answer sets up a counterclaim, or is defensive must be determined hy the facts alleged, and not by the name given the plea, or by the particular form of the prayer for relief. 38 Tex.Jur., Sec. 54, p. 84.

Defendant’s answer (Para. XI), alleges that the machinery was represented as capable of certain performance which it failed to perform; thereafter it was returned to Elliott for complete remodeling; that when Elliott returned it to defendant, it again failed to perform and broke down; that defendants then returned the machine to Elliott, “it being evident it would not perform in accordance with the contract”; “Defendants show that there was a total failure of consideration for the execution of said lease agreement”; that Elliott made false material representations of fact; that defendants rescinded such contract and returned the machine to Elliott; said lease is of no force and effect; and defendant prayed that plaintiff take nothing by its suit.

Defendant urges that it plead “failure of consideration”; that such plea is not an “offset or counterclaim”; and further that it seeks no affirmative relief against plaintiff; for which reasons their pleading is of a “defense” and not an “offset” or a “counterclaim.”

Under the law recited, it is the facts .plead, and not the name given the plea, or the prayer for relief which determines whether a “counterclaim,” or a “defense” has been plead. We think clearly a counterclaim was plead.

All of defendant’s points and the contentions thereunder made are overruled, and the judgment of the Trial Court is Affirmed.


author: RICHARDS, Justice.

text:
    James T. RAGSDALE et ux., Appellants, v. H. B. LANGFORD et ux., Appellees.
    No. 10977.
    Court of Civil Appeals of Texas. Austin.
    June 13, 1962.
    Rehearing Denied July 11, 1962.

      J. J. Byrne, Lampasas, Curtis, Duncan & Bragg, Killeen, for appellants.
    W. Lance Corsbie, Waco, for appellees.
   RICHARDS, Justice.

H. B. Langford et ux., appellees, brought an action for damages against James Rags-dale et ux., appellants, for breach of' a covenant against encumbrances in a general warranty deed conveying the title to certain business premises in the City of Killeen, Texas, to appellees. At the time of the execution of the deed by appellants there was an outstanding unrecorded lease upon a building which formed a part of the conveyed premises for an unexpired term of approximately 5½ years which had been executed by James Ragsdale as lessor to one Tom Ragsdale as lessee. Shortly after Langford had taken possession of the premises under the deed, he was advised by appellant James Ragsdale of the outstanding lease to Tom Ragsdale, whereupon ap-pellees filed this suit.

The case was tried before a jury, which found in answer to a special issue that the reasonable rental value of the building under lease to Tom Ragsdale was $100.00 per month for the five year period from March, 1959. The Trial Court rendered judgment in favor of appellees for the sum of $5,-700.00 with 6% interest from date of judgment, the amount of the judgment being’ based upon the jury’s finding of $100.00 rental value per month for a period o.f five years less the amount of $300.00, the amount payable under the lease at $5.00 per month for the same period. After motion for new trial filed by appellants had been overruled, this appeal was perfected.

Appellants’ appeal is based on four points of error, which, in summary, are (1) that the monthly rental value of the leased premises was not the proper measure of damages; (2) that the verdict is not supported by the evidence since there was no evidence that the premises or the improvements were or were not of uniform class, grade or value and no evidence as to the value of the improvements compared with the value of the land or of the value of the improvements under lease compared with the value of the unleased improvements and '(3) that appellee Langford was not qualified as a witness to testify as to the rental value of the premises which had been previously leased to Tom Ragsdale.

The statutory covenant against encumbrances provided by Art. 1297, Vernon’s Ann.Civ.St., is intended to protect a grantee against rights or interests of and in third persons which, although consistent with the fee being in the grantor at the time the conveyance is executed, diminish the value of the estate conveyed. Such a covenant is one of indemnity providing compensation for damages arising from the outstanding right or interest of a third person which is breached upon the execution and delivery of the deed. City of Beaumont v. Moore, 146 Tex. 46, 202 S.W.2d 448, 453.

The measure of damages in a suit for breach of warranty is governed by the rule applicable to partial failure of title, that the damages will bear the same proportion to the whole purchase money as the value of the part to which the title fails bears to the whole premises estimated at the price paid. City of Beaumont v. Moore, supra; Hynes v. Packard, 92 Tex. 44, 45 S.W. 562; 15 Tex.Jur.2d, “Covenants”, Sec. 80.

Where property is purchased for rental purposes and there is an outstanding lease which constitutes a breach of the covenant against encumbrances, the measure of damages is the value of the use of the premises which is ordinarily the rental value during the remainder of the unexpired term of the lease. 21 C.J.S. Covenants § 145 c.

The Trial Court submitted the following Special Issue to the jury:

“What do you find from a preponderance of the evidence to be the reasonable rental value of the paint shop in question, per month, for the five year period from March of 1959?”

to which the jury answered “$100.00”. No written objection to the submission of the issue having been made, such objection was waived. Rule 72, Texas Rules Civ.Proce-dure. Nor did appellants request the submission of any other special issue upon the question of damages. Since appellants failed to object to the submitted issue on damages and failed to request further issues, they cannot now complain of the issue as submitted by the Trial Court or the failure of the Trial Court to submit additional issues. Rule 279, T.R.C.P.; Wichita Falls & Oklahoma Ry. Co. v. Pepper, 134 Tex. 360, 135 S.W.2d 79, 85.

Appellants complain that the verdict of the jury is not supported by the evidence since there was no evidence that the premises or improvements were or were not of uniform class, grade or value and there was no evidence of the value of the improvements compared with the value of the land or of the value of the improvements under lease compared with the value of the unleased improvements is untenable. Under the uncontradicted evidence the premises in question consisted of a tract of land upon which buildings had been erected which were occupied by different commercial businesses, namely, a cafe, a radio shop, a furniture store, a welding shop, a wheel aligning shop and a paint shop, the rentals of which were computed upon various bases. Therefore, there was no necessity of proof that the premises in question were of a uniform class and grade unless the premises had been sold upon an acreage basis at a certain price per acre and title having failed to a certain number of acres it would be necessary in a recovery of damages of the breach of title to show that all of the acres were of equal value.

Where, however, as in the instant case, there is a disproportionate value as to different parts of the premises conveyed, the true measure of damages, if there was a failure of title to any portion of the land, would be the actual value of the particular lot or parcel to which there was a failure of title, which value would be ascertained by its relative value compared with the balance of the land assuming the price agreed upon by the parties as the value of the whole. Raines v. Calloway, 27 Tex. 678, 685; Mayer & Schmidt v. Wooten, 46 Tex.Civ.App. 327, 102 S.W. 423, 427, no writ history.

The transcript of the record fails to show that appellants’ counsel made any objection in writing to the special issue submitted by the Court. However, appellants’ fifth ground of their Motion for New Trial was that the Court erred in submitting the requested special issue “over the objection of Defendants” because the monthly rental value of the ground leased to Tom Rags-dale was not the proper measure of damages, if any. If we are to assume that appellants had made the proper written objection to the special issue as required by Rule 72, T.R.C.P., and that such objection was inadvertently omitted from the tran-' script, this would not avail appellants.

In Whitson Company, Inc. v. Bluff Creek Oil Co., 156 Tex. 139, 293 S.W.2d 488, 493, the Court held as follows:

“No instructions were requested regarding the factors which the jury might consider in measuring market value. The only objection made by it to the special issue submitting market value * * * was this: ‘Because said! issue does not inquire as to the proper measure of damages.’ That general objection cannot be considered. If the market value as submitted was not the correct measure of damages, objection, should have been made to the issue by Whitson Company pointing out distinctly the grounds for its objections. Rule 274, Texas Rules of Civil Procedure. Having failed to do so, it cannot thereafter be heard to say that the measure of damages as submitted was improper.”

Further, in the absence of a showing to the contrary, this Court will presume in support of the judgment that the proper measure of damages was applied by the Trial Court. 4 Tex.Jur.2d “Appeal and Error — Civil Cases,” Sec. 812.

Appellee, H. B. Langford, testified that' prior to the execution of the warranty deed from appellants to appellees on March 22, 1959, Tom Ragsdale, who represented himself to be the agent of appellants for the sale of the property in question, took him to the premises which consisted of a commercial lot, partitioned off into several-buildings consisting of a cafe, a radiator shop, a furniture store, a welding shop, a wheel aligning shop and a paint shop. The paint shop at that time was occupied by Tom Ragsdale, who represented to him that the rental value thereof was $100.00 per month and that he would pay that amount. The next day appellant James Ragsdale also showed the buildings to him which resulted, in the purchase by appellees of the premises from appellants on April 1, 1959 under a general warranty deed for a consideration of $35,000.00. Appellant James Ragsdale continued to occupy the premises for approximately thirty days thereafter, at which time Langford took possession thereof and about ten days or two weeks later appellant James Ragsdale exhibited an outstanding lease by him to Tom Ragsdale of the building containing the paint shop, which lease was for a period of 5½ years commencing October 25, 1958, and ending April 24, 1964, at a monthly rental of $5.00.

He further testified that he was familiar with the property values of business properties in the City of Killeen; that he had purchased the premises in question for rental purposes for a consideration of $35,000.00 which was the reasonable cash market value of the property at the time of the conveyance without the lease; that possession of the paint shop under lease to Tom Ragsdale had been withheld from appellees by appellant James Ragsdale and Tom Ragsdale; that prior to his purchase-of the property from appellants Tom Ragsdale had told him that he would pay him $100.00 per month rental for the use of the premises which he was occupying under the prior lease and he was not advised by Tom Ragsdale of the existing lease of the paint shop.

No objections were made by appellants’ counsel to any of the testimony given by the witness as to the reasonable market value of the property or as to the statement made to him by Tom Ragsdale that he would pay appellees $100.00 per month rental for the paint shop. Instead, appellants’ counsel cross-examined him concerning the statemént made to him by Tom Ragsdale as to the monthly rental value of the paint shop of $100.00 per month which he would pay and that he knew of others who would be willing to rent the premises at such amount.

Appellees introduced in evidence the deed with a general warranty clause from appellants to appellees showing a total consideration of $35,000.00 as the purchase price of the premises, and the unrecorded lease from appellee J. T. Ragsdale as lessor to Tom Ragsdale as lessee.

In a suit for breach of warranty of title recitals of the consideration contained in the deed of conveyance constitute prima facie evidence of the value placed upon the property. White v. Street, 67 Tex. 177, 179, 2 S.W. 529, 530. The testimony of appellee Langford as to the reasonable market value of the premises and the rental value of that part which was encumbered by the existing lease was subject to rebuttal by appellants who, however, offered no evidence whatever as to the reasonable market value of the premises or the rental value of the leased paint shop, nor was the testimony of appellee Langford or his qualification as a witness as to the market value of the entire premises and the rental value of the premises under lease objected to upon any ground. The qualification of a witness testifying as to market value is primarily a question for the decision of the Trial Court. Slack v. Magee Heirs, Tex.Civ.App., 252 S.W.2d 274, 280, aff. 152 Tex. 427, 258 S.W.2d 797; 24 Tex.Jur.2d, “Evidence”, Secs. 531, 532, 533.

We hold that the Trial Court did not err in admitting in evidence and considering the testimony of appellee Langford as to the reasonable market value of the property and the reasonable rental, value of the premises encumbered by the prior unrecorded lease to Tom Ragsdale.

All of appellants’ points of error are overruled. It is our opinion that the Trial Court correctly submitted the special issue upon the question of damages and that there was ample evidence before the Trial Court to support the judgment which is accordingly affirmed.

Affirmed.


author: WILSON, Justice.

text:
    STATE of Texas et al., Appellants, v. Barney B. JETT et al., Appellees.
    No. 4000.
    Court of Civil Appeals of Texas. Waco.
    June 21, 1962.

      Henry Wade, Dist. Atty., Dallas County, A. D. (Jim) Bowie, Don T. Cates, Emmett Colvin, Jr., Homer G. Montgomery, Ted Z. Robertson, Asst. Dist. Attys., Dallas County, Dallas, for appellants.
    Alexander D. McNabb, McKool & Mc-Kool, Dallas, for appellees.
   WILSON, Justice.

Condemnors in this eminent domain proceeding say the opinion testimony of their witnesses was the only admissible evidence of the market value of condemned property, and therefore the court should have instructed the jury to return a verdict for the highest value testified to by those witnesses.

The court was not authorized to instruct such a verdict. “Opinion evidence does not establish any material fact as a matter of law.” Hood v. Texas Ind. Ins. Co., 146 Tex. 522, 209 S.W.2d 345, 346; Board of Firemen’s Relief, etc. v. Marks, 150 Tex. 433, 242 S.W.2d 181, 185, 27 A.L.R.2d 965; 24 Tex.Jur.2d, Sec. 549, p. 42.

It is contended the court erred in overruling condemnors’ motion to strike opinion testimony of appellees’ witnesses concerning the value of the tract taken, because their opinions were limited to its value excluding the value of the leasehold interest of another party to the action. The assignment in appellants’ motion for new trial is that the court erred in not excluding the testimony of these witnesses “because they failed to appraise the whole property and subtract the leasehold interest therefrom.”

The court submitted a first issue inquiring as to the market value of the land taken, instructing the jury not to consider the portion thereof which was subject to the leasehold. By additional issues the court instructed the jury to find the value of the condemned tract, subject to the leasehold interest, and the value of that interest. He instructed that the sum of the answers to the latter two separate issues must equal the amount found in answer to the first. The jury findings conformed to the instruction. Condemnors made no objections to the charge. They present no point asserting the values found by the jury are excessive.

On cross-examination appellants elicited testimony from one of appellees’ witnesses that in arriving at his opinion as to value of the land taken he did not consider nor appraise the value of the leasehold; and his estimate of value did “not include any value for leasehold interests.” “Q. Now, if you included the leasehold interest in it, would this figure go up, or would it go down? A. It would have to go up.” He testified that if he had valued the leasehold separately, he would add it to the value testified to. The other witness — having likewise given his opinion on direct of the value of the land condemned, subject to and excluding the leasehold — testified on appellants’ cross-examination that he had not valued the leasehold separately; and if he had done so, “it would still leave it the same; I don’t think it would have any effect on it.” He testified, however, that if he had placed a value on the lease, he “would put it on top of” the value submitted.

Appellant states its position to be that it is impossible to “appraise a fee estate in land, burdened by lesser estates, because if the lesser estates have value they must be subtracted — not added — to the value of the fee; and it is impossible to value “the lessor’s reversionary interest without first ascertaining the value of the outstanding leasehold estates.”

Appellants’ contentions are overruled for the following reasons: (1) These witnesses were not necessarily expressing .an opinion as to a “reversionary interest.” Although critical analysis of portions of their testimony by technical standards might -warrant such conclusion, they also testified their opinion of value excluded value of the leasehold, and if they should hypothetically value the latter, the opinion as to value of the land taken would be the same. (2) Under the court’s instruction, with any inconsistent portions of the testimony of these witnesses being subject to conflicting construction, the jury was authorized to give the whole such weight as it deemed proper. (3) Appellants introduced opinion evidence as to the separate valuation of the leasehold; the jury found it separately, and as to the amount so found, appellants “agree •that this figure is correct.” The jury was .authorized to apply such testimony of appellants’ witnesses, and its finding, to the testimony of appellees’ witnesses and the •evidence as a whole. (4) Appellants did not object to the charge which instructed the jury, in effect, as to the construction to he placed on the testimony of these and ■other witnesses. (S) The rule stated in decisions relied on by appellants that the value of the land taken must be determined .as if all interests in the property “were in .a single ownership,” relates to the issue to he determined by the fact finder; it does not fashion a mold into which opinion testimony must be poured, nor fix immutable hounds by which it must be circumscribed. It does not imply testimony is a nullity unless it fully fits the pattern of the ultimate inquiry. (6) The evidence of these wit-messes is consistent with the form of submission used in the charge. It is reasonably, if not certainly, subject to the construction that their opinion as to values excluded the value of the leasehold. Their further testimony that if they had valued the latter they would have added it to the amount originally expressed is precisely what the court in-ctructed the jury to do, with appellants’ .acquiescence.

Affirmed.


author: DIXON, Chief Justice.

text:
    Louis Dean RUBY et ux., Appellants, v. CAMBRIDGE MUTUAL FIRE INSURANCE COMPANY, Appellee.
    No. 16017.
    Court of Civil Appeals of Texas. Dallas.
    June 22, 1962.

      E. D. Forbes, Dallas, for appellants.
    Thompson, Knight, Wright & Simmons and Jerry P. Jones, Dallas, for appellee.
   DIXON, Chief Justice.

This suit was brought by appellants Louis Dean Ruby and wife, Peggy J. Ruby, against appellee Cambridge Mutual Fire Insurance Company for damages to wall-to-wall carpeting alleged by appellants to be insured under the terms of a policy issued by appellee on appellants’ home.

.The parties agreed on a written stipulation of facts. On September 21, 1959 damage in the amount of $232.08 caused by water was done to the wall-to-wall carpeting in appellants’ home when something went wrong with a water heater resulting in water flooding portions of the house.

At the time a policy of insurance was in force and effect which, under Texas Physical Form of Loss 148, provided coverage as follows:

“Section 1
“COVERAGE: Subject to the provisions of this form and of the policy to which this form is attached including endorsements thereon, this policy insures against physical loss to the described dwelling(s), building(s), or structure (s) covered under this form.
“7. The term ‘Dwelling’ is defined in SECTION IV of the policy of insurance in question as follows:
“DWELLINGS: A Dwelling shall mean any building designed for occupancy by not more than two families, and shall include everything which is-legally a part of the dwelling, except machinery which is not used solely in the service of the dwelling. It shall also include, if not otherwise insured,, materials in and adjacent to the dwelling for making alterations, extensions,, and repairs thereto, and the following property belonging to the insured as-building landlord but not as tenant or occupant; building, maintenance equipment and supplies; floor coverings, window shades, and furnishings of corridors and stairs; and refrigerators and stoves.”

Appellants’ residence is a building designed for occupancy by not more than two families. At the time in question it was appellants’ residence as owner-occupant, not as a building landlord.

The carpeting was installed after the policy was issued. It was used solely in the building in the area in which it was placed and was cut to fit that area. It was stretched over the floor and held in place by pressing the carpeting over the points of small nails protruding from a “tack board”. The “tack board” was a narrow strip of wood placed on the floor next to the interior walls of appellants’ residence and was nailed in some manner to the floor or the floor molding of the house. Neither the carpeting in question nor the mat under it was glued or fastened to the floor or any other part of the house by any other means.

Beneath the carpeting there was a finished tile floor.

The only damage to the carpeting in question or to the appellants’ residence upon removal of the carpeting would be small nail holes in the outer edge of the carpeting where it was attached to the “tack board”, and small holes in the flooring or molding of the house caused by removing the “tack board”. The carpeting could be removed and used in whole or in part in another building.

On trial of the cause appellants would testify that it was their intention to make the carpeting a part of the dwelling and the only evidence appellee would introduce to controvert such testimony would be the manner in which the carpeting was laid and the circumstances surrounding the laying of the carpeting.

Upon purchasing the dwelling appellants executed a deed of trust to Fidelity Union Life Insurance Company, and a provision of the deed of trust would extend its coverage to include any wall-to-wall carpeting which was subsequently placed in the dwelling. Appellants’ claim for damages for loss on building items covered by the policy includes the claim of Fidelity Union Life Insurance Company as mortgagee or trustee, if any.

The trial court concluded that to hold ap-pellee liable under the terms of the policy it was necessary for appellants to establish by a preponderance of the evidence that the carpeting was a fixture, and that appellants failed to discharge their burden in that regard. Judgment was accordingly rendered that appellants take nothing.

In their first point on appeal appellants allege error on the part of the court in not rendering judgment on the special verdict as to the facts involved as a matter of law under the stipulation of facts.

In their argument appellants contend that the carpeting in question is a fixture, therefore under the terms of the policy must be considered “legally a part of” appellants’ dwelling. With this contention we do not agree.

The exact meaning of the term fixture has never been definitely fixed. But the term has been broadly defined as “something that is personal in its nature but so annexed to realty as to have become a part of the realty.” See 25 Tex.Jur.2d 392, 393, and cases there cited.

No general rule applicable to every case can be laid down for testing whether property is a fixture. A rule often applied is as follows: (1) Has there been a real or constructive annexation of the property in question to the realty? (2) Was there a fitness or adaption of the article to the uses or purposes of the realty with which it is connected? (3) Was it the intention of the party making the annexation that the chattel should become a permanent accession to the freehold? 25 Tex.Jur.2d 394, 395.

Another test frequently employed by courts in determining whether an article is a fixture is whether the article can be .removed without material injury to the building. If it can be so removed it will not ordinarily be considered a fixture. Crabb v. Keystone Pipe & Supply Co., Tex.Civ.App., 177 S.W.2d 989; 25 Tex.Jur.2d 398, 399.

Applying the above tests we cannot say that the trial court erred in holding impliedly that the wall-to-wall carpeting in question did not become “legally a part of” appellants’ dwelling within the meaning of the insurance policy.

We have found no Texas case directly in point, but two cases from other jurisdictions lend support to our holding. Hartford Fire Ins. Co. v. Balch, 350 P.2d 514, (Okl.1960) ; and Plough v. Petersen, 140 Cal.App.2d 595, 295 P.2d 549, 55 A.L.R.2d 1042, (1956).

It is to be remembered that it was stipulated as a fact that the carpeting could be removed and used in whole or in part in another building; and that the only damage to the carpeting or to the residence upon removal of the carpeting would be small nail holes in the floor or molding next to the wall resulting from the removal of the “tack board”. It was also stipulated that neither the carpet nor the mat under the carpeting was glued or plastered to the floor in any manner except as above stated. It was further stipulated that under the carpet was a finished tile floor. Thus the surface had been made complete and ready for occupancy without the necessity of any additional covering.

We agree with appellants that intention is ordinarily considered the most important of the tests to be applied in determining whether an article is a fixture. However the intention of a party, 'though established as a fact, will not always prevail in the face of undisputed physical facts to the contrary, such as the manner in which an article is or is not attached to the realty. For example ordinary chairs, tables, dishes and kitchen utensils are in a broad sense a part of the owner’s dwelling, yet we cannot say they become fixtures for insurance purposes merely because their owner intended for them to be. Shamburger Lbr. Co. v. Bredthauer, Tex.Civ.App., 62 S.W.2d 603 ; 25 Tex.Jur.2d 401-402.

The above conclusion seems to us to be especially true in this case in view of the express provision in the policy definition of dwelling: “It shall also include the following property belonging to the insured as building landlord but not as * * * occupant * * ⅜.” (emphasis ours). Then the definition names floor coverings as an item in the “following property.”

In the instant case it cannot be said that the intention of appellants has been established. True, appellants would have testified it was their intention to make the carpeting a part of the dwelling. But they were interested parties and if they had so testified, their testimony, though uncon-tradicted, would not have established the fact of their intention as a matter of law. Simmonds v. St. Louis, B. & M. Ry. Co., 127 Tex. 23, 91 S.W.2d 332, (Syl. 4); Seaboalt v. Vandaveer, Tex.Civ.App., 231 S.W.2d 665, 667. The trial court was not bound ■to believe the testimony of appellants, upon whom rested the burden of establishing their intention.

However, we need not rely on the above rule in regard to the uncontradicted testimony of an interested party, for in our opinion their testimony is not uncontradict-ed. The manner in which the carpeting was laid and the circumstances surrounding the laying seems to us to controvert the testimony of appellants in regard to their intention. Thus a fact issue was presented as to their intention.

If appellants and Fidelity Union Life Ins. Company chose to enter into a contract whereby the latter’s deed of trust lien covered the carpeting, such agreement is immaterial here.

Appellants’ first point on appeal is overruled.

In their second and third points appellants allege it was error on the part of the court (2) to make findings of fact not embraced in the stipulations, and (3) to draw any inference not necessarily compelled as a matter of law.

We see no merit in these points. Appellants are the parties who asked for findings of fact and conclusions of law. If it was error for the court to grant their motion, it was invited error and appellants may not complain about it. Smith v. Chipley, 118 Tex. 415, 16 S.W.2d 269.

Further, appellants’ second and third points are vague, general and indefinite. They do not point out the particular findings or conclusions to which they object.

Moreover, the findings and conclusions made by the trial court are merely inferences of fact and conclusions of law based on the stipulated facts.

Anyway, the stipulations themselves furnish an adequate basis to support the judgment of the court without looking to the written findings and conclusions filed by the court. Appellants’ second and third points are overruled.

Appellee has filed a cross-point. However, we are asked to consider said cross-point only in the event of a reversal based on appellants’ points of appeal. Since we have decided to affirm the judgment we shall not consider appellee’s cross-point.

The judgment of the trial court is affirmed.


author: COLLINGS, Justice.

text:
    The TRAVELERS INSURANCE COMPANY, Appellant, v. Homer C. PIERCE, Appellee.
    No. 3733.
    Court of Civil Appeals of Texas. Eastland.
    June 29, 1962.
    Rehearing Denied July 20, 1962.
    Mays, Leonard, Moore & Dickson, Sweetwater, for appellant.
    Robinson, Wilson & Graham, Abilene, for appellee.
   COLLINGS, Justice.

This is a' workmen’s compensation case. Homer C. Pierce' brought suit against The Travelers Insurance Company seeking total and permanent compensation for alleged injuries to his' héad, neck' and back. Based upon a'jury verdict, judgment was rendered in favor of the plaintiff for total and permanent disability. The Travelers Insurance Company has appealed.

It was found by the jury that appellee’s incapacity is not confined solely to his left arm and that appellee sustained total and permanent disability from September 28, 1960, as a natural result of the injury sustained by him on that date. It is contended in appellant’s 1st and 2nd points that such findings are so contrary to the great weight and preponderance of the evidence as to be clearly wrong and unjust and that the trial court erred in rendering judgment thereon. Appellant admits that appellee sustained an injury but denies that he sustained total and permanent disability. In this connection appellant particularly urges a consideration of the fact that appellee did considerable manual labor after his accidental injury; that he made $200.00 a week, and since the injury he has earned more than he did during the same length of time immediately preceding the accident. Appellant also urges the fact that there was a period of almost nine years prior to the accidental injury in which appellee did not rely upon manual labor for a living but made $250.00 a week as business agent for his union.

The evidence shows that appellee was 48 years of age at the time of his injury on September 28, 1960; that he had worked as an operating engineer, rigger or iron worker for 26 years, and at the time in question was a rigger or iron worker for G. & N. Steel Corporation. He was working on the Shep Site Missile Base in Taylor County, unloading steel from a truck. The steel was fabricated and in curved bundles about 45 to 50 feet long with eight bars to the bundle, each bar approximately 2¼ inches in diameter. The evidence indicated that as the crane operator lifted a bundle of these steel bars it hung on one end and that Homer Pierce climbed on the tiuck bed and with the assistance of a fellow worker on the opposite side of the truck tried to pry it loose with a 2 X 4 so that it could be unloaded; that when the crane operator attempted to lift the bundle, the entire load flopped over and the end of the load swung around and hit appellee in the stomach knocking him backward; that it knocked appellee’s left elbow into other steel bundles on the truck, and he was thrown through the air and landed on his back about 20 feet away. There was evidence to the effect that appellee thereby suffered injury to his neck, low back and left arm and elbow. Appellee, together with another man who was hurt in the same accident, was rushed to a hospital in Abilene where he remained for about a week. He was treated by Dr. Bray who was called as a witness by appellant. Dr. Bray operated on appellee’s left arm and took out the head of the radius which had been fractured. The left arm was placed in a cast. Appellee was released from the hospital and about 10 days later went back on the job although his arm was still in a cast. He received the same pay before and after the accident. He testified that he did not perform the duties of a rigger as he had before, but was provided a pickup to ride around in. He stated that he had been put on the payroll to help him out. He admitted that he remained on that job until the latter part of December, but stated that he actually was not able to do the work; that his neck would get to hurting him bad, and he would get dizzy and feel like he was going to fall off the crane upon which he worked. Appellee did, how‘ever, work intermittently until July of 1961. He said that he had to work to support his family, but that he continued to' have pain and that when he worked he was in “pain and misery.” Appellee wore the cast on his arm for approximately 6 weeks. He continued to see the doctor for the stiffness in the elbow joint and the pain in his back and neck. Appellee testified that he did not believe his condition was improving; that when he tries to work he has pain across his back and legs; that his legs get numb and go to sleep; that he feels like he is just as bad, if not worse than shortly after he got hurt.

A few weeks after the cast was removed from appellee’s arm Dr. Bray put fluid in his elbow joint by means of a needle. The doctor took X-rays of his neck in December 1960, and, appellee thought, took X-rays of his back and legs. Dr. Bray continued to treat appellee until the latter part of December. On December 29, 1960, the doctor took X-rays of appellee’s neck and wrist because of complaints of pain by appellee. On March 1, 1961, appellee again saw Dr. Bray and complained of soreness and pain in his neck, elbow and wrist. The doctor then referred appellee to Dr. Billy Burdeaux in Houston, who later examined and treated appellee. Trial of this cause began on September 20, 1961 and at that time appellee had not worked since July of that year. Dr. Bray testified that he could find no evidence of injury to any portion of appellee’s body except his left arm. He did not say that appellee could obtain and retain a job involving manual labor, but did say that he thought appellee could get a job in the field in which he had been working.

Appellee was also treated by Dr. R. H. Tull, Sr., of Abilene. He was first treated by this doctor on December 30, 1960, and at that time Pierce was complaining of his neck, low back and elbow. Dr. Tull testified, on the basis of his examination and treatment, that appellee had injuries to his neck, his back and his wrist and elbow; that X-ray pictures showed injury to the bony structure of the lower part of appel-lee’s back. After Dr. Tull’s first examination and treatment of appellee, he saw him seven or eight times. Dr. Tull stated that, in his opinion, appellee could not perform manual labor consistently; that he could not pass appellee for employment at manual labor, and that the fall which appellee had suffered was the producing cause of his disability. Dr. Tull testified that, in his opinion, this condition of appellee was permanent.

As contended by appellant and as shown by the facts of the case as above substantially set out, there was evidence inconsistent with the finding that appellee was totally and permanently disabled. The testimony of Dr. Bray who was called by appellant was to the effect that appellee was not totally and permanently disabled. There was also evidence to the effect that appellee, himself, had made statements in applying for work that he had no physical disability. Such evidence, however, simply presented a fact issue for jury determination. After a consideration of the evidence as a whole, we are of the opinion and so hold that the findings of the jury complained of are not so contrary to the great weight and preponderance of the evidence as to be clearly wrong and unjust. In re King’s Estate, 150 Tex. 662, 244 S.W.2d 660. Numerous cases hold that the fact that an injured claimant continues to work after an accident and makes as much or more money than he did before, does not conclusively show a lack of total disability, nor does it necessarily render a jury finding of total and permanent disability against the great weight and preponderance of the evidence.

In several points appellant contends that argument of appellee’s attorney to the jury presents prejudicial error and that the court erred in failing to so hold. We have carefully considered these points and find that they are not well taken.

An attorney has the right to answer argument urged by opposing counsel. The first argument complained of was, in effect, an accusation of appellant and its counsel of unfair conduct. This argument was in answer to an argument by one of appellant’s attorneys concerning what was fair in the case and does not constitute reversible error. We also overrule appellant’s point urging reversible error because of argument by appellee’s attorney, in effect, that certain arguments of appellant’s counsel were an effort to “bamboozle” the jury or to “pull the wool” over their eyes.

Arguments by appellee’s counsel complained of in 3 other points were not objected to at the time and complaint was made for the first time in appellant’s motion for a new trial. These arguments were not flagrant abuses of the limits of proper argument. They were not of such a prejudicial nature that, either individually or as a whole, they were reasonably calculated to cause, or probably did cause the rendition of an improper judgment. No reversible error is shown. Aultman v. Dallas Railway & Terminal Co., 152 Tex. 509, 260 S.W.2d 596.

The judgment of the trial court is affirmed.


author: YOUNG, Justice.

text:
    A. B. SWANK, Jr., Appellant, v. Charles SHARP et al., Appellees.
    No. 16030.
    Court of Civil Appeals of Texas. Dallas.
    June 22, 1962.
    Kenny & Floyd, H. E. Kenny, Jr., Dallas, for appellant.
    H. P. Kucera, City Atty., and N. Alex Bickley, Asst. City Atty., Dallas, for ap-pellees.
   YOUNG, Justice.

The opinion heretofore rendered on April 27, 1962 is withdrawn and the following being substituted therefor:

A. B. Swank, Jr. here appeals from the denial of a temporary injunction.

Appellant, a resident citizen tax payer of the City of Dallas, sought injunctive relief in the trial court against these members of the Dallas City Council, individually, and as members of a committee appointed by the Council; identified as the “Ambulance Committee”. Prior to this suit these individuals as a committee had been holding closed or executive meetings on this subject as distinguished from “Open Meetings” as referred in § 13, subd. 3 of the City Charter ; reading: “All meetings of the Council and of the committees thereof shall be open to the public and the rules of the Council shall provide that citizens of the city shall have a reasonable opportunity to be heard at any such meetings, in regard to any matter considered thereat.” Appellant asserts that he was at all times denied “a reasonable opportunity to be heard at any such meetings” of this Committee; and, except for the temporary restraining order previously issued by the court, this Committee of ap-pellees would have continued to meet in closed sessions. On hearing of the application for temporary injunction, same was denied.

Basically, appellant complains of error in that the court by denial of temporary injunction has refused to maintain a status quo of the litigation pending a trial on the merits. At instance of appellant the trial court made and filed findings of fact from which we note the following: That on June 19, 1961 the City Council appointed Councilman Sharp as Chairman, Councilman Self and Councilwoman Blessing as a Committee “to study future ambulance contracts and present ambulance services” as the present City Ambulance Service contract would expire October 31, 1961; such Committee to make investigation and report to the whole Council; that appellees after their appointment met on four separate occasions at the City Hall Conference Room; calling and interviewing the City Manager, Chief of Police and the Director of Public Health as City officials and also invited and interviewed representatives of the present contract holders for ambulance service, both white and colored; that altogether possibly twenty (20) persons were so interviewed by the Committee; all persons coming before the Committee, appeared voluntarily, no oaths being administered or subpoena being issued to require attendance; that such Committee planned to have one more meeting, which was not held because of the previous restraining order and that the public was at all times excluded from the meetings so held.

Appellees state in supplemental brief that following studies and recommendations of the Committee, a contract for ambulance service was let by the City Council in October 1961, the successful contractor to give a $25,000 corporate surety bond which has not yet been furnished; in the meantime and temporarily the City accepting a personal surety.

From the foregoing, it would appear that appellees have ceased to function as an “ambulance committee”; its objective — procurement of the October 1961 City Ambulance Contract — being now an accomplished fact. Our first inquiry therefore involves the mootness of subject matter and accordingly, we have called upon the parties hereto for supplemental briefs. It is well-settled law in Texas that “A case becomes moot when it appears that one seeks to obtain a judgment upon some pretended controversy when in reality none exists, or when he seeks judgment upon some matter which, when rendered, for any reason, cannot have any practical legal effect upon a then existing controversy. City of Dallas v. Rutledge (Tex.Civ.App.) 258 S.W. 534, 537; Adams v. Union R. Co., 21 R.I. 134, 42 A. 515, 517, 44 L.R.A. 273; State v. Dolley, 82 Kan. 533, 108 P. 846. Courts do not sit for the purpose of expounding the law upon abstract questions, but to determine the rights of litigants by the rendition of effective judgments. Ex Parte Steele (D.C.) 162 F. 694.” McNeill v. Hubert, 119 Tex. 18, 23 S.W.2d 331. “The rule is well established that review proceedings are not allowed for the purpose of settling abstract questions, but only to correct errors injuriously affecting the rights of some party to the litigation. Accordingly, an appeal or error proceeding will be dismissed if the question presented by it is fictitious, or has become moot or academic, or if, without any fault of the appellee or defendant in error, an event has occurred which makes a determination of it unnecessary or renders it impossible for an appellate court to grant effectual relief.” 3 Am. Jur. 308, Appeal and Error, § 733.

In supplemental brief, appellant has merely cited Texas cases entirely consistent with above rule. Incidentally he has here initiated litigation of a limited nature and ending with letting of contract on November 1, 1961. In the meantime appellant could have kept the matter alive by stay order on appeal to this court and request for advancement of the cause, but he did not see fit to do so. The advancement of cause was at instance of appellees by motion of date December 29, 1961.

Appellees likewise in their own behalf seek a favorable construction of ,§ 13, Article 3, City Charter, and invoke the rule annotated in 132 A.L.R. 1187 that “Appellate courts not infrequently pass upon questions affecting important public interest even where in the particular case the question has become academic. Commonwealth of Massachusetts v. Klaus, 145 App.Div. 798, 130 N.Y.S. 713.” Appellees cite the rule that “Even though litigation may not be effective in all respects because of circumstances arising after appellate proceedings are taken, the appellate court does not thereby lose jurisdiction of the cause, and it may be retained for the determination of questions properly presented involving the duties and authority of public officials that are of general interest to the public.” Syllabus by the court in State ex rel. Railroad Comrs. v. Southern Teleph. & Constr. Co. (1913) 65 Fla. 67, 61 So. 119. We have found no case in Texas where our Supreme Court has so expanded the rule of mootness of cause and hence express no opinion on the merits of this litigation; that is to say a construction of § 13, Dallas City Charter.

The appeal is therefore dismissed, the matter at issue having become moot.

      . Not officially, but through our local press we note that the required corporate bond of $25,000 has been duly approved and filed.