text:
    HOUSTON BELT & TERMINAL RAILWAY COMPANY, Appellant, v. J. WEINGARTEN, INC., Appellee.
    No. 15035.
    Court of Civil Appeals of Texas. Houston.
    Nov. 9, 1967.
    Rehearing Denied Nov. 30, 1967.

      Fulbright, Crooker, Freeman, Bates & Jaworski, Charles M. Haden, Gary B. Webb, Thomas P. Sartwelle, Houston, for appellant.
    Vinson, Elkins, Weems & Searls, B. Jeff Crane, Jr., Raybourne Thompson, Jr., Houston, for appellee.
   COLEMAN, Justice.

This is an appeal brought by the Houston Belt & Terminal Railway Company (hereinafter referred to as The Belt), from a judgment awarding indemnity against it to J. Weingarten, Inc. (hereinafter referred to as Weingarten), in the amount of $51,-749.70. The judgment was based on a contract between these parties.

Charles Tepkin, husband of the plaintiff, was killed while working as a switchman for The Belt when a railroad car on which he was riding derailed while operating on tracks owned by Weingarten in Harris County, Texas. The plaintiff recovered a joint and several judgment against The Belt and Weingarten. By agreement The Belt has paid the judgment and the only questions on appeal concern indemnity and contribution.

On December 15, 1952, The Belt and Weingarten executed an agreement governing the maintenance and operation of certain industrial spur tracks owned by Wien-garten. By this contract The Belt agreed to construct and/or maintain and to operate certain spur tracks to warehouse facilities owned by Weingarten. The agreement provided that Weingarten would pay to The Belt from time to time, within twenty days after bills are rendered therefor, the entire cost of maintaining and renewing these spur tracks, The Belt to be the judge of the necessity for and the character of maintenance required. Weingarten also agreed to indemnify and hold harmless The Belt for loss, damage or injury from any act or omission by Weingarten, its employees or agents, to the person or property of the parties hereto and their employees, and to the person or property of any other person or corporation while on or about these tracks. The agreement further provided that if any claim or liability other than from fire shall arise from the joint or concurring negligence of both parties hereto, it shall be borne by them equally. It specified that it could be terminated by The Belt on ten days’ written notice if Weingarten failed to keep any of its covenants therein contained, and that it could be terminated by either party on thirty days’ written notice. It also provided that no termination or expiration shall affect the rights and liabilities, if any, of the parties hereunder then existing. It is undisputed that neither party has given formal written notice of any intention to terminate the contract.

Appellant’s first four points of error are based on its contention that the trial court erred in concluding that the contract was in full force and effect at all times material to this law suit. The contract clearly gives The Belt the sole right and duty to determine the necessity for and character of repairs on the tracks, but it is the contention of appellant that the contract was rescinded by agreement of the parties.

No issues were submitted to the jury on the question of the recision of the contract. The jury found that The Belt failed to furnish their employee a safe place to work; that Weingarten failed to provide adequate drainage for the roadbed of the tracks; that Weingarten failed to place a sufficient number of ties under the tracks; that Wein-garten failed to provide sufficient ballast for the roadbed of the tracks; that each of these failures constituted negligence and a proximate cause of the derailment of the car in question.

Each of the acts of negligence charged to Weingarten concerned a matter fairly within the obligation of The Belt to maintain and renew the tracks.

The only act of negligence on the part of Weingarten, as found by the jury, which The Belt contends was an independent act of negligence not concerning track maintenance, is the finding that Weingarten failed to provide adequate drainage for the roadbed. There is no testimony that the condition of the drainage ditch was responsible for the fact that the track was uneven unless it be the testimony that the ditch was not deep enough to permit the installation of the drain pipe going under the track in the immediate vicinity of the accident at the proper level. There was testimony that the level was sufficient had iron pipe been used rather than jointed concrete pipe. There was testimony that this pipe separated at a joint and became stopped up, permitting a seepage of water into the roadbed. There was testimony that the roadbed became soft and that this condition together with an insufficient number of ties and quantity of ballast permitted the rails to sink and to become uneven, a condition known to The Belt as existing for a considerable length of time prior to the accident.

In its cross-action The Belt alleged that the contract with Weingarten was in full force and effect at all times material to this action. It alleged that before the derailment The Belt warned Weingarten that the tracks needed repairs, but that instead of allowing The Belt to do these repairs Wein-garten started haggling about the price and at length undertook to do the work itself and would not allow The Belt to perform the needed repairs. It alleged that the tracks were repaired by Weingarten in an improper manner and, as a result, became uneven and out of level, causing the accident in question. The cross-action charged that this conduct constituted negligence on the part of Weingarten, as well as a breach of contract. There is no allegation of an offer to rescind on the part of one party accepted by the other, or of facts from which fair notice of such a defense would appear. There was no pleading of the conclusion that the contract had been mutually rescinded.

Under Rule 301, Texas Rules of Civil Procedure, requiring the judgment to conform to the pleadings in a case, a judgment supported by proof of facts which were not alleged would be erroneous. Starr v. Ferguson, 1943, 140 Tex. 80, 166 S.W.2d 130; Oil Field Haulers Ass’n v. Railroad Commission, 381 S.W.2d 183 (Tex.Sup.1964).

Appellant is not in a position to complain of a judgment based on the conclusion that the contract was in full force and effect. Jones v. Allen, 294 S.W.2d 259 (Tex.Civ.App., 1956, ref., n. r. e.); Radcliff v. Clemons, 265 S.W.2d 182 (Tex.Civ.App., 1954, ref., n. r. e.).

Appellant did not complain of the conclusion of the trial court that the contract was in force, or that the trial court failed to find recision by mutual consent, in its motion for new trial. Rule 374, T. R.C.P., provides that a ground of error not distinctly set forth in the motion for new trial, in cases where a motion for new trial is required, shall be considered as waived. Appellant’s first four points of error were waived by reason of appellant’s failure to set them out distinctly in the motion for new trial. Dallas Ry. & Terminal Co. v. Bailey, 1952, 151 Tex. 359, 250 S.W.2d 379; State of Cal. Dept. of Mental Hygiene v. Bank of Southwest Nat. Ass’n, 1962, 163 Tex. 314, 354 S.W.2d 576.

The evidence is undisputed that after the accident under consideration, appellant repaired the track and billed Wein-garten for the expense, and that Weingar-ten paid this bill. Other evidence demonstrated that both parties performed under the contract after the occurrence relied on as showing mutual recision. If after a party breaches a contract, the other party continues to insist on performance on the part of the party in default, the previous breach constitutes no excuse for nonperformance on the part of the party not in default and the contract continues in force for the benefit of both parties. Dibrell v. Ramsey Bros., 294 S.W. 645 (Tex.Civ.App., Austin, 1927, error ref.) ; Sinclair Refining Co. v. Costin, 116 S.W.2d 894 (Tex.Civ. App., Eastland, 1938); Continental Casualty Co. v. Boerger, 389 S.W.2d 566 (Tex.Civ.App., Waco 1965, writ dism.).

By its fifth and sixth points appellant urges that the trial court erred in granting Weingarten indemnity against The Belt, and in failing to grant The Belt indemnity against Weingarten, by reason of the provisions of the contract since the jury found Weingarten guilty of specific acts of negligence proximately causing the derailment, and only found The Belt guilty of failing to provide its employee with a safe place to work, a nondelegable, statutory duty.

By Article I of the contract The Belt agreed to maintain and operate the track in question. By Article II Weingarten agreed to pay within twenty days after bills were rendered the entire cost of maintaining and renewing the track, The Belt to be the judge of the necessity for and the character of maintenance required. Wein-garten agreed to keep effective the necessary permission to cross public streets and to do or pay for such paving at crossings as might be required by the City or County. Weingarten also agreed to keep an area 8i/2 feet from the center of the track and 27 feet above the track clear of obstructions, and to adopt and enforce reasonable rules and regulations for the conduct of its employees while on or near the track to protect them from injury, and to conduct its grocery supply business continuously during the term of the contract. Wein-garten agreed to indemnify The Belt against loss or damage arising by fire caused by locomotives to property on Wein-garten’s premises, with certain exceptions, regardless of The Belfs negligence; to indemnify The Belt for loss resulting from an act or omission of Weingarten, its agents or employees, to the persons or property of the parties, their employees or other persons on or about the track. Finally, it was agreed that if any claim or liability, other than from fire, should arise from the joint or concurring negligence of both parties, it should be borne by them equally.

The Belt filed an answer to Mrs. Tepkin’s petition and a cross-action against Weingarten for indemnity, or in the alternative for contribution. It alleged that under the terms of the contract it agreed to inspect and maintain the track and Weingarten agreed to pay for such repairs. It then alleged that prior to the accident The Belt warned Weingarten that the tracks needed repair immediately, and that Weingarten began haggling about the price and finally undertook to do the work itself and would not allow The Belt to perform the needed repairs. It alleged that the tracks were repaired by Weingarten in an improper manner and as a result became uneven and out of level, causing the accident in question. It alleged that this conduct constituted a breach of a paramount duty owed not only to the deceased employee, but also to The Belt, by reason of which The Belt was entitled to contribution, and, in the alternative, full indemnity at common law.

The cross-action then alleged the provisions of the contract relating to payment for repairs, indemnity and contribution. It was alleged that the refusal of Wein-garten to allow The Belt to make the necessary repairs and to pay therefor constituted a breach of contract. There follows the allegation that as a result of this breach of contract, and by reason of the indemnifying agreement, The Belt was entitled to full indemnity, or, in the alternative, contribution.

The Belt requested no issues relating to the alleged conduct of Weingarten in refusing to permit The Belt to make repairs or to pay for repairs. The evidence does not conclusively establish such refusal. The Belt’s failure to request issues on these matters constituted a waiver of its cause of action based on breach of contract. Rule 279, T.R.C.P.; Grant v. Marshall, 154 Tex. 531, 280 S.W.2d 559 (1955). The Belt must recover, therefore, if at all, on the basis of the contract, or the rules of common law governing contribution and indemnity under the facts found by the jury.

In its cross-action Weingarten alleged that The Belt leased certain premises from Weingarten consisting of a railroad right of way upon which The Belt was contractually obligated to construct and/or maintain, inspect and determine needed repairs to such property, thereby assuming all liability arising out of defective conditions present by reason of The Belt’s failure to adequately maintain those premises. There was an allegation that Weingarten was the legal titleholder of such property, the alleged defective condition of which plaintiff alleges to have caused the death made the basis of her cause of action, and that The Belt, as lessee, assumed all obligations of Weingarten in the care and maintenance of such property. The prayer was for indemnity, or, in the alternative, for contribution.

Since no lease agreement, other than the instrument designated as a track agreement, was introduced or referred to in the statement of facts, Weingarten necessarily relies on the track agreement to support the judgment for indemnity. Weingarten has not contended that the agreement is not in full force and effect, but it does contend that since it was conclusively established that the defective condition of the track, a condition known to The Belt, was the proximate cause of the derailment, The Belt was in default under the terms of the contract, and can not rely on its provisions to escape liability resulting from such breach.

By continuing to perform its obligations under the contract and by insisting on performance on the part of The Belt, Weingarten lost its right to rescind the contract or to refuse performance on its part, but not its cause of action for damages for breach of the contract by reason of The Belt’s failure or refusal to maintain the track. Dibrell v. Ramsey Bros., 294 S.W. 645 (Tex.Civ.App., Austin, 1927, error ref.); Sinclair Refining Co. v. Costin, 116 S.W.2d 894 (Tex.Civ.App., Eastland, 1938); Western Irrigation Co. v. Reeves County Land Co., 233 S.W.2d 599 (Tex.Civ.App., El Paso, 1950).

At common law Weingarten was entitled to full indemnity as against The Belt since, although as to Mrs. Tepkin, the plaintiff, they were joint wrongdoers, The Belt had breached a duty it owed to Wein-garten as well as to its deceased employee. In such a case Article 2212, Vernon’s Ann. Civ.St., dealing with contribution between joint wrongdoers, has no application. Auston Road Co. v. Pope, 147 Tex. 430, 216 S.W.2d 563 (1949); Wheeler v. Glazer, 137 Tex. 341, 153 S.W.2d 449 (1941); Renfro Drug Co. v. Lewis, 149 Tex. 507, 235 S.W. 2d 609 (1951).

It is settled law that in Texas indemnity contracts are valid even though they provide for the relief of a party from the consequences of his own negligence. Mitchell’s, Inc. v. Friedman, 157 Tex. 424, 303 S.W.2d 775 (1957); Spence & Howe Construction Co. v. Gulf Oil Corp., 365 S.W.2d 631 (Tex.Sup.1963).

The intention of the parties with reference to indemnity and contribution must first be ascertained by rules of construction applicable to contracts generally with neither party favored over the other merely because the agreement is one of indemnity. Once the intention is determined the liability of the indemnitor under the contract as interpreted will not be extended beyond the terms of the agreement. Mitchell’s, Inc. v. Friedman, supra.

While a contract containing an indemnity and contribution clause identical to the one in this agreement was construed in Ealand v. Gulf, Colorado & Santa Fe Railway Co., 411 S.W.2d 591 (Tex.Civ.App., Beaumont, 1967), that case furnishes us little guidance since there was another paragraph in the contract not found in this agreement, which was an important factor in construing that contract.

A substantially identical provision concerning indemnity and contribution was construed in Booth-Kelly Lumber Co. v. Southern Pacific Co., 183 F.2d 902 (U.S.Ct. of App., 9th Cir., 1950). There the court held that it was the intention of the parties to provide that the portion of the paragraph providing for indemnity should apply to situations covered by Section 95 of the Restatement of the Law of Restitution, which provides:

“Where a person has become liable with another for harm caused to a third person because of his negligent failure to make safe a dangerous condition of land or chattels, which was created by the misconduct of the other or which, as between the two, it was the other’s duty to make safe, he is entitled to restitution from the other for expenditures properly made in the discharge of such liability, unless after discovery of the danger, he acquiesced in the continuation of the condition.”

The court then held that the portion of the paragraph providing for contribution applied to situations covered by Section 102 of the Restatement, which provides:

“Where two persons acting independently or jointly, have negligently injured a third person or his property for which injury both became liable in tort to the third person, one of them who has made expenditures in the discharge of their liability is not entitled to contribution from the other.”

In Foster v. Pennsylvania R. Co., 201 F.2d 727 (U.S.Ct. of App., 3rd Cir., 1952), the same agreement was considered and in a footnote the court said:

“It is apparent that paragraph 8 of the siding agreement treats of three different situations. The first deals with fire caused by locomotives and attempts to relieve the railroad from loss caused by its own negligence. The second deals with a primary-secondary, active-passive kind of negligence and provides for indemnity for the railroad from loss caused by the primary negligence of Crown Can, for which the railroad was also liable but only secondarily so, because of some legal relation to the injured party, as here, that of employer-employee. The third covers the situation of concurring, primary negligence and provides for contribution.”

The Booth-Kelly case was followed in Baltimore & Ohio R. Co. v. Alpha Portland Cement Co., 218 F.2d 207 (U.S.Ct. of App., 3rd Cir., 1955). In this case the court specifically considered that portion of Section 95 of the Restatement providing that one guilty of passive or secondary negligence nonetheless is not entitled to indemnity if he acquiesces in the continuation of the condition. The court held that in such a case acquiescence, being a matter of volition, cannot exist without actual knowledge of the particular unsafe condition forming the basis of the plaintiff’s recovery. It is our opinion that, following the same line of reasoning, before acquiescence can be found, it must also appear that the condition was obviously dangerous, or was known to be dangerous to the party to be charged. It would be difficult to justify a holding that one knowingly agreed to, or permitted, the maintenance of a dangerous condition unless he knew that the condition was dangerous.

Clearly The Belt is not entitled to indemnity since the evidence conclusively established its negligence in failing to properly maintain the track under the terms of the contract. The evidence does not conclusively establish that Weingarten acquiesced in the maintenance of the particular dangerous conditions found by the jury to be proximate causes of this accident. There were no special issues submitted or requested on this question.

The difficulty arises in determining whether The Belt is entitled to contribution in spite of the fact that Weingarten’s negligence resulted from The Belt’s violation of a duty owed to Weingarten. The contract requires Weingarten to indemnify The Belt against its own negligence in the case of certain damage resulting from fire even though Weingarten is not negligent. It specifically requires Weingarten to indemnify The Belt from loss resulting from the failure of Weingarten to require its employees, and others on or around the track with the permission of Weingarten, to notify the employees of The Belt of their presence by proper signals or flags, and this regardless of the quality of the negligence of The Belt which might concur in causing the loss. If Weingarten should violate the duty placed on it to keep the track free of obstructions, or to adopt and enforce reasonable safety rules for its employees, there is little doubt but that it would be liable to indemnify The Belt under paragraph (h) despite the negligence of The Belt in failing to provide its employees with a safe place to work or similar passive negligence. If, on the other hand, The Belt is guilty of negligence of the same quality as that of Weingarten, then contribution would be required under paragraph (h). Specific provision was made for indemnity to the Belt in certain situations without respect to the quality of its own negligence, or despite the fact that Wein-garten was not guilty of negligence. The provisions of paragraph (h) can be made effective without attributing to the parties an intention that Weingarten should contribute in the event of a loss caused by the violation of a duty owed to Weingarten by The Belt under the terms of the same contract. An interpretation to this effect would deprive Weingarten of, perhaps, the only effective remedy for a breach of The Belt’s contractual duty to maintain the track. The Belt is not entitled to contribution.

The Trial Court did not err in awarding indemnity to Weingarten. The judgment of the Trial Court is affirmed.


source: Caselaw Access Project

author: SELLERS, Justice.

license: Public Domain

text:
    Arthur Lewis GREEN, Appellant, v. Mrs. Homer POOL, Appellee.
    No. 313.
    Court of Civil Appeals of Texas. Tyler.
    Nov. 16, 1967.
    Ramey, Brelsford, Flock & Devereux, Richard Grainger, Michael A. Hatchell, Tyler, for appellant.
    Gordon Wellborn & Rex Houston, Henderson, for appellee.
   SELLERS, Justice.

Mrs. Homer Pool brought this suit against Arthur Lewis Green to recover damages for the death of her daughter, Linda Pool, who was killed when a pony which Linda was riding collided with a station wagon owned and driven by the defendant Green.

The defendant Green who lives in Jefferson County filed a plea of privilege to be sued in the County of his residence. This plea was controverted by the plaintiff, claiming venue in Rusk County under Section 9a of the Venue Statutes, Vernon’s Ann.Civ.St. art. 1995, subd. 9a. After a full hearing by the trial court, the defendant’s plea was overruled, from which ruling the defendant has duly prosecuted this appeal. The accident from which this suit arises occurred in Rusk County about 214 miles South of Henderson, Texas, on Highway No. 259. Highway No. 259 is a main and well-traveled highway which is approximately 35 to 40 feet wide.

At the time of the accident, the defendant, Arthur Lewis Green, was traveling South on Highway No. 259 toward Nacog-doches. Mr. Green testified that he usually drove between 50 and 55 miles per hour but he thought he was probably traveling between 40 and 50 miles per hour at the time in question.

As the defendant was proceeding down Highway No. 259, Linda Pool was approaching the highway on horseback from the East on a narrow oil-topped road. Linda and about a dozen others were participating in a trail ride with various members of a riding group to which she belonged. The oil-topped road on which Linda was riding crosses Highway No. 259 at right angles and there is a stop sign governing traffic on this road as it reaches Highway No. 259. The oil-topped road is substantially lower than the main highway, and one approaching Highway No. 259 on the oil road must proceed from a low spot in the road and up an incline before reaching Highway No. 259.

A Mrs. Watson, the only eye witness of the trail riders to testify at this hearing stated that she and two gentlemen were riding in the lead of about a dozen trail riders that were present at that time. She stated that she and the two gentlemen had reached the right-of-way of Highway No. 259 and had turned to the left near the fence row of the highway. She testified that about the time she turned left at the highway, she heard horses hooves pounding against the oil-topped road; that she looked back and observed Linda’s horse coming at full speed toward the highway; that when she first observed the horse running, it was about 150 feet back down the oil-topped road; that she knew Linda’s horse to be a gentle horse for her children had ridden the same, and that Linda was a good rider; that when she noticed the horse as ⅛ came up the incline and across the highway, the horse was running for all it was worth, and in her opinion, was making between 15 and 20 miles per hour. She further testified that she knew the horse was running away and she heard one of the trail riders scream just as the horse was within two or three feet of the traveled portion of Highway No. 259; that she then looked and could see both the car and the horse at the time it entered the highway and in her opinion, the car was 100 or 150 feet back toward Henderson from the intersection and traveling at 70 miles per hour or better; that as the horse approached the highway some two or three feet from the main traveled part, going at full speed, it only took seconds after that for the collision to occur. It is without dispute from her evidence as well as that of the defendant that he took no precautionary measures whatsoever as far as slowing his speed or turning right or left. There is no evidence in the record as to what caused Linda’s horse to “scare” and “bolt” into a runaway; and there is no contention made that the automobile was responsible for the horse becoming scared.

Mrs. Watson testified that she believed Linda could have brought the horse under control if she had had a little more distance to go.

The defendant stated that he never saw the horse and rider until they hit him although he said he saw a “brown blur” a few feet to the left just before the collision.

It is without dispute that the collision occurred completely within the defendant’s lane of travel. When the station wagon and the horse came together, over half of the horse was in front of the station wagon at the time the car struck it, and Linda was still on the horse and the horse was still making 15 to 20 miles per hour. Linda was thrown over the car and into the ditch on the West side of the highway and the horse was hanging onto the station wagon with his entrails scattered all over the station wagon and the ground. The car went some 200 to 300 feet before it stopped after the collision.

To sustain venue in Rusk County, the burden was on the plaintiff to prove negligence on the part of the defendant which was the proximate cause of the accident. The judgment of the trial court must be sustained unless the undisputed facts relieve the defendant of negligence, or such negligence as was the proximate cause of the accident.

Appellee takes the position that appellant was negligent in failing to observe the horseback riders as he approached the intersection, none of whom were on the paved part of the highway, and failed to observe Linda as she crossed one lane of travel and into defendant’s lane of travel and collided with defendant’s car, which, according to the evidence would not take her but one or two seconds to reach the point of impact with defendant’s car, and that defendant did not slow his speed or turn his car one way or the other in an effort to avoid the collision and for this reason the plaintiff proved its case for venue-in Rusk County.

The eye witness testified that when Linda entered the highway, her horse was going 15 to 20 miles per hour; that at that time the car was some 100 to 150 feet back up the highway toward Henderson; and that it only took seconds after that for the collision to occur.

The legal question then for this Court to decide is when did the defendant have to take precautionary action to avoid the collision with Linda on her horse. To determine this question, we will apply the rule laid down in Mortenson v. Hindahl, 247 Minn. 356, 77 N.W.2d 185, as follows:

“Ordinarily a motorist is under duty to exercise reasonable care to avoid injuring animals on the highway, Tyler v. Hoover, 92 Neb. 221, 138 N.W. 128; 60 C.J.S. Motor Vehicles, § 411, but in meeting and passing a horseback rider, he is under no special duty to take steps to avoid a collision therewith unless the horse shows signs of fright or that its rider has lost control of it. Harris v. Hicks, 143 Ark. 613, 221 S.W. 472; Pease v. Cochran, 42 S.D. 130, 173 N.W. 158, 5 A.L.R. 936; Tudor v. Bowen, 152 N.C. 441, 67 S.E. 1015, 30 L.R.A.,N.S., 804. If the horse turns suddenly into the path of the motorist so quickly that the latter cannot avoid striking it, he is absolved from negligence as a matter of law. Pease v. Cochran, supra; 5 Am.Jur., Automobiles, § 266.
“Whether there was negligence on the part of Mrs. Hindahl proximately causing the accident here accordingly would depend upon whether the evidence would support a finding that she had observed that the pony was out of control in sufficient time to take some precautionary measure such as decreasing her speed or turning or stopping so as to avoid coming in contact with it. * * * ”

Applying this rule to the facts of this case, it would seem that the defendant was under no duty to take precautionary action with reference to these horseback riders on the approaching road. This leaves only his duty to Linda and her horse as she entered the highway and across into the path of defendant’s car, just one or two seconds. During this time, under the above authority, the defendant did not have to take precautionary action until he discovered that the horse was out of control. Surely, the defendant had some time to observe that a horse running with a person on the highway, as was Linda’s, to determine the horse was out of control, and having discovered it, he must still have time to take precautionary action, and in the absence of such time, the defendant was not guilty of negligence as a matter of law.

It is this Court’s candid opinion from the record as a whole that the defendant did not see Linda’s horse on the highway, but if he had seen it, he would not have had time to take precautionary action to prevent the collision after he discovered the horse was out of control and therefore he was not guilty of negligence in failing to avoid the collision.

We feel that the case of San Antonio Machine & Supply Co. v. McKinley, Tex.Civ.App., 239 S.W. 340, is authority in this State for the holding that a scared horse, frightened by a train, which shies and collides with an automobile in its lane of travel, such as we have in this case, is the proximate cause of the collision.

The judgment of the trial court is reversed and the cause is ordered transferred to a District Court in Jefferson County, Texas.


author: FRASER, Chief Justice.

text:
    The TEXAS AND PACIFIC RAILWAY COMPANY, Appellant, v. Jewell HOYLE, Appellee.
    No. 5897.
    Court of Civil Appeals of Texas. El Paso.
    Oct. 18, 1967.
    Rehearing Denied Nov. 29, 1967.

      Mays, Leonard, Moore & Dickson, George W. Leonard, Jr., Sweetwater, Stub-beman, McRae, Sealy & Laughlin, Harrell Feldt, Midland, for appellant.
    William B. Smith, Midland, for appel-lee.
   OPINION

FRASER, Chief Justice.

On November 15, 1964 a Texas and Pacific Railway train collided with an automobile that was on the train track and knocked the automobile into and over the driver of the automobile, plaintiff-appellee Jewell Hoyle. He was trying to escape from the automobile as the train hit it. It is alleged that one Inez Baker, a woman of some 30 years of age, had been crossing at this point when her car stalled. In order to understand the background of this incident, it is well to point out that Lee Street, in Midland, Texas, intersects both the railroad and Highway 80 going to Odessa. This accident happened at the Lee Street crossing in Midland. Inez Baker, in coming from the southerly side, had to first cross the railroad tracks at Lee Street in order to get on Highway 80, where it was her intention to make a left turn and proceed to the City of Odessa, some miles farther west. It seems to be agreed that this is a very busy crossing, and it is not controverted that the railroad had flashing red warning lights installed and that they appeared to be in proper working order and flashing at the time of the accident. According to the evidence, there is a stop and go sign just north of the railroad tracks, and that as Inez Baker, who had eight children from three months to 17 years of age in her car, was proceeding over the railroad tracks, the light had apparently changed and the line of traffic had stopped. It is her testimony that her car stalled on the tracks and, as she said “shortened out” or something to that effect. In any event, she could not move her car. There is some evidence that either a little boy or little girl went to a nearby filling station, but the man there said he was alone and couldn’t come and help. At the time the Baker car stalled there 'was no train in sight, and it is her testimony and that of others that when they looked up and saw the light and heard the noise of the onrushing train they were just simply frightened. Her testimony was: “A. Yes. We was just sitting there. We couldn’t get out; we was scared and froze to the seats.” There was testimony that the Baker car was on the tracks in a stalled condition some five or six minutes before the accident, and some time before the railroad warning lights began flashing. Mrs. Baker then testified that a car hit her car from the rear, pushing it off the track, and then the train hit the car that had been pushing hers.

It is appellee’s testimony that his car stalled when he bumped the Baker car, with the eight children in it, off the track and that he tried twice to start the motor of his car and back off into a position of safety, but the motor wouldn’t start, and he then-tried to leap to safety, but it was too late. Three witnesses testified to the emergency situation and that appellee pushed the Baker car off the railroad track.

There was testimony from a Max Schumann that he had surveyed the area for a mile on each side of the Lee Street crossing, and that it is about 3,866 feet from the Lee Street crossing back east to the stock loading pens, and that the fairground road is approximately 5,250 feet east of the Lee Street crossing, and that the CJM Packing House was still farther east of the fairground road. At the time of the accident the train was approaching the Lee Street crossing from the east, going in a westerly direction. Mr. Schumann further testified that an object moving 40 miles per hour would travel 58 feet in one second. The fireman, one A. J. McClinton, who was in the locomotive at the time of the accident, testified that the seats occupied by the engineer and himself are 12 to 14 feet above the track level; that the Lee Street intersection is a busy one; that the terrain at Lee Street crossing and the area is level, and the track is straight, and that from the engine of the train you can see automobiles on both sides of the tracks at the Lee Street crossing from as far back as the stock pens; that as far back from the Lee Street crossing as the CJM packing company, from the engine one can see when something is on the tracks at the Lee Street intersection. That on the occasion in question he saw cars on each side of the track at the Lee Street intersection from as far back as the stock pens. It will be remembered that the stock pens were some 3,866 feet away from the intersection of Lee Street and the railroad.

J. H. Johnson, the engineer operating the train for appellant, testified that he had been over the Lee Street crossing many times; that it was a busy intersection and that they were running late. The evidence does not indicate that there is any obstruction to vision from this crossing for at least a mile easterly down to the stock pens, etc. In other words, from the Lee Street crossing the track ran level and unobstructed for at least a mile east of there. Taking all of the evidence into consideration, it seems that one operating a locomotive could see objects on the track at the Lee Street crossing from as far away as one mile. It should be pointed out that the fireman and the engineer deny that there was a car (presumably the Baker car) stalled on the crossing; that the only car they ever saw on the track was that of the appellee, and that they were then 250 to 350 feet away when he drove up on the track and stalled. There was, of course, testimony as to the total destruction of the automobile and the injuries sustained and expenses incurred by appel-lee.

Appellant, in its brief, states that this is not a case of discovered peril, but a case of imminent peril involving the “rescue” doctrine.

We think it well now to make a general review of the issues submitted to and answered by the jury. The jury found as follows : That the engineer was not operating the train in excess of 40 miles per hour within the city limits of Midland; that he was not operating such train at a speed in excess of ordinary care; that the engineer, J. H. Johnson, failed to keep a proper lookout and that such was a proximate cause of the accident; that prior to the collision plaintiff was in a position of peril; that the engineer did not discover the peril of Jewell Hoyle within such time and distance that, by the exercise of ordinary care, he could have avoided the collision. That plaintiff Jewell Hoyle, using his own car, pushed or knocked the vehicle operated by Inez Baker from the railroad track prior to the collision in question; that immediately prior thereto Inez Baker and the occupants of her car were in a position of peril; that plaintiff was acting to rescue Inez Baker and her passengers from a position of peril when he knocked or pushed her car from the railroad tracks. Then follow issues as to damages to the person and automobile of plaintiff. Then the following issues occur: That a clearly visible electric or mechanical signal device was giving warning of the immediate approach of the train at the time plaintiff approached the crossing in question; that the train of the Texas & Pacific Railway Company was plainly visible and in hazardous proximity to such crossing. That within 1500 feet of the crossing, the train emitted a signal audible from such distance, and such train, by reason of its nearness to such crossing, was an immediate hazard; that plaintiff stopped his automobile within 50 feet, but not less than 15 feet, from the nearest rail of the track upon which the train was approaching. That after having so stopped, he proceeded when he could not do so safely, and that such action was a proximate cause of the collision. That it was negligence for plaintiff Hoyle to drive his automobile on the track in front of the approaching train, and that such was a proximate cause of the collision in question. That plaintiff did not attempt to proceed over the crossing when he could not safely do so; that the train emitted an audible signal as it approached the crossing; that plaintiff failed to heed the audible signal; that such failure was negligence and that such negligence was a proximate cause. That a visible electric or mechanical signal was giving warning of the immediate approach of the train as the train approached the crossing; that plaintiff failed to heed such electric or mechanical signal; that such was negligence; that such negligence was a proximate cause of the collision; that plaintiff failed to get out of his motor vehicle as soon as its motor stopped running on the railroad crossing; that such failure was negligence and that such negligence was a proximate cause of the accident. That plaintiff left a place of safety and went to a place of danger on the railroad crossing; that such was negligence and that such negligence was a proximate cause of the collision. That plaintiff did not drive his automobile on to the railroad crossing without making any stop whatsoever as he approached it; that the plaintiff, Jewell Hoyle, did not attempt to beat the train over the crossing; and that the plaintiff did not act in a rash and reckless manner on the occasion in question.

The jury further found that appellee Hoyle had full knowledge that the train was approaching the railroad crossing when he drove his automobile on to the crossing; that he fully appreciated the danger of driving his automobile on to the railroad crossing ahead of the approaching train; that he voluntarily assumed the risk of so doing; and lastly, that the collision was not the result of an unavoidable accident. In summation, we should like to point out that there was a sharp conflict between the testimony of the witnesses for plaintiff-ap-pellee and the operators of defendant’s train. The jury resolved that conflict in favor of plaintiff, finding that defendant-appellant had failed to keep a proper lookout and that such was a proximate cause of the accident. Although the jury convicted plaintiff of a number of acts of contributory negligence, they specifically found that, at the time, he was in the act of rescuing Inez Baker and the occupants of her car from a position of imminent peril, and that in so doing he did not act in a rash and reckless manner.

In appellant’s first point, it takes the position that there was no evidence of probative force to support the jury’s finding that the appellant’s engineer, J. H. Johnson, failed to keep a proper lookout; and in its second point maintains there was no evidence of probative force to support the jury’s finding that such failure was a proximate cause of the appellee’s injuries. In Point 4 appellant charges that the evidence was insufficient to support the finding that the appellant’s engineer failed to keep a proper lookout; and in its fifth point maintains that the evidence is insufficient to support the jury’s finding that such failure, if any, on the part of the engineer was a proximate cause of appellant’s injuries. Appellant’s sixth and seventh points are to the effect that the jury’s finding that appellant’s engineer, J. H. Johnson, failed to keep a proper lookout and that such was a proximate cause of appellee’s injuries, are so contrary to the great weight and preponderance of the evidence as to be clearly wrong. We feel these points must be overruled.

As stated earlier in this opinion, the scene of the collision was an admittedly busy crossing in the City of Midland, Texas. The train of defendant-appellant, according to witnesses, had a clear, level view of at least a mile before reaching the crossing; that the car of Inez Baker had been stalled on the tracks for five or six minutes. The record shows that there was testimony that the highway stop and go, red and green light, changed five or six times while Inez Baker was parked on the track, and testimony that it took about a minute for each change; further there was testimony to the effect that the train operators themselves said that they saw cars on either side of the track. The jury found the train was proceeding at only 40 miles an hour, and there was evidence that there was nothing to obstruct the view of the train operators for at least a mile easterly from the scene of the accident (the direction from which the train was approaching). There is no evidence of fog, rain or any impairment to visibility, nor is such alleged, and Inez Baker and other witnesses testified that while the car was on the tracks an effort was made to get someone to move it; that at the time the car first stalled, and for some little time thereafter, there was no evidence of any train approaching; and finally, Inez Baker testified that when they did look up and see the train approaching with the lights flashing, etc., they were too frightened to move. She had previously testified that she was stopped on the train tracks by a change of the highway signal ahead of her stopping the flow of traffic, and that her car “shortened out or something” and she was unable to get it off the tracks. Several witnesses testified to the Baker car being on the tracks for some little time, one of them being the filling station employee close by. It seems inescapable, therefore, that the jury had ample evidence to find that a train, having a mile or more of unobstructed vision, knowing it was approaching a busy crossing, and operating at a speed of no more than 40 miles an hour, could have stopped in plenty of time had a proper lookout been kept by either or both of the train operators, and that such findings are not so contrary to the great weight and preponderance of the evidence as to be clearly wrong. The same reasoning applies, of course, to appellant’s sixth and seventh points wherein appellant claims that the jury’s finding that Mr. Johnson, the appellant’s engineer, failed to keep a proper lookout and that such was a proximate cause of plaintiff-appellee’s injuries, was so against the great weight and preponderance of the evidence as to be clearly wrong.

Of course this is a situation where there is a sharp conflict in evidence, with the train operators maintaining that there was no car on the track as they observed the crossing from a mile back, but that as they approached to within about 100 yards of the crossing plaintiff-appellee drove up on to the track and was hit. It should be remembered here that there was a specific finding by the jury to the effect that plaintiff-appellee was not trying to beat the train to the crossing. Therefore, with interested and disinterested witnesses testifying that plaintiff-appellee bumped or knocked the Inez Baker car off of the train track after the Baker car had remained there for several minutes, it seems clear to us that appellant’s Points 1, 2, 4, 5, 6 and 7 must be, and are, overruled. After all, it must be remembered that the law requires train operators, under conditions similar to those existing at the time of this accident, to keep not just a lookout, but a proper lookout. A proper lookout would have revealed the Baker car on the tracks, and the pushing and knocking of the car off the tracks by plaintiff-appellee, all of which the train operators deny having seen. The jury specifically found that the Baker car was on the track while the train was approaching, until impact with the Hoyle car. We are cited to textbook authorities, including Volume 48 Tex.Jur.2d, Railroads, §§ 282, 283; and §§ 461-463, to the effect that it is the basic duty or care in the operation of trains that a lookout should be kept by trainmen from the cab of the locomotive, when approaching a crossing, and that it is the settled law of the State that a railway company in operating its trains owes a general duty of keeping a lookout for persons as well as animals and inanimate objects on its track. The jury specifically held that the operators of the railroad company train did not keep a proper lookout prior to the collision; that immediately prior to the collision the Baker car was in a position of imminent peril until bumped off the track by plaintiff-appellee and, as we have stated, there is ample evidence in the record to show that the Baker car had been stalled on the train track for at least five minutes before the collision.

Appellant, in its third point, maintains that the trial court erred in rendering judgment for appellee because he had been found contributorily negligent in five respects, each of which was a proximate cause of the collision, and that appellee did not obtain the necessary jury findings on the essential elements of the rescue doctrine. We think this point must also be overruled. By way of review let it be said that there was ample evidence that, during the several minutes the Baker car was on the railroad track, they were not in any peril or danger because no train was in sight or hearing; but as the train approached, then Inez Baker and her eight passengers were in great and imminent peril and so frightened that they could not get out of the car and, as was testified, could see and almost feel the train upon them. Under these conditions appellee pushed or knocked the Baker vehicle off of the tracks in order to rescue them and was injured in so doing. It is in evidence that immediately after the accident, appel-lee, although grievously injured, muttered the words that he could not stand to see those little kids killed by the train. Then, too, all of the testimony and facts herein-above related applying to the clear visibility of over a mile must be kept in mind. The jury did find plaintiff-appellee guilty of some five acts of contributory negligence, but in Issues 11, 12, 13 and 47, the jury specifically found that he pushed or knocked the Baker vehicle off the railroad track prior to the collision at a time when the occupants of the Baker car were in a position of peril, and that plaintiff-appellee was acting to rescue Inez Baker and the occupants of her car when he bumped the Baker automobile off the track; and, lastly, the jury found that plaintiff-ap-pellee did not act in a rash and reckless manner on the occasion ,in question. We think the elements of the rescue doctrine were properly submitted and adequately supported by evidence of probative force. As stated in Panhandle & S. F. Ry. Co. v. Haywood, 227 S.W. 347 (Tex.Civ.App., 1921): “Where one acts to save another from imminent peril brought about by the negligence of the defendant, the rule of ordinary care is not applied to his act, but he is only precluded from recovery if he acted rashly under the circumstances.” (And cases therein cited.) It is worth noting that it is in evidence that this was a comparatively light or small train of cars, to-wit, one diesel unit and seven passenger cars. As stated by our Supreme Court in Goolsbee v. Texas & N. O. R. Co., 150 Tex. 528, 243 S.W.2d 386 (1951) :

“ * * * The doctrine of imminent peril is one which may be invoked to relieve a party of the consequences of his conduct, which otherwise would be held negligent. It is most often invoked as a defense to a charge of contributory negligence. International & G. N. R. R. Co. v. Neff, 87 Tex. 303, 28 S.W. 283; Jackson v. Galveston, H. & S. A. Ry. Co., 90 Tex. 372, 38 S.W. 745; Fort Worth & D. C. Ry. Co. v. Kimbrow, 131 Tex. 117, 112 S.W.2d 712; Foster v. Woodward, Tex.Civ.App., 134 S.W.2d 417, error refused. But it properly may be invoked as a defense to a charge of primary negligence. Dallas Ry. & Terminal Co. v. Young, Tex.Civ.App., 155 S.W.2d 414, error refused; Schroeder v. Rainboldt, 128 Tex. 269, 97 S.W.2d 679, 684 (approval of lower court’s holding permitting submission of issues on defendant’s sudden emergency.) In either instance it is invoked to lower the legal standard of care which a party must exercise to the point where conduct which otherwise might be regarded as negligent or con-tributorily negligent is not so regarded.”

See also Swift & Company v. Baldwin, Tex. Civ.App., 299 S.W.2d 157 (n. w. h.) ; Keystone-Fleming Transport Inc. v. City of Tahoka, Tex.Civ.App., 315 S.W.2d 656 (ref., n. r. e.) ; Shultz v. Dallas Power and Light Co., Tex.Civ.App., 147 S.W.2d 914 (dism., judg. cor.). This last case again points out that one undertaking to rescue another from a perilous situation created by another can recover despite his own contributory negligence; but not so if his actions be rash or reckless. Again we point out that the jury specifically found that plaintiff-appellee did not act in a rash and reckless manner on the occasion in question. Next, it must be noted that in Issues 5 and 6, the jury specifically found that J. H. Johnson, on the occasion in question, failed to keep a proper lookout, and that such was a proximate cause of the injuries to plaintiff-appellee. In Issue 11 the jury found that plaintiff-appellee pushed or knocked the vehicle operated by Inez Baker from the railroad track prior to the collision in question; and in answer to Special Issue No. 12 the jury found that Inez Baker and the occupants of her car were in a position of peril immediately prior to the time plaintiff-appellee knocked or pushed the Baker car from the railroad tracks. In summation of this point, we should like to repeat that at the moment the Inez Baker car stalled, and for some time thereafter, her car was not in a position of imminent peril because, according to the evidence, there was no train approaching on the track. The perilous position of Inez Baker and the occupants of her car was caused by the approach and negligent operation of the defendant’s train. Appellant’s third point is overruled.

In its eighth point appellant contends that appellee, at most, was entitled to recover for the property damage, if any, because the jury found him negligent in failing to alight from his automobile as soon as the motor stalled on the railroad crossing, and such was found to be a proximate cause of his personal injuries. Without reviewing the entire incident, we believe this point must also be overruled. There were four witnesses, including the appellee, who testified that the Baker car was about to be struck by the train when appellee pushed it from the track. It must be remembered, too, that the engineer maintains that he first saw plaintiff-appellee when the train was from 250 to 350 feet away and approaching at a speed of 40 miles an hour. Although it is not made an issue nor brought out in the evidence, we cannot avoid the fact that appellee was on the driver’s side of the car, going north, and that the train hit the car on the passenger side and propelled the car over and upon appellee. We think the elements of the rescue doctrine and imminent peril are equally applicable to the situation of plaintiff-appellee, plus the fact that he apparently made one or two frantic attempts to start his motor, and then jumped. It would be equally tenable to hold him negligent for jumping without trying to remove his car from the tracks, and appellant would likely have charged him with negligence in not trying to remove his car. We do not intend to be argumentative, but this plaintiff-appellee was in a position of imminent peril and fright, and we think any negligence that the jury found chargeable to him is canceled by the “rescue” doctrine. Finally, it must again be remembered and noted that in Issue 47 the jury specifically found that he did not act in a rash and reckless manner. With all this in mind, it would be a strange decision that absolved appellee of negligence in pushing the Baker car off the track and at the same time held him negligent under the same extreme and emergency circumstances for not freeing himself from his own vehicle in time. Therefore we do not find merit in appellant’s eighth point and hold that the same should be overruled.

Appellant’s ninth point charges the court with error in rendering judgment for appellee’s medical expenses because there was no finding by the jury thereon. We feel this point must be overruled. Appellant did not put on any evidence with regard to this matter, and there was a difference of opinion only between the hospital and the doctor and appellee as to how much he, the plaintiff-appellee, had spent with the doctor and the hospital. We consider this an uncontroverted matter under Rule 272, Texas Rules of Civil Procedure. The record shows that the doctor and hospital claim that he had been charged less than the amounts to which he had testified. The court granted judgment in the smallest amounts — in other words, the amounts as testified to without contradiction by the hospital and the doctor. We do not believe this situation meets the test of a controverted issue, and it amounted to nothing more than a disagreement or misunderstanding between the patient (plaintiff-appellee) and the doctor and hospital. Finally, we do not see how appellant can claim any harm here or injury, because the court awarded the lowest amount testified to. This, in our opinion, would preclude the existence of any harm by not having submitted the matter in an issue. All parties apparently agreed that plaintiff-appellee had spent at least the amount allowed by the court for hospital and doctor bills.

In summation, it seems clear that the Baker car got into this position of imminent peril due to the fact that the engineer and fireman operating appellant’s train failed to keep a proper lookout, and the plaintiff-appellee rescued the car and its occupants in the manner described. We believe that the acts of negligence found by the jury against the plaintiff-appellee are excused and canceled under the “rescue” doctrine. He was a man who acted in a sudden emergency and — according to the jury — in an effort to rescue some people, but did not perform the rescue in a rash or reckless manner; and it is our belief that there is adequate evidence to support the jury’s findings with respect thereto. We will not deal further with our disposition of Points 8 and 9.

Accordingly, therefore, appellant’s points are all overruled and the decision of the trial court is affirmed.


author: O’QUINN, Justice.

text:
    James O. GERST, Savings and Loan Commissioner of Texas, et al., Appellants, v. OAK CLIFF SAVINGS AND LOAN ASSOCIATION, Appellee.
    No. 11519.
    Court of Civil Appeals of Texas. Austin.
    Nov. 1, 1967.
    Rehearing Denied Nov. 29, 1967.

      Crawford C. Martin, Atty. Gen., George M. Cowden, 1st Asst. Atty. Gen., A. J. Carubbi, Jr., Staff Legal Asst. Atty. Gen., Sam Kelly and Robert C. Flowers, Asst. Attys. Gen., Austin Thompson, Walker, Shannon & Gracey, Fort Worth, Clark, Thomas, Harris, Denius & Winters, Austin, Wyndall R. Johnson, Fort Worth, for appellants.
    Jacobsen & Long, Joe R. Long, Austin, Turner, Rodgers, Winn, Scurlock &' Terry, James R. Rodgers, Dallas, for appellee.
   O’QUINN, Justice.

Appellee Oak Cliff Savings and Loan Association, domiciled in Dallas County, sought to establish a branch office in Fort Worth,, which was denied by order of the Savings and Loan Commissioner January 21, 1966.

Oak Cliff Savings appealed from the order of the Commissioner. The trial in district court, which began September 6, 1966, resulted in judgment for Oak Cliff Savings, entered October 3, 1966. The trial court held the order of the Commissioner “null and void and of no force and effect,” and remanded the cause to the Commissioner “for such further proceedings as may be necessary, not inconsistent with” the judgment.

Appellants are the Commissioner, defendant in district court, and six savings and loan associations, intervenors in the case. The intervening associations constitute all of the savings associations having their home offices in Tarrant County. The in-tervenors have aligned themselves in support of the Commissioner’s order of denial.

The appeal to district court was made under Section 11.12, Article 852a, of the Texas Savings and Loan Act, which became effective January 1, 1964. Acts 1963, 58th Leg., ch. 113, sec. 1, p. 269. The trial court, in remanding the application, acted pursuant to Section 11.12(6) of Article 852a. Appeal to this Court is under Section 11.12(7) of Article 852a.

We consider it settled law that the same basic standards are set for the approval or disapproval of applications to open branch offices as are set for the granting of an application for a charter. Southwestern Savings and Loan Association v. Falkner, 160 Tex. 417, 331 S.W.2d 917; Falkner v. Gibralter Savings Association, 348 S.W.2d 467, Tex.Civ.App., Austin, writ ref. n. r. e.

These cases, it is true, construed Article 881a-2, the savings and loan law repealed with enactment of the present Texas Savings and Loan Act (Article 852a, supra). Under the present statute, as under the prior legislation, no express authority is given for establishment of branch savings and loan offices. We may presume the legislature was aware of these decisions construing the savings and loan act at the time the present law was enacted. 53 Tex.Jur.2d, Statutes, sec. 183, p. 275, and cases cited.

Under Section 2.08 of Article 852a, the Commissioner, before approving a charter, must find certain facts regarding technical prerequisites and that the incorporators are of such fitness and integrity as to justify belief they will conduct an honest and efficient operation and have qualified fulltime management.

The Commissioner must also find that:

“(3) there is a public need for the proposed association and the volume of business in the community in which the proposed association will conduct its business is such as to indicate profitable operation ;
“(4) the operation of the proposed association will not unduly harm any existing association.”

Pursuant to authority provided under Article 342-114 of The Texas Banking Code of 1943, “general rules and regulations not inconsistent with the Constitution and Statutes of this State” may be promulgated for building and loan associations. The existing rules and regulations were adopted in November, 1963, and became effective January 1, 1964.

Under Section 2.4, chapter 2, of the rules and regulations, “The Commissioner shall approve an application for a branch office” upon finding, from data with the application, evidence adduced at the hearing, and from his official records, that certain specified requirements and conditions are satisfied.

Among the conditions specified are those found in subparagraphs (d) and (f) of Section 2.4. These subsections read:

“(d) the proposed operation will not unduly harm any other association operating in the vicinity of the proposed location
* * *
“(f) the proposed location of the additional office is within the same county as the principal or home office of the applying association except in cases where it appears that the proposed additional office is to be in a different county from that in which the principal or home office of the applying association is located and there is no other association, either State or Federal, adequately serving the community in which such additional office is to be located.” (Emphasis added)

After hearing the application in December, 1965, the Commissioner, in an order made January 21, 1966, denied the Oak Cliff Savings application for a branch office to be located at 3526 Bluebonnet Circle, in Fort Worth, Tarrant County. The order of the Commissioner affirmatively shows that he found all requirements and conditions, prescribed by statute and by the rules and regulations, had been satisfied, except three.

The Commissioner found that:

(1) There was “no public need for the proposed branch office” and “the volume of business in the community in which the proposed branch office would conduct its business is not such as to indicate a profitable operation * * * ”
(2) “ * * * the establishment of the proposed branch office would result in undue harm to existing associations * * . * ”
(3) “ * * * the proposed location of the additional office is not within the same county as the principal or home office or the applicant association, and the community in which such additional office is to be located is being adequately served by savings and loan facilities.”

Upon these findings against the application, the Commissioner denied the branch office.

All but the last of these negative findings by the Commissioner were under the statutory requirements in subsections (3) and (4), Section 2.08, of Article 852a. The-last finding falls under subsection (f) of Section 2.4 of the rules and regulations.

The Supreme Court, in Gerst v. Nixon, 411 S.W.2d 350 (Tex.1966), construed subsection 5(b), Section 11.12, as written in the Savings and Loan Act of 1963 (Article 852a), to provide that the Commissioner’s order must stand or fall “upon the evidence adduced and matters noticed at the Commissioner’s hearing.” (411 S.W.2d 350, 357, col. 2).

The Supreme Court observed that:

“The substantial procedural change in this rule [Gerst v. Cain, 388 S.W.2d 168, Tex.1965] by the 1963 Act was to make the record of the Commissioner’s hearing rather than evidence produced originally in court the basis from which it must be determined if the evidence conclusively required affirmative findings relating to the matters mentioned in subsections (3) and (4) of Section 2.08.”' (411 S.W.2d 350, 358, col. 2).

Inasmuch as the Commissioner made a negative finding under Section 2.4(f) of the rules and regulations and based his order at least in part on such finding, we believe the question is squarely before us as to whether subsection (f) of Section 2.4 is valid. Appellee Oak Cliff Savings has raised the issue under its counterpoints two and three.

In Gerst v. Jefferson County Savings and Loan Asso., 390 S.W.2d 318, Tex.Civ. App., Austin, writ ref. n. r. e., this Court did not find it necessary to decide whether the requirements of rules for establishment of branch offices are more lenient or more onerous than the statutory requirements. This Court did express “the opinion that if there is a conflict between the requirements of the statutes and the rules * * * then, to such extent, such rules are void and of no force or effect,” with the further observation “that the rules as read or as interpreted cannot supplant the statutes.”

The requirement of Section 2.4(f) of the rules, referred to in the savings and loan industry as the “county line rule,” is a requirement in addition to the statutory requirements enumerated in Section 2.08 of Article 852a. We believe this additional requirement if enforced would increase the burden on an applicant seeking to establish a branch office. A rule that is broader than the statute empowering the making of the rule, or seeks to extend or restrict the statute, cannot be sustained. 2 Am.Jur.2d Administrative Law, sec. 300, p. 126.

As stated in Gerst v. Jefferson County Savings and Loan Asso., supra, “The only authority needed * * * is the statute under which the rules were promulgated. [Article 342-114, Texas Banking Code of 1943]. This statute expressly limited the content of the rules to matters not inconsistent with the Constitution and statutes.” (390 S.W.2d 318, 322, col. 2).

In defense of the “county line rule,” appellants cite numerous statutes of other states containing restrictions or requirements similar to the requirement or condition found in the rule. This argument is directed to the merit or lack of merit of such laws and does not meet the question of whether an administrative rule can stand if it has no support in the statute or is in conflict with the statute. The cases cited by appellants in support of the rule pertain to construction of statutes and administrative rules. These authorities are not in point because they do not deal with the fate of a rule when it lacks statutory authority or runs counter to the law it purports to implement.

The Commissioner erred by including in his consideration the irrelevant factors injected by application of the “county line rule” found in subsection (f) of Section 2.4. The findings of the Commissioner should have been made without regard to the requirement of this rule.

We hold that subsection (f) of Section 2.4 of the rules is invalid and may not be the basis for granting or denying an application for a branch office.

It is from the record made before the Commissioner that the courts are required to determine whether the order of the Commissioner is reasonably supported by substantial evidence. Gerst v. Nixon, supra, 411 S.W.2d 350, 357, col. 2. In reviewing the record in this appeal we must determine whether the Commissioner’s order was reasonably supported by substantial evidence, exclusive of the findings under subsection (f), Section 2.4, of the rules.

The record shows that Oak Cliff Savings established a full branch operation in Arlington, in Tarrant County, in August, 1956. This application became its second effort to maintain a branch office in Tarrant County-

At the hearing before the Commissioner, in December, 1965, the association’s president, John Ingle, testified that at the time Oak Cliff Savings had 436 savings customers in the immediate area of Fort Worth surrounding the proposed new location. The savings of these 436 customers amounted to $2,376,719.74. The association also had in this community 166 loan customers with balances totaling $2,772,142.46.

Ingle testified that in all of Tarrant County, Oak Cliff Savings had 3,776 savings customers whose accounts aggregated $10,923,266.39. The association had loans with 1,280 customers in Tarrant County with balances amounting to $20,003,863.34.

With reference to these customers, Ingle testified that

“Large numbers of these account holders have been customers of the association for many years. Our entry into the Tarrant County market is nothing new. All we really do want to do is establish a physical facility which will enable us to properly serve these people in this area who prefer to do business with Oak Cliff Savings. We have no idea, of course, how many people in this area may want to do business with us. We do know who do business with us, do so at great inconvenience to themselves as our nearest full-service facility is in Arlington at the eastern edge of Tarrant County, some 24.9 miles from our proposed office. We know further that we are literally losing the opportunity to serve many savings customers because of this inconvenience factor. * * * We estimate nearly ninety percent of our new accounts are opened in person and that a large portion of the remaining ten percent open their accounts by mail only because of the distance involved. * * * We know that typical new savings customers have many questions that are best answered by direct conversation across the desk and can unqualifiedly state our service to them is much better when we have an opportunity to talk to them face to face.”

It was shown at the hearing that there are six savings and loan associations in Fort Worth, all of them with their principal or home offices in the central business district. As already pointed out, all six of these associations are intervenors in this case, aligned with the Commissioner to oppose Oak Cliff Savings’ application for a branch office. The six Fort Worth associations have eight branch offices, six of which are within the city limits. Three of these branch offices are in the “southwest quadrant” of the city in which Oak Cliff Savings seeks to establish its branch office.

The Commissioner had before him a study made of deed of trust filings in Tar-rant County during the period of nineteen months immediately prior to the hearing. It was shown that a total of 28,626 loans had been made in this period, but that savings and loan associations had made only 4,586 of these loans, or about sixteen percent of the total.

Oak Cliff Savings in this period made more loans in Tarrant County than any of the six savings associations having their home offices in Fort Worth. The Oak Cliff loans were more than nineteen percent of the 3,656 made by these seven associations.

The following table summarizes this evidence.

Association: Oak Cliff Savings Mutual Savings Fort Worth Savings Equitable Savings Tarrant Savings First Federal Western Savings Loans: . 712 . 686 . 573 . 485 . 482 . 415 . 303 Total loans 3,656

Both Oak Cliff Savings and the inter-venors relied heavily upon the testimony of •expert witnesses in presenting evidence before the Commissioner.

Witness for Oak Cliff Savings was Dr. Richard B. Johnson, chairman of the department of economics at Southern Methodist University in Dallas, who qualifed as an experienced consultant in economics, banking, and industry. Dr. Johnson was shown to have specialized in financial and other market analysis work over a period of more than twenty years.

Oak Cliff Savings indicated in its application that the association considered the “southwest quadrant” of Fort Worth the primary potential market for its proposed branch office. The area within a two-mile radius of the proposed location was regarded as its immediate savings market area.

With respect to the market area, Dr. Johnson testified that “ * * * the size of the savings and loan markets in the suburbs is not very large. Certainly not five miles; probably not less than three miles in radius, and in my judgment, only intensive for a period of only about two miles.”

It was Dr. Johnson’s testimony that since the market area for suburban locations is limited to a radius of two to three miles, these branch offices should be placed “with some frequency.” Dr. Johnson testified, “Thus, unless you place offices with some frequency in suburban areas and provide intensive office exposure, you provide less convenience and attract less savings than otherwise would occur.”

Dr. Johnson testified that this explained why the Dallas savings experience had been better than the experience of Fort Worth, as was shown at the hearing. “If you don’t provide the sufficient intensity of office exposure,” Dr. Johnson testified, “two things happen: Either they save in alternative offices outside the county or in banks, or even in other institutions than savings and loans or banks, or they don’t save. The savings habit is hard to develop, not easy to sustain, and unless you facilitate it, it dwindles away.”

The rules governing savings habits, Dr. Johnson testified, are not applicable to the loan market. It was his testimony that “there is a clear distinction between the radius of a savings market and the radius of a loan market. People who are interested in getting credit can get more mobile, can move over, wider areas, and have to make the trip only infrequently, anyway. They are not as tied to a location as a saver, not as responsive to convenience expressed in a location.”

It was on this thesis that Dr. Johnson testified to major loan market segments from the Fort Worth and Dallas metropolitan areas, using charts, tables, and other exhibits prepared by him and offered in evidence at the hearing. Dr. Johnson testified that “One can think, I believe, of an entire major segment of a metropolitan area as a loan market exposure, but one cannot think of an equivalent large territory as a savings market exposure for an office.”

Oak Cliff Savings in support of its application adhered to the theory that while the savings market area might be limited to a radius of two to three miles, the loan market area was more extensive and was a part of the over-all metropolitan growth, economy, planning, and development.

The intervenors, in opposing the application, accepted the theory that the savings market of a branch office will be confined generally to a radius of approximately two miles. The intervening associations contended, however, that the introduction of savings and loan offices from other geographical areas, having a different economy, would be unduly harmful to existing associations.

Witness for intervenors was Dr. Gene Lynch, associate professor of finance at Texas Christian University in Fort Worth. Dr. Lynch was shown to have been teaching a total of eleven years. He qualified as an experienced consultant in matters related to banking and savings and loan institutions.

Dr. Lynch testified that he had made studies and surveys of the “southwest quadrant” of Fort Worth, with respect to the savings and loan industry, and had formed opinions adverse to the application. Dr. Lynch had the opinion that no public need existed for the proposed branch office, that existing associations were adequately serving the area, and that “the proposed facility would cause undue harm” to other associations operating in the vicinity.

It was the opinion of Dr. Lynch that Fort Worth had become “a relatively static area” not able to support further savings and loan facilities. Dr. Lynch’s conclusions based on his studies were expressed in the following testimony:

“Q Now, before getting specifically into the statistical data, have you arrived at any conclusion based upon your studies concerning Fort Worth and the southwest quadrant and the Bluebonnet two mile circle?
A Yes, I have.
Q Briefly, as to Fort Worth, what in a nutshell was your conclusion in that regard?
A It’s growing very slowly. It is a relatively static area.
Q And as to the southwest quadrant and the two mile radius around Bluebonnet circle, what were your conclusions ?
A The southwest quadrant is also relatively static and growing very slowly. Of course the radius within that area is also growing slowly, except more so.
Q All right. What was your conclusion regarding the rate of residential construction whether it was increasing or declining ?
A The rate of residential construction is declining.
Q And what about the age of the area ?
A The area contains large portions of older people, and some other general characteristics of the quadrant and two mile radius are these:
Most of the housing additions are fully developed. A substantial per cent of the homes are deteriorating. The area has an older population compared to the county and the major areas of the city. There is a lack of adequate streets. The area is served by four full service savings and loan facilities in addition to downtown savings and loan offices and by seven neighborhood banks.
Q Were the areas of growth within the southwest quadrant large portions of it or were they relatively small portions and where were they located ?
A I’m sorry; your question ?
Q Whatever growth has occurred in the southwest quadrant, where have those areas been?
A The growth has occurred only at the fringes, primarily at the fringes of the southwest quadrant.
Q And are those relatively large or relatively small portions of the southwest quadrant?
A Relatively small.
Q Did you form any conclusions as to whether savings and loan associations need substantial growth in the area that they are operating in ?
A Well, I drew the conclusion that savings and loans need substantial growth and population and new housing to support loan demand. Yes.
Q Does such growth provide them with new savings customers and new loan customers ?
A Generally economic growth would provide new savings and new homes. Yes.
Q And population growth?
A Yes.
Q And you stated that this is a relatively static area?
A Yes, it is.
Q Regarding the Fort Worth economy, did you make any comparative studies of the — pardon me; have you prepared a report?
A Yes, I have.”

The “comparative studies” made by Dr. Lynch and testified to before the Commissioner compared the growth and economy of Fort Worth with Dallas and Houston, and the growth of Tarrant County with Harris, Bexar, and Dallas Counties. The substance of this testimony was that both Fort Worth as a city and Tarrant County as a county showed less growth, and a slower rate of growth, than Dallas and Houston and the counties of Harris, Bexar, and Dallas.

It was shown at the hearing before the Commissioner that the number of persons per bank during the period from 1960 to 1964 had shown comparable reductions in both Dallas County and Tarrant County.

During this same period the number of persons per savings and loan facility in Dallas County had dropped from 32,811 to 24,579. In this period in Tarrant County the number of persons per savings and loan facility had gone from 38,464 to 33,255. It was Dr. Johnson’s testimony that an increase of available savings facilities had accounted for the marked reduction of this ratio in Dallas County while the ratio had decreased much less in Tarrant County for the want of such additional facilities.

“In this single metropolitan complex,” Dr. Johnson testified, “Dallas-Fort Worth, the east end is served with greater intensity than the west end of the metropolitan area. The west end is consistently served less intensively, and, therefore, with less convenience, and, therefore, generates less savings out of its potential.”

It was Dr. Johnson’s testimony that “there will be an expanding savings potential to be tapped by financial offices in Tarrant County; that the rate of growth of savings potential in Tarrant County will be at least as great as that in Dallas County in the next five to twenty years ‡ ⅜ jjc )>

The testimony of Dr. Lynch adduced in behalf of intervenors in support of their contention that Fort Worth’s growth and the growth of the “southwest quadrant” may be characterized as “relatively static” is stated in summary by the Commissioner in his order.

The Commissioner pointed out that the “southwest quadrant” in 1960 “had a population * * * of 111,664 persons and had shown a modest growth to 1965 with an approximate population of 118,500 persons, an increase of approximately 1.2 percent per annum.”

The Commissioner continued:

“It was established that the southwest quadrant of the City of Fort Worth (including the two mile radius of Bluebonnet Circle) is growing very slow and is substantially a static area. The only areas showing growth were shown to be on the fringe of the southwest quadrant. This was reflected by several economic indicies, such as residential development, school enrollments, telephone utility connections, and postal delivery stops, showing either declines or very modest increases.”

Dr. Johnson testified that studies produced by the Texas Highway Department indicated a population increase in Tarrant County of 11.1 percent from 1960 to 1964 and an increase in Dallas County of 18.8 percent during the same years. Projection of population growth showed a growth by 1970 of 32 percent in Dallas County and 31 percent in Tarrant County. The percentage of increase in Tarrant County indicated an increase of 60,000 persons from 1960 to 1964, with a projected increase by 1970 of 185,000 persons in addition to the 60,000 persons.

Testimony regarding building permits in Tarrant County showed a rise from 3,576 living units in 1960 to 6,913 in 1964, with an additional 4,671 such units the first nine months of 1965 prior to the hearing in December. In 1960 residential building permits were valued at about $29,000,000. The value in. 1964 was $66,300,000 and $55,500,000 for the first nine months of 1965.

The labor force in Tarrant County rose from 151,849 in 1950 to 207,154 in 1960. The labor force had reached 243,300 by October, 1965, some two months before the hearing. In the fifteen-year period from 1950 to 1965, the labor force increase was accelerated in the last five years. In the first 10 years the increase was 55,300, but in the last five years the increase was 36,-100.

The median income per household for Fort Worth was $5,489 in 1960, increasing to $6,307 in 1964. Effective buying income per household in Tarrant County for 1960 was $5,406 and increased to $7,059 in 1964.

During this period savings in savings and loan associations grew at the rate of about $18,000,000 per year.

The primary market proposed to be served in Fort Worth by Oak Cliff Savings was shown to have increased in population from 117,993 in 1960 to 127,028 in 1964. Households in this area increased from 38,293 in 1960 to 46,456 in 1964.

Median income per household in the market area was shown to be higher than the median for Fort Worth as a whole. The market area also showed a greater increase in median income from 1960, when the median was $6,193, to 1964 when it reached $7,122. The increase in Fort Worth as a whole for the same period was from $5,484 to $6,307.

Dr. Lynch testified that the primary market area, sometimes referred to as the “southwest quadrant,” contained only twenty percent of the Tarrant County population, but accounted for thirty percent of the savings deposits in the Fort Worth associations from all sources, in or out of the county. It was Dr. Lynch’s opinion that the Fort Worth associations had acquired more than $64,000,000 in savings from this market area. Dr. Lynch testified that this market area showed a higher percentage of building permits issued than the city of Fort Worth from 1960 to 1963. This market area was described by Dr. Lynch as “a relatively densely populated area.” Dr. Lynch testified, “I think there are probably fewer acres taken up by rivers and tributaries of the Trinity River, perhaps by railroad tracks. I haven’t been called upon to make a determination of the relative attractiveness of the area for savings purposes in my study.”

Dr. Lynch found that postal delivery stops increased by 1,600 in the primary market area during the two years preceding the hearing, compared with an increase of 2,100 for the four years from 1959 to 1963.

Comparable sectors of Fort Worth and Dallas were examined before the Commissioner through the testimony of Dr. Johnson to demonstrate the disparity between the sectors as to the number of persons exposed to savings and loan offices. In the Fort Worth sector, related to the market area proposed to be served by Oak Cliff Savings, it was shown that there were in 1964 about 40,000 persons per savings and loan office. In Dallas a comparable area had 24,379 persons per office. Dr. Johnson testified that the Fort Worth market area would remain a good market if the ratio were reduced to 15,000 to 20,000 persons per savings and loan office.

It was shown at the hearing that the Fort Worth-Dallas area has been treated by the Texas Highway Department as a single metropolitan region for purposes of establishing the highways pattern. The major arteries of the territory are intercommuni-cations of two central business districts. Concentration of traffic between the two central business districts is placed heavily upon three major connecting routes.

The turnpike count more than doubled between the two cities from 1958 to 1965, and daily crossings of the county line at the time of the hearing were in excess of 75,000 automobiles. Eastbound cars in the turnpike count numbered 1,300,000 and westbound traffic was 1,271,000 cars, a difference of less than 30,000, during the first nine months of 1965.

Dr. Johnson testified that the interconnection between the Fort Worth and Dallas areas was most important in the aspect of financial interrelations. “Maintenance of the mobility of funds within a metropolitan area, or within the country as a whole, is very important,” Dr. Johnson testified.

It was Dr. Johnson’s testimony that there are three reasons for maintaining mobility of funds: First, to increase savings needed to supply capital for an expanding population and explosive technology; second, movement of capital to aid movement of goods and people; and third, avoiding impediments to financial mobility to help the movement of savings, which come from a wide cross section of income groups.

It was Dr. Johnson’s testimony that the area in which Oak Cliff Savings proposed to operate in Tarrant County there was “an underexposure of savings and loan offices relative to the population and income * * * where the growth prospects are so great that rather than creating too many institutions to serve the public * * * ” the region was already “in the situation of having too few * * * ” Dr. Johnson testified, “I see no problem for Tarrant County as a whole. It is underexposed in savings and loan offices as compared with Dallas, and faces a growth situation which undoubtedly will provide an expanding opportunity to recruit savings and utilize them.”

It is apparent from the record that Oak Cliff Savings and intervenors marshalled their witnesses and arranged much of their evidence to meet the issue created by the “county line rule.” The Commissioner manifestly based his order in large measure upon findings appropriate only if the requirement of the rule is something the applicant must meet. We have held that the rule is invalid and unenforceable.

On the requirements of law we consider applicable, the Commissioner found (1) no public need, (2) insufficient volume of business to indicate a profitable operation, and (3) that undue harm would result to existing associations.

The Supreme Court held in Gerst v. Nixon, supra, that the words “public need” as used in Section 2.08(3) of Article 852a, with respect to savings and loan associations, have the same meaning as “public necessity” as used in the Texas Banking Code of 1943. (411 S.W.2d 350, 358, col. 1). Public need is a substantial or obvious community need for the proposed branch office in the light .of attendant circumstances, as distinguished from a mere convenience on the one hand and an absolute or indispensable need on the other. Gerst v. Nixon, supra, citing Chimney Rock National Bank of Houston v. State Banking Board, 376 S.W.2d 595, Tex.Civ.App., Austin, no writ.

The testimony of intervenors opposing the application emphasized, by comparison with other Texas cities and other counties, that Fort Worth has not grown in population and in its economy as rapidly as Houston and Dallas, and that Tarrant County has grown at a slower pace than the counties of Bexar, Harris aand Dallas. Dr. Lynch, intervenors’ expert witness, characterized the Fort Worth growth as “relatively” static. We believe the conclusions stated by Dr. Lynch that public need was lacking, business was not sufficient for profitable operation, and undue harm would come to existing facilities were not supported by substantial evidence. There was a lack of substantial evidence to support the Commissioner’s findings to the same effect.

We believe that a substantial need for the proposed branch office was demonstrated by all the facts related to the economy of the market area, as well as by population growth, the rise in median income, and the large number of persons in the community in relation to the number of savings and loan facilities. The fact that savings deposits in Fort Worth associations increased $72,000,000 in five years preceding the hearing indicates significant growth and expansion of this industry.

It is undisputed that Oak Cliff Savings has already demonstrated its ability to compete in the Fort Worth market, and in the market area of its proposed location. There is no substantial evidence that the proposed operation will not be profitable or that the volume of business in the community is not such as to indicate success of the proposed operation.

We believe there is no substantial evidence that opening the branch office sought by Oak Cliff Savings would unduly injure existing associations by providing excessive competition. Oak Cliff Savings is already competing with existing associations in the market - sought to be served. For more than a year and a half prior to the hearing Oak Cliff Savings completed more loans in that market than any existing facility. It would appear that the existing services were something less than adequate for this to occur in a market in which such additional business could be developed.

It is obvious from the Commissioner’s order that his finding of undue injury to existing associations was based upon application of the “county line rule” to the competitive aspects of the savings and loan industry.

In his order denying the branch office, the Commissioner declared:

“Furthermore, the Commissioner finds that the proposed branch office would result in undue harm to existing associations, and this application seeks to establish a full service branch office facility in an area which is in a different county from the principal or home office of the applicant association, and the community in which such additional office is sought to be located is being adequately served by existing savings and loan facilities.”

The Commissioner found that the “county line rule” had “served a valid purpose in restraining over zealous competition.”

Upon the issue of injury to existing associations, this case is controlled by Gerst v. Cain, 388 S.W.2d 168 (Tex.1965) and Gerst v. Nixon, 411 S.W.2d 350 (Tex.1966). The lessening of opportunity for existing associations and making it more difficult for them to increase their business are not factors amounting to excessive competition, and therefore undue injury, in this field of competitive enterprise.

We hold that the Commissioner’s negative findings are not supported by substantial evidence, and that the evidence so conclusively requires affirmative findings as to make the refusal of the branch office arbitrary and capricious.

The judgment of the district court is affirmed.