author: LANGDON, Justice.

text:
    EXPANDO PRODUCTION COMPANY, Appellant, v. Dan H. MARSHALL et al., Appellees.
    No. 16755.
    Court of Civil Appeals of Texas. Fort Worth.
    Sept. 16, 1966.
    Rehearing Denied Oct. 28, 1966.

      W. M. Thacker, Jr., Jones, Fillmore, Robinson & Lambert, and Harold Jones, Wichita Falls, for appellant.
    Jimmy P. Horany and Paul O. Wylie, Archer City, for appellees.
   OPINION

LANGDON, Justice.

This case involves construction of a pooling clause contained in certain oil and gas leases. The pivotal question is whether such pooling clause permitted the enlargement of a producing unit several years after it was initially formed and long after the primary term of such leases had expired. The trial court held that the attempt to enlarge the unit was not authorized by the pooling provision of the leases and declared same to be null and void. Judgment was accordingly entered for the appellees. The pipeline purchaser (a defendant in the trial court) was directed to account to ap-pellees in accordance with their respective interests as set out in the original unit designations. Appellees were also adjudged to be entitled to receive as damages interest at the rate of 6% per annum on the amounts held in suspense by the pipeline purchaser during the time this matter has been in controversy.

We reverse the trial court and judgment is rendered that the amended unit designation filed of record on April 30, 1963, constituted a valid enlargement of the unit and that appellees are entitled to be paid for unit production in accordance with the interests which they own in the enlarged unit.

The controlling facts are undisputed. In 1947, appellees, or their predecessors in title, executed a number of separate oil and gas leases covering various town lots in Holliday, Texas, to H. V. Scholl, as lessee. It appears that Scholl acquired one of appellees’ town lot leases by assignment. Each of the leases contained the following identical pooling provision:

“Should this lease cover land which is so shaped or be in such quantity that any part of it cannot be developed under the laws and regulations of any governmental body with authority, or purported authority, over the same, the lessee or his or its assigns shall have the right as to all or any part of the land herein leased to unitize, pool and combine the leasehold estate and lessors royalty estate with other like estates in the immediate area to create unitized areas to be developed and operated as though such lands and interests were all included within the terms hereof and constitute a single lease. All productions from such unitized area shall be divided and allocated on an acreage basis to all land included in the unit. In the event any such unitized area is created by lessee, it shall within a reasonable time thereafter file with the county clerk of the county in which said land is situated, a written statement designating and describing the land and interests so unitized.”

On November 14, 1947, Scholl filed an application with the Railroad Commission for a Rule 37 permit to drill a well referred to herein as the Holliday Townsite Unit Well No. 1, to be located in the Daume Field in Archer County. The application indicated that there were 20 acres surrounding the well and the plat which was attached to the application included all of ap-pellees’ town lots as well as a number of additional lots which were not under lease to Scholl, including the 1.92 acres in dispute in this case. The Commission granted the permit and a producing well was drilled and completed. Thereafter, on March 5, 1949, Scholl filed a designation of pool in the Deed Records of Archer County, Texas, unitizing appellees’ town lot leases into a unit consisting of a total of 10.104 acres.

At the time the designation of pool was filed, it appears from the record that the Railroad Commission had adopted field rules for the Daume Field which provided for 330/660 spacing, 20 acre proration units and an allocation formula based on 50% per well and 50% acreage.

It further appears that the Railroad Commission was never notified that the acreage assigned to the Holliday Townsite Unit well contained only 10.104 acres rather than 20 acres and the well continued to receive a full allowable as if the well had 20 acres assigned to it until the amended unit designation was filed in April of 1963. By 1963, however, the Daume Field was under waterflood operations and a waterflood allowable had been assigned to the well in lieu of thát provided for under the Railroad Commission’s proration rules. Thus, during the time the well was subject to proration under the Commission’s rules, it received higher allowables than it would otherwise have been entitled to receive had the Commission been aware that only 10.104 acres were assigned to the unit.

During the latter part of 1962 (after waterflood operations had commenced in the Daume Field), Fain and McGaha, predecessors in title to appellant Expando Production Company, acquired the oil and gas leases comprising the 10.104 acre Holliday Townsite Unit. Sometime after appellants acquired the leases, in approximately January of 1963, a well known as the Fin-nell well was completed in the Town of Holliday from the same producing horizon that the Holliday Townsite Unit well was producing. The initial potential of the Finnell well was in the vicinity of 400 barrels a day and this completion stimulated leasing activity in the Town of Holliday.

On March 29, 1963, Fain and McGaha acquired leases on town lots covering 1.92 acres from appellant C. D. Shamburger Lumber Company, Inc. The town lots comprising the said 1.92 acres were actually located inside the boundaries of the Hol-liday Townsite Unit but were not included in the designation of pool filed by Scholl. Consequently, the owners of the 1.92 acres had received none of the proceeds of pro-(faction from the Holliday Townsite Unit despite the fact that such acreage had been subject to drainage and had in fact been used for allowable purposes by Scholl when he filed his proration unit plat with the Commission.

The record further shows that the 1.92 acres was entitled to a drilling permit under Railroad Commission Rule 37 and there is testimony to the effect that a well would have been drilled on the acreage if appellants had not succeeded in obtaining a lease from Shamburger. After obtaining the lease covering the town lots comprising the 1.92 acres, Fain and McGaha on April 30, 1963, filed an amended unit designation for the purpose of enlarging the original unit to include the 1.92 acres.

By letter dated August 2, 1963, Fain and McGaha notified the royalty owners that the Holliday Townsite Unit had been enlarged to include the Shamburger town lots which increased the size of the Unit from 10.104 acres to 12.024 acres. The pipeline purchaser prepared a new division order reflecting the revised interests of the royalty owners by reason of the enlargement. The letter and division order constituted the only notification to the appel-lees of the enlarged unit and they have not consented or in any way ratified or acquiesced to such enlargement.

On March 17, 1964, Fain and McGaha applied to the Railroad Commission for approval of its amended unit designation for the Holliday Townsite Unit and by letter dated March 23, 1964, the Railroad Commission notified them that the Commission records had been revised to show a total of 12.024 acres assigned to the Holliday Townsite Unit. Counsel for the appellees timely filed a protest with the Commission complaining of the change in unit designation.

By including the 1.92 acres into the Hol-liday Townsite Unit appellees’ royalty ownership in the Unit was proportionately reduced which they contend'is in violation of the pooling provision contained in their leases.

Appellees also contend and the trial court agreed that the pooling clause contained in the leases granted a limited power to pool as distinguished from a general power which could only be exercised at the time the original unit designation was filed. They say that it was not necessary for the development of any part of the leased premises to enlarge the unit and point out that the inclusion of the 1.92 acres did not result in the drilling of an additional well. Appellees also correctly state that it was not necessary to increase the size of the unit for the well to be operated under the regulations of the Commission. In order to enlarge the unit without their consent, appellees say that such enlargement could only be accomplished as a result of a necessity to comply with governmental regulations.

Appellees also point out the long lapse in time between the formation of the initial unit and the enlargement thereof, calling attention to that part of the pooling provision contained in the leases which requires the lessee to file a written statement with the County Clerk describing the land unitized “within a reasonable time” after the designation of the unit has been determined.

Appellants contend on the other hand that the enlargement of the Holliday Town-site Unit was in accordance with the terms of the pooling clause and that such action was in the best interests of the appellee royalty owners.

To support their position that appellants violated the terms of the pooling provision by the attempted enlargement, appellees rely heavily upon Grimes v. La Gloria Corp., 251 S.W.2d 755 (San Antonio Civ.App., 1952, no writ hist.), together with the recent Supreme Court case of Jones v. Killingsworth, 403 S.W.2d 325 (Texas, 1965). These cases hold that the lessee’s power to pool is confined to such authority as is provided by the lease and is not left to the uncontrolled discretion of the lessee even though he exercises good faith. In the La Gloria case, the Court held that a lessee could not exclude acreage previously committed to a unit without the consent of the lessor or without clear authority to do so under the pooling provision. For the reasons hereinafter stated we do not believe that our holding here is inconsistent with these opinions.

We construe the language of the pooling clause in appellees’ leases to mean that the lessee is authorized to unitize such acreage as is required to comply with the development and drilling pattern established by the regulatory authority, here the Railroad Commission of Texas. Field Rules for the Daume Field provide for a 20 acre development plan.

In order to develop the leases pursuant to the laws and regulations of the Railroad Commission, the lessee needs to have a total of 20 acres to assign to a well drilled in the Daume Field. The fact that a well may be legally operated on acreage smaller than called for by Railroad Commission regulation is beside the point. The Lessee was given authority to pool up to the amount of acreage provided for by the rules and regulations of the Railroad Commission governing the Daume Field. That was 20 acres.

The fact that one need consult the governing rules and regulations of the Railroad Commission to ascertain the true intention of the parties as to the construction of a pooling provision has found judicial approval by the courts of this State on more than one occasion. In the Killingsworth case, the Supreme Court construed the pooling provision there involved in relation to the applicable rules of the Railroad Commission in the Fairway Field.

If the parties who agreed to the language of the pooling provision had not intended to permit the lessee to pool an amount of acreage called for by regulations of the Railroad Commission, as appellees contend, then the pooling provision is rendered virtually meaningless. It probably would also have prevented the formation of the original unit by Scholl because it was possible even at that time to obtain permits for the drilling of wells on separately owned town lots. We find nothing in this record to establish that Scholl was required to form the original unit solely for the purpose of drilling a well. It appears that he might have been required to drill several wells if he had not filed his initial designation of pool.

It is entirely possible that under Commission Rule 37 several of appellees’ town lots which were initially unitized by Scholl and included in the original unit might have been entitled to separate drilling permits. But appellees concede that the initial unitization of the town lots was authorized in order to conform to the regulations of the Railroad Commission.

The circumstances under which the amended unit designation was filed by appellants Fain and McGaha were no different from those under which the original unit was created. The original unit contained only 10.104 acres, less than the 20 acre development pattern called for by Railroad Commission regulation. The formation of the original unit, like the later enlargement of the unit, was not done solely for the purpose of obtaining a drilling permit but was done for the purpose of developing the premises under Railroad Commission regulations which contemplated the assignment of 20 acres to each producing well.

It seems inescapable to us that the pooling provision was included in the original leases, at least in part, to prevent the separate devolpment of each of the town lots. The parties envisioned development of the leases in accordance with the development pattern established by the governing regulatory authority. Indeed such government regulation has been held to almost compel such a unitization provision. In Phillips Petroleum Company v. Peterson, 218 F.2d 926 (10th Cir., 1954), cert. denied, 349 U.S. 947, 75 S.Ct. 871, 99 L.Ed. 1273, the court declared: “Provisions in oil and gas leases for unitization have become a practical necessity in the oil and gas industry, because of governmental rules and regulations imposing strict requirements for the proper spacing of wells and the granting of production allowables on the basis of formulae predicated in whole or in part on the quantity of acreage from which the oil and gas can be efficiently recovered by one well completed in the reservoir involved.”

In this case the enlargement certainly appears to be in the best interests of both the appellants and appellees. Appellants contend that appellees will ultimately derive more proceeds from the enlarged unit than would have been the case if the unit had remained in its original size and an additional well had been drilled on the 1.92 acres. There is no doubt that the drilling of a well on the 1.92 acres would not only have been an additional expense to appellants but it would also have reduced the amount of oil that could have been recovered from the Holliday Townsite Unit well. The record shows that the drilling of such well might have reduced recovery from the Holliday Townsite Unit by as much as 50%. Recognizing this, Fain and McGaha obtained a lease on the 1.92 acres and by including the acreage into the Holliday Townsite Unit, they prevented the drilling of the additional well. There is nothing in the pooling clause that prevents the enlargement of a unit so long as such unit does not exceed the development program called for by governmental regulation. We hold that Fain and McGaha were within their contractual rights to enlarge the unit to include the 1.92 acres.

Appellees also urge that the conditions under which the pooling authority could be exercised did not exist at the time that the amended unit designation was filed. The last sentence of the pooling clause provides as follows: “In the event any such unitized area is created by lessee, it shall within a reasonable time thereafter file with the County Clerk statement designating and describing the land and interests so unitized.” The amended unit designation was filed a number of years after the designation of the original unit. The primary terms of the leases had long since expired and the leases were being held by production from the Holliday Townsite Unit well.

In Texaco, Inc. v. Lettermann, 343 S.W.2d 726, 731 (Amarillo Civ.App., 1961, writ ref., n. r. e.), it was contended that the lessee had no authority to exercise the pooling power a second time after the termination of the original unit. The first unit had been dissolved by reason of the drilling of a dry hole and part of the land was included in a subsequently formed unit where a producing well was obtained. Several years lapsed between the termination of the first unit .and the designation of the second unit. In upholding the action of the lessee, the court observed: “In determining whether or not lessees’ power to pool leases had been exhausted, the courts look to the good faith of the lessee as well as to the lease pooling clause itself. No specific language is found in the pooling clause before us which either permits or prohibits a lessee from exercising these rights a second or subsequent time. No such phrase as ‘at any time’ or ‘from time to time’ is found in the pooling clause of the appellees’ lease.”

In Tiller v. Fields, 301 S.W.2d 185 (Texarkana Civ.App., 1957, no writ history), the court was called upon to construe a pooling provision which read in part as follows: “ ‘Lessee, at its option, is hereby given the-right and power to pool or combine the-acreage covered by this lease or any portion thereof with other land, lease or leases in the immediate vicinity thereof, when in Lessee’s judgment it is necessary or advisable to do so in order properly to develop' and operate said premises in compliance with the spacing rules of the Railroad Commission of Texas or other lawful authority, or when to do so would, in the judgment of Lessee promote the conservation of the oil and gas in and under and that may be produced from said premises.’ ” It was contended that the above language was too vague to be enforced because it did not define either the time for exercising the pooling authority or the size of the unit to be formed pursuant to such authority. In rejecting this contention, the court declared: “Anticipatory provisions in leases for the commitment by the lessee of such leases to unitization, of necessity must be in general terms. Neither the lessor nor the lessee has any way of knowing at the time the lease is taken the facts with respect to which it will be necessary for the lessee to apply his power. It is not practicable for the lessee to await the ascertainment of such facts. He knows from experience that because of the possibility of many changes in ownership of the lessor’s interest as time goes on, it may be difficult to effect an agreement if the right to unitize is not included in the lease itself.”

There is no doubt but what there is a fiduciary obligation on the part of the lessee to exercise the utmost good faith toward the lessor in exercising the power granted under a pooling provision. Unitization cases in practically all jurisdictions so hold. Where, like here, the pooling is accomplished after production is obtained and after the primary term has expired (and where there is no clear indication contained in the pooling clause itself with respect to the exact timing of such unitization), we are of the opinion that the good faith exercised by the lessee becomes of paramount importance. Tiller v. Fields, supra. In this case, we are of the opinion that appellants exercised the degree of good faith required of them toward appellees and that there was no violation of the pooling provision because of the lapse in time between the formation of the original unit and the filing of the amended unit designation to enlarge the unit.

Reversed and rendered.


source: Caselaw Access Project

author: BATEMAN, Justice.

license: Public Domain

text:
    Marcien JENCKES et al., Appellants, v. MERCANTILE NATIONAL BANK AT DALLAS et al., Appellees.
    No. 16763.
    Court of Civil Appeals of Texas. Dallas.
    Sept. 23, 1966.
    Rehearing Denied Oct. 21, 1966.

      Jackson, Walker, Winstead, Cantwell & Miller and Jack Pew, Jr., Dallas, for appellants.
    W. O. Shultz, Asst. Atty. Gen., Austin, George Terry, James Kilgore, Mark Martin, Robert W. Smith and Robert L. Blumenthal, Dallas, for appellees.
   BATEMAN, Justice.

The appellants are the trustees of the Blake Brothers Liquidation Trust, assignees of all members of Blake Brothers and Company, a partnership alleged to have been the only “registered owner” of Texas Pacific Land Trust Certificate No. 390. This certificate seems to have disappeared many years ago. In a suit brought by the State of Texas against them and others, the appellants filed a cross-action against the appellees hereinafter named and others, to recover “all the proceeds, accumulations and avails of said Certificate No. 390,” and for declaratory judgment declaring them to be the true owners of such property. This cross-action was severed from the main suit, and at the conclusion of a nonjury trial thereof judgment was rendered that appellants take nothing, but without prejudice to. their right to sue again for the property if additional evidence of their ownership shall become available. The facts were stipulated and only questions of law are presented on this appeal.

Certificate No. 390, covering 100 shares of proprietary interest in the Texas Pacific Land Trust, was issued June 26, 1888 to Blake Brothers and Company, which has since that date been its only registered owner on the books of the Trust, no transfer thereof having been made on such books at any time to a known or identifiable person or persons, and no such person having established his ownership thereof to the satisfaction of the trustees of the Texas Pacific Land Trust or the custodian, or by judgment of a court of competent jurisdiction.

This is the third action appellants or their predecessors have instituted to recover this property. The first was in New York in 1952, resulting in a judgment “for the defendants, dismissing the complaint for fail-tire of proof,” but without prejudice to the filing of another suit if new evidence of their ownership is discovered. Davis v. Fraser, Sup., 121 N.Y.S.2d 643. That judgment was affirmed unanimously, but without written opinion, by the Appellate Division, 283 App.Div. 657, 127 N.Y.S.2d 838, and was also affirmed by the New York Court of Appeals in 1954 in Davis v. Fraser, 307 N.Y. 433, 121 N.E.2d 406.

The second attempt was a suit in the 101st District Court of Dallas County. The trial of that case resulted in a judgment that the appellants had failed to establish their ownership of the certificate and that they “take nothing,” but “without prejudice to their right to bring another suit for recovery of same if additional evidence of their ownership and loss of such Certificate shall become available.” That judgment was affirmed in 1958 by the Texarkana Court of Civil Appeals in Davis v. Fraser, Tex.Civ. App., 319 S.W.2d 799, wr. ref. n. r. e. That opinion quotes the entire opinion of the trial court in New York, in Davis v. Fraser, Sup., 121 N.Y.S.2d 643, 644. We refer to all of the opinions above mentioned for a more complete history of this interesting litigation. Those opinions also set forth in detail the evidence upon which it was held that ownership of the certificate had not been established.

Appellees say that the cause of action asserted in the present suit is identical with that sued on in the two previous cases, and that appellants are barred by the doctrine of res judicata and estoppel by judgment from relitigating the same issues. Appellants reply that after the decision of Davis v. Fraser, Tex.Civ.App., 319 S.W.2d 799, wr. ref. n. r. e., the Texas Legislature in 1963 enacted a statute now known as Vernon’s Ann.Civ.St., Art. 1358a, which created for them a new cause of action upon which the present suit was based and that their present suit on that statute could not be barred by judgments rendered long before that statute was enacted.

This statute specifically applies “to all distributions of cash or property, tangible or intangible, made or payable, by any corporation, joint stock company or business trust having transferable shares or certificates of beneficial interest, organized under the laws of this state or substantially all of whose capital or assets consisted of property located in this state at the time of organization, to persons registered on its books as the owners of shares or certificates * * * and including all such distributions heretofore payable which were not paid to the person registered as the owner of the shares or interest on the records of such organization at the time such distributions were payable, * * * but which are now being held in suspense by such organization or which were paid or delivered by it into an escrow account or to a trustee or custodian,” and provided that such distributions, etc. shall be payable to the person in whose name such shares or certificates are or were registered on the records of any such organization at the time such distributions are or were payable, and that such registered owner shall be presumed to be or to have been the owner of the shares or certificates so registered in his name at that time, and that “this presumption shall be rebuttable only by proof of an actual transfer having been made by such registered owner prior to that time to some known and identifiable person or persons.” It also provides that a claim by anyone other than the registered owner shall be barred unless suit is brought thereon within four years from the time that such distribution was originally payable or, as to a cause of action theretofore accrued, within one year from the effective date of the act or four years from the time the distribution was originally payable, whichever is longer.

Appellants’ six points of error raise the different aspects of the sole ultimate question : Does Art. 1358a, V.A.C.S., create for appellants a cause of action which is so different from that asserted in the two previous suits as to relieve appellants from the application of the doctrine of res judicata or estoppel by judgment? We think this question must necessarily be answered in the negative.

Appellants say these defenses are not available to appellees; their theory being thus stated in their brief:

“It is thus apparent that the Davis v. Fraser litigation is entirely different from that now before this Court. The Davis v. Fraser cases were attempts to try the title to Certificate No. 390. In the present suit, the title to Certificate No. 390 is not in issue. In the Davis v. Fraser cases, Appellants’ predecessors sought to receive distributions attributable to Certificate No. 390, upon the theory that they were the owner of Certificate No. 390. In the present case, Appellants seek such distributions, not as owners of Certificate No. 390, but as the persons entitled to such distributions under the provisions of a Texas statute. At the time of the Davis v. Fraser cases, Appellants could not pursue their remedies under such statute, because the statute was not then in existence.”

We do not agree with this theory. The burden was upon the appellants and their predecessors, in all three cases, to establish that they were the owners of the lost certificate and the accumulated profits thereof. Without proof (or a presumption) of ownership appellants could not be entitled to the distributions. Their ownership was an essential element, a sine qua non, of their cause of action in each case. Two courts of competent jurisdiction had held that they failed to prove this indispensable element. Appellants were not entitled to ask another court to reach a contrary conclusion unless they could produce new or additional evidence of their ownership. The door was not left open for a subsequent suit based upon a change in the rules of evidence, but only for a suit supported by newly discovered evidence. No such new evidence having been discovered, the two Davis-Fraser judgments stand as a complete bar to appellants’ recovery in this case. Hanrick v. Gurley, 93 Tex. 458, 479, 56 S.W. 330.

Appellants remind us that the Legislature has the power to change the common law and that no one has vested rights therein, citing Miller v. Letzerich, 121 Tex. 248, 49 S.W.2d 404, 85 A.L.R. 451; International-Great Northern R. Co. v. Reagan, 121 Tex. 233, 49 S.W.2d 414, and Louisiana Ry. & Nav. Co. v. State, Tex.Civ.App., 298 S.W. 462, affirmed, Tex.Com.App., 7 S.W.2d 71. However, this well settled rule of law has no application here. In none of the cases cited by appellants was the change in the law advanced as a means of destroying the effect of a judgment of a court, based upon the law as it was at the time of the judgment, which has been affirmed by every appellate court having jurisdiction thereof. That is the case we have here.

Much more in point is Murphy v. India Tire & Rubber Co., Tex.Civ.App., 27 S.W. 2d 1110, no wr. hist., where, after a defendant’s plea of privilege was sustained and the case transferred from Dallas County to Bexar County, the Legislature added subdivision 29a to Art. 1995, V.A.C.S. The plaintiff then dismissed the suit without prejudice and refiled in Dallas County, asserting that the suit was now maintainable in Dallas County by virtue of the new exception embodied in subdivision 29a. However, this court held that the order sustaining the plea in the first suit was res judicata and settled for all time the question of venue of any suit upon that same cause of action despite the intervening change in the law. This in our opinion is the correct rule and is applicable here.

Appellants say the Murphy case is not in point here because the Legislature, in enacting subdivision 29a, did not expressly make it retroactive, whereas Article 1358a by its terms is retroactive. This in our opinion is not a valid criticism, but it brings us to a consideration of the constitutionality of Article 1358a. Appellees contend that, as to the parties to this litigation, Art. 1358a, V.A.C.S., is unconstitutional because: (1) having as its purpose the reversal or frustration of the decision of the Texas appellate courts in Davis v. Fraser, Tex.Civ.App., 319 S.W.2d 799, wr. ref. n. r. e., it constitutes an invasion by the Legislature of the judicial powers vested in the judiciary of the state, contrary to the provisions of Art. 11, Sec. 1, of the Texas Constitution, Vernon’s Ann.St.; and (2) it is a retroactive law in violation of Art. 1, Sec. 16, of the Texas Constitution. We agree with appellees.

We are not asked to declare this statute unconstitutional generally, or as it applies to any other set of facts or as to any other parties than those in the case before us, and we do not do so. But we do hold that the application of this new law to the facts of this case, giving it the force and effect which appellants urge us to give it, would be to recognize a power in the Legislature to overrule and make nugatory a decision of a Texas Court of Civil Appeals on which our Supreme Court had refused to grant a writ of error because “no reversible error” had been shown. Our system of government does not contemplate that a party who has lost his case in the court of last resort may still appeal to the Legislature to undo what the courts have done by legislating him into a more favorable position.

In Langever v. Miller, 124 Tex. 80, 76 S.W.2d 1025, 96 A.L.R. 836, the Supreme Court, in striking down a depression-born statute denying creditors the right of execution on deficiency judgments, quoted the following from Cooley on Constitutional Limitations:

“But the legislative action cannot be made to retroact upon past controversies, and to reverse decisions which the courts, in the exercise of their undoubted authority, have made; for this would not only be the exercise of judicial power, but it would be its exercise in the most objectionable and offensive form, since the legislature would in effect sit as a court of review to which parties might appeal when dissatisfied with the rulings of the court.”

In Arnold v. City of Sherman, Tex.Civ.App., 244 S.W.2d 880, it was shown that the Supreme Court had already held, in City of Sherman v. Arnold, 148 Tex. 516, 226 S.W.2d 620, that Arnold, who had been discharged as a city fireman, could not obtain reinstatement under a civil service statute because the rules and classifications thereunder had not been published as required by the statute. The statute was subsequently amended to eliminate the necessity for publication, and Arnold brought his second suit saying the law had been changed in such manner as to give him a new cause of action, as to which the holding of the Supreme Court was no longer controlling. This court, however, held that the judgment of the Supreme Court was res judicata of all rights adjudicated therein and that the legislative amendment of the statute did not affect the vested rights conferred by that judgment. Writ of error was refused by the Supreme Court.

See also Milam County v. Bateman, 54 Tex. 153; and Ferguson v. Wilcox, 119 Tex. 280, 28 S.W.2d 526.

Article 1, Sec. 16, of the Texas Constitution prohibits the Legislature from passing retroactive laws. It is well settled, however, that a statute may be retroactive in its effect, without violating this constitutional provision if it does not interfere with or attempt to impair or destroy vested rights. McCain v. Yost, 155 Tex. 174, 284 S.W.2d 898; May v. Curry, Tex.Civ.App., 385 S.W.2d 603, wr. ref. n. r. e. The question then presents itself here as to whether Article 1358a, which is admittedly retroactive, interferes with or attempts to impair or destroy vested rights. Appellants say that it does not because the presumption of ownership provided for is rebuttable by anyone proving that he is the true owner, and the fact that the statute requires such true owner to bring his suit for that purpose within a prescribed limitation period does not impair the rights of such unknown owner because the limitation period is not unreasonable, citing Williams v. Reed, Tex.Civ.App., 160 S.W.2d 316, wr. ref. w. m.; Highland Park Ind. School Dist. v. Loring, Tex.Civ.App., 323 S.W.2d 469, no wr. hist.; Hartely v. Langdon & Co., Tex.Civ.App., 347 S.W.2d 749, no wr. hist.; and Cathey v. Weaver, Tex.Civ.App., 193 S.W. 490, affirmed 111 Tex. 515, 242 S.W. 447. We do not agree with appellants. The mere fact that the statute contains a reasonable limitation period within which the true owner may sue to establish his rights does not detract from the fact that the statute also attempts to give appellants the fruits of the certificate in question by saying a presumption of ownership exists, whereas the courts of two states had previously held that such presumption did not exist and that appellants had failed to prove themselves entitled to such fruits.

In our opinion, Art. 1358a, V.A.C.S., as applied to the facts and parties of this case, does impair the vested rights of the unknown owner or owners of the certificate in question and its fruits, which rights became vested when the courts of New York and Texas held that appellants and their predecessors had not proved that they were the owners. One of the cases relied on by appellants, National Carloading Corp. v. Phoenix-El Paso Express, Inc., 142 Tex. 141, 176 S.W.2d 564, cert. den. 322 U.S. 747, 64 S.Ct. 1156, 88 L.Ed. 1578, speaks of a “vested right” as being, among other things, “a legal exemption from the demand of another.” The Davis v. Fraser judgments gave the unknown owner or owners “a legal exemption” from the demands of appellants and their predecessors. This was a valuable, vested right which the Legislature could not, under the Texas Constitution, take away from them. The above cited cases of Langever v. Miller, supra; Arnold v. City of Sherman, supra; Milam County v Bateman, supra; and Ferguson v. Wilcox, supra, also support our holding in this respect. See also Mellinger v. City of Houston, 68 Tex. 37, 3 S.W. 249; International & G. N. R. Co. v. Edmundson, Tex.Com.App., 222 S.W. 181; Heights Hospital, Inc. v. Patterson, Tex. Civ.App., 269 S.W.2d 810, wr. ref.

Appellants also argue that the ap-pellees, having no rights which would be affected by Article 1358a, do not have the right to challenge its constitutionality. While we recognize the general rule relied on by appellants, it is our view that under the facts of this case the appellees, having been sued, were and are entitled to resist appellants’ claims and to take the position that the statute, if given the retroactive effect demanded by appellants, would conflict with the Constitution. As herein-above stated, they do not attack the law generally. Moreover, the Mercantile National Bank at Dallas, as custodian, and the guardian ad litem “for all persons interested in claiming or asserting an interest in the property in question” were certainly entitled to take any position which could be taken by those for whom they were acting, and no one could deny that the rights of such persons would be affected, if not actually destroyed, by the statute.

The State of Texas’ claimed right of escheat would likewise be affected. Therefore, we overrule appellants’ contention in this respect.

We feel that the court made a correct disposition of the case. All of appellants’ points of error are overruled, and the judgment appealed from is

Affirmed.

        . On November 27, 1959, the 101st District Court of Dallas County, Texas ordered the certificate cancelled and a new certificate issued to the appellee Mercantile National Bank at Dallas, as custodian. Other appellees in the case now before us are the State of Texas, the Texas Pacific Land Trust, and Mark Martin, guardian ad Utem for “all persons interested in claiming or asserting an interest in the property in question.”


author: CLAUDE WILLIAMS, Justice.

text:
    O. L. NELMS, Appellant, v. Frank SHOTOLA, Appellee.
    No. 16764.
    Court of Civil Appeals of Texas. Dallas.
    Oct. 7, 1966.

      Brundidge, Fountain, Elliott & Churchill and Warren C. Lyon, Dallas, for appellant.
    Nesbitt, Bentley & Walden and Clarence Bentley, Dallas, for appellee.
   CLAUDE WILLIAMS, Justice.

Frank Shotola, a licensed real estate broker, brought this action against O. L. Nelms seeking a judgment to recover commission for the sale of real estate. Dallas Title & Guaranty Company was made a party defendant by virtue of its acting as escrow agent in the real estate transaction but this defendant was dismissed on motion of plaintiff.

In his unverified petition Shotola alleged that as a real estate broker and agent for Nelms he obtained a purchaser for a tract of land owned by Nelms which supported his claim for the recovery of real estate commissions of two and one-half per cent of the total sale price, all of which being evidenced by written contract attached to the petition. The contract, a standard sales agreement, was executed by O. L. Nelms as seller, Frank A. Shotola, as agent for seller, and W. B. Dunaway as purchaser. The contract provided that purchaser was to buy the described real estate at the rate of 35 cents per square foot. It further provided that:

“Seller agrees to pay the undersigned duly authorized agent a commission of two-and-one-half per cent (2½%) of the total sale price in cash for negotiating this sale.”

As a part of the “SPECIAL CONDITIONS” of the contract it was provided:

“In addition to the above price of thirty-five cents (35^) per square foot, Purchaser agrees to pay to O. L. Nelms his cost of constructing the two buildings now located on the property, cost estimated to be approximately fifteen thousand dollars ($15)090). 27,000.00.”

The petition stated that the sales price of the land was $212,872.65 and that Sho-tola’s commission should have been $5,321.-82. He alleged that Nelms paid him the sum of $4,681.76 as part of his commission, leaving a balance due of $640.06, representing two and one-half per cent of $25,602.49. Shotola also sued for reasonable attorney's fees in the sum of $300.

Nelms filed a general denial followed by motion for summary judgment based upon the contention that there had not been a compliance with the terms of Art. 6573a, Sec. 28, Vernon’s Ann.Civ.St. of Texas, providing that an action to recover commission for the sale of real estate must be based upon a written agreement between the parties. Nelms supported his motion for summary judgment with an affidavit in which he stated that he had never entered into a written listing agreement with Shotola promising to pay him a commission.

Shotola filed his motion for summary judgment, based on the pleadings and his attached affidavit in which he stated that Nelms signed a written agreement, attached to plaintiff’s petition and being a sales contract providing for the payment of real estate commissions.

By First Amended Original Answer Nelms alleged that pursuant to the “SPECIAL CONDITIONS” referred to above in the sales contract it was not the intent of the parties that Shotola would be paid a commission relating to the improvements situated on the real estate but was to be paid only for a sale of the real estate.

The trial court overruled the motion for summary judgment filed by Nelms and sustained the motion for summary judgment of Shotola. Judgment was rendered in favor of Shotola against Nelms in the sum of $640.06 representing commissions due under the contract and also the sum of $200 as reasonable attorney’s fees incurred, making a total judgment of $840.06. From that judgment Nelms appeals.

By his first point of error appellant contends that the trial court erred in refusing to sustain his motion for summary judgment because the record is undisputed that prior to the execution of the sales contract relied upon by appellee the parties had entered into oral negotiations and that such oral agreement was insufficient, as a matter of law, to comply with Art. 6573a, Sec. 28, V.A.C.S. This article provides:

“No action shall be brought in any court in this State for the recovery of any commission for the sale or purchase of real estate unless the promise or agreement upon which action shall be brought, or some memorandum thereof, shall be in writing and signed by the party to be charged therewith or by some person by him thereunder lawfully authorized.”

The substance of appellant’s contention is that the statute requires a written contract listing the real estate for sale with the broker and that a subsequent written contract, even though specific in its terms relating to the payment of commissions, is not sufficient. We cannot agree with appellant. The contract of sale is not denied by appellant. It is explicit in its terms relating to the payment of a two and one-half per cent commission to Shotola. While appellant makes a statement in his brief that there was a prior oral agreement between Nelms and Shotola, we find no evidence in the record to support such statement. Appellant does not plead an oral agreement nor is there any statement in appellant’s affidavit which would support the statement relating to prior oral agreement. The only agreement we find in the record is the written sales contract duly executed by the parties and acknowledged by appellant to be valid in that he has paid appellee a substantial part of the commissions provided for therein. Appellant’s only contest is to the payment of the remaining portion of the sales commission referred to in the second part of the contract.

We think appellant’s contention has been completely answered by the Fort Worth Court of Civil Appeals in McConnell v. Columbia Co., Tex.Civ.App., 326 S.W.2d 20, wr. ref. n. r., e., which involved a similar contention. The court, in overruling the point, said:

“The writing required by Sec. 28 [Art. 6573a., V.A.C.S.] is sufficient so long as the entire contract may be established therefrom even though it was made subsequent to an oral agreement. Air Conditioning, Inc. v. Harrison-Wilson-Pearson, 151 Tex. 635, 253 S.W.2d 422. The agreement, however, must state the name of the broker to whom the commission is to be paid. Watson v. Brazelton, Tex.Civ.App., 176 S.W.2d 216. It must promise that a definite commission will be paid .or must refer to a written com-missio'n schedule. Buratti & Montandon v. Tennant, supra. It must be signed by the person to be charged with the commission, and it must identify or provide a means of identifying the property intended to be conveyed. Pickett v. Bishop, 148 Tex. 207, 223 S.W.2d 222; Tidwell v. Cheshier, 153 Tex. 194, 265 S.W.2d 568. The writing either in itself, or by reference to some other existing writing, must identify with reasonable certainty the land to be conveyed. Wilson v. Fisher, 144 Tex. 53, 188 S.W.2d 150.”

The same situation was presented to the Waco Court of Civil Appeals in Bridwell v. Sandefur, Tex.Civ.App., 341 S.W.2d 710, wr. dism., in which the court said:

“As we understand appellant’s position, it is to the effect that when the plaintiffs began their work of trying to find a purchaser for seller’s property, they were doing so under the terms of an oral contract, and that by reason thereof they had not complied with the foregoing statute here cited. [Art. 6573a, Sec. 28, V.A. C.S.] We think there is no merit in this contention because the record is without dispute that the plaintiffs were duly licensed real estate agents, and that when they were ready to bring the seller and the purchaser together, they provided in the contract of sale that the seller was to pay them a commission of 5%. We think that agreement written into the contract of purchase and sale, is sufficient, and complies with the provisions of the statute.”

In our opinion the contract of sale in this case is sufficient in every detail to meet the requirements of the statute under consideration and for that reason the trial court correctly overruled Nelms’ motion for summary judgment.

By his second point of error appellant complains of the action of the trial court in granting judgment against him in the sum of $640.06 for the reason that the amount of such judgment is not supported by the record. Appellant admits that he paid appellee commissions totaling $4,681.76 which, he contends, represents two and a half per cent of the sales price of the unimproved land sold. The amount of the judgment, $640.06, was apparently based upon two and one-half per cent of the sum of $25,602.49 which appellant contends was the price of the improvements situated on the property in question. That part of the contract relating to commissions for the sale of the improvements on the premises is found in the “SPECIAL CONDITIONS” provision which provides:

“In addition to the above price of thirty-five cents per square foot, purchaser agrees to pay to O. L. Nelms his cost of construction of the two buildings now located on the property, cost estimated to be approximately Fifteen Thousand and no/100 ($15/DQ9iQ0) Dollars. $27,000.00.”

Thus it is apparent that the only two figures mentioned in the contract are the sum of $15,000 and $27,000. There is nothing in the affidavit in support of the summary judgment which would reveal any light on the question as to how the amount of $25,602.49 has been determined. Such amount is not mentioned in the contract itself. We therefore find no basis in this record for the amount of the court’s judgment awarded appellee. Hardin et al. v. Eubank, et al., Tex.Civ.App., 245 S.W.2d 554. Appellant’s second point is sustained.

The only point in controversy between the parties relating to the amount of commissions to be paid to Shotola is whether he was to be paid the two and a half per cent of the amount of the improvements on the property, whether the same be $15,000 or $27,000, or “cost estimated to be approximately” such amount. Therefore, it is obvious from the face of this record that an issue of fact is presented as to the determination of the actual cost of such improvements. We think that when the contract is construed as a whole it is unambiguous and provides that appellee is to receive a two and one-half per cent commission on the total sale price of the property. However, assuming such to be the case, it must be borne in mind that this is a summary judgment action and that any issue of fact presented would preclude the granting of such summary judgment. Any doubt as to the existence of an issue of fact must be resolved in favor of appellant. Since there are no affidavits or other extrinsic evidence which would establish, as a matter of law, the amounts of such improvements from which the two and one-half per cent commission could be computed, an issue of fact is presented and therefore the trial court was in error in granting summary judgment. Appellant’s third point is sustained.

By his fourth and final point appellant argues that the court erred as a matter of law in granting summary judgment for attorney’s fees since there was no evidence to support such award. The trial court rendered judgment for $200 attorney’s fees. No affidavits or other extrinsic evidence was presented in this record to support such finding. This being a summary judgment proceeding we must sustain appellant’s point. The question was definitely settled by our Supreme Court in Himes v. American Home Fence Co., 379 S.W.2d 290, in which the court said:

“It appears however, that the plaintiffs were awarded attorney’s fees of $575.00 in addition to the amount of the account which is the basis of their suit. Aside from the unverified allegations of the petition regarding the claim for attorney’s fees, the only ‘showing’ made with respect to such claim is the affidavit of one plaintiff that demands had been made upon defendant for payment of the account, that more than thirty days had expired between the date of demand and the filing of the petition, that the plaintiffs had employed attorneys and agreed to pay them a fee of $575.00, and that ‘insofar as this Plaintiff is concerned, such amount is a fair and reasonable amount.’ This does not conclusively establish for purposes of the summary judgment that the amount which the plaintiffs agreed to pay their attorneys is reasonable. The affidavit fails to show that the affiant is qualified to express an opinion on such matters, and he did not even purport to say that the $575.00 is, in fact, reasonable under the circumstances. Cases dealing with the fixing of attorney’s fees by the trial judge when acting as the trier of fact have no application to a summary judgment proceeding.”

The judgment of the trial court is reversed and remanded.

Reversed and remanded.


author: McDONALD, Chief Justice.

text:
    Mrs. Veda WILBURN et al., Appellants, v. K. W. MARTIN LUMBER COMPANY et al., Appellees.
    No. 4497.
    Court of Civil Appeals of Texas. Waco.
    Sept. 29, 1966.
    Rehearing Denied Oct. 27, 1966.

      Harold A. Ellard, Harold B. Stone, Dallas, for appellants.
    Brown, Day & Crowley, Ft. Worth, for appellees.
   OPINION

McDONALD, Chief Justice.

This is an appeal by plaintiffs from an instructed verdict and judgment for defendants in a truck-tractor collision case.

Plaintiffs Wilburn, et al., surviving wife and children of Burns Wilburn, deceased, sued defendant Lumber Company and its driver, for injuries and resulting death of deceased, which plaintiffs alleged occurred when the farm tractor deceased was riding on Highway 24 was struck from the rear by defendants’ truck.

Trial was to a jury. After plaintiffs rested, defendants moved for instructed verdict, which motion was granted. The trial court thereafter rendered judgment for defendants.

Plaintiffs appeal on 10 points, asserting:

1)The trial court erred in granting defendants’ motion for instructed verdict because there is probative evidence of the following items, which were negligence, proximately causing the collision:
A) That defendant failed to keep a proper lookout.
B) That defendant failed to turn to the right.
C) That defendant failed to timely apply its brakes.
D) That defendant was traveling at excessive speed.
E) That defendant was following too closely.
F) That defendant failed to overtake deceased’s vehicle to his left.
2) That discovered peril was raised by the evidence.
3) That the trial court erred in not granting a new trial on newly discovered evidence.

Three witnesses testified as to the collision : Deputy Kunkle and Patrolman Reed, both of whom arrived on the scene after the accident, and Bullard, driver of defendant’s truck.

Bullard testified he was driving east on Highway 24 at 45 m. p. h. and a quarter of a mile ahead saw a farm tractor driving east on the right shoulder of the road; that 30 or 40 feet before he got to the tractor the man on the tractor made a sharp left-hand turn, “at which time I slammed on my brakes and turned hard to the left and sounded my horn.” Bullard testified the truck jackknifed and hit the tractor. Deputy Kunkle testified the right door and part of right fender of the truck were damaged and there were no marks on the front of the truck. Kunkle testified the skid marks made by defendant’s truck from the beginning to the point of impact were approximately 78 feet; and witness Reed testified they were approximately 99 feet.

Driver Bullard was looking, and saw deceased driving on the right shoulder a quarter mile away. There was nothing to indicate deceased would get in Bullard’s lane of traffic until deceased made the sharp turn to the left.

The evidence is that Bullard kept a proper lookout; applied his brakes as quickly as danger was manifest; was not traveling at excessive speed; was not following too closely (deceased was traveling on the right shoulder); and made every effort to avoid the collision, including turning to the left.

At 40 miles per hour, one travels at 60 feet per second; and at 45 miles per hour one travels 66 feet per second. Viewing the evidence most favorably to plaintiffs, this placed deceased some 99 feet ahead of. Bullard when he applied his brake; and gave Bullard approximately U/2 seconds to avoid the collision. Under such circumstances we think the evidence is not sufficient to raise the issue of discovered peril, or for Bullard to have averted the collision by a turn to the right. See Welch v. Ada Oil Co., CCA, (nre) 302 S.W.2d 175; Herrin Pet. Trnsp. Co. v. Proctor, 161 Tex. 222, 338 S.W.2d 422; Texas & N. O. Ry. v. Hart, 163 Tex. 450, 356 S.W.2d 901. In the Hart case, supra, the court holds that an elapsed time of “two and a fraction seconds” too short to raise the issue of discovered peril. See also: Ham v. McDonald, CCA (nre), 364 S.W.2d 752; Cox v. City of Amarillo, CCA (nre) 391 S.W.2d 494.

Plaintiffs moved for a new trial on the grounds of newly discovered evidence, asserting that a witness Hartline, had been found who saw the accident, and who would testify that defendant was traveling 55 to 60 miles per hour. The evidence on motion for new trial has not been brought forward by Statement of Facts or by Bill of Exception, and we cannot say the trial court abused his discretion in not granting same. New Amsterdam Cas. Co. v. Jordan, Sup. Ct., 359 S.W.2d 864.

All of plaintiffs’ points and contentions are overruled.

Affirmed.


author: CLAYTON, Justice.

text:
    LIBERTY MUTUAL INSURANCE COMPANY, Appellant, v. Guadalupe MARTINEZ, Appellee.
    No. 5795.
    Court of Civil Appeals of Texas. El Paso.
    July 27, 1966.
    Rehearing Denied Oct. 19, 1966.

      Emil C. Rassman, John E. Gunter, Midland, for appellant.
    John P. Dennison, Pecos, for appellee.
   OPINION

CLAYTON, Justice.

Appeal from a judgment of the District Court of Pecos County, Texas. Plaintiff below, appellee here, Guadalupe Martinez, was injured by an automobile driven by one Lee M. Weatherby. Weatherby and Martinez were on the way to a standpipe on the farm of Mrs. Ivie (Ivy?) Weatherby, mother of Lee M. Weatherby, for whom Martinez also worked, to make some repairs, but had not reached the standpipe. Lee M. Weatherby was the owner of policies of insurance with appellant, Liberty Mutual Insurance Company, and he notified one Ar-ner, who was the agent of appellant, of the accident. Arner was advised by the company’s supervisor that the company had a voluntary workman’s compensation policy for Weatherby. Arner assumed that premiums had been paid for such coverage. A meeting was held in the office of Mr. Dennison, attorney for Martinez, with Martinez, his attorney, Mr. Weatherby, Mr. Arner and the attorney’s secretary, who later acted as notary public, present. Mr. Arner stated that Weatherby had “plenty” of coverage and explained the voluntary workman’s compensation policy and that the company wanted an agreement and release from Martinez on a voluntary workman’s compensation form which would grant Martinez compensation in return for a release of the employer (Weatherby) and the insurer from all claims, demands or causes of action by reason of the accident. This was translated to Martinez by Weatherby, and Dennison advised Martinez to agree to the same. At a later date, Martinez and his attorney signed such agreement and release, and Arner signed the same as agent for appellant company, with Mr. Dennison’s secretary taking Martinez’ acknowledgment, a copy being sent to appellant’s home office. It was subsequently discovered by appellant that no such coverage existed and no premiums had been paid, and appellant refused to comply with the agreement. Martinez then brought this suit for specific performance. The trial court ordered specific performance and the insurance company brought this appeal.

The trial court found that the agreement and release were not the result of mutual mistakes as to any material fact by the parties thereto, and this finding is the basis of appellant’s first point of error. The court found, and the record supports such finding, that neither Martinez nor his attorney had any knowledge of the insur-anee contracts that existed between Lee M. Weatherby and the appellant, nor were either of them furnished copies of such policies prior to the time the agreement and release was executed and delivered, but they relied entirely upon the representations of the appellant’s authorized agent that there was ample insurance coverage, as these representations were translated to appellee, who did not understand English. Therefore, texts and authorities cited by appellant as to the effect of mutual mistake are not applicable here. Point of Error No. 1 is therefore overruled.

The appellant's second point of error attacks the court’s finding that there were no equitable grounds of relief for appellant under the agreement and release, and ordering specific performance. Appellant had pleaded, alternatively, that the written agreement in question was the result of a unilateral mistake on the part of appellant that it had received premiums from appel-lee’s employer, Lee M. Weatherby, for voluntary compensation coverage, when it had not received such premiums and therefore was not the insurer, and no such coverage existed and no consideration therefor had been paid, that appellee and his employer knew of such mistake but remained silent when they had a duty to inform appellant that no premiums had been paid for such coverage. The record seems clear that ap-pellee knew nothing of such matters, and therefore had no such duty. From the record, it seems doubtful if Weatherby had such knowledge because Arner testified that from his conversation with Weatherby, “I feel like he thought he had coverage” and “I feel like he expected this to be covered”. But even if Weatherby had knowledge of the absence of premium payments, we do not see how this is attributable to appellee, when Weatherby was not a party to this action and did not even sign as a witness to the agreement and release. Furthermore, the agreement and release prepared by Arner recites that appellee was injured “while in the employ of Lee M. Weatherby”, whereas Weatherby testified at the trial that at the time of the injury, the appellant was in his mother’s employment.

With reference to unilateral mistakes, 13 Tex.Jur.2d 480, § 256, recites:

“As a general rule, to avoid a contract for a mistake of fact, the mistake relied on must be mutual; a mistake by only one party to the agreement, where it is not induced by the acts of the other party, will usually not constitute grounds for relief.”

There are certain exceptions to this general rule, which we deem inapplicable here. Furthermore, the same text continues, on page 482, § 258:

“To warrant relief in equity on the ground of mistake, the mistake made must ordinarily not be due to negligence on the part of the petitioner. In other words, if a mistake has resulted from a party’s own lack of proper care, indifference, or neglect, relief as a general rule will not be available.”

Appellant had before it, in its files, and before the agreement and release was executed, the information now relied on to avoid its contract, but from its own lack of proper care, indifference or neglect, failed to come forward with it until after its agent had signed the agreement, and we believe it is not now entitled to avoid the obligations of the agreement. The second point of error is overruled.

In the trial court’s third conclusion of law, the court recited: “The agreement and release in question is a binding contract and is supported by a sufficient consideration, to-wit: the unconditional release of his (Martinez’) claim”. This finding is attacked by appellant in its third point of error. The accident occurred on March 16, 1964 and the release was executed on April 7, 1964, in which Martinez, “in consideration of the undertakings of the insurer and the payments to be made and benefits to be provided as hereinbefore set forth” forever released Lee M. Weatherby and the insurer of and from all causes of action, rights, remedies, claims, suits or judgments Martinez then had or thereafter might have by reason of the occurrence. In 13 Tex.Jur.2d 189, § 53, it is stated:

“Forbearance to exercise a legal right, or outright surrender of a legal right that one is not bound to surrender, is, as a general rule, a sufficient consideration for a contract or promise.”

And, as stated in Cottingham v. Harrison, 89 S.W.2d 255, 257 (Tex.Civ.App., 1935, err. dism.), “Where a contract consists of mutual promises and the promises are not illegal, there can be no question of a want of consideration.” Here again, Martinez had no knowledge of the insurance coverage of Weatherby, or any possibility of liability on the latter’s part for negligence, if any, in connection with his injuries, and his unconditional release of Weatherby and the appellant seems to bring this matter under the general rule set out above and provide sufficient consideration for the agreement to be binding on appellant. Appellant’s third point of error is overruled.

Finding no error herein, the judgment of the trial court is affirmed.


text:
    M. C. WINTERS, INC., Appellant, v. Jack W. LAWLESS et ux., Appellees.
    No. 16759.
    Court of Civil Appeals of Texas. Dallas.
    July 8, 1966.
    Rehearing Denied Oct. 7, 1966.

      Moursund & Ferguson, Johnson City, for appellant.
    Walding, Almaguer & Breeding and Jack H. Walding, Dallas, .for appellees.
   CLAUDE WILLIAMS, Justice.

Appeal from an order overruling a plea of privilege. Jack W. Lawless and wife, Laura E. Lawless, brought this action on October 6, 1965 in a district court of Dallas County, Texas against M. C. Winters, Inc., a Texas corporation, and Bob Helm, of Dallas County, Texas, alleging that defendants had committed a trespass upon lands in Dallas County owned by them and seeking damages in the sum of $58,350. On October 19, 1965 M. C. Winters, Inc. filed its plea of privilege to be sued in Blanco County, Texas. Both defendants then filed original answers, subject to the plea of privilege of the corporation. On October 26, 1965 plaintiffs filed their controverting plea in opposition to the plea of privilege filed by the corporate defendant. Such instrument was acknowledged in statutory form by both plaintiffs. Thereafter on November 19, 1965 M. C. Winters, Inc. filed its special exceptions directed to the controverting plea on the ground that such plea had not been verified, as required by law, and was therefore of no force and effect. The corporate defendant prayed that the court immediately transfer the cause against it to Blanco County. On the same date, November 19, 1965, plaintiffs filed their motion requesting leave of the court to amend their controverting plea to include a verifying affidavit. On the same date the court granted the motion to amend. On November 20, 1965 plaintiffs filed their amended controverting plea, being the same as their original plea with the exception of affidavits by both plaintiffs in which they verified the facts contained in such plea as being true and correct. On November 27, 1965 M. C. Winters, Inc. filed its motion to strike the amended controverting affidavit on the grounds that the alleged instrument was filed more than ten days after the filing of the plea of privilege and was therefore a nullity. The record does not disclose that this motion was ever presented to the court or acted upon.

On January 21, 1966 the court overruled the plea of privilege and M. C. Winters, Inc. brings this appeal.

By its sole point on appeal appellant contends that because appellees’ original controverting plea was not verified it was completely void and not being amended to supply the verification within the time allowed by law for filing such controverting plea appellant became entitled to have the cause transferred to the county of its residence based upon its plea of privilege. It also contends that ther' subsequent attempt to amend and verify the original controverting plea was ineffectual absent allegation and proof of good cause for not filing the controverting plea within the ten-day period. We find appellant’s contentions to be lacking in merit and affirm the trial court’s judgment.

The facts, as related above, are undisputed. The question for determination here is one of law. May a controverting plea filed within ten days after the filing of the plea of privilege, as provided by Rule 86, Vernon’s Texas Rules of Civil Procedure, be amended by express order of the court following such ten-day period, to correct and supply a verification omitted from the original controverting plea?

Appellant relies upon Rule 86, T.R.C.P., which provides that a party desiring to controvert the plea of privilege shall, within ten days, file a controverting plea under oath setting out specifically the grounds relied upon to confer venue of such cause on the court where the cause is pending. Appellant also cites Rule 5, T.R.C.P., which provides that for an act to be done within a specified time, the court may upon “motion permit the act to be done after the expiration of the specified period where good cause is shown for the failure to act.” It contends that since appellees admittedly did not file a verified controverting plea within the original ten-day period that the court was without power to extend the time for filing an amended plea, duly verified, without a showing of good cause. Appellant points to such cases as Brashears v. Strawn Nat’l Bank, Tex.Civ.App., 57 S.W.2d 177 (n. w. h.); Continental Fire & Casualty Ins. Corp. v. Whitlock, Tex.Civ.App., 210 S.W.2d 261 (n. h. w.); Lopez v. Cantu, Tex.Civ.App., 130 S.W.2d 345 (n. w. h.); and Eastland v. Whitman, Tex.Civ.App., 318 S.W.2d 447 (n. w. h), as holding that unless an affidavit is properly sworn to it becomes a mere purported affidavit which has no effect and is fatally defective so that the court would not have authority to allow the same to be amended. We have carefully considered each of the cases cited by appellant and find the same to be distinguishable and, in our opinion, inapplicable to the present case. We think that the case should be determined upon the basis of a liberal construction of the rules relating to amendment of pleadings generally.

Rule 63, T.R.C.P. provides that parties may amend their pleadings as long as such action does not operate as a surprise to the opposite party. It has been repeatedly said by our courts that this right granted by Rule 63 is mandatory or a matter of right. Before a pleading can be dismissed for want of form or other defectiveness the party affected must always have an opportunity to amend. Harold v. Houston Yacht Club, Tex.Civ.App., 380 S.W.2d 184 (n. w. h); 46 Tex.Jur.2d § 205, p. 21.

It is obvious to us from a reading of the original controverting plea filed by appel-lees that it was their express purpose and desire to carry out the express terms and provisions of the rule but for some reason not disclosed the form used by the officer was that of acknowledgment rather than affidavit. The amendment specifically allowed by order of the court did nothing more than to supply the correct form of affidavit for that of the incorrect form of acknowledgment. This is not the case of a party completely ignoring the provisions of the rule or not filing a controverting affidavit at all within the prescribed time. Nor is it a case where appellant has been harmed by the proceedings since it admittedly had received a copy of the controverting plea in due time and was aware of the contents thereof. We think that the situation presents the case of a defective instrument which is susceptible to being amended by order of the court without doing harm to the adverse party.

Rule 1, T.R.C.P. succinctly states that the objectives of our rules of civil procedure are to obtain a just, fair, equitable and impartial adjudication of the rights of litigants and that to the end that this objective may be attained the rules of civil procedure shall be given a liberal construction.

In Farmer v. Cassity, Tex.Civ.App., 252 S.W.2d 788, 791 (n. w. h.), the affidavit to the controverting plea was devoid of a jurat and signature of the officer administering the oath. The question raised was whether the controverting plea was an absolute nullity because of this defect. The court said:

“We hold that it was not. * * * We agree that the jurat and the officer’s signature should have been appended to the oath, but the defect was amendable. [Citing cases.] This being so the controverting plea could not be a nullity.”

Appellant cites Continental Fire & Casualty Ins. Corp. v. Whitlock, Tex.Civ.App., 210 S.W.2d 261 (n. w. h.), which originally held that plaintiff's unsworn controverting plea was fatally defective and reversed and remanded the judgment. However, an examination of the case reveals that the matter was tried on its merits and again reversed and remanded, pending a final and ultimate judgment on defendant’s plea of privilege. Continental Fire & Casualty Ins. Corp. v. Whitlock, Tex.Civ.App., 213 S.W.2d 761, 762 (n. w. h.). The trial court allowed plaintiff to amend its controverting plea and defendant again appealed. In Continental Fire & Casualty Ins. Corp. v. Whitlock, Tex.Civ.App., 215 S.W.2d 657 (n. w. h.), the same case upon which appellant relies, the court expressly recognizes the right to amend the controverting plea, saying:

“It has many times been held that a plea controverting a plea of privilege, although defective, is amendable under the same rules as other pleadings and that, when it is amended, the amendment relates back to, and supersedes, the original controverting plea.”

It is significant to note that in the last cited case the controverting plea was not filed for more than eight months after appellant filed its plea of privilege.

In Fester v. Locke and wife, Tex.Civ.App., 285 S.W.2d 239 (n. w. h.), the court said:

“With permission of the court a plea of privilege or controverting affidavit to such a plea may be amended like all other pleadings, and even though the original plea filed be fatally defective, if it constitutes an effort to file a plea of privilege under our practice it may be amended on the same conditions and to the same extent as other pleas.”

In Carlton v. Houston Agricultural Credit Corp., Tex.Civ.App., 376 S.W.2d 363, the controverting plea lacked the essential fact of verification and was later amended. The court approved this action, saying:

“We believe that the controverting affidavit could be and was properly amended and the court was justified in considering such amended affidavit and also properly overruled the plea of privilege.”

This court, in Staley v. Western Steel Wire & Pipe Co., Tex.Civ.App., 355 S.W.2d 565, writing on the same subject, held that a defective plea of privilege may be amended.

In Leonard v. Maxwell, Tex.Civ.App., 356 S.W.2d 335, a very similar situation was presented. Following the filing of a plea of privilege the defendants filed their controverting plea but the same was not verified. Following a motion to strike the controverting plea because of its lack of verification the court permitted defendants to file their first amended controverting plea in which the defect was corrected. The Court of Civil Appeals at Austin, relying upon the last appeal of Continental Fire & Casualty Ins. Corp. v. Whitlock, supra, held that it was proper to allow the amendment to the defective controverting plea. The case reached the Supreme Court. In Leonard v. Maxwell, Tex. Sup., 365 S.W.2d 340, the majority of the court ruled that the controverting affidavit itself did not meet the requirements of the law and therefore reversed the case. In doing so the majority did not comment upon nor decide the question relating to the amendment of the defective plea. However, Justice Norvell in speaking for a minority of the court, in a dissenting opinion, at page 347, said:

“In the present case the Court of Civil Appeals has held that an unsworn plea may be amended and that the pleas subsequently filed were in effect amendments to the controverting plea filed within the ten-day period prescribed by the rules. The unsworn plea was not regarded as a nullity and the amendments thereto were held to be effective.
“This Court is now seemingly in accord with the liberal view expressed by the Court of Civil Appeals that an unsworn plea is not a nullity but subject to amendment.
"While I do not believe the Brashears case can be reconciled with the holding of the majority of the Court of Civil Appeals in this case, I would concur in a holding that any controverting plea, no matter how defective and whether sworn to or not, is subject to amendment so long as it may be ascertained from the wording of the plea that the plaintiff is asserting a right to maintain the suit where the same had been filed.”

In Brashears v. Strawn Nat’l Bank, Tex. Civ.App., 57 S.W.2d 177 (n. w. h.), chiefly relied upon by appellant, it is to be observed that the controverting affidavit was not timely filed and the court, by way of dictum, stated that even if the controverting plea had been timely filed it was not subject to amendment. In Lopez v. Cantu, Tex.Civ.App., 130 S.W.2d 345 and Eastland v. Whitman, Tex.Civ.App., 318 S.W.2d 447, both relied upon by appellant, we find that there was no attempt to amend the controverting plea in either case, as was done in the instant case.

We believe that the trial court in this case was entirely justified in permitting the amendment to the original controverting plea to supply the omitted form of affidavit. When such was done it had the effect of relating back to the original filing and did not constitute an effort to extend the time of filing as contemplated by Rule 5, T.R.C.P.

We have examined the statement of facts in this case and find that appellees introduced ample evidence of a trespass committed upon their lands in Dallas County which would clearly bring the case within an exception to the venue statute.

Appellant’s point of error is overruled and the judgment of the trial court is affirmed.

Affirmed.


author: DIXON, Chief Justice.

text:
    Roger COLEMAN, Relator, v. Honorable Charles E. LONG, Jr., et al., Respondents.
    No. 16866.
    Court of Civil Appeals of Texas. Dallas.
    Oct. 7, 1966.

      Fritz, Vinson & Turley, Windle Turley, Dallas, for relator. ■
    Henry Wade, Dist. Atty., John J. Orvis, Asst. Dist. Atty., and Burt Berry, Dallas, for respondents.
   DIXON, Chief Justice.

Relator Roger Coleman seeks writs of mandamus directed to Respondents Honorable Charles E. Long, Jr., District Judge; Honorable Bill Shaw, District Clerk, Dallas County, Texas; and Mrs. Edith Davis, Official Court Reporter of the 134th Judicial District Court, directing Respondents to sustain and affirm Relator’s affidavit of inability to pay costs of appeal filed pursuant to Rule 355, Vernon’s Texas Rules of Civil Procedure, and to prepare and make available to Relator a Transcript and Statement of Facts.

Relator is plaintiff in a suit styled Coleman v. United Finance & Thrift Corporation of Dallas, Inc., in which he sued for usurious interest and unreasonable collection efforts. Judgment was rendered in Relator’s favor as to usurious interest, but in favor of the defendant on Relator’s claim for damages resulting from unreasonable collection efforts. Relator gave notice of appeal.

Following the overruling of his motion for new trial, Relator on May 14, 1966 filed his affidavit of inability to pay costs of appeal. Notice of the filing of such affidavit and a copy thereof was mailed on the previous day to the attorney of the defendant United Finance. There is no issue as to the receipt of notice by the defendant. No contest of Relator’s affidavit was filed within ten days following receipt of the notice.

At the time of filing his affidavit Relator, .in anticipation of a possible contest, filed a request with the trial court for a hearing to be held on May 27, 1966.

On the last named date Relator through his attorney appeared before the time set for the hearing, called to the attention of the court that no contest had been filed and presented to the court a proposed written order sustaining and affirming Relator’s affidavit and allowing Relator to prosecute his appeal under such affidavit. The court refused to sign said order.

During the course of the hearing on May 27, 1966 the District Clerk with leave of the court filed a contest of Relator’s affidavit. This was the only contest filed and as will be noted it was filed several days after the expiration of ten days following the giving of the notice required by Rule 355(c), T.R.C.P.

After hearing evidence the court sustained the contest of Relator’s affidavit and entered an order accordingly. Thereafter the District Clerk refused to prepare a Transcript and the court reporter refused to prepare a Statement of Facts.

The undisputed testimony is that Relator is destitute and for two years has been totally disabled from working or earning money; that his wife is employed at a salary of $25 per week; and that he has tried unsuccessfully to borrow the money necessary to make a cash deposit for costs or to obtain sureties on an appeal bond.

The basis of the District Clerk’s contest is that on May 27, 1966 the sum of $1,104 was paid into the registry of the court in Relator’s behalf in payment of a stipulated usury judgment against defendant United Finance.

Relator’s defense against the contest is that all but $66.59 of the above amount belongs to Relator’s attorneys by virtue of written assignments duly filed in this and other suits filed by Relator against three other loan companies. The contingent fee of the attorneys is based on both the amounts of money actually collected for Relator and the amounts of debts can-celled.

We agree with Relator when he says in his first point that mandamus is his proper remedy. It is so held in a number of cases later cited in this opinion.

We also agree with Relator when he says in his second and third points that since no contest was filed within ten days from the time notice was given the allegations of his affidavit must be taken as true; and thereafter jurisdiction passed to the Court of Civil Appeals.

Subsections (b), (c) and (e) of Rule 355, T.R.C.P. expressly provide that a notice of the filing of the affidavit shall be given to the opposing party or his attorney; that a contest may be filed within ten days by an interested officer of the court, or a party to the suit; and that “Where no contest is filed in the allotted time the allegations of the affidavit shall be taken as true.” (Emphasis ours.)

There are numerous decisions which support our holding that Rule 355, T.R.C.P. is mandatory and that if no contest is filed within the ten-day period the affidavit of inability to pay costs of appeal must be sustained. Slay v. Burnett, 143 Tex. 621, 187 S.W.2d 377, 382; Burleson v. Rawlins, Tex.Civ.App., 174 S.W.2d 979 (no writ hist.); Adams v. Courson, Tex.Civ.App., 99 S.W.2d 686 (no writ hist.); Turner v. Atlanta Nat’l Bank, Tex.Civ.App., 83 S.W.2d 454 (no writ hist.) ; Dunn v. Allen, Tex.Civ.App., 63 S.W.2d 857 (no writ hist.).

In Barrera v. McCormick, Tex.Civ.App., 63 S.W.2d 1084 it is held that when an affidavit of inability to pay costs on appeal remains on file for more than ten days without being contested a party has properly perfected his appeal, jurisdiction thereafter rests in the Court of Civil Appeals, the trial judge may not thereafter try a contest of the affidavit, and it becomes the duty of the clerk to make up and furnish appellant with a proper transcript.

In Haines et al. v. Russell et al., Tex. Civ.App., 49 S.W.2d 957 (no writ hist.) this court speaking through Justice Looney made a similar holding and in addition stated:

“It follows necessarily that jurisdiction of the whole case vested in this court; and as the trial judge was without jurisdiction to hear the contests, the order entered sustaining same is void.”

The Barrera and Haines cases were construing Art. 2266, Vernon’s Ann.Civ.St., but the language of the statute in respects material here was substantially the same as the language of the pertinent parts of the present Rule 355, T.R.C.P. and the holdings in the cited cases are applicable here.

Respondents argue that by asking the court to set a hearing for May 27, 1966 Relator waived Respondents’ failure to file a contest within ten days. There is no merit to the argument. Relator made his request when he filed his affidavit. In oral argument he stated that he did so in anticipation of the possible filing of a contest and in order to expedite matters should a contest be filed. Anyway, the failure to file within ten days is jurisdictional in nature — it had the effect of passing jurisdiction to the Court of Civil Appeals as held in the cited cases. And thereafter jurisdiction to try the contest and deny the appeal could not be conferred on the trial court by agreement or consent of the parties. See 15 Tex.Jur.2d 482 and cases there cited.

Respondents further argue that the effect of Rule 5, T.R.C.P. is to enlarge the time within which the trial court in the exercise of its discretion may allow a contest to be filed. But, to the contrary, Rule 5 expressly states that the court “may not enlarge the period * * * for taking an appeal * * * from the trial court to any higher court * * Our courts have consistently held that time periods in regard to the procedures necessary to perfect appeals will not be enlarged. Glidden Co. v. Aetna Casualty & Surety Co., 155 Tex. 591, 291 S.W.2d 315; Gonzalez v. United States F. & G. Co., 154 Tex. 118, 274 S.W.2d 537; A. F. Jones & Sons v. Republic Supply Co., 151 Tex. 90, 246 S.W.2d 853; Cocke v. Birr, 142 Tex. 432, 179 S.W.2d 958.

In his fourth and fifth points Relator ■says that important rights of Relator and the interests of the public can only be protected by the issuance of the mandamus in this case; and that the trial court abused its discretion in affirming the contest of Relator’s affidavit. In support of the latter view Relator cites several cases, among them being Pinchback v. Hockless, 139 Tex. 536, 164 S.W.2d 19 (Tex.Com.App.); Wright v. Peurifoy, Tex.Civ.App., 260 S.W.2d 234 (no writ hist.); Burleson v. Rawlins, Tex.Civ.App., 174 S.W.2d 979 (no writ hist.); Aguirre v. Hanney, Tex.Civ.App., 107 S.W.2d 917 (no writ hist.); Van Benthuysen v. Gengler, Tex.Civ.App., 100 S.W.2d 116 (no writ hist.); and Adkins v. E. I. Du Pont De Nemours & Co., 335 U.S. 331, 69 S.Ct. 85, 93 L.Ed. 43.

As we have sustained Relator’s second and third points we deem it unnecessary to pass on the fourth and fifth points and we shall not do so.

The application for the writs of mandamus will be granted and the Respondents are directed to sustain Relator’s affidavit of inability to pay costs of appeal and to prepare and furnish him with a Transcript and a Statement of Facts for the appeal.

We are satisfied that the Judge of the District Court, the District Clerk of Dallas County and the Official Court Reporter of the 134th District Court will honor this opinion and will comply with the directions herein contained. The writ of mandamus will issue only if the Respondents or any of them fail or refuse to do so.