author: CLAYTON, Justice.

text:
    Kenneth L. McGEE et al., Appellants, v. PHILLIPS PETROLEUM COMPANY, Appellee.
    No. 5579.
    Court of Civil Appeals of Texas. El Paso.
    Nov. 20, 1963.
    Rehearing Denied Jan. 8, 1964.

      John J. Watts, Thomas A. Sneed, James D. Cunning-ham, Odessa, for appellants.
    Carl W. Jones, Midland, James Little and Jack Little, Big Spring, Wm. J. Zeman and Lloyd G. Minter, Bartlesville, Okl., for ap-pellee.
   CLAYTON, Justice.

This is a summary judgment case. The trial court rendered a summary judgment in favor of appellee, Phillips Petroleum Company, against appellants, Kenneth McGee and others. Appellants originally instituted suit against Woodrow Douglas Oil Company and appellee Phillips Petroleum Company, but took a non-suit against Douglas following the trial' court’s action in granting the summary judgment in favor of Phillips, thus making the -trial court’s order in such respect appealable as'a final judgment.

The suit was for damages arising out of a truck-automobile collision which occurred in Ward County on or about July 5, 1960, when a automobile being driven by Shirley McGee (wife of appellant Kenneth L. McGee) collided with a truck being driven by one Floyd Morgan Cawley. Appellant’s wife was killed and his three minor daughters sustained personal injuries. Appellants’ suit against appellee is based upon the contention that the driver of the truck (Cawley), on the occasion in question, was an agent, sub-agent or employee of Phillips Petroleum Company.

By way of answer Phillips filed a general denial to appellants’ petition and then filed its motion for summary judgment asking that it be dismissed from the cause on the grounds that Cawley, the driver of the truck, was not an employee of Phillips and that no circumstances existed which would permit his actions, on the occasion in question, to be imputed to Phillips. Appellee alleged in the motion that Cawley was an employee of the other defendant in said cause — namely, Woodrow Douglas Oil Company, and that at the time of such accident was driving a truck owned by the said Woodrow Douglas Oil Company. Appellee’s motion is supported by attached affidavits and a copy of a “Jobber Sales Contract” admittedly entered into between appellee and Douglas, and it is appellee’s contention that such affidavits and exhibits, together with the depositions and pleadings on file, show that there is no genuine issue of fact raised with reference to the responsibility of Phillips for the consequences of the actions of Cawley, the driver of the truck, at the time of such accident, and that it (Phillips) is therefore entitled to a summary judgment dismissing it from this action, as a matter of law.

Appellants filed no opposing affidavits, but replied to appellee’s motion for summary judgment, asserting that the evidence in the depositions on file, the provisions of the “Jobber Sales Contract” between appel-lee and Douglas Oil Company, the actual conduct of the parties and the condition of the business in which they are engaged establishes that the relationship between appellee and Douglas and its employees is that of a principal-agent relationship, or principal-sub-agent relationship, and/or master-servant relationship, and that a genuine issue of fact exists as to whether or not the negligence of Douglas Oil Company and/or its driver is imputable to Phillips Petroleum Company.

Appeal is predicated upon a single point by which it is contended that the trial court erred in sustaining the motion for summary judgment because the evidence showed that Phillips had the right to control Woodrow Douglas Oil Company and its employees in the details of the work necessary to be performed in the conduct of the business, thus rendering Phillips liable for the negligent acts of the driver Cawley on the occasion of the collision in question.

Since this is a summary judgment action under Rule 166-A, Texas Rules of Civil Procedure, we are governed by well-established principles announced by the Supreme Court of Texas in Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929. Thus, when Phillips Petroleum Company, as defendant in the court below, moved for summary judgment it assumed the negative burden of showing, as a matter of law, that appellants have no cause of action against it. Neigut v. McFadden, Tex.Civ.App., 257 S.W.2d 864; Statham v. City of Tyler, Tex.Civ.App., 257 S.W.2d 742; Achterberg v. Gillett, Tex.Civ.App., 322 S.W.2d 306; Seale v. Muse, Tex.Civ.App., 352 S.W.2d 534; Glasgow v. Floors, Inc. of Texas, Tex.Civ.App., 356 S.W.2d 699.

The undisputed facts, disclosed by the record before us, reflect that Floyd Morgan Cawley was the driver of the truck on the occasion of the accident in question; that the truck was owned by Woodrow Douglas Oil Company, and that Cawley was in the general employment of such company at the time of the accident. The truck in question was a semi-trailer tank truck with the name “Phillips 66” lettered on the tank trailer portion of the truck. It is also undisputed that Woodrow Douglas Oil Company had a written contract with Phillips Petroleum Company. The contract is in evidence. It is identified as a “Jobber Sales Contract”; is for a primary term of one year (from March 6, 1960 to March 5, 1961), and for successive periods of one year each thereafter, or until either party shall notify the other, in writing, at least 90 days prior to the expiration of the primary term or of any succeeding one-year period, of its desire to terminate the contract; it provides that during the term of the contract Phillips Petroleum Company (Seller) agrees to sell and Woodrow Douglas Oil Company (Buyer) agrees to purchase from Seller, within specified minimum and maximum monthly limits, certain petroleum products. The contract is clearly one of sale and not one of consignment. The terms of payment provide that Buyer shall be entitled to one per cent discount on the net invoice price for payments made in full within ten days from the date of the invoice, but provides that Seller shall have the right to decline to make delivery of its petroleum products to Buyer except for cash payable upon delivery whenever Seller shall have any doubt as to Buyer’s financial responsibility. Other provisions of the contract give Seller “first refusal” of the right to purchase, lease or otherwise acquire Buyer’s petroleum products business and/or properties in whole or in part should Buyer receive a bona fide offer therefor which Buyer desires to accept. Buyer is required to give Seller notice of the terms and conditions of the offer if it desires to accept, and Seller shall have 30 days thereafter in which to exercise its option to purchase, lease or otherwise acquire the business and/or properties on the same terms of such proposal. Buyer agrees to protect the brand or trade names of Seller’s petroleum products and to sell such products under the respective brand names only, it being provided that in the event of any violation of the “brand protection” clause of the contract Seller shall have the right to terminate the contract immediately without notice, or suspend shipment of petroleum products under the contract during the period of such violation. Seller agrees to lend Buyer certain of Seller’s advertising media (signs, pump globes, etc.) the same to remain the property of Seller and to be returned to Seller upon demand. It is specified that the terms of the contract shall be binding upon and shall inure to the parties thereto “and their respective heirs, executors, administrators, successors and assigns; provided, however, that Buyer shall not assign this contract in whole or in part without the written consent of Seller.”

Thus far, under the undisputed facts set out above, only one favorable presumption from the 'standpoint of appellants’ contentions may be drawn from such evidence. There is a presumption that one whose name appears on a truck or vehicle is presumed to be the owner thereof and the employer of the one operating it. However, the presumption itself is not evidence, and disappears the moment that the contrary is shown by the undisputed evidence. McCormick & Ray, Texas Law of Evidence, 2nd Ed., Sec. 56, Vol. 1, Ch. 3, p. 69 et seq.; Empire Gas & Fuel Co. v. Muegge, 135 Tex. 520, 143 S.W.2d 763 (adopted opinion of Com.App.); Houston News Co. v. Shavers, Tex.Civ.App., 64 S.W.2d 384 (wr.ref.).

Considering, alone, the express provisions of the “Jobber Sales Contract” discussed above, we would be compelled to conclude, as a matter of law, that Woodrow Douglas Oil Company was an independent contractor in its dealings with Phillips Petroleum Company, and consequently the negligence of its employees could not be imputed to Phillips by reason of any provision of the written contract. But, as we held in McMahan v. Herring, Tex.Civ.App., 348 S.W.2d 679, “Such provisions, however, cannot be taken alone, but must be viewed along with all other evidence bearing on the relationship of the parties, contractual and otherwise. Humble Oil & Refining Co. et al. v. Martin, et al., 148 Tex. 175, 222 S.W.2d 995.”

Mrs. Carl Sawyer, President of Woodrow Douglas Oil Company, stated in her deposition and in her affidavit filed in support of appellee’s motion for summary judgment, among other things, the following: That she has been familiar with the operations of Woodrow Douglas Oil Company since its beginning in 1944 and its incorporation in 1955; that her company had for many years marketed Phillips Petroleum Company products in her company’s retail outlets under contracts with Phillips similar to the contract discussed above; that Phillips owns no stock in her company and that the Woodrow Douglas Oil Company has always been in the position of keeping the profits of its operations and bearing its own losses; that her company buys from and pays Phillips for gasoline which her company then sells for cash or credit, as it sees fit, at prices fixed by her company; that while it has been the custom of Douglas to sell Phillips’ products, Douglas is not restricted in the contract with Phillips to selling only their products (except that Douglas must protect Phillips’ trademark), and that Douglas has sold other products since it has been in operation, but only Phillips’ gasoline. Further, that at the time of the accident in question, Floyd Morgan Cawley was driving a truck registered in the name and owned by Woodrow Douglas Oil Company; he was transporting gasoline for Woodrow Douglas Oil Company; he was on its payroll and was one of its regular employees acting within the course of his employment at the time of such accident. Mrs. Sawyer also stated that her company employs, controls, pays, and discharges it own employees; that it fixes its own hours for opening and closing its business and stations; that it owns and finances its own trucks and pays all of its own utilities, license fees, taxes, etc.; it has “Phillips 66” printed on its trucks and “Phillips 66” signs on its stations because “we feel it is to our advantage to make it clear we are handling Phillip’s products in order that we will benefit from their advertising programs.” That neither she nor the manager, nor any of the employees of Douglas draw any salary of any kind from Phillips. That within its assigned territory, station locations of Douglas are determined following its own investigation, and it operates such stations as it wishes or shuts them down as it wishes without any intervention of Phillips. It makes no official reports of any kind to Phillips, as to sales, number of employees, etc. It has a friendly working relationship with Phillips and encourages its suggestions in areas where they might improve the operation of Douglas or help it sell more goods or services. However, Douglas runs its business and Phillips runs its, and no control or right of control on its (Phillips) part over Douglas’ employees is recognized; nor does Douglas recognize any right of financial control over its operations on the part of Phillips, and the latter has never indicated that it feels that it has any right of financial control over the former.

Mrs. Sawyer admitted that her company (Woodrow Douglas Oil Company) had borrowed money from Phillips in the past on buildings and equipment (other than trucks) and in such cases had always paid interest at the rate of six per cent and had given full security for such loans in the form of deeds of trust, etc. She also admitted that she permitted Phillips to examine the books of her company if it desired to do so, and to make suggestions about her company’s accounting operations, but stated that she regarded such comments as mere suggestions “which we follow or refuse to follow as we see fit.”

In many respects the above statements were corroborated by the deposition of the district salesman of Phillips Petroleum Company, and also, in all material respects, by Carl Sawyer, the general manager of Woodrow Douglas Oil Company, by deposition and affidavit. Of special significance, we believe, is the latter’s testimony as follows :

“Q. Does Phillips Petroleum Company attempt to give any orders or instructions to any of your drivers?
“A. No, sir.
"Q. As to how they are to perform their work?
“A. No.”

We believe that the foregoing is a full review of the evidence adduced upon the motion for summary judgment relative to the relationship of the parties herein, and upon which evidence appellants maintain that “Phillips Petroleum Company had the right to control Woodrow Douglas Oil Company and its employees in the details of the work necessary to be performed in the conduct of the business, thus rendering Phillips Petroleum Company liable for the negligent acts of Floyd Morgan Cawley on the occasion of the collision in question.” Carefully considering all the above evidence, as we are admonished to do in the Supreme Court case of Humble Oil & Refining Co. v. Martin, 148 Tex. 175, 222 S.W.2d 995 (a case relied upon by appellants), we reach a decision contrary to that asserted by appellants. Wé believe that the evidence in this case is quite similar to that presented in Texas Co. v. Wheat, 140 Tex. 468, 168 S.W.2d 632 (distinguished by the Supreme Court in the Martin case), in which the Supreme Court, in discussing the relationship of the Texas Company with one Gossen, a lessee of a filling station from the Texas Company, held:

“Whether or not the relation of master and servant existed between the Texas Company and Gossen so as to make the doctrine of respondeat superior applicable, depends on whether the Texas Company had 'the right to control Gossen in the details of the work to be performed in the operation of the service station. Carter Publications, Inc., v. Davis, Tex.Civ.App., 68 S.W.2d 640, 641, writ refused; Lone Star Gas Co. v. Kelly, Tex.Com.App., 46 S.W.2d 656.”
“ * * * The fact that Gossen paid rent, bought and paid for the merchandise, bore all the expenses of operating the station, employed and controlled the employees in the discharge of their work, stood the losses and appropriated the profits is consistent with the relationship of landlord and tenant, and inconsistent with that of master and servant.”

In the case before us, we fail to find in the record any showing that Phillips Petroleum Company had the right to control the Woodrow Douglas Oil Company or any of its employees in the details of the work to be performed in the operation of the latter company; that from all the evidence Caw-ley, the driver of Douglas’ truck at the time of the collision, was an employee of Douglas and was not an agent, sub-agent or employee of Phillips so as to impute to the latter any actions of the former; and that the summary judgment was therefore properly granted.

Finding no error on the part of the trial 'court, its judgment is in all things accordingly affirmed.

PRESLAR, J., not participating.


source: Caselaw Access Project

author: WALTER, Justice.

license: Public Domain

text:
    ALLIED CHEMICAL CORPORATION et al., Appellants, v. G. E. KADANE & SONS, Appellees.
    No. 3836.
    Court of Civil Appeals of Texas. Eastland.
    Dec. 13, 1963.
    Rehearing Denied Jan. 10, 1964.
    ■ Perkins, Bezoni & Kirwan, Midland, for appellants.
    Kilgore & Kilgore, Dallas, for appellees.
   WALTER, Justice.

Allied Chemical Corporation and Union Texas Petroleum, hereinafter referred to as Allied, filed a trespass to try title suit against G. E. Kadane & Sons, hereinafter referred to as Kadanes, on an undivided one-half mineral interest in and under the Southeast quarter (SE/4) of Section 81, Block 13, Shackelford County, Texas. As the issues developed, only the title to the oil and gas leasehold estate covering the West one-half (WJ4) of the Southeast quarter (SE/4) of said section was involved. Kadanes answered and alleged that they were the owners of an oil and gas lease on the West one-half (W1/2) of said Southeast quarter. They also pleaded a general denial, not guilty, and the three, five and ten year statutes of limitation. The facts were stipulated. Each party made a motion for a summary judgment. Kadanes’ motion was granted. The judgment recites “that the defendant has good record title, as well as title under the Five Year Statute of Limitations.” “ * * * That the Plaintiffs take nothing against the Defendant as to the determinable fee simple interest in an undivided % of all of the oil and the determinable fee simple interest in all of the gas * * * under the W/2 of the SE/4 of Section 81, Block 13 of the Texas & Pacific Railroad Company lands in Shackelford County, Texas.” Allied has appealed.

W. H. Driggers and wife, Georgia E. Driggers, are the common source of title between the parties so far as record title is concerned.

Allied claims title to an undivided one-half of the leasehold estate under the following instruments:

1. Deed dated July 12, 1919, from W. H. Driggers and wife Georgia E. Drig-gers, as grantors, to Claude C. Stanley, G. O. Kimmell and R. P. Ralston, as grantees. Said deed provides in part as follows: “ * * * all that certain undivided one-sixteenth (Vi6) interest in and to all of the oil, gas and other minerals * * * and this conveyance includes as a part of the one-sixteenth 046) interest hereinabove conveyed all of our undivided one-half (V4) interest in and to all of the royalty * * * ; and in the event of any forfeiture in such leases or leasehold interest, then the undivided one-sixteenth (Yi6) interest in the oil, gas and other minerals affected thereby shall merge into and be included in this conveyance, and it is understood that the grantees herein shall be entitled to one-half 04) of the rental hereinafter to become due under the mineral leases now on said premises, and in the event the leases should for any reason be forfeited and the land should be leased again for oil, gas and other minerals, then the grantees herein in addition to the one-sixteenth (Vie) of the oil, gas and other minerals, above provided for, shall be entitled to and shall receive one-half 04) of the consideration and rentals to be paid for other oil, gas and mineral leases on said premises. * * * with the right on the part of the said C. C. Stanley, G. O. Kimmell annd R. P. Ralston to enter upon said premises for the purposes of mining, developing and extracting from said lands their interest in said minerals * *
2. An instrument dated July 8, 1939, wherein the interest originally acquired from W. H. Driggers et ux by G. O. Kimmell, C. C. Stanley and R. P. Ral-ston became vested in Standish Hall, as trustee.
3. Oil and gas lease dated April 8, 1952, from Standish Hall, trustee, to Union Sulphur and Oil Corporation covering the lands involved for a primary term of ten years.

Through mergers and assignments, the oil and gas leasehold estate acquired from Standish Hall, trustee, by Union Sulphur and Oil Corporation is now vested in Allied.

John D. Windham and wife, Maggie Windham, James T. Windham and wife, Bettie Jo Windham, and Mrs. Robbie W. Davidson, and husband, Roy H. Davidson, Jr., acquired the interest which the grantors in the Driggers deed had in the property after their conveyance to Claude C. Stanley, G. O. Kimmell and R. P. Ralston.

Kadanes claim title to the leasehold estate under the following instruments:

1. An oil and gas lease from John D. Windham and wife and Mrs. Robbie W. Davidson and husband to J. C. Ellett dated August 18, 1948. The lease covers all of said Section 81, Block 13, and was for a period of five years.
2. An oil and gas lease executed by Standish Hall, trustee, to J. C. Ellett, dated August 18, 1948, covering all of said Section 81, Block 13. This lease was for a primary term of five years.
3. By assignments duly recorded, Kadanes acquired the Standish Hall, trustee, and the Windham et al. leases, which were originally acquired by J. C. Ellett, insofar as they covered the West one-half (W/2) of said Southeast quar-. ter (SE/4) of said section.

Allied seeks to recover under its oil and gas lease from Standish Hall, trustee, to Union Sulphur and Oil Corporation, dated April 8, 1952.’ This lease provides in part as follows:

“If no well be commenced on said land on or before the 8th day of April, 1953, this lease shall terminate as to both parties, unless the lessee on or before that date shall pay or tender to the lessor, * *

There is no evidence in this record that Allied or its predecessors drilled a well or paid rentals under this lease. Therefore, we are compelled to find, insofar as this record is concerned, that their “unless” lease ipso facto terminated. W. T. Waggoner Estate v. Sigler Oil Company, 118 Tex. 509, 19 S.W.2d 27; 42 Tex.Jur.2d, page 531, paragraph 236.

The rule is well settled in a trespass to try title suit that a plea of not guilty places upon the party bringing the suit the duty and burden of proving its own title in order to recover. Texas Company v. Lee et al., 138 Tex. 167, 157 S.W.2d 628.

We have also concluded that Kadanes have perfected title to the disputed leasehold interest under the five year statute of limitation. This suit was filed on April 19, 1962. Kadanes’ Windham No. 1 on the disputed leasehold was completed as a producer in August, 1953. They completed their Windham No. 2 in January, 1954. They have been producing and selling oil and gas from these wells to Cities Service and Lone Star Gas Company who have accounted to Kadánes for 100% of the runs. Kadanes have accounted to the Windhams and to Standish Hall, Trustee, under a division order signed by them and addressed to Kadanes.

On February 15, 1954, Union Sulphur requested that Kadanes furnish it with a statement of the drilling, marketing and operating expenses on the No. 1 well, together with the production figures and copies of' run statements and a statement of operating expenses. So far as this record is concerned, Kadanes ignored this request.

On March 26, 1954, attorneys for Allied wrote attorneys for Kadanes, asserting that Allied was claiming the disputed leasehold under their oil, gas and mineral lease dated April 8, 1952, from Standish Hall, trustee, to Union Sulphur and Oil Corporation covering the property in dispute. On March 30, 1954, attorneys for Kadanes replied and stated that they considered the Union Sul-phur lease as a top lease under which no rights could mature.

Kadanes rendered the disputed leasehold interest and paid taxes thereon before they became delinquent in Shackelford County ■from 1954 to and including 1961.

Kadanes’ limitation plea is predicated upon the five year statute of limitation which reads as follows:

“Art. 5509, Revised Civil Statutes of Texas: Every suit to recover real estate as against a person having peaceable and adverse possession thereof, cultivating, using or enjoying the same, and paying taxes thereon, if any, and claiming under a deed or deeds duly registered, shall be instituted within five years next after cause of action shall have accrued, and not afterward. * * ‡ »

The peaceable and adverse possession contemplated by Article 5509, is defined in Article 5514 and 5515 as follows:

“ ‘Peaceable possession’ is such as is continuous and not interrupted by adverse suit to recover the estate.”
“ ‘Adverse possession’ is an actual and visible appropriation of the land, commenced and continued under a claim of right inconsistent with and hostile to the claim of another.”

The execution of an oil and gas lease is in legal contemplation a sale of' real estate. Avis v. First National Bank of Wichita Falls, 141 Tex. 489, 174 S.W.2d 255.

Allied contends that Allied and Kadanes are tenants in common. It contends that before the five year statute of limitation can be set in motion against a co-tenant, notice tantamount to actual notice of an adverse holding and in complete repudiation of the co-tenant’s interest must be shown. It is true that before a co-tenant can hold adversely to his co-tenant, it is necessary that such other co-tenant receive actual or constructive notice of the hostile claim being made. “Actual notice ‘embraces those things of which the one sought to be charged has express information, and likewise those things which a reasonably diligent inquiry and exercise of the means of information at hand would have disclosed’ ”. Woodward v. Ortiz, 150 Tex. 75, 237 S.W.2d 286. “Constructive notice results when there are such acts of unequivocal notoriety in the assertion of the adverse claim that there will be presumed to have been notice of the adverse claim.” IS Tex.Jur.2d 189, Par. 26.

From appellants’ reply brief, we copy the following': “The principles of law applicable are quite clear and the only question involved here is whether notice of the adverse claim was received by Appellant.”

Every element under the five year statute of limitation, including actual and constructive notice of Kadanes’ hostile claim, has been conclusively established by the undisputed facts.

We have carefully considered all of appellants’ points and find no merit in them. They are overruled.

The judgment is affirmed.


author: COLEMAN, Justice.

text:
    The CITY OF HOUSTON, Appellant, v. HOWE & WISE, Appellee.
    No. 14188.
    Court of Civil Appeals of Texas. Houston.
    Dec. 5, 1963.
    Rehearing Denied Jan. 9, 1964.

      R. H. Burks, City Atty., Homer T. Bouldin, Edgar Pfeil, Senior Asst. City Attys., Houston, for appellant.
    Fred Parks and Donn C. Fullenweider, Houston, for appellee.
   COLEMAN, Justice.

This is the second appeal of a suit on a contract to recover fees alleged to be due for supervisory engineering services. On this trial the issues were confined to the liability of the City for fees alleged to be due in connection with the removal and relocation of certain railroad property. The opinion of this Court on the previous appeal is reported under the style of City of Houston v. Howe & Wise, 323 S.W.2d 134.

The controversy grows out of a letter by the terms of which appellees waived their right to fees, to which they might become entitled under their contract, for services to be performed in connection with the removal and relocation of such railroad property as would be made necessary by the construction of Lake Houston, conditioned on their not being required to perform such services. A railroad bridge was subsequently relocated and appellees performed no services referable to this work.

Appellees alleged in effect that they were induced to eliminate this railroad work from their contract by fraudulent misrepresentations. In answer to special issues the jury found that F. N. Baldwin, Director of Utilities for the City of Houston, told W. F. Smith, a partner in the firm of Howe & Wise, that the City would not pay more than $50,000.00 to the Beaumont, Sourlake & Western Railway Company in connection with their railway bridge; that this representation was false; that F. N. Baldwin knew that this representation was false; that W. F. Smith would not have executed the waiver letter had such representation not been made; that in making the representation it was the intention of F. N. Baldwin to induce W. F. Smith to sign a letter purporting to waive his fee for the removal and relocation of the railroad bridge; and that W. F. Smith signed the waiver letter relying on such representation.

By written contract the City of Houston employed Howe & Wise to perform the engineering services, incident to the clearing of the Lake Houston reservoir area and “the removal, rearrangement and/or relocation of a railroad and certain pipelines which cross the reservoir area, including the area on which the dam itself will actually rest.” The contract provided:

“While for convenience the engineer’s services in connection with the clearing and in connection with the removal of such existing facilities or their rearrangement, etc., will be separately described, this is a single entire employment for the entire engineering services involved in all the work herein referred to.”

Other portions of the contract pertinent to the questions involved herein follow:

“B.

“Supervising the Rearrangement, Removal or Relocation of the Railroad and Pipelines.

“Under this part of the Engineer’s employment, he will, working in close cooperation with the City’s Director of Utilities and/or the City’s Legal Department, perform in general the following services, to-wit,—

“As stated above, there is a railroad and a large number of pipelines which cross the reservoir area. . Agreements have not yet been reached between the City and the owners of these facilities as to the extent to which they may severally remain in their present location with or without any rearrangement or any additional construction. Similarly, no decision or agreement has yet been reached, and many months may be required before agreements are reached, as to the extent, if any, to which the cost of any removal, relocation or rearrangement of such facilities will be borne by the City. It is possible that some of the facilities, particularly the railroad, will simply be abandoned and nothing done except to tear up the tracks so far as involves the reservoir area. Similarly, some of the pipelines may be simply abandoned and by-passed. In connection with others, they may be placed in trestles and carried across the reservoir in that manner while as to others, they may be left in the ground but first strengthened by additional construction, weighting, or other construction work.

“It is the Engineer’s responsibility when a decision is reached that a certain existing facility will remain where it is but that certain construction work or relocation or strengthening will be done, to supervise generally the work which is done and see to it that it is done in such manner as to involve the minimum of danger to the City’s reservoir. On the other hand, where an existing facility is simply to be removed, the Engineer will have no responsibility except to see to it that the removal is in such manner as does not endanger the City’s reservoir or leave the ground in such condition as to constitute a future hazard or danger. The same shall apply to the simple abandonment of the railroad with the removal, however, if the railroad company sees fit, of its tracks and/or its present railway bridge across the San Jacinto River.

“The City and the Engineer both realize that the foregoing description of the Engineer’s services and duties under this part of his employment is extremely general. It shall, however, be fairly construed to require the Engineer in connection with the work actually done in the matter of the present facilities within the reservoir- area to perform those engineering services which the City in ordinary prudence would find it necessary to perform for itself if this agreement had not been entered into.

* * *

“III.

“Co-operation with the City.

“In the performance of his duties and particularly in the matter of the preparation of the clearing specifications and the approval of' work proposed to be done or done in connection with the present utilities within the reservoir area, the Engineer will hold periodic conferences with the Mayor or with the City’s Director of Utilities to the end that the project as perfected will have full benefit of the City’s accumulated experience and knowledge of existing needs and facilities and be consistent with current municipal policy. To implement this co-ordination, the City will make available to the Engineer all of its existing plans, maps, field notes, statistics, computations and other data relative to the entire project.

“IV.

“Time for Performance of Services.

“The City presently hopes to be able to award a contract for the actual construction of its dam about or shortly after the middle of the year 1951. * * *

«* * *

“The Engineer’s services in connection with the rearrangement, removal or relocation or abandonment of the existing utilities within the reservoir area will, of course, be performed as the necessity therefor arises, depending upon the agreements which from time to time are reached between the City and the owners of such facilities as to what is going to be done about them.

“V.

“FEES: For and in consideration of the services to be rendered by the Engineer, the Engineer shall receive a fee which shall be five per cent (5%) of the actual cost to the City of the work of clearing of the reservoir site and of the rearrangement, removal or replacement of the railroad and/ or the pipelines within the reservoir area.

«. * * *

“As for the rearrangement, relocation or replacement of the railroad and other utility facilities within the reservoir area, the cost for the purpose of determining the final amount of the Engineer’s fee will be the actual cost to the City, i. e., the amount paid by it incident to such rearrangement, removal of or replacement of any such facility or facilities. To clarify this point, the following examples are stated:

“(a) If for example it is determined that a certain facility will remain in the reservoir area but that its owner will do certain construction or strengthening work of a cost of $50,000.00 of which the City agrees to pay $10,000.00, then $10,000.00 will be considered as the cost of this part of the work for the purpose of computing the Engineer’s five per cent fee.

“(b) If an existing facility is to be removed and replaced by another facility crossing the reservoir area of a cost, within the reservoir area itself, of $200,000.00 of which the City agrees to pay $20,000.00 then $20,000.00 would be taken as the cost of this item for determining the amount of the Engineer’s percentage fee.

“(c) If an existing facility is to be abandoned so far as it is within the reservoir area, then the Engineer will be entitled to no percentage at all upon any amount which the City may see fit to pay the owner of such facility as a part of its cost or damage on account of such abandonment, unless by replacement of the facility within the reservoir area itself the situation is brought within that described in (b) above.

“(d) Similarly, if an existing facility so far as it is within the reservoir area is to be abandoned by the owner of its salvages and removes part or all of the materials constituting the same (i. e., pipe, rails, bridge, etc.), then the Engineer shall be entitled to no percentage fee on account of this particular facility even though the City sees fit to agree to pay the owner thereof some sum of money in satisfaction of all or a part of its damages or less on account of such abandonment or salvage.

“(e) In the improbable event of the City itself undertaking within the reservoir area construction by way of replacing of or substitution for any of these existing facilities, then the Engineer’s percentage fee shall be computed upon the entire cost of such work even though the City may be reimbursed for a part of such cost by the owners of some or all of the facilities so replaced.

“Although it is impossible at the moment to do much more than hazard a guess as to the cost to the City as hereinabove defined of the work to be done incident to the railroad and the other existing utilities within the reservoir area, the parties to this agreement presently estimate the probably total cost to the City of all of the work in connection with which the Engineer is hereby employed (that is, the reservoir clearing as well as the replacement, removal and/or rearrangement of facilities within the reservoir area) at the sum of $1,890,000.00, based upon which it is presently estimated that the Engineer’s total fee will amount to the sum of $94,500.00.

* Hí H=

“VI.

“PAYMENTS. * * *

“There is also attached a copy of a further letter from the Engineer addressed to such Director, dated January 3, 1951, discussing the applicability of certain of the provisions of numbered Paragraph V of this agreement to certain possible situations in such letter referred to. It is understood that the provisions of such letter shall be taken into full account in applying the provisions of such numbered Paragraph V hereof.”

“HOWE & WISE Consulting Engineers

January 3, 1951

“Mr. Frank N. Baldwin, Director

Public Utilities

City of Houston

Houston, Texas

Subject: Our Engineering Contract; San Jacinto River Reservoir

“Dear Mr. Baldwin.

“We have checked over the contract you submitted and believe that it is in line with our proposal.

“However, there is one point that we believe-should be expanded to prevent a situation arising which might be governed by more than one interpretation of the meaning of the contract. We refer specifically to-paragraphs (a), (b), (c), (d) and (e) under ‘FEES’ on page seven (7) of the contract. We can discuss these all together. We would like it to be clear that in cases of divided costs between the owner of a utility and thei-City of Houston in relocating, removing and replacing, abandoning, or other disposition of such utilities, that Howe &. Wise not be expected to furnish full engineering services for such relocation, or, etc., at a fee determined by a percentage of the City’s cost only. In such cases we would expect the owner of such utilities to do the required engineering or pay Howe & Wise a fee comparable to that agreed to in this contract. Should the owner prefer to do the required engineering, then for the fee stated in paragraphs (a), (b), (c), and (e), Howe & Wise are to represent the City of Houston and make such inspections as are necessary to require the fulfillment of the agreement between owner and the City of Houston. Should Howe & Wise furnish the required engineering services, then Howe & Wise should receive the fee as stated herein and also a like fee from the owner on his part of the cost of such work. Such understanding should be in any agreement the City of Houston might make with the owner of said utility.

“Yours very truly,

HOWE & WISE

Original signed by W. F. Smith Ity W. F. Smith

WFS/fl”

It was stipulated between the parties that:

“ * * * the City of Houston paid Guy A. Thompson, Trustee, the Beaumont, Sourlake and Western Railway Company one million, five hundred and seventy-nine thousand, four hundred and seventy dollars in relocating and rebuilding their railroad line and bridge through the Lake Houston area in question in this case.

“It is further stipulated and agreed that the reasonable cost for the engineering services of Howe & Wise in supervising and checking and performing all the details called for in the contract in evidence in this case would have been the sum of two thousand dollars.

“It is further stipulated and agreed that all of the work to be performed by Howe & Wise under the contract in evidence in this case was fully and completely performed with the exception of the supervising and inspections and engineering work in connection with the relocating or rebuilding of the railroad line and bridge; and, that the Plaintiff, Howe & Wise, have been fully and completely compensated for all of the work performed by them under the contract or called for by the contract with the exception of the railroad line and bridge or other work in connection with the relocating of said railroad line and bridge.”

The trial court entered a judgment in favor of appellees, Howe & Wise, in the sum of $76,973.50. This sum was arrived at by taking 5% of the amount paid to the Trustee for the Railway Company and deducting therefrom the stipulated reasonable cost of services called for in the contract in connection with the railroad bridge.

It is appellant’s contention that under the facts of this case the statement that the City would not pay more than $50,000.00 to the Railway Company was the statement of an opinion, and known to be such by Smith, since he knew that the matter was being negotiated by the City’s Legal Department with the Railway Company at the time and no final settlement had been reached or agreed to by the Railway Company and the City Council of Houston.

Appellant relies on the rule quoted in Patterson v. Bushong, Tex.Civ.App., 196 S.W. 962, as follows:

“It is said in 12 R.C.L. p. 244, that:

“ ‘As a general rule, in order to constitute actionable fraud, a false representation must relate to a matter of fact, and such fact must be one which exists in the present or which has existed in the past. It must also relate to a fact which is susceptible of knowledge ; otherwise there is nothing in relation to which the persons making it could state what he knew to be untrue. Generally, therefore, fraud cannot be predicated upon the mere expression of an opinion which is understood, to be only such or cannot reasonably he understood to be anything else, nor upon representations in regard to matters of estimate or judgment. The person to whom such statements are made has no right to rely upon them, and does so at his peril, nor can it be supposed that they influenced his judgment.’ ”

The testimony of Frank N. Baldwin developed that he was educated as a civil engineer and had also obtained a degree in architectural engineering. He had been employed by the City of Houston in 1938 or 1939 and became head of the Department of Utilities about 1946. As head of this department he reported only to the Mayor of the City. The Utilities Department was in charge of Lake Houston, or, more properly, the San Jacinto Water Project. He testified that if anyone wanted to know anything about the water department or the status of a water problem he would be the man to see rather than the Mayor or the City Council.

He testified that several engineering firms had contracts with the City and that because he wanted to see the firm of Howe & Wise get part of the work, he suggested to Mr. Smith that he submit a proposal. Mr. Baldwin had “some voice in recommending” what firms the City would contract, and he recommended that Howe & Wise be employed for the work finally set out in the contract forming the basis of this controversy. The reports of the engineers hired by the City to make an estimate of the damages that would be suffered by the Railroad by reason of the necessity of relocating their bridge were first sent to his department and, before the contract with Howe & Wise was entered into, the engineers had estimated the cost of removal of the bridge at $600,000.00. He knew that the Railroad had submitted estimates of the cost of removal, prior to the Howe & Wise contract, in the amount of $1,250,000.00 to $1,500,-000.00. His department handled the purchase of property needed for the reservoir, but if an agreement for purchase could not be reached the negotiations were turned over to the legal department. When an agreement with the owner was reached on the purchase of property, his department “made recommendations to the Mayor and City Council and they would purchase it.” Outside engineers employed by the City discussed their final estimates with him before such estimates were submitted. Prior to the time the waiver letter was written, Howe & Wise had been authorized by him to negotiate with two utility companies on a settlement of damages to be suffered by them in connection with the construction of the reservoir. In connection with such work, he had informed Howe & Wise that he would recommend that certain amounts be paid and his recommendations were followed by the City Council. In negotiating with the utilities damaged by the construction of the reservoir, Howe & Wise reported only to Baldwin, and when a final decision was reached by the City as to the amount of money it would pay as a compromise settlement of the damage claims, this decision was communicated to Howe & Wise by Baldwin. Mr. Baldwin testified that he was in a better position to know what the City was going to do .about the railroad bridge than was Mr. Smith.

In October, 1951, Howe & Wise submitted a bill to the City for certain work which they had undertaken at the request of Mr. Baldwin. Since this work was done outside the reservoir area, a legal question arose concerning the construction of the Howe & Wise contract and the question was submitted to the legal department. While the matter was being considered other bills were submitted and were not paid. The firm of Howe & Wise was in very serious financial difficulty. By the First of November the total amount of estimates presented for payment had amounted to $7,600.00. Mr. Baldwin then learned from the legal department that they hesitated to approve payments to Howe & Wise for work concerning properties outside the reservoir area because it might set a precedent for a claim on the part of Howe & Wise that its contract covered work on that part of the railroad bridge located outside the reservoir area. It was suggested that the difficulty might be removed by securing a waiver from Howe & Wise of their right to compensation for such work.

On the 23rd day of November, Mr. Baldwin called Mr. Smith and told him that he thought his bills would be approved if he would waive compensation for the railroad bridge. Mr. Smith testified that Mr. Baldwin told him at that time that in no event would the City pay the Railroad more than $50,000.00. Mr. Baldwin denied making that statement and testified that there was no discussion of what the City would pay. However, Smith testified that he believed Baldwin’s representation and because of it told him that he would waive compensation due by reason of payments made by the City to the Railroad on condition that he would not be responsible for any work concerned with the bridge. A letter to this effect was written at Baldwin’s suggestion and on December 20, 1951, the bills were paid.

Mr. Smith testified that because of the statement made by Mr. Baldwin he thought that the City would make only a token payment to the Railroad. On such a basis the compensation due him under his contract would amount to $2,500.00 or less. It was stipulated that the reasonable cost of the engineering services of Howe & Wise in supervising and checking and performing all of the details called for in the contract referable to the railroad bridge would have been the sum of $2,000.00. While Smith testified that he had made his own estimate of the expense of relocating the railroad bridge and knew that the cost would be very substantial, he also knew that it was possible that the bridge might be relocated outside the reservoir area, in which event he would be entitled to no fee based on the bridge work, and that $2,500.00 was a small part of the contract.

He testified that he had complete confidence in Mr. Baldwin and justified his unquestioning acceptance of the statement made by Mr. Baldwin on the basis of the close association which1 had existed between them for many years. He related that he had gone to work under him for a federal agency several years earlier; that he had later been promoted to the position of Area Engineer on the recommendation of Mr. Baldwin; that he had frequently sought his advice on problems arising in his work with1 the County; that he had sought the contract in question on Mr. Baldwin’s advice and had secured it on his recommendation; that he had lunch with Mr. Baldwin and saw him socially and on business several times each week. An impartial and fairminded jury might well have concluded that, in view of the past relationship shown to have existed between Smith and Baldwin, and in view of tlie position which Baldwin held and the sources of information available to him, Smith relied on the representation made by Baldwin and in so doing acted as a reasonable man would have done under the circumstances.

Appellant points out that, in our opinion on the previous appeal, we held that the waiver was voluntary and intentional. This statement was made in rejecting the cause of action asserted by appellee to set aside the waiver on the ground that it was induced by economic compulsion. The word “voluntary” as used there conveyed the holding of the Court that as a matter of law the waiver was not induced by economic compulsion.

It is also pointed out that on the previous appeal we held that the overwhelming weight and preponderance of the evidence showed that Smith did not rely on Baldwin’s representation, and, further, that by reason of facts shown by Smith’s testimony to be known to him, he had no right to rely on a statement which he knew was only an opinion. It is argued that the evidence on this appeal is substantially the same and that we are bound to reach the same conclusion under th.e doctrine of the Law of the Case. The evidence at this trial is substantially different insofar as it bears on the ■question of reliance in fact. Evidence produced at the former trial indicated that the waiver was signed primarily because of ■economic necessity. On objection of appellant, much of this evidence was excluded on this trial. More detailed evidence was produced showing the relationship between Smith and Baldwin and the customary procedures followed by the City in reaching agreements to pay compensation to those damaged by the construction of the reservoir. There is evidence of probative force to support the answer made by the jury on the reliance issue and there is nothing to indicate that the jury was influenced by any improper motive in reaching its answer. The conclusion of the court to the ■contrary on the previous appeal might have been supported by the circumstance that the jury, after finding that Smith relied on the ■statement by Baldwin, also found that he ■signed the waiver letter only because Baldwin had led Smith to believe that unless he ■did he would not be paid for previous services.

Without further recitation of the testimony, we have determined, after a careful study of all the evidence, both that ■opposed to, as well as that supporting, the verdict of the jury, that none of the answers made by the jury to issues submitted to them, are so contrary to the weight and preponderance of the evidence as to be clearly wrong, and that all of the answers are supported by evidence of probative force.

Appellees’ testimony, considered in its entirety, cannot be taken as a judicial .admission that the representation made by Baldwin was merely an opinion. Rather it shows that, while Smith realized that the ■statement should be characterized as an •opinion since it obviously referred to an action to be taken in the future, he understood ■either that Baldwin knew the state of negotiations, and knew that there was a reasonable probability that the railroad would accept an offer of $50,000.00 or less, and that ■there was little doubt but that the City Council would follow the recommendation of the legal department and pay such an amount, or else that Baldwin honestly entertained an opinion, based on facts known to him, that the City would in no event pay more than the stated sum. Neither supposition amounts to what the courts have characterized a mere opinion, a conclusion drawn from known facts, or facts available to both parties, or sheer speculation.

Having determined, after a review of all the evidence, that the answers made by the jury to the special issues are not clearly wrong and unjust, we are now required to determine whether under the issues as answered by the jury a proper judgment was rendered. In view of the answers made by the jury to the special issues, we find that appellees were induced to enter into the contract waiving the profit to accrue to them from the relocation of the bridge by reason of the representation made by Baldwin, a representation that Baldwin knew was false, but nevertheless made for the purpose of inducing Smith to enter into the contract. Smith relied on this representation and would not have entered into the contract of waiver had the representation not been made. As a result of this course of conduct, designed to deceive ap-pellee, he was deceived and as a result suffered a severe financial loss. Appellant, under the verdict of the jury, has been unjustly enriched and equity seeks to prevent unjust enrichment.

A statement of the rule which we think applicable in this case is found in an annotation in Volume 51 A.L.R. 46, at page 63, reading:

“If one makes a statement regarding an event to take place in the future, obviously the statement should ordinarily be regarded merely as an expression of opinion, and the courts will frequently stop at this point and hold that such a statement cannot serve as a basis on which to predicate fraud. But if there are circumstances tending to show an actual fraudulent intent at the time the promise or representation regarding a future event is made, then the situation is entirely changed. According to the weight of authority, if the person making the promise or statement as to a future event is guilty of an actual fraudulent intent, and makes the promise or misrepresentation with the intention of deceiving and defrauding the other party, and accomplishes this result, to the latter’s injury, fraud may, under many circumstances, he predicated thereon, notwithstanding the future nature of the representations. This result is reached frequently on the theory that a person’s intention or belief is a matter of fact, and that, therefore, if a misrepresentation is made with regard to the same, the misrepresentation is one of fact. But the particular circumstances determine largely the result in this class of cases. This seems to be true, partly, at least, for the reason that the questions whether a representation should be regarded as a mere expression of opinion, and whether one to whom it is made ordinarily does and has a right to rely thereon, depend on the nature of the representation and the relation of the parties.”

This statement of the law finds support in many Texas cases and in the Restatement of the Law of Contracts, § 474. Buchanan v. Burnett, 102 Tex. 492, 119 S.W. 1141; Mitchell v. Zimmerman, 4 Tex. 75; Henderson v. Railroad Company, 17 Tex. 560; Edward Thompson Co. v. Sawyers, 111 Tex. 374, 234 S.W. 873; Chicago, T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S. W. 472; Buchanan v. Burnett, 102 Tex. 492, 119 S.W. 1141; Ramey v. Allison, 64 Tex. 697; Safety Casualty Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176, 121 A.L.R. 1263; opinion adopted; Spradlin v. I. & L. Development Co., Tex.Civ.App., 253 S.W.2d 92, err. ref., n. r. e.; Price v. D’Yarmett, Tex.Civ.App., 27 S.W.2d 616, writ ref.; Russell v. Industrial Transportation Co., 113 Tex. 441, 251 S.W. 1034, 51 A.L.R. 1; Tips v. Barneburg, Tex.Civ.App., 11 S.W.2d 187; Riggins v. Trickey, 46 Tex.Civ.App. 569, 102 S.W. 918; Houston v. Darnell Lumber Co., Tex.Civ.App., 146 S.W. 1061, writ den.

Appellant insists that appellee had a duty to use reasonable diligence to determine the truth or falsity of the representation, and that an inquiry to the City legal department or to the railroad company would have revealed that neither party expected that the claim of the Railroad', would be settled for the amount represented. In the case of Thigpen v. Locke, Tex.Sup., 363 S.W.2d 247, the court held:

"As to the contention that there was. some evidence on the second theory of actual fraud, petitioner has interposed' the rule that a party to an arms-length. transaction is charged with the obligation of reading what he signs and,, failing that, may not thereafter, without a showing of trickery or artifice,, avoid the instrument on the ground that he did not know what he was signing. Indemnity Insurance Company of North America v. W. L. Macatee & Sons, 129 Tex. 166, 101 S.W.2d 553. This rule is but a narrower application of the principle that the party claiming-fraud has a duty to use reasonable dil^ igence in protecting his own affairs.. Tn an arm’s-length transaction the defrauded party must exercise ordinary-care for the protection of his own interests and is charged with knowledge-of all facts which would have been discovered by a reasonably prudent person similarly situated. And a failure to exercise reasonable diligence is not excused by mere confidence in the honesty and integrity of the other party.’’ Courseview, Inc. v. Phillips Petroleum Co., 158 Tex. 397, 312 S.W.2d 197.”

This rule was established in Texas as-early as Womack v. Western Union Telegraph Co., 58 Tex. 176, and Morrison v. Insurance Company of North America, 69 Tex. 353, 6 S.W. 605. In the Indemnity Insurance Company case the court recognized an exception where the signature was obtained by a false representation, trick or artifice. While it may be that the Supreme Court in Thigpen v. Locke, supra, has eliminated “false representation” from this exception, the case quoted from, Courseview, Inc. v. Phillips Petroleum Company, 158 Tex. 397, 312 S.W.2d 197, merely reaffirmed a similarly well established rule to the effect that where a cause of action is based on fraud, the statutes of limitation do not begin to run until the fraud is discovered, or by the exercise of reasonable diligence might have been discovered. Smith v. Fly, 24 Tex. 345, Kuhlman v. Baker, 50 Tex. 630; Bass v. James, 83 Tex. 110, 18 S.W. 336; Sherman v. Sipper, 137 Tex. 85, 152 S.W.2d 319, 137 A.L.R. 263.

However, where a contract is induced by acts of positive fraud, a different rule has been applied. This rule seems to have been adopted in Texas for the first time by the Supreme Court in Labbe v. Corbett, 69 Tex. 503, 6 S.W. 808, and was clearly stated by Justice Speer in Western Cottage Piano & Organ Co. v. Anderson, 45 Tex.Civ.App. 513, 101 S.W. 1061, as follows:

“It is not the rule that a person injured by the fraudulent and false representations of another is held to the exercise of diligence to suspect and discover the falsity of such statements. In the absence of knowledge to the ■contrary, he would have a right to rely and act upon such statements, and ■certainly the wrongdoer in such a case cannot be heard to complain that the other should have disbelieved his solemn statements.”

This statement of the rule is well supported by authority. Buchanan v. Burnett, 102 Tex. 492, 119 S.W. 1141; Moore v. Beakley, Tex.Com.App., 215 S.W. 957; Graves v. Haynes, Tex.Com.App., 231 S.W. 383; Wortman v. Young, Tex.Com.App., 235 S.W. 559; Guaranty Bond State Bank v. Kelley, Tex.Com.App., 13 S.W.2d 69; Crofford v. Bowden, Tex.Civ.App., 311 S.W.2d 954, writ ref.; Smith v. Bifano, Tex.Civ.App., 330 S.W.2d 473, writ ref., n. r. e.; Wren v. Bohannon, Tex.Civ.App, 256 S.W.2d 112; Schonrock v. Taylor, Tex.Civ.App., 212 S.W.2d 260, writ ref. It is unlikely that by the statement in Thigpen v. Locke, supra, the Supreme Court of Texas intended to change this well established rule of law and we are unable to say that appellee had knowledge of facts demonstrating the falsity of the representation, which the jury found Baldwin made to him. Under the circumstances of this case, there was no duty on appellee to investigate for the purpose of learning the truth of the representation.

Appellant urges that appellees are not entitled to a judgment, even if the waiver is set aside, because under the contract they were not required to do any work, or entitled to compensation based on payments to the railroad company, if the railroad company did its own engineering in the relocation and reconstruction of the bridge. Appellant also points out that there is no evidence in the record that the City requested appellees to perform engineering services in connection with the bridge or that appel-lees offered to perform such services. They state that the record shows that the Railroad did its own engineering.

The record discloses that the railroad bridge was replaced by another bridge within the reservoir area. The record does not show that all engineering services required in the construction of the bridge were furnished by the Railroad. The heading of paragraph B of the contract between the City and Howe & Wise indicates that the work to be done by the engineers would be of a supervisory nature. This view is reinforced by the wording of the entire paragraph. The fact that the railroad engineers designed the bridge and supervised its construction, if such be assumed, would not necessarily rule out the necessity of supervision by the City for the purpose of requiring that the work be done in such a manner as to involve a minimum of danger to the reservoir. It may be determined from a construction of paragraph B that in ordinary prudence the City would have found it necessary to perform such service for itself had there been no agreement with Howe & Wise. An inference may be drawn from the stipulation of the parties that some engineering services of a reasonable cost of $2,000.00 were required for necessary supervision of the construction of the bridge.

Paragraph V of the contract provided that a fee be paid Howe & Wise for all services to be rendered by them, calculated by taking 5% of the actual cost to the City of certain payments made by the City. There is no provision making that portion of this total fee determined by the cost of relocating the railroad contingent on the supervision of such work by them. Only if the bridge had been abandoned, or removed, and not reconstructed within the reservoir area, did the contract provide that Howe & Wise would receive no percentage of the money which the City paid the Railroad for all or part of its damage. It was stipulated that appellees fully performed the contract “with the exception of the supervising and inspections and engineering work in connection with the relocating or rebuilding of the railroad line and bridge.” Smith testified that the reason he failed to fully perform was the waiver agreement. Since this agreement was induced by the fraud of an agent of the City, the City has prevented performance and the failure to perform is excused. Sanderson v. Sanderson, 130 Tex. 264, 109 S.W.2d 744, opinion adopted. At the previous trial of this case, appellees recovered a judgment against appellant for other sums due them under this contract, and on appeal this judgment was affirmed except as to this item. Necessarily it was determined that the contract was substantially performed by appellees and that, they were entitled to recover the money due-them by the terms of the contract. The-question remanded for trial was whether the-cost of relocating the railroad should be-considered in determining appellees’ compensation in view of the waiver contract. 4-Tex.Jur.2d, Appeal and Error, § 1007 et. seq.

Appellant’s contention that the-trial court erred in permitting appellees to-examine F. N. Baldwin under the adverse-witness rule cannot be sustained. Before calling their first witness, appellees invoked', the rule. Appellant designated Mr. Baldwin the representative of the City and requested that he be excused from the rule. This request was granted by the court by-reason of his having been so designated.. At the time the events transpired on which; this suit is based, Mr. Baldwin was employed by the City in an executive position,, and the foundation of the suit is his alleged! wrongful conduct. When he was called as; a witness by appellees, he was in fact a hostile and adverse witness. City of Waco v. Criswell, Tex.Civ.App., 141 S.W.2d 1046; City of Houston v. Glover, Tex.Civ.App., 355 S.W.2d 757, writ ref., n. r. e.

Appellant asserts that the trial' court erred in admitting into evidence the-bills submitted to the City by Howe & Wise-which had not been paid at the time the waiver letter was executed. Prior to the-offer of these bills testimony concerning the-amount of money due Howe & Wise was volunteered by F. N. Baldwin and received' without objection. The evidence was relevant on the issue of reliance, and properly was admitted into evidence.

The judgment of the trial court is affirmed.


author: ARCHER, Chief Justice. HUGHES, Justice

text:
    W. E. MOODY et al., Appellants, v. TEXAS WATER COMMISSION et al., Appellees.
    No. 11126.
    ‘Court of Civil Appeals of Texas. Austin.
    Nov. 20, 1963.
    Rehearing Denied Jan. 8, 1964.

      E. H. Thornton, Jr., Houston; Coulter Hoppess, Bryan; Kuykendall & Kuyken-dall, Austin, for appellants.
    Waggoner Carr, Atty. Gen., F. R. Booth and W. O. Shultz, Asst. Attys. Gen., Austin; Trueman O’Quinn, Austin; Beard, Kultgen & Beard, Waco, for appellees.
   ARCHER, Chief Justice.

This is an appeal from a judgment dismissing appellants’ cause of action because of lack of jurisdiction.

The appeal is based on five points assigned as error and are:

“First Point: The trial court erred in holding that the order of the Texas Water Commission, dated August 2, 1962, was a final order from which an appeal would not lie to the courts.
“Second Point: The trial court erred in holding that Section 5 of Article 7472e denied to appellants the right to appeal from the order of August 2, 1962, even though the Texas Water Commission had not observed and followed the mandatory provisions of Article 7472e in determining feasibility of the Federal project.
“Third Point: The action of the trial’ court in dismissing this cause of action constituted a denial to appellants of the due process clause of Article 1, Section 19, of the Texas Constitution, and the Fourteenth Amendment to the United .States Constitution.
“Fourth Point: The trial court erred' in holding that appellants’ suit attacking the validity of the Commission’s order of August 2, 1962, was prematurely filed.
“Fifth Point: The trial court erred in holding that appellants had no justi-ciable interest in the order of the Commission until the Commission had entered a final order relating to the appropriation and diversion of public waters, as provided by Articles 7492, et seq., Vernon’s Revised Civil Statutes.”

This suit was filed by the appellants, complaining of the Texas Water Commission and the Brazos River Authority, alleging that plaintiffs each owned land which would be taken and inundated by reason of the construction of the water impoundment project

Allegations were made that Brazos River Authority is an agency of the State; that Texas Water Commission is an agency of the State and that the trial court had jurisdiction and venue of the proceedings under the provisions of Article 7477, Section 12, V.A.C.S.

Further allegation was that the Navasota River is an intrastate stream across which the project involved would be constructed and that pursuant to the provisions of Article 7472e before any project which is recommended by a Federal Agency pertaining to the impoundment of water can be authorized, such must be submitted to the Governor of Texas, who is required to forward such recommendation to the Water Commission which is vested with the authority to approve or disapprove the feasibility of such project after a hearing.

On April 11, 1962, the Corps of Engineers of the Army pursuant to prior direction of the Water Commission submitted its recommendation for the construction of the project to the Governor who transmitted the report to the Texas Water Commission which "held a public hearing on May 10, 1962, of testimony relative to the feasibility of such impoundment and subsequently issued its ■order finding the water impoundment project to be feasible and transmitted a copy ■of such order to the Governor who notified the Corps of Engineers of the finding.

Plaintiffs sought a judgment declaring the order entered by the Water Commission to be void and of no effect and for an injunction against the Brazos River Authority from entering into any contract to reimburse the United States Government for any sums of money for the construction of the project involved herein.

The Texas Water Commission answered by a plea to the jurisdiction of the court on several grounds and subject to such pleas filed 19 special exceptions and a general denial.

The City of Bryan, City of College Station and the City of Navasota intervened, pleading that they were interested in the matters in controversy and would be affected by the decree of the court and abated the pleas and special exceptions of the Texas Water Commission.

The parties stipulated as to material fact issues and on May 2, 1963, the court made and entered the following judgment:

“Be it remembered that on October 26, 1962, came on to be heard and considered by the Court the pleas to the jurisdiction filed herein by defendant, Texas Water Commission, and, after hearing argument of counsel, the Court entered its order on the 30th day of October, 1962, overruling said pleas to the jurisdiction.
“Thereafter, on the 28th day of March 1963, the parties by their attorneys of record, appeared for the purpose of hearing the motion of the defendant, Texas Water Commission to dismiss this suit on the ground that it was prematurely filed and, in the alternative, that said cause be dismissed on the ground that it was moot. After considering said motion and argument of counsel, the Court took the matter under advisement and, after due deliberation and consideration of the pleadings and the briefs, the Court is of the opinion that its order entered on October 30, 1962, overruling the plea to the jurisdiction filed herein by Texas Water Commission should be and the same is hereby set aside and held for naught.
“After due consideration the Court is of the opinion that this cause should be dismissed for want of jurisdiction because Section 5 of Article 7472e, Vernon’s Annotated Civil Statutes, provides that the action of the Texas Water Commission in this cause shall be final, no provision for appeal being provided; because the order of the Texas Water Commission here in issue is not a final order of an agency having exclusive jurisdiction over the subject matter of the order; because no vested property right of plaintiffs has been affected; and because further proceedings before the Texas Water Commission are required by Article 7492 et seq., Vernon’s Civil Statutes, before any final order may be entered relating to the impoundment and diversion of public waters and before plaintiffs will have such a justiciable interest as to authorize them to maintain a cause of action against the Texas Water Commission.
“It is therefore ORDERED, ADJUDGED and DECREED by the Court that this cause of action asserted herein by the plaintiffs be and the same is hereby dismissed for want of jurisdiction for the reasons hereinabove set out.
“It is further ORDERED by the Court that all costs incurred herein be taxed against the plaintiffs. To this order, judgment and decree of the Court, the plaintiffs, in open court excepted, and, in open court, gave notice of appeal to the Court of Civil Appeals in and for the Third Supreme Judicial District of Texas, sitting at Austin, Texas.”

The appellees take the position that the case is moot and should be dismissed; that the order finding the project feasible is not a final order and that further proceedings are required before appellants will have such a justiciable interest as to authorize the maintenance of a cause of action against the Commission.

Since the provision of Article 7472e, V.A.C.S., has been complied with, the Federal Agency has recommended the project and has submitted such to the Governor who has forwarded such recommendations to the Texas Water Commission for a hearing. A hearing having been held and had and a copy of the order of the Commission duly entered approving such project and a certified copy of such order having been forwarded to the Governor who has notified the agency of the action of the Commission approving the feasibility of the project, the matter is now moot, and no effective relief can be granted.

The judgment of the trial court should be affirmed. Polk v. Davidson, 145 Tex. 200, 196 S.W.2d 632.

In Railroad Commission v. Wencker, 140 Tex. 527, 168 S.W.2d 625, the Supreme Court held:

“We think that when this entire record is considered as a whole it presents no issue of fact to be determined by the courts. The record plainly shows that respondent has a permit to drill a well on this tract of land as ordered by the courts. Consequently this cause is; moot, and should be dismissed.”

State ex rel. Myers v. Shinnick, Mo.Sup., 19 S.W.2d 676; Missouri-Kansas-Texas R. R. Co. v. Ridgway, 146 Tex. 392, 208 S.W.2d 363.

On August 6, 1963, the Governor, by letter, notified the Acting Chief of Engineers that the proposed Millican Reservoir Project was approved.

The opportunity of the State to comment officially upon the proposed project is derived from a provision of the Flood Control Act of 1944 as amended, 33 U.S.C. § 701-1 (a). This Act is long and we do not. copy such herein, but provision is made for plans, submission to Congress and that relations of the Chief of Engineers shall’ be with the Governor or an agency designated and for the written views and recommendations and for transmittal of such plan to Congress, etc. Anderson v. Seeman, 252 F.2d 321 (Fifth Cir. 1958), cert. den. 358 U.S. 820, 79 S.Ct. 32, 3 L.Ed.2d 61.

Prior to the enactment of Article 7472e-there was no statutory procedure whereby the views of the State could be given to’ Congress on a project like the one involved herein and Sec. 8, the emergency clause im enactment of Article 7472e, recites the purpose of the Legislature.

The several sections of Article 7472e set out in detail the procedures to be followed by the Governor and the Water Commission.

The Act requires the Governor to submit reports of Federal Agencies received by him to the Texas Water Commission for a. public hearing, for study and recommendations to him as to the feasibility of the project, and after such hearing that the Commission shall enter its order either approving or disapproving the feasibility of the-project, giving its reasons therefor. Upon receipt of such orders the Governor is required to notify the Federal Agency.

The Act sets out in detail in the several' sections the procedures to be followed ini hearing, determining and order to be entered, and these have been complied with.

The nature and action of the Commission in similar matters has been held to be administrative. City of Strawn v. Board of Water Engineers, Tex.Civ.App., 134 S.W.2d 397, er. ref.; Southern Canal Co. v. State Board of Water Engineers, 159 Tex. 227, 318 S.W.2d 619.

No provision for judicial review was prescribed in the Act as might have been and the fact that the legislature has denied judicial review does not invalidate the Act. City of Amarillo v. Hancock, 150 Tex. 231, 239 S.W.2d 788.

The appellants herein who were designated protestants before the hearing began, filed a motion asking that the three members of the Commission disqualify themselves from hearing evidence as to the feasibility of the project and from entering an order because of prior determination and decision to approve the feasibility of the project.

In support of the motion the protestants, on April 19, 1961, long prior to any final engineering reports as to the feasibility of said dam had been filed with the Board, and before the instant hearing, publicly adopted a resolution finding that the proper location for the construction of the dam was at the site known as the Millican Site.

The failure of the members of the Commission to disqualify themselves upon appellants’ motion did not deny appellants due process of law under the State or Federal Constitution.

The Board has broad public responsibility in water resource planning and development as are set out in Articles 7472c, 7472d, and 7472d-l, and the resolutions are consistent with the Commission’s statutory duty.

The public duties must be performed and governmental powers exercised by the officials or body designated by law and cannot be delegated to others. Horne Zoological Arena Co. v. City of Dallas, Tex.Civ.App., 45 S.W.2d 714; 73 C.J.S. Public Administrative Bodies and Procedure § 62, p. 389; Federal Trade Com. v. Cement Institute, 333 U.S. 683, 68 S.Ct. 793, 92 L.Ed. 1010.

The order of the Texas Water Commission is in the nature of a recommendation concerning a project proposed for construction by an agency of the Federal Government and is not conclusive and does not commit the Federal Government to construct the project.

Generally courts can review only final actions of an agency having exclusive jurisdiction of the matter concerned. 1 Tex.Jur.2d 678, Sec. 38; Sun Oil Co. v. Railroad Comm., 158 Tex. 292, 311 S.W.2d 235.

The construction of multiple-purpose flood control projects by the Federal Government has been held to be a legitimate exercise of the commerce power. United States v. Grand River Dam Authority, 363 U.S. 229, 80 S.Ct. 1134, 4 L.Ed.2d 1186.

In Anderson v. Seeman, 252 F.2d 321 (5th Cir. 1958) cert. den., 358 U.S. 820, 79 S.Ct. 32, 3 L.Ed.2d 61, the Court held that “We think the language * * * is not susceptible of the construction that before the building of the dam the United States must seek and obtain permission from the Texas Board of Water Engineers. * * * Nothing is stated that permits the conclusion that even as to future projects a final disagreement with a state shall stand as a veto of the project.” First Iowa Hydro-Elec. Co-op v. Federal Power Commission, 328 U.S. 152, 66 S.Ct. 906, 90 L.Ed. 1143; City of San Antonio v. Board of Water Engineers, Tex.Civ.App., 334 S.W.2d 325, er. ref., n. r. e.

No effective relief can be granted appellants at this time, and the suit is moot, or in any event the order of the Texas Water Commission pursuant to Article 7472e is not appealable.

The judgment of the trial court is affirmed.

HUGHES, Justice

(concurring).

My concurrence in the majority opinion is limited to the holding that the order appealed from is purely administrative in character, made under a statute which does not provide for an appeal, and which order does not affect vested property rights or violate any constitutional rights of appellants. -

The Trial Court acquired no jurisdiction by the attempted appeal from such order and its judgment of dismissal was proper.


author: DIXON, Chief Justice.

text:
    NEW HOME CONSTRUCTION CORPORATION et al., Appellants, v. James B. O’NEILL, Appellee.
    No. 16252.
    Court of Civil Appeals of Texas. Dallas.
    Dec. 6, 1963.
    Rehearing Denied Jan. 3, 1964.
    Lefkowitz, Green, Ginsberg, Eades & Gilmore, Jack D. Eades, Dallas, for appellants.
    Clair F. Achenbach, Dallas, for appellee.
   DIXON, Chief Justice.

Appellee James B. O’Neill brought this suit against New Home Construction Company, a corporation, and Harry C. Silver and Sam Laughlin, appellants, and Ray A. Radford for damages for breach of a written warranty and for defects in construction of a house purchased from appellants. Following a trial before a jury judgment was rendered against appellants for $6,300.-00.

Judgment was rendered in favor of Ray A. Radford, an air-conditioning contractor, and he does not figure in this appeal.

On January 22, 1957 appellee purchased a house from appellants for a consideration of $13,800.00. At the same time appellants executed a written Warranty of Completion of Construction in Substantial Conformity with Approved Plans and Specifications in accordance with Section 801 of the Housing Act of 1954, or Section 36.4525 of Veterans Administration Regulations. The warranty was executed for the purpose of inducing a VA-FHA loan.

Appellee moved into the house on February 1, 1957. On July 5, 1957 he sent appellants a ten-page letter listing 108 alleged defects in the construction. Appellants wrote a letter dated July 17, 1957 to the Veterans Administration requesting that a representative of the Administration meet with appellee and a representative of appellants to arbitrate the controversy.

On August 16, 1957 the FHA notified the parties that as a result of its inspection it thought appellants should accept responsibility for correcting eleven of the 108 items, and appellee should assume responsibility for the remaining items, which according to FHA were items of ordinary maintenance. Appellants undertook to remedy the eleven defects. On October 1, 1957 the FHA Director wrote to appellants thanking them for their cooperation and advising that the Director was closing his file concerning appellee’s complaint.

Thereafter appellee filed this suit. He went to trial on his sixth amended petition. Appellants assert that appellee’s cause of action is solely for breach of the written warranty for construction of the house in conformity with the plans and specifications. Appellee contends that his petition asserts a cause of action for breach of the written warranty and also for defects in construction.

We pause here to point out that non-conformity to plans and specifications is one thing; defects in material and workmanship constitute another thing. A house may be well built in all particulars, yet not be constructed in conformity with plans and specifications. On the other hand a house may conform to plans and specifications yet may eventually disclose defects in construction. City of Huntsville v. McKay, Tex. Civ.App., 286 S.W. 305, 307.

The distinction is important in this case, for the written warranty is only for substantial compliance with approved plans and specifications. And the warranty requires that appellee shall give written notice within one year of instances of failure to conform to the plans and specifications. Ap-pellee failed to give such notice. His letter of February 1, 1957 listed 108 alleged defects in workmanship and materials. It did not give notice of alleged deviations from plans and specifications.

The jury found that appellee failed to give the required notice. There is ample evidence in support of the jury’s finding. Since we believe notice was mandatory under the terms of the written warranty we have concluded that under the record now before us appellee is not entitled to recover in his cause of action based on the written warranty. We therefore sustain appellants’ first and second points on appeal.

What of appellee’s alleged cause of action for defects in the construction of the house? Appellants say appellee’s sixth amended petition does not state any such cause of action. It must be admitted that appellee’s pleading is not altogether clear. But it does refer to defects and evidence was admitted of defects. The case was submitted to the jury in part on the theory of defects. Therefore we hold that appel-lee’s pleading alleges a cause of action on the ground of alleged defects in the construction of the house separate from and in addition to the cause of action on the written warranty.

Nevertheless, appellee’s judgment for alleged defects cannot be permitted to stand, for there is no evidence to support the jury’s finding that reasonable compensation for repairs is $6,300.00.

The jury found in answer to Special Issue No. 11 that the house can be repaired without substantially reconstructing the building. In answer to Special Issue No. 12 the jury found that the sum of $6,300.00 will fairly and reasonably compensate ap-pellee for such repairs. Judgment was rendered for that amount.

It is well established that the measure of damages for construction defects which can be remedied without impairing the building as a whole is the reasonable cost of remedying the defects. Loggins v. Gates, Tex.Civ.App., 301 S.W.2d 525, 527; Birmingham v. Lindemann, Tex.Civ.App., 236 S.W.2d 843; Super-Cold Southwest Co. v. Green & Romans, Tex.Civ.App., 196 S.W.2d 340; McBurnett v. Smith & McCallin, Tex.Civ.App., 286 S.W. 599, 601; Waco Cement Stone Works v. Smith, Tex.Civ.App., 162 S.W. 1158, 1159; 10 Tex.Jur.2d 65; Restatement of Law of Contracts, Sec. 346; 76 A.L.R.2d 810.

The only evidence of the reasonable cost of necessary repairs we find in the record is that offered by the witnesses Webb, Gibson and Phillips. One of them testified such cost would be $100.00; another that it would be $600.00; the third that it would be $1,270.00. We find no evidence that the reasonable and necessary cost of the repairs would be $6,300.00. We sustain appellant’s third point on appeal.

The judgment of the trial court is reversed and the case remanded for another trial.

Reversed and remanded.