text:
    CENTRAL POWER AND LIGHT COMPANY, Appellant, v. STATE of Texas, Appellee.
    No. 202.
    Court of Civil Appeals of Texas. Corpus Christi.
    Sept. 29, 1966.
    Rehearing Denied Dec. 29, 1966.

      Philip McConnell, Corpus Christi, for appellant.
    W. O. Shultz, Asst. Atty. Gen., Austin, for appellee.
   OPINION

SHARPE, Justice.

This suit was brought by the State of Texas, appellee, upon the relation of its State Treasurer, to escheat certain personal property held by Central Power and Light Company, appellant, under the provisions of Article 3272a, Vernon’s Ann.Civ.St. Five categories of property were originally involved in the trial court, i. e., (1) unclaimed dividends and funds for redemption of stock, (2) unclaimed customer’s service deposits and interest thereon, (3) unclaimed funds for the redemption of bonds, (4) unused and unclaimed deductions from employees salaries for the purchase of United States Savings Bonds, and (5) unclaimed wages. All of these funds had been unclaimed for seven years prior to filing of the instant suit, and were alleged to be abandoned.

In a non-jury trial, judgment was rendered ordering escheat as to the first four above-mentioned categories, but denying it as to the fifth, concerning unclaimed wages, on the basis that such claims were barred by limitation. At the request of appellant, the trial court made and filed findings of fact and conclusions of law, which will be more fully discussed in the course of the opinion.

Appellant urges two points of error, as follows:

FIRST POINT
The error of the Trial Court in finding and adjudging that the customers’ service deposits and accrued interest thereon constituted a pledge or bailment and the relationship of debtor-creditor between the Appellant and the customers was not created and that limitations had not run against the former customers’ rights or claims thereto; hence, the State was entitled to escheat such claims and enforce them against Appellant.
SECOND POINT
The error of the Trial Court in adjudging the escheat by the State of Texas of claims to funds of debts in favor of claimants or creditors whose last known addresses were, according to Appellant’s books and records, in other states than Texas with laws providing for the es-cheat of such claims to funds and debts.

On this appeal only unclaimed customers service deposits are involved under point one, and unpaid dividends on preferred stock under point two.

Hereafter, appellant will sometimes be referred to as the “Company” and the parties who contracted with it for service as the “Customer” or “owner of the deposit.”

The basic facts relating to point one will be briefly stated. Appellant is a public utility corporation, incorporated under the laws of Texas, engaged in the business of generating and selling electric power and energy. Over a period of some forty years, ending in 1957, covered by the State’s suit, approximately 29,000 former customers of appellant failed to claim service deposits and accrued interest thereon totaling $76,-904.49 upon discontinuing electric service from appellant. Each of these unclaimed deposits with any accrued interest thereon was reported to the State Treasurer in accordance with the requirements of Article 3272a, V.A.C.S. The originals of these reports were introduced in evidence in the trial court as Plaintiff’s Exhibit No. 1 and have been forwarded to and are part of the record in this Court. Representative or specimen forms of receipts and certificates issued to customers in connection with these deposits are also in the record. The customers making the deposits discontinued taking electric service more than seven years before the institution of this suit by the State. Beginning in the year 1936, all inactive customers deposits held by appellant for five years after discontinuance of service have been transferred to nonop-erating income and, accordingly, were included in income for payment of federal income taxes. This practice was followed through the calendar year 1960.

With reference to customers service deposits the trial court made findings of fact as follows:

“1. I find that the funds involved in this suit which are designated as ‘inactive customer deposits’ were deposited with Central Power & Light Company by the persons listed in Exhibit C of Plaintiff’s Exhibit No. 1 as a condition precedent to the furnishing of electrical service to such persons by Central Power & Light Company.
“2. I find that Central Power & Light Company acknowledged by the receipts issued that such deposits were security for the payment of any and all indebtedness for services rendered by Central Power & Light Company to the depositor.
“3. I find that, subsequent to the dates Central Power & Light Company filed its reports of property subject to escheat and prior to the time this action was filed, such company either refunded or credited on existing accounts 1733 ‘inactive customer deposits’ listed in Exhibit C of Plaintiff’s Exhibit No. 1 totaling $8850.96 upon demand and without protest that the statutes of limitation barred the recovery of such deposits.”

Also concerning customers service deposits, the trial court filed conclusions of law as follows:

“1. I conclude that the deposits of money held by Central Power & Light Company as ‘inactive customer deposits’ are held in a fiduciary capacity pursuant to a type of bailment known as a pledge.
“2. I conclude that the periods of limitation provided by the statutes of this State have never commenced to run and the « causes of action of those persons listed in Exhibit C of Plaintiff’s Exhibit No. 1 for the return of their deposits have not been barred by such statutes of limitation.
“3. I conclude that Article 1440 of Vernon’s Civil Statutes imposes upon Central Power & Light Company an absolute duty to return the ‘inactive customer deposits’ in question and that the limitation statutes of this State cannot relieve the Company of such duty or bar an action to compel the performance thereof.
“4. I conclude that the plea of limitations asserted by Central Power & Light Company has as its sole purpose the circumvention and avoidance of the provisions of Article 3272a of Vernon’s Civil Statutes and is not intended to preclude the right of the persons making such deposits to have them returned.”

Under its first point, appellant’s basic argument is that the unclaimed customers service deposits and accrued interest thereon were barred by the two and/or four-year statutes of limitation, and that the State can escheat no greater right than the former owners or claimants had, which amounts to no more than an unenforcible claim against appellant. Appellant further specifically contends that the customers service deposits created only simple debts arising out of a creditor-debtor relationship which were barred by limitation when this suit was filed. Appellee contends that the trial court correctly concluded that they were pledges or bailments and that limitations would not begin to run in the absence of a showing that repudiation of the pledges had been communicated to the pledgeors; therefore, that the claims were enforcible against appellant.

In Southern Pacific Transport Company v. State of Texas, 380 S.W.2d 123 (Tex.Civ.App., 1964, writ refused), it was held that statutes of limitation can be plead against the State of Texas to bar enforcement of stale claims which are escheated under Article 3272a, V.A.C.S.; that when the right to plead limitations vests in a defendant, it cannot be constitutionally divested by the State; that the State can escheat no greater right to enforce the claim than was held by the former owner; that after limitations had run, whatever claim the State escheated was unenforcible; and that, although the State could recover judgment escheating the claims, a judgment enforcing payment of the same was improper.

The exact question as to whether claims to customers service deposits of the type involved here are subject to the running of the statutes of limitation has not been passed upon by Texas appellate courts.

Appellant relies in part upon cases from other jurisdictions holding that the relationship between the claimant and the holder of the deposit is that of debtor-creditor; and that limitations will bar enforcement of the claim. See State of New Jersey v. Atlantic City Electric Company, 23 N.J. 259, 128 A.2d 861 (1956); State of New Jersey by Furman v. Plainfield-Union Water Company et al., 75 N.J.Super. 571, 183 A.2d 684 (1962); Commonwealth v. Kentucky Power & Light Company, 257 Ky. 66, 77 S.W.2d 395 (1934). The New Jersey escheat cases in determining the contractual intent of the parties place emphasis upon the factors that the customers service deposit was made and accepted without restriction as to use and without objection to commingling it with the general funds of the company; and that the company obligated itself to pay interest at a fixed rate per annum. The relationship between the company and customer was there held to be that of debtor and creditor. The only case cited to us holding to the contrary, and strongly relied upon by appellee, is Brooklyn Borough Gas Co. v. Bennett, 154 Misc. 106, 277 N.Y.S. 203 (1935), a trial court decision.

The subject of utility customer service deposits has been dealt with in two Texas Statutes: Article 1440, V.A.C.S., and Article 1054, Vernon’s Ann.P.C. From 1923 until amended in 1963 those statutes read as follows:

“Art. 1440. Deposits for installing service
“Every person, firm, company, corporation, receiver or trustee engaged in the furnishing of water, light, gas or telephone service which requires the payment on the part of the user of such service a deposit of money as a condition precedent to furnishing the same, shall pay six per cent interest per annum on such deposit to the one making same, or to his heirs or assigns, from the time of such deposit, the same to be paid on the first day of January of each year or sooner if such service be discontinued. When such service is discontinued, such deposit, together with any unpaid interest thereon, or such part of such deposit and unpaid interest, not consumed in bills due for such service, shall be returned to such depositor, his heirs or legal representatives. Acts 2nd C.S. 1923, p. 101.”
“Art. 1054. Deposit for installing service
“Every person, firm, company, corporation, receiver or trustee engaged in the furnishing of water, light, gas or telephone service which requires the payment on the part of the user of such service a deposit of money as a condition precedent to furnishing any such service, shall pay six per cent interest per annum on such deposit to the one making same, or to his heirs or assigns, from the time of such deposit, the same to be paid on the first day of January of each year, or sooner if such service be discontinued. When such service is discontinued, such deposit, together with any unpaid interest thereon, or such part of such deposit and unpaid interest not consumed in bills due for such service, shall be returned to such depositor, his heirs or legal representatives. Whoever violates any provision of this article shall be fined not less than twenty-five nor more than two hundred dollars, or be confined in jail not less than six months nor more than one year, or both. Acts 2nd C.S. 1923, p. 101.”

The said statutes were amended by Acts 1963, 58th Legislature p. 50, ch. 32, Sections 1 (Art. 1440, V.A.C.S.) and 2 (Art. 1054, V.A.P.C. so as to provide that interest on deposits would be payable annually on demand, instead of on the first day of January of each year, but such amendments are not material to disposition of the instant suit.

A review of analogous Texas cases leads us to the view that the majority rule concerning customers service deposits, particularly as announced in the persuasive New Jersey decisions, should be followed by us. The case of Brooklyn Borough Gas Co. v. Bennett, supra, appears to be distinguishable on several grounds, particularly because of the differences in the Statutes of New York there involved and the pertinent Texas Statutes.

The basic relationship between the company and the customer here is that of supplier and user; and a customer’s service deposit was required by the contract which created that relationship, as security for payment of the user’s bill. Although three different forms of receipts or certificates appear in the record, they all provide in substance that when service is discontinued the company will refund or return the deposit together with unpaid interest thereon less any amounts due it. The provisions of the above-mentioned statutes concerning return of the customer’s service deposit are substantially the same as contained in the agreement of the parties. In any event, the statutory provisions would be incorporated into the contract between the parties. Winder Bros. v. Sterling, 118 Tex. 268, 12 S.W.2d 127, 14 S.W.2d 802 (1929).

The contract thus provides for the time and manner for discharging the company’s obligation concerning the deposit. The time is upon discontinuance of service and settlement of the account. The manner of determining the amount is that the customer’s bill, if any, may be deducted from the deposit; and if there is no bill, the full amount of the deposit is to be returned to the customer.

When service is discontinued the relationship of supplier and user ceases to exist. When the amount of the customer’s bill is ascertained the sum of money owed by the company is then settled. The deposit, or balance of it, is no longer security held for payment of a debt owing by the customer. Collection by the customer is all that remains to terminate the transaction. He has a right to collect and the company has an obligation to pay, both of which are fixed by the contract.

There is nothing in the contract between the parties which shows an intent that the company would hold the deposit indefinitely after the relationship of supplier and user is terminated. On the other hand, the intent shown is that the customer would have a matured right to a refund of an amount of money equivalent to the deposit, or the balance of it, after discontinuance of service and settlement of the account. Under these conditions, the obligation of the company is nothing more than to pay a simple debt.

We therefore hold that the legal relationship between the company and its customers established in this case was that of debtor and creditor; and that the statutes of limitation can be properly asserted by the company, if it so elects, as a defense to the claim of the owner of the deposit. Limitations will begin to run on the owner’s claim for return of the deposit when service is discontinued plus a reasonable time for the ascertainment of the amount of the customer’s bill and the balance owed by the company.

The trial court erred in concluding that the company held that customers service deposits in a fiduciary capacity pursuant to a type of bailment known as a pledge; that the customers claims were not barred by limitation; that Art. 1440, V.A.C.S., imposes an absolute duty upon the company to return such deposits, of which it cannot be relieved by the statutes of limitation; and that the company’s plea of limitations was for the sole purpose of avoiding the provisions of Art. 3272a, V.A.C.S., and, therefore, ineffective.

In addition to our holding that the contracts in question show an intent to create the relationship of debtor and creditor, it is further apparent that the customer’s service deposits are not attended by the legal characteristics of pledges and that the parties do not have the remedies of pledgeor and pledgee.

It appears here that title to the specific money deposited by the customer passed to the company upon its delivery. Story v. Palmer, 284 S.W. 331 (Tex.Civ.App.1926, n. w. h.). The money so deposited was not segregated to preserve its separate identity, but was commingled with the general funds of the company. Upon discontinuance of service and settlement of the account, the owner of the deposit, or the balance of it, had a claim, not to specific money, but to an amount of money owed by the company. Thus, the essential element of a pledge, that the pledgeor retain title to the property pledged is lacking. See First Nat. Bank of Wichita Falls v. McCamey, 130 Tex. 148, 149, 105 S.W.2d 879 (1937).

It further appears that the company did not have a lien on the money actually deposited, because its specific identity was lost. Instead, the company originally acquired title to the money, and after it was commingled with other funds had a contract right to apply the amount held by it to the customer’s bill. Foreclosure on specific money was impossible, and as to an amount of money was unnecessary. It thus appears that another essential element of a pledge, that the pledgee have a lien on property and consequent right to enforce it, is also lacking. First Nat. Bank of Wichita Falls v. McCamey, supra.

It is also the rule that where a valid pledgeor-pledgee relationship exists originally and the pledgor’s debt is satisfied, the pledgee is legally obligated to return the property pledged to the pledgeor. If the pledgee fails to perform such obligation the pledgeor may elect to recover the property itself, or to sue for damages for breach of contract of the pledgee’s obligation to return it, or to recover the proceeds in case it has been sold. See 46 Tex.Jur.2d, Pledges and Collateral Security, Sec. 18, p. 212. In this case the company could not return the specific money, but could return only an amount of money owing to the customer upon discontinuance of service and settlement of the account. The customer’s cause of action, therefore, could not be for return of the specific property pledged; neither could it be for conversion of specific property, since it appears that title to the money had long since passed to the company under the agreement of the parties. The remedy of the customer would simply be that of a creditor for recovery of a debt against which statutes of limitation will operate.

There is authority for the proposition that where money, as distinguished from other personal property, is deposited to secure payment of an account, the deposit is not a pledge, but is the subject of a creditor-debtor relationship. See Wilcox v. Gauntlett, 200 Mich. 272, 166 N.W. 856, (1918); Commercial National Bank v. Cutter Realty Company, 205 N.C. 99, 170 S.E. 139 (1933). There are several Texas cases dealing with money deposits as security for payment or performance of lease contracts, in none of which are the deposits treated as pledges. See Smith v. J. Weingarten, Inc., 120 S.W.2d 878 (Tex.Civ.App., 1938, wr. dism.); Fry v. Spencer, 141 S.W.2d 730 (Tex.Civ.App., 1940, n. w. h.); Hill and Hill Truckline, Inc., v. Powell, 319 S.W.2d 128 (Tex.Civ.App., 1958, n. w. h.)

Although we are convinced that only a relationship of creditor-debtor is here involved, it is also apparent that even if a pledgeor-pledgee relationship originally existed, the claims in question are nevertheless subject to a defense of limitations. Here the owner of a customers service deposit had a claim for the return of the deposit, or balance of it, upon discontinuance of service and settlement of the account. The amount of the company’s liability was then fixed and only collection by the owner remained. The case therefore is subject to the rule that if the only act necessary to perfect a plaintiff’s cause of action is one to be performed by him, and he is not under legal disability, that he cannot indefinitely suspend the running of limitations by delaying performance of the act. See Jackson v. Tom Green County, 208 S.W.2d 115 (Tex.Civ.App., 1948, wr. ref. n. r. e.). If demand was an integral part of the customer’s cause of action for return of the deposit, it is true that limitation would not run unless waived or unreasonably delayed; however, it has been held that in the absence of mitigating circumstances, a time coincident with the running of the statute of limitations will be deemed reasonable, and if demand is not made within that period, the action will be barred. Cook’s Adm’rs v. Cook, 19 Tex. 434 (1857); Foreman v. Graham, 363 S.W.2d 371 (Tex.Civ.App.1962, n. w. h.) ; Aetna Casualty and Surety Co. v. State for Use and Benefit of City of Dallas, 86 S.W.2d 826 (Tex.Civ.App.1935, wr. ref.). In this case every claim for refund of deposit was more than seven years old when this suit was filed. There is no showing of disability or other reason on the part of customers or owners of the claim which would prevent making of demand. It thus appears that if demand was necessary, it has been unreasonably delayed, and the four year statute of limitation is available as a defense.

We now pass to a discussion of the trial court’s conclusions of law numbers 3 and 4, which hold in substance that Art. 1440, V.A.C.S., imposes an absolute duty on the company to return the customer’s service deposits not subject to relief under statutes of limitation, and that the sole purpose of the pleas of limitation here was to circumvent the provisions of Art. 3272a, V.A.C.S. Ap-pellee argues that in enacting Articles 1440, V.A.C.S., and 1054, V.A.P.C., the legislature intended that the relationship between utilities and their customers concerning deposits be something other than debtor-creditor; that there was thereby created an absolute duty to return the deposit not subject to operation of statutes of limitation. The trial court agreed with these contentions in its conclusions of law. Appellant contends that the trial court erred in so concluding and that the statutes of limitation are fully applicable to the customer’s service deposits. Appellant particularly says that the legislative history of Art. 3272a, V.A.C.S., supports its position and, further, that the courts will not imply exceptions to the operation of statutes of limitation in order to circumvent a defensive plea based upon the same. We agree with appellant.

At its First Called Session in 1961 the Texas Legislature passed H.B. 5, 57th Legislature, p. 49, Ch. 21, now codified as Article 3272a, V.A.C.S., which statute is completely silent on the subject of limitations in escheat cases. Appellant points to the fact that at the same session, H.B. 182 was rejected by the Texas House of Representatives. Sec. 16 of that bill reads as follows:

“The expiration of any period of time specified by statute or court order, during which an action or proceeding may be commenced or enforced to obtain payment of a claim for money or recovery of property, shall not prevent the money or property from being presumed abandoned property, nor affect any duty to file a report required by this act or to pay or deliver abandoned property to the State Treasurer.”

Appellant further calls attention to the fact that at the Regular Session of the 59th Legislature in 1965, H.B. 117 was introduced for the purpose of amending the original Í961 act, now Art. 3272a, V.A.C.S. Section 16 of that bill, as originally introduced, contained a provision that periods of limitation would not be a bar to the escheat of abandoned property. That section was deleted by the House Committee on Revenue and Taxation. As finally passed H.B. 117, Acts of 1965, 59th Legislature, p. 1230, Ch. 565, amending Art. 3272a, V.A. C.S., remained silent on limitations in escheat cases.

It is apparent that if the legislature had intended that statutes of limitation would not be available as a defense in escheats of “security deposits, unclaimed refunds and deposits for utility and other services” provided for in Articles 1440, V.A.C.S., and 1054, V.A.C.C., that the above-mentioned provisions would not have been omitted or deleted from the final act. Our conclusion on this point is in accord with the statement in Southern Pacific Transport Company v. State, supra, wherein the court at 380 S.W.2d 127, 128, said:

“There is no express provision in the laws of Texas which abrogates appellant’s right to plead limitation as against enforcement of claims which are barred before escheated, nor is there any implied exception of which we are aware.”
* * * * * ■ *
“In Continental Supply Co. v. Hutchings, Tex.Civ.App., 267 S.W.2d 914, error ref., the court said: ‘Statutes of limitation are now generally regarded with favor by the courts, are to be construed as other statutes, and their application is not to be evaded by implied exceptions.’ ”

Appellee also argues, in accordance with finding of fact No. 3 of the trial court that appellant, subsequent to filing its report, had made refunds or credits on 1733 accounts designated “inactive customer deposits” amounting to $8,850.96, without protest or insistence upon limitations, that such deposits were admitted to be pledges. This position is not well taken. Appellant’s waiver of the bar of limitations in some instances was permissible at its election and would not effect other claims which are subject to the defense of limitation. In any event, such waiver would not transform a debt into a pledge. To sustain appellee’s position on this point, we would necessarily be engrafting an additional exception to the operation of statutes of limitation, which is not permissible. Southern Pacific Transport Company v. State, supra; Continental Supply Co. v. Hutchings, supra.

For the reasons stated, appellant's point one is sustained as to lack of en-forcibility of payment of the claims involving customer’s service deposits which are barred in any event by the four year statute of limitations.

Appellant’s point two must also be sustained. The trial court erred in holding that the State of Texas was entitled to es-cheat certain claims in favor of various small creditors for dividends on preferred stock in the amount of $462.06 where appellant’s records and reports reflected that such unclaimed dividends were in the names of persons or claimants whose last known addresses were in nine other States having laws providing for escheat of such claims and funds. The record reflects that such laws were brought to the attention of the trial court.

The question here presented has been authoritatively settled by the decision of the Supreme Court of the United States in the case of The State of Texas v. State of New Jersey et al., 379 U.S. 674, 85 S.Ct. 626, 13 L.Ed.2d 596 (1965). There it was held that claims for debts or funds involving intangible personal property had their situs with the creditor, and that the State in which he is shown to reside, as reflected by the debtor’s books, if it has an applicable escheat law, is the only State entitled to effect such escheat. That rule is applicable here to the extent that appellant is indebted for unclaimed dividends on preferred stock to the creditors who reside in other States having escheat laws. The State of Texas is not entitled to es-cheat the same.

The trial court erred in holding by its conclusions of law 5, 6 and 7, that such nine other States, in the absence of jurisdiction in personam over appellant did not have the power to escheat the claims or property held by it, even though the last known address of the person entitled thereto was in such other States.

We are, therefore, of the opinion that as to customer’s service deposits involved under point one, the judgment escheating such claims should be affirmed, but that portion ordering appellant to pay the amount of such escheated claims should be reversed and rendered in favor of appellant; and that as to the dividends on preferred stock involved under point two, the judgment should be reversed and here rendered that such claims and funds are not subject to es-cheat by appellee. The judgment is otherwise affirmed.

Affirmed in part and reversed and rendered in part.


source: Caselaw Access Project

author: LANGDON, Justice. MASSEY, Chief Justice.

license: Public Domain

text:
    LIBERTY MUTUAL INSURANCE COMPANY, Appellant, v. Harold E. SMITH, Appellee.
    No. 16757.
    Court of Civil Appeals of Texas. Fort Worth.
    Dec. 2, 1966.
    Rehearing Denied Dec. 30, 1966.

      Brown, Day & Crowley and M. Hendricks Brown, Fort Worth, for appellant.
    John W. Herrick, Fort Worth, for ap-pellee.
   OPINION

ON MOTION FOR REHEARING

LANGDON, Justice.

...This is a workmen’s compensation case. Claimant recovered judgment in the trial court based upon a jury finding of total and permanent disability to which appellant makes no complaint. Its appeal is based solely upon the claimant’s alleged failure to file proper notice of nonabidance in compliance with Article 8307, § 5, Vernon’s Ann.Tex.Civ.St.

On March 13, 1964, the Board rendered its final award.

On March 19, 1964, the claimant filed suit in the district court of Tarrant County to set aside said final award.

On March 23, 1964, the Board received the following communication,

“Fort Worth, Texas
“Industrial Accident Board
“Austin, Texas
“Gentlemen:
“This will advise that a suit was filed in this Court to set aside the award of the Industrial Accident Board of Austin, Texas, and styled:
“Harold E. Smith
“Vs. No. 33993-C
“Liberty Mutual Insurance Company
“The number of the Board is-
“The Date of the alleged injury was 5-10-63
“The Name of the Employer was Bell Helicopter Co.
“Yours very truly,
“George Johnson
“District Clerk
Tarrant County, Texas
“By Sally B. Moran, Deputy.”

On March 24, 1964, the appellant (defendant) was served a copy of the claimant’s petition and citation in the case filed in the district court.

It is undisputed that the above letter from the deputy district clerk was the only communication received by the Board concerning notice of the claimant’s nonabidance with and appeal from its final award.

In the district court case the defendant filed a plea in abatement based upon denial under oath that notice of nonabidance required by Art. 8307, § 5, V.A.T.S., was filed within 20 days after the Board’s final award. Prior to trial it moved for dismissal and after trial for instructed verdict and judgment notwithstanding the verdict based upon the same grounds. All motions were overruled.

By five points of error the appellant contends the trial court had no jurisdiction to try the case as an appeal from the award of the Industrial Accident Board nor jurisdiction to enter judgment therein and erred in overruling its various pleas and motions all because of claimant’s alleged failure to give proper notice of nonabidance in strict compliance with the statute and finally that claimant failed to meet his burden of proof in showing that he as an interested party, had filed the required notice.

The claimant contends that the letter from the deputy district clerk to the Board was substantial if not strict compliance with the statute and relies upon the well established rule that the workmen’s compensation laws should be liberally construed in favor of the claimant.

We affirm.

The applicable portion of Art. 8307, § 5, V.A.T.S., is as follows: “All questions arising under this law, if not settled by agreement of the parties interested therein and within the provisions of this law, shall, except as otherwise provided, be determined by the Board. Any interested party who is not willing and does not consent to abide by the final ruling and decision of said Board shall, within twenty (20) days after the rendition of said final ruling and decision by said Board, file with said Board notice that he will not abide by said final ruling and decision. And he shall within twenty (20) days after giving such notice bring suit in the county where the injury occurred to set aside said final ruling and decision, and said Board shall proceed no further toward the adjustment of such claim, other than hereinafter provided. * * * If any party to such final ruling and decision of the Board, after having given notice as above provided, fails within said twenty (20) days to institute and prosecute a suit to set the same aside, then said final ruling and decision shall be binding upon all parties thereto; * * (Emphasis supplied.)

Art. 427c-l, of the Penal Code regarding the “Clerk’s failure to notify Industrial Accident Board of Appeals or give notice of judgment” reads as follows: “In every case appealed from the Board to any district or county Court, the Clerk of such Court shall, within twenty (20) days after the filing thereof, mail to the Board a notice giving the style, number, and date of filing such suit, and shall, within twenty (20) days after judgment is rendered in such suit, mail to the Board a certified copy of such judgment. The duties devolving upon district and county clerks under this law shall constitute a part of their ex officio duties and for such services they shall not be entitled to any fee. * * *

“Any Clerk of a district or county Court who fails to comply with the provisions of this law shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not more than Two Hundred and Fifty Dollars ($250). Acts 1937, 45th Leg., p. 1352, ch. 502, § 19.”

A review of the above statutory provisions will reflect that the Legislature has provided a time table by which finality of the Board’s award may be established or an appeal therefrom be perfected.

Under the statute the claimant is given twenty days after the final award of the Board to file his notice of non-abidance and thereafter may within 20 days file suit in the district court to set aside the award of the Board. The district clerk is given 20 days after the suit is filed in which to notify the Board of its filing. If, after filing his notice of nonabidance the claimant fails to file suit to set aside the award it becomes final and the claimant is bound by it. It is apparent that a claimant who files a notice of nonabidance is not required to file a suit. He may do so if he wishes and such suit must be filed within the 20 day period prescribed by the statute. Filing of the notice of nonabidance is for the benefit and information of the Board. It does not deprive the Board of jurisdiction nor confer any jurisdiction upon the district court. No rights are affected by this notice nor is jurisdiction conferred upon the district court until suit is filed within 20 days after such notice. The filing of the notice of nonabidance merely sets up a time table which must be adhered to once it is filed commencing from the date of such filing. The filing of the notice of nonabidance puts the Board- on notice that a suit may be filed in the district court which will deprive the Board of further jurisdiction. The suit must be filed within the time table prescribed by the statute in order to deprive the Board of jurisdiction or to confer jurisdiction upon the district court.

In the instant case the .notice received by the Board was that the claimant has filed suit to set aside the award rather than notice that he may file a suit. The Board was immediately placed upon notice that it had no further jurisdiction and that jurisdiction had been conferred upon the district court in which the suit was filed. What additional information could a notice of nonabidance on the part of the claimant have imparted? The Board was clearly notified of the claimant’s unwillingness to abide by the Board’s final award within the 20 day period. The notice was initiated by the claimant’s suit filed for and on his behalf. Certainly he was an interested party. Article 8307, § 5, V.A.T.S., does not require notice to other “interested parties” as it once did. However, in this case the appellant was served with copy of petition and» citation in-the case within 11 days after the final award of the Board. Thus the time table was reduced or squeezed into 11 days rather than the maximum 40 days for the claimant and 60 days for the district clerk as prescribed by the statutes.

As previously stated the notice of nonabidance filed within the 20 day period following the final award is to set in motion the time table which must be adhered to. However, when all of the notices and action required by the statutes are complied with in the first twenty days after the final award the requirements of the time table have been satisfied.

* The claimant’s notice of nonabidance and the filing of his suit with service on the appellant was accomplished within the period of 11 days (March 13 to March 24, 1964) rather than the maximum 40 day period permitted by the statute and the notice required by the clerk was given within the same 11 days rather than the 60 days provided by statute.

Thus, within a period of 11 days from the time of the final award, the Board, because of the claimant’s action in filing suit and the clerk’s notification thereof, was clearly on notice, initiated by the claimant’s action in filing suit, that the latter was not only unwilling to abide by the final award but had already filed his suit to set it aside. Likewise within the same 11 day period the appellant was served with copy of claimant’s petition and citation. In our opinion the statutory provisions relative to notice were satisfied.

The following excerpts from various designated sections of 63 Tex.Jur.2d are set forth below and reference is made to the authorities cited under each:

“The notice (of nonabidance) should actually be received by the board within the twenty-day period, and not merely mailed within that period.” § 338, p. 323. In the instant case it was received "within 10 days rather than 20 days.

“The statute does not require that the notice be signed by the claimant. A notice is sufficient only if it shows that the party giving it was a party to the award and in definite language advises the board that he will not abide by the award, but, on the contrary, will bring a suit to set it aside.” § 339, p. 324.

The notice from the clerk in very definite language reflected that the claimant, a party to the award, did not intend to abide by it and had already filed suit to set the award aside.

“The filing of a notice of nonabidance with the board means the presentation of the notice to the board.” § 340, p. 324.

“The statute establishes that unless the party dissatisfied with an award files his suit within twenty days after receipt by the board of his notice of nonabidance, he cannot have the award reviewed. * * * The words ‘institute and prosecute,’ as used in that portion of the statute that declares that the final ruling and decision of the board shall be binding, unless the dissatisfied party shall institute and prosecute a suit within the allotted period, mean no more than that the party shall bring a suit. * * *

“Similarly, a filing of the suit before the board has received the notice is not necessarily fatal, and it has been said that there is nothing in the act that would render fatal the filing of suit before the giving of notice provided both were within twenty days after the award.” § 341, p. 325.

In the instant case notice was given, suit filed and appellant was served all within 11 days after the final award rather than within the 20 day period.

“A suit to set aside an award of the industrial accident board brought under the statute, is in fact a suit, not an appeal, though appellate in character, and proceedings before the board are viewed as mere preliminaries to the suit. . Thus the legal effect of bringing a suit to set aside an award or order is to divest the board of all jurisdiction in respect of the claim and to invest the court with jurisdiction over all parties and issues concerned, subject only to the qualification that the rights and obligations of the parties in a suit brought under the act are entirely controlled by it except as to matters of form and procedure not therein prescribed. The subject matter is withdrawn from the board when the suit is filed and the statute prohibits the board from proceeding further toward the adjudication of the claim.

“The filing of the suit no longer has the effect of merely suspending the award or restoring it to effectiveness on abandonment or dismissal of the action; the award is abrogated, becomes a nullity, and, except for jurisdictional purposes, is as though it had not been. A claimant is out of court without an award or judgment in his favor if he fails to prevail.” § 343, p. 328. (Emphasis supplied.)

The preceding paragraph reflects the harsh effects visited upon a claimant who with diligence files his suit within the statutory 20 days as distinguished from a claimant who gives his notice of non-abidance and fails to file a suit. The latter will be bound by the Board’s award whereas the award would be a nullity for the diligent were the appellant to prevail in this cause. We do not believe this to be the intent of the Legislature when all requirements as to notice and filing of the suit were performed within the 20 days following the award.

“There is no right to invoke the jurisdiction of the district court until the parties have exhausted the rights given them by the workmen’s compensation law, and unless the board had jurisdiction the court itself can have none. Thus, unless the employer is given notice of the injury and the claim is acted on by the industrial accident board, the courts have no jurisdiction to hear and determine a suit for compensation based on the injury. It must be shown that the board has made a final award on a claim for compensation before the jurisdiction of the courts can be invoked. It should also be shown that notice of nonabidance was given and that suit thereafter was filed within the statutory periods.” § 347, p. 334. All actions and notices required were filed within the first 20 days.

There is a long line of Texas cases which hold that compliance with the Texas Workmen’s Compensation Act means only “substantial compliance.” Pacific Indemnity Co. v. Woodall, 253 S.W.2d 490, 492 (Fort Worth Civ.App., 1952, ref’d).

The case of Maryland Casualty Co. v. Hodge, 49 F.2d 127 (CCA, 5th Cir., 1931), contains the following language: “The Texas courts have liberally construed the statute in favor of workmen, and have held that informal notice of injury and demand for compensation is sufficient. Texas Employers’ Ins. Ass’n v. Tabor (Tex.Civ.App.) 274 S.W. 309, affirmed by the Commission of Appeals, 283 S.W. 779; Texas Employers’ Ins. Ass’n v. Wonderley (Tex.Civ.App.) 16 S.W.2d 386. It is apparent from the provisions of the statute and the just cited cases that a substantial compliance with the provisions as to notice and filing of the claim is all that is required.”

We find no application of the holding in Southern Surety Co. v. Arter, 44 S.W.2d 913 (Tex.Com. of App., 1932), to the facts of this case. The Southern Surety Co. of New York admittedly was not a party to the suit before the Board.

In Lewis v. American Surety Co., 143 Tex. 286, 184 S.W.2d 137, Commissioner Hickman, later Chief Justice of the Supreme Court in an opinion adopted by that court wrote as follows, “Were we to apply that same strictness to the notice and claim which is applied in passing on an exception to a pleading, the conclusion would doubtless be that the petitioner could not deny that he suffered a hernia on the date named. But, this court has consistently held that it was the intention of the Legislature that the proceedings with reference to giving notice and filing claims should be informal, and that great liberality should be indulged in determining the sufficiency and scope of such notices and claims.”

In Pacific Indemnity Co. v. Woodall, 253 S.W.2d 490, 492 (Fort Worth Civ. App., 1952, Ref’d), it is stated: “The courts have many times held that the Workmen’s Compensation Act, Vernon’s Ann. Civ.St. art. 8306 et seq., is to be construed liberally to the end that the benefits desired would be conferred upon the injured employee and that his rights would not be denied by any strained or narrowed construction of the provisions of the law. * * The Rule that the Act must be liberally construed in the employee’s favor should have particular application to the technical and procedural provisions of the Act. Texas Employers’ Ins. Ass’n v. Beckman, Tex.Civ.App., 207 S.W.2d 183.”

In summary we find that there has been substantial compliance if not strict compliance with all- of the pertinent statutory provisions. Every jurisdictional fact or event has occurred within 20 days of the award. Appellant as well as the Board was given adequate and timely notice and certainly the appellant sustained no harm.

In view of the facts and the authorities cited herein this court would be required to place a strained and strict construction upon the statutes in order to warrant a dismissal of the claimant’s case simply because a clerk notified the Board that an “interested party” was dissatisfied with the award and had filed suit rather than a direct notification from the claimant. This is particularly true since it was the action and initiative of the claimant in filing his suit which set in motion and prompted the ultimate notice from the clerk. Our holding would be otherwise had the clerk failed to send such notice within the 20 days after the award as was permitted under the statute but the fact remains that notice was timely.

A person acting on behalf of an “interested party” such as a friend, relative or attorney can clearly cause compliance with the notice of nonabidance provided for in § 5 of Art. 8307, supra.

As shown previously it is not necessary for the claimant to personally sign such notice. Any person acting for the claimant must have the express or implied consent of the “interested party” in giving such notice. The district clerk with the implied knowledge and approval of the claimant was acting in the interest of and on behalf of the claimant, the “interested party”, in forwarding to the Board notice of the filing of the suit before the expiration of the 20 days from date of the final award of the Board rather than to delay such notice until 20 days after the suit was filed.

We paraphrase the last paragraph of the opinion in Hart v. Texas Employers’ Ins. Ass’n, 42 S.W.2d 798 (Amarillo Civ. App., 1931, Ref’d), to read as follows: “That the (appellant) and the board had the statutory notice cannot be denied, and it is not shown that the failure to give the notice before filing the suit has in any way prejudiced the rights of any one. The provisions of the Workmen’s Compensation Law (Vernon’s Ann.Civ.St. art. 8306 et seq.) are to be liberally construed, and, while substantial compliance with its provisions is required, the objection urged here is purely technical, * * We think that the trial court’s action in refusing to sustain the various pleas and motions and in refusing to dismiss the case was proper.

For the reasons stated we are of the opinion that claimant has substantially complied with all formalities and requirements of the statute concerning notice and the timely filing of suit and that all of appellant’s points of error should be and same are accordingly overruled and the judgment of the trial court should be and same is hereby affirmed.

Affirmed.

Massey, C. J., dissents.

DISSENTING OPINION ON MOTION FOR REHEARING

MASSEY, Chief Justice.

In the belief that the District Court lacked jurisdiction because of want of notice to the Industrial Accident Board as provided by Art. 8307, § S, I would reverse the judgment of the trial court and dismiss the plaintiff’s suit. This was the decision reached in the original opinion of this Court on October 7, 1966.

Defendant insurance company appealed on the ground that the court did not have jurisdiction because of plaintiff’s failure to give notice to the Board that he would not abide by its final ruling and decision of March 13, 1964.

Plaintiff filed suit in a district court of Tarrant County on March 19, 1964 to set aside the Board’s award.

On March 23, 1964, the Board received the following communication:

“Fort Worth, Texas
“Industrial Accident Board
“Austin, Texas
“Gentlemen:
“This will advise that a suit was filed in this Court to set aside the award of the Industrial Accident Board of Austin, Texas, and styled:
“Harold E. Smith
“Vs. No.-33993-C
“Liberty Mutual Insurance Company
“The number of the Board is-
“The Date of the alleged injury was 5-10-63
“The Name of the Employer was Bell Helicopter Co.
“Yours very truly,
“George Johnson
“District Clerk Tarrant County, Texas
“By Sally B. Moran, Deputy.”

On March 24, 1964, defendant was served a copy of the petition and citation in the case filed in District Court.

The Board received no communication concerning notice and appeal except the letter from the deputy District Clerk.

Neither plaintiff nor his attorney communicated in' any manner with the Board within twenty days after the date of the Board’s award.

In the District Court suit defendant filed a sworn denial that notice was given the Board as required by Article 8307, Sec. 5, V.A.T.S.

Defendant, prior to trial, moved for dismissal and later moved for instructed verdict and judgment notwithstanding the verdict, all based on lack of jurisdiction because of plaintiff’s failure to file notice with the Board in compliance with Article 8307, Sec. 5.

All motions were overruled and judgment, based on jury verdict, rendered for plaintiff.

Plaintiff contends the letter from the deputy District Clerk to the Board was substantial compliance, if indeed not strict compliance, with the statute, and also relies strongly on the well-established rule that the workmen’s compensation laws should be liberally construed in favor of the claimant.

The pertinent portion of Article 8307, Sec. 5, is as follows: “All questions arising under this law, if not settled by agreement of the parties interested therein and within the provisions of this law, shall, except as otherwise provided, be determined by the Board. Any interested party who is not willing and does not consent to abide by the final ruling and decision of said Board shall, within twenty (20) days after the rendition of said final ruling and decision by said Board, file with said Board notice that he will not abide by said final ruling and decision.”

In Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084 (1926), the Supreme Court held: “This suit arises out of a workman’s compensation proceeding, and it is therefore in derogation of the common law. The rights to be enforced, and all the remedies provided therefor, are purely statutory, as distinguished from the common-law rights and remedies. * * * The general rule is that where the cause of action and remedy for its enforcement are derived not from the common law but from the statute, the statutory provisions are mandatory and exclusive, and must be complied with in all respects or the action is not maintainable. * * * The Workmen’s Compensation Act having created the rights to be enforced and provided the remedy therefor, each step in the progress of the maturity of a claim from the time of the injury to its final adjudication is a mandatory requirement, necessary to the exercise of jurisdiction by the first and succeeding statutory agencies. * * * ”

In Traders & General Ins. Co. v. Lincecum, 126 S.W.2d 692 (Tex.Civ.App., 1939, no writ hist.), this court, speaking through Justice Speer, held: “It is so well settled in this state that the rights of the parties in such cases as this are determined alone by the provisions of our Workmen’s Compensation Act, to the exclusion of all other remedies, that it requires no citation of authorities. It is equally well settled that the rights and remedies provided by the Act are statutory and must be complied with in all respects to mature the claim preparatory for the adjudication by the courts when not satisfactorily determined by the Industrial Accident Board. Mingus v. Wadley, 115 Tex. 551, 285 S.W. 1084; Federal Surety Co. v. Jetton, Tex.Com.App., 44 S.W.2d 923.”

In Texas Employers’ Ins. Ass’n v. Leake, 196 S.W.2d 842 (Tex.Civ.App., 1946, ref., n. r. e.), we held: “The liberality with which the Act is to be construed cannot be extended so as to ignore the plain unambiguous language by virtue of which the Legislative Act is to effectuate its most wholesome purpose. Its very strength lies in the language of the statute and any recovery must come within its provisions. There are many essential elements which enter into the rights of one seeking to recover compensation under the Act. A compliance with each is necessary for the courts to acquire jurisdiction on the statutory appeal from the award of the Board. Federal Surety Co. v. Jetton, Tex.Com.App., 44 S.W.2d 923; Scott v. Texas Employers’ Ins. Ass’n, Tex.Civ.App., 118 S.W.2d 354, error refused; Johnson v. Employers Liability Assur. Corp., 131 Tex. 357, 112 S.W.2d 449.”

Substantially the same holdings were made in Hood v. Texas Employers’ Ins. Ass’n, 260 S.W. 243 (Tex.Civ.App., 1924, no writ hist.); Taylor v. Royal Indemnity Co., 276 S.W.2d 412 (Tex.Civ.App., 1955, no writ hist.); Casualty Reciprocal Exchange v. Underwood, 33 S.W.2d 585 (Tex.Civ.App., 1930, no writ hist.).

Texas is cited in 100 C.J.S. Workmen’s Compensation, § 721, pp. 1070-1071, as one of the states where procedure provided by statute must be strictly followed.

In Pappas v. Royal Indemnity Company, 251 F.2d 439 (U.S.Ct. of App., 5th Cir., 1958), the question before the court was whether or not failure to file notice of appeal with the Board within twenty days was fatal to the appellee. The Court held: “We think it is.” The reasoning of the Court in reaching that result is applicable to the instant case. Said the Court: “Appellant would have had a better argument if the law had not been changed in 1927. Prior to 1927, Section 5 of Article 8307 required, in addition to notice of appeal to the Board, personal service of the notice on all adverse parties. It might have been argued then that omission of notice was cured by filing suit within twenty days; that the object of the requirement was to place the adverse parties on notice. But the 1927 Amendment, excising notice to-adverse parties, makes it clear that the sacramental notice is the notice to the Board. This is not just a technicality. (Emphasis added.) Under Article 8306, Section 12d, the Board retains jurisdiction of a claim and may issue new orders and alter its award until the notice of appeal is filed. There can be no appeal from an award that is not final. The effect of filing notice of appeal therefore is to make the award final and from that moment cut off the Board’s power to issue further orders affecting the award.”

The statute is clear and unambiguous in providing that “any interested party” who does not consent to abide by the final ruling shall file with the Board notice that he will not abide by the final ruling and decision.

The District Clerk was not an “interested party.” He was not affected by the award of the Board. Southern Surety Co. v. Arter, 44 S.W.2d 913 (Tex.Com.App., 1932).

Whether statutory law would properly be construed liberally or strictly as applied to any action necessarily depends upon existence of jurisdiction. Where jurisdiction to decide a cause of action does not exist a court should dismiss. In my opinion that was the condition existent in the court below.


author: PHILLIPS, Justice.

text:
    Herbert H. WOLFF, Appellant, v. TRAVELERS INSURANCE COMPANY, Appellee.
    No. 11435.
    Court of Civil Appeals of Texas. Austin.
    Dec. 14, 1966.
    Rehearing Denied Jan. 4, 1967.

      Jack Garey, K. Mack Kidd, Austin, for appellant.
    Meyers, Shannon & Armstrong, James R. Meyers, Austin, for appellee.
   PHILLIPS, Justice.

This is a workmen’s compensation case wherein the claimant, appellant here, sustained a back injury when he fell off a bus chassis during the course of his employment for Ward Body Works of Austin. Trial was to a jury which found that as a result of the injury to his back claimant was totally and permanently' incapacitated. The jury further found that a proposed surgical operation designed to fuse the lower part of his lumbar spine would not materially improve his condition and that such an operation would be more than ordinarily unsafe for claimant to undergo. The trial court rendered judgment for appellee notwithstanding the verdict which in effect, upheld the order of the Industrial Accident Board hereinafter described.

We reverse the judgment of the trial court and render judgment for appellant.

Before the trial appellee had admitted liability for a compensable injury and made regular weekly compensation payments for a period of time. Subsequently, appellee made a demand for surgery before the Industrial Accident Board. Pursuant to this demand two of the three members of the Board ordered appellant to undergo a proposed spinal fusion operation. Claimant refused the operation, consequently the Board limited appellant’s compensation to fifty two weeks under the provisions of Vernon’s Tex.Rev.Civ.Stat.Ann. art. 8306, Sec. 12b (1917). Hence the abovemention-ed trial and judgment.

Appellant is before us on twenty two points of error primarily concerned with the sufficiency of the evidence to sustain the jury’s findings on the surgery Sections 12b and 12e, Tex.Rev.Civ.Stat.Ann. art. 8306, among other points, and the court’s judgment notwithstanding said verdict.

We hold that the provisions in Sections 12b and 12e of Article 8306 providing that the Board shall not order an injured workman to submit to surgery unless their concurrence is by unanimous vote requires that all three members of the Board be present and vote and such vote be unanimous. It is undisputed that the employee representative, Mr. Leonard Carlton, was not present either during the discussion or the final decision requiring claimant to submit to surgery. Consequently we will only discuss this point raised by appellant in his assignments of error XV to XX.

Tex.Rey.Civ.Stat.Ann. art. 8307, Sec. 8, states that: “A majority of the Board shall constitute a quorum to transact business, and the Act or decision of any two members thereof shall be held the act or decision of the Board, except as otherwise herein specifically provided(Italics added.)

The Workmen’s Compensation Act is extremely long and detailed, however there are only two instances where the findings of the Board are required to be unanimous and these are with respect to the surgery Sections 12b and 12e of Article 8306.

Webster’s New International Dictionary, Second Edition, Unabridged, describes unanimous as:

“1. Being of one mind; agreeing in opinion, design or determination; con-sentient; as, the assembly was unanimous; the members of the council were unanimous in their approval of the report.
2. Formed with or indicating unanimity; having the agreement and consent of all; as, a unanimous opinion, vote.” (Italics added.)

Under the provisions of Article 8307, cited above, a quorum of the Board, or two members, may transact the vast and extensive business of the Board with the exception of the surgery provisions where the findings of the Board must be unanimous. To interpret these surgery provisions as having no different requirement from the other provisions of the Act would be to ignore the word “unanimous” entirely.

S3 Tex.Jur.2d, As to language of statute, Sec. 181 (1964) states the law as follows: “Where the statutory language is plain and unambiguous, and expresses a single definite and sensible meaning, it is conclusively presumed that the legislature intended to convey that meaning.”

Section 2 of Article 8307, cited above, entitled “Eligibility of Members” states that at the time of each appointment one member of the Industrial Accident Board shall be an employer of labor in some industry or business covered by this law; one shall be employed in some business industry as a wage earner, and the third member shall be a practicing attorney of recognized ability, and shall act in the capacity of legal adviser to the Board, in addition to his other duties as a member thereof, and be chairman of said Board.

In Tex.Atty.Gen.Op. Nos. 0-5079, (1943) and 0-4837, (1942) the Attorney General, in response to questions concerning the eligibility of members to the Board, pointed out that the qualifications described in Section 2 of Art. 8307 must be strictly construed in that they must truly represent the categories of endeavor described in the statute.

We quote from Opinion 0-4837: “Section 2, of Article 8307 quoted by you.evidences, we think, a very definite purpose on the part of the legislature that the membership of the Board should consist of a representative of employers of labor, a representative of labor, who himself is a wage earner, and lastly, of a lawyer. In prescribing the eligibility of the representative of labor, the statute requires that he be ‘employed in some business industry.’ We think this is a significant limitation upon the eligibility of such member. It is not enough to meet the requirement of the statute that he be an employee of some business, or of some industry. He must be employed in some ‘business industry.’ ”

In Texas State AFL-CIO v. Brown, 378 S.W.2d 917 (Tex.Civ.App. Austin 1964, writ ref’d n. r. e.) this Court recognized the fact that where a statute sets up a board (in this case the Texas Employment Commission) where individual members are to represent labor, management and the public respectively, the members are in fact agents for these various classifications and their partiality to such classifications is to be expected.

Consequently, the law envisioned that a totally disabled claimant 58 years old, with a history of epilepsy faced with a decision of whether to undergo major surgery or limit his compensation to 52 weeks would be entitled to have the labor representative on the board cast a vote.

In State ex rel. Rea v. Etheridge, 32 S.W.2d 828 (Tex.Comm’n App.1930, holding approved), the Court held that a statute empowering a quorum of a city council to enact taxing ordinances by two thirds vote of council does not authorize acceptance by two thirds vote of council present and voting, a quorum being necessary, but where the council consisted of five aldermen, two thirds vote of the entire elected group or all five, was necessary. The Court said: “However, if no text-writer, and no appellate court had ever discussed the proposition, in view of the public policy of this state on the subject, we would feel bound to give to the language in article 961 ‘council of such city,’ under the facts of this case, which are not contradicted, the construction which we have indicated, and to hold as an original proposition that this language must be strictly construed, and the means prescribed by law must be closely followed, to exercise the taxing power by virtue of title 28. The statute says that the town council shall be composed of five aldermen, and, strictly construing this language, there is no escape from the conclusion that the word ‘council,’ as thus used in that connection, means the five aldermen having the power to vote on propositions, and it was necessary in this instance, in order to enact a valid ordinance on this proposition, that two-thirds of the five aldermen should have been shown by the record affirmatively to have voted in favor thereof.”

It is now well settled that the statute is to be liberally construed in favor of-the injured employee and the beneficiaries designated and any reasonable doubt that may arise as to the right of the injured employee to compensation will be resolved in favor of that right. 62 Tex.Jur.2d, Construction of act, Sec. 8 (1965) and the cases cited.

Inasmuch as the jury found that the injury incurred by the appellant in the course of his employment was total and permanent and inasmuch as the order of the Board ordering surgery or limiting recovery to fifty two weeks is void, we reverse and render this case in favor of appellant and hold that he is entitled to full compensation for permanent and total disability.

The judgment of the trial court is reversed and rendered.

Reversed and rendered.

      . “Point of Error No. XY: The trial court erred in entering judgment that claimant be limited to 52 weeks compensation because the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e; Article 8306, V.A.O.S.
      Point of Error No. XYI: The trial court erred in overruling plaintiff’s motion to strike because the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e, Article 8306, V.A.O.S.
      Point of Error No. XVII: The trial court erred in overruling plaintiff’s motion in limine and admitting evidence on the question of the proposed surgery because the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e, Article 8306, V.A.C.S. Point of Error No. XVIII: The trial court erred in submitting Special Issue No. 9 to the jury because as a matter of law the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e, Article 8306, V.A.O.S. Point of Error No. XIX: The trial court erred in submitting Special Issue No. 10 to the jury because as a matter of law the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e, Article 8306, V.A.O.S. Point of Error No. XX: The trial court erred in overruling plaintiff’s motion for new trial because the Industrial Accident Board did not unanimously order the claimant to submit to surgery as required by Sections 12b and 12e, Article 8306, V.A.C.S.”

      . Those parts of Art. 8306 requiring a unanimous finding by the Board are as follows:
      “If the examination and the written report thereof and the expert opinions thereon then on file before the board do not show to the board the existence of disease or other physical condition rendering the operation more than ordinarily unsafe and the board shall unanimously so find and so reduce its findings to writing and file the same in the case and furnish the employé and the association with a copy of its findings, then if the employé with the knowledge of the result of such examination, such report, such opinions and such findings, thereafter refuses to submit within a reasonable time, which time shall be fixed in the findings of the board, to such operation, he shall be entitled to compensation for incapacity under the general provisions of this law for a period not exceeding one year. * * *
      If it be shown by the examination, report of facts and opinions of experts, all reduced to writing and filed with the board, that such operation is advisable and will relieve the condition of the injured em-ployé or will materially benefit him, the board shall so state in writing and upon unanimous order of said board in writing, a copy of which shall be delivered to the employé and the association, shall direct the employé at a time and place therein stated to submit himself to an operation for said injury.” (Italics added.)


text:
    The CITY OF DALLAS, Appellant, v. Irvine A. FRIDGE et ux., Appellees.
    No. 11454.
    Court of Civil Appeals of Texas. Austin.
    Dec. 7, 1966.
    Rehearing Denied Jan. 4, 1967.

      N. Alex Bickley, City Atty., Lee E. Holt, Pat Stacy, Asst. City Attys., Dallas, for appellant.
    J. Alex Blakeley, Dallas, Ralph M. Hall, Don R. Stodghill, Rockwall, for appellees.
   PHILLIPS, Justice.

This is a condemnation case. The City of Dallas condemned 5.36 acres of land belonging to appellees taking the entire tract and a fee simple title.

Appellees’ 5.36 acre tract of land, which they purchased in 1959, is among approximately 20,669.436 acres of land purchased by the City of Dallas from the year 1959 to December 1965, for the purpose of the Forney Reservoir Project. Forney Reservoir is being constructed for the purpose of supplying water for the future needs of the City of Dallas.

A partial summary judgment having been granted by the court to the appellant as to its powers and rights to condemn the property in question, this case was submitted to a jury on the sole issue of the market value of appellees’ land.

Appellant City of Dallas presented one value witness, George Becker, Jr., who appeared as a City of Dallas employee who handled the acquisitions of Forney Reservoir for the City of Dallas. Becker placed the value of appellees’ land at $1,972.00.

Appellees’ value witness was George W. Riddell who has been a realtor and appraiser in Dallas County since 1932. He testified as to the many individuals and firms from whom he had appraised, including the City of Dallas, appellant herein. Mr. Rid-dell enumerated the real estate societies and organizations of which he was a member. He described the property and neighborhood and brought numerous exhibits to show the jury in picture form the area under discussion. He testified as to the appraisal techniques that he used in appraising subject property. He brought the jury sales of three pieces of property within the immediate neighborhood, plus the sale of subject property itself.

The sales used by appellees’ witness Rid-dell ranged in value, per acre, from approximately $1,000 in 1959, to $2,050 in 1961, to $4,800 in 1964, to $8,000 in 1965.

Based on these sales and other sales that he considered and investigated, and his complete appraisal of appellees’ property, Riddell placed a value of $4,000 per acre on the property as of October 22, 1965 or a total figure of $21,440.

The jury returned a verdict of $19,757 and judgment was entered thereon.

We affirm this judgment.

Appellant is before this Court on five points of error, the first being that of the trial court in making statements and commenting in the presence of the jury, as to the credibility, qualifications and testimony of the appellees’ only value witness, Riddell, while said witness was being cross-examined by the appellant, which were a comment upon the weight of the evidence as well as the witness’ credibility and displayed a bias and prejudice on the part of the court in favor of the appellees against the appellant.

We overrule this point.

The exchange in question was as follows:

“Q Mr. Riddell, yesterday I was asking' you, I believe, about your opinion as to the effect of the Forney Reservoir on the Zion Road area in Dallas County. Would you give the Jury the benefit of your opinion in that regard, as far as your opinion not affecting real estate values in that area?
MR. HALL: Your Honor, in complete fairness to the witness and the Jury, we ask the Court instruct him not to just give him an area, but to inquire of this witness of a sale in particular that he is talking about.
THE COURT: Yes, relegate it to a tract that he has done.
MR. HOLT: Do I understand the Court’s ruling to be that I cannot go into the effect and influences of the reservoir on the area of the location of the subject property?
THE COURT: Counsel, he has testified to certain sales, that he examined himself—
MR. HOLT: Yes, Your Honor.
THE COURT: And that is where he has so made himself an expert in this particular matter that he has appraised this country around there.
MR. HOLT: First of all, Your Honor, we except to the remarks of the Court as a comment on the weight of the evidence.
THE COURT: All right. Fine. Let’s move along now.
MR. HOLT: I have no ruling, Your Honor, on as to whether or not I am to be deprived of the right to question this witness as to the effect of the For-ney Reservoir on the area of real estate in the general location of the subject property.
THE COURT: This Court is not going to deprive anyone of anything. It is the ruling of this Court that you may ask him his opinion with relation to what he has testified to.
MR. HOLT: He has testified, Your Honor, to a general knowledge of real estate in this area.
MR. BLAKELEY: Your Honor, might I ask if the Court would object to instructing the Jury to disregard any comments of counsel?
THE COURT: All right, Mr. Blakeley—
MR. BLAKELEY (interposing): And also, Your Honor, we have no objection if he wants to go into the question I think he is leading up to, the general enhancement to the community in general. I believe that is what he is leading up to. We have no objection to that.
THE COURT: You may proceed with your answer if the objection is withdrawn.”

We hold that appellant waived his objection to the comment of the trial court by failing to secure a ruling thereto by the trial judge. Webb v. Mitchell, 371 S.W.2d 754 (Tex.Civ.App. Houston 1963, no writ) and the cases cited therein. In order for the Court of Civil Appeals to decide a question which is not fundamental, the record must show that the question was raised and passed upon by the trial judge. Van Zandt v. Desdemona Independent School District, 283 S.W. 626 (Tex.Civ.App. Eastland 1926, no writ).

Appellant’s second point of error is the failure of the court to strike from the record all testimony and evidence presented by the appellees relative to the sale from Anderson to Ivy when the undisputed evidence shows that the sale involved a trade of two other parcels of real estate, thus rendering such sale when used as a comparable sale for value purposes, not comparable as a matter of law.

We overrule this point.

One of the sales used by the appellees’ witness, Riddell, to support the value placed on appellees’ property was a sale from one Anderson to one Ivy. This sale was admitted into evidence without objection as to a trade being involved. At a later time appellant moved the court to strike the sale from the record. The court overruled this motion on the ground that the objection went to the weight rather than the admissibility.

We hold that the trial court was correct in this ruling. The evidence discloses that $43,000 was the agreed price for the land in this sale even though two pieces of property were involved in the transaction as a trade. There was testimony that the consideration shown in the deed from Anderson to Ivy was the actual consideration of the sale even though a trade was involved.

This point is controlled by the court’s holding in State v. Hays, 361 S.W.2d 401 (Tex.Civ.App. Dallas 1962, writ ref’d n. r. e.), wherein the court held that in passing on the admissibility of alleged comparable sales a trial judge must to a certain extent pass on the degree of similarity of said properties and sales. No inflexible rule has been laid down to govern the court’s decision and in admitting or rejecting such evidence, a judge is allowed considerable discretion. This is true even when the sales in question involve other than monetary consideration especially where the testimony is offered not as primary evidence of value, but merely to give an account of the factual basis upon which the expert witness founds his stated opinion as to the value of the real estate being condemned.

Appellant’s third point of error is that of the court in allowing appellees’ witness Riddell to present testimony and evidence relating to the sale from R. T. Taylor to Irvine A. Fridge and consider it as a basis for his opinion as to market value when the undisputed evidence shows that this witness, on previous examination, had sworn under oath, that his opinion as to market value was based solely upon four sales of which the sale from R. T. Taylor to Irvine A. Fridge was not included, and when the sale is too remote in time to be considered as a reliable basis for market value.

We overrule this point.

After appellees had rested their case and counsel for appellant had presented testimony through appellant’s value witness that the market value of the subject property was $1,972.00, appellees’ witness Riddell was recalled to the witness stand and in rebuttal he testified that appellees had paid $5,000.00 for the property in October of 1959. Appellant objected to this testimony, however, the trial court allowed this testimony into evidence along with a copy of the deed reflecting this transaction.

It is the general rule that when land is taken by eminent domain, evidence of the price paid for the land is competent as evidence of its value, if the sale was a voluntary one, and not so remote in time as to have no bearing upon the question of the value of the property at the time it is condemned. Broesche v. State, 348 S.W.2d 770 (Tex.Civ.App. Houston 1961, no writ).

Here appellant’s value witness testified that none of the sales near appellees’ property were comparable. He further testified that he had found a sale more comparable to the subject property some eight miles away. Based on this one sale he placed a value of $1,972.00 on appellees’ 5.36 acres as of October 22, 1965 in spite of the fact that appellees had paid $5,250.00 for the same 5.36 acres on October 1, 1959.

To apply the general rule here that sales too remote in time are not admissible in evidence would do violence to the better known rule based on common, everyday horse-sense that real estate, especially in the vicinity of Dallas, has been appreciating steadily in value during the past decade or so. Consequently, every presumption would be against a value less than that actually paid for the land. Where appellant’s witness chose to offer into evidence such a value, appellees certainly had the right to refute this opinion testimony with evidence of the amount actually paid. It was within the discretion of the trial court as to whether this evidence should have been admitted and we hold that he did not abuse his discretion therein. Holcombe v. City of Houston, 351 S.W.2d 69 (Tex.Civ.App. Houston 1961 no writ).

Appellant’s fourth point of error is that the answer of the jury to Special Issue No. 1 is not supported by the evidence because the undisputed evidence shows that all sales used by appellees’ sole value witness are affected in their market value by and due to the location of the Forney Reservoir, and the use of such sales to form an opinion as to value by the said witness could not form any reasonable basis for the answer of the jury to Special Issue No. 1 in the light of the court’s instruction.

We overrule this point.

There is ample evidence in this record from appellees’ value witness Riddell to support the increased value of the property near the subject property as well as the subject property for reasons other than any enhancement that may have occurred due to the Forney Reservoir project. Consequently, the admission of these sales was in the discretion of the trial judge.

In addition, the court specifically instructed the jury that in arriving at their answer to Special Issue No. 1 they should not take into consideration any increase in value which may have accrued to defendant’s land due to the location of the Forney Reservoir. See Vey v. City of Fort Worth, 81 S.W.2d 228 (Tex.Civ.App. Fort Worth 1935 writ dism’d).

Appellant’s fifth point of error is that the answer of the jury to Special Issue No. 1 is so contrary to the great weight and preponderance of the evidence as to be manifestly unjust, and completely out of range of probative testimony.

We overrule this point.

An outline of the evidence presented the jury and upon which they based their finding as to the value of the property taken is set out above.

The judgment of the trial court is affirmed.

Affirmed.

        . Issue as to market value of appellees’ land condemned for reservior purposes.