author: CULLEN, Commissioner.

text:
    COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellant, v. Lewis B. SHERROD et al., Appellees.
    Court of Appeals of Kentucky.
    March 22, 1963.

      John Breckinridge, Atty. Gen., H. D. Reed, Jr., Asst. Atty. Gen., James B. Stewart, Leslie D. Aberson, Dept, of Highways, Frankfort, for appellant.
    Denney & Landrum, James M. Todd, Lasserre Bradley, Lexington, for appellees.
   CULLEN, Commissioner.

This is an eminent domain case, involving the taking of a strip for highway widening purposes from the front of a tract of land, a portion of which tract was under lease for commercial use. The appeal is by the Commonwealth from a judgment awarding the landowners $31,075 and the lessees $41,215.

The landowners owned a 12-acre tract just outside the city limits of Lexington, having a 450-foot frontage on U. S. Highway No. 68. In approximately the center of the front part of the tract there was a parcel with a frontage of 150 feet and a depth of 250 feet on which there were a restaurant building and related structures, primarily designed for drive-in trade but with some space for inside customers. This parcel was leased for a period which, at the option of the lessees, could run to 1975 (the condemnation suit was tried in 1960). The remainder of the tract had no structures on 'it other than a residence and farm outbuildings near the back of the tract. The frontage north of the restaurant parcel was level with the road, but the frontage south of the restaurant parcel was in the form of a wide gully, around 10 feet below the level of the road, which extended back several hundred feet.

For the purpose of converting the existing two-lane highway into a four-lane highway the state condemned a strip averaging 23 feet in depth along the entire frontage. This embraced some of the parking spaces on the restaurant parcel. In addition, for the purpose of building a culvert and changing the drainage courses, the state condemned an additional 30 feet from the frontage of the gully parcel.

The verdict awarded the landowners $1,-750 for the land taken from the gully parcel, $750 for the land taken from the frontage north of the restaurant parcel, $5,175 for land taken from the restaurant parcel, $23,-250 for resulting damages to the gully parcel, and $150 for use of a temporary construction easement. The verdict awarded the lessees $28,350 as damages for the portion of the leasehold taken, $4,150 as resulting damages to the leasehold interest, $215 for use of a temporary easement, and $8,500 for loss of business during the highway construction period.

We are reversing the judgment because of error in the instructions (other errors also warranting reversal will be discussed at a later point in this opinion). We find the following errors in the instructions : First, the instructions do not state anywhere that the total damages cannot exceed the difference in the value of the entire tract before and after the taking, or that the measure of damages is such difference. They do say in one place that the total damages to the landowners cannot exceed the difference in the value of the entire tract before and after the taking, but this puts too high a ceiling on the total damages to the landowners because the difference in value of the entire tract would embrace damage to the lessees. Second, the instructions, which included interrogatories and blank spaces for filling in amounts of awards, were so confusing, overlapping and contradictory that -when the verdict was brought in neither the judge nor any of the parties could understand- it, and the judge was required to question the jurors orally in order to determine what the verdict meant. Third, the instructions authorized (and in fact directed) the jury to add together various items of damages to the landowners and to the lessees instead of directing the jury to determine first the damage to the tract as a whole and then apportion that amount between the landowners and the lessees. See Korfhage v. Commonwealth, Ky., 296 S.W.2d 476; City of Ashland v. Price, Ky., 318 S.W.2d 861. Fourth, the instructions gave no basis at all on which the jury could determine the damages to the landowners from the taking of a portion of the restaurant parcel, except that the instructions carried a vague implication that the landowners could be awarded the full value of the land taken and the lessees could be awarded damages to the leasehold on top of that. Fifth, the instructions stated that the measure of damages for the taking of the leasehold is the difference between the fair monthly rental value of the property immediately before the taking and immediately after the taking, multiplied by the number of months remaining in the lease, plus other direct damage to the leasehold. Aside from the fact that this would permit double recovery, it is a distortion and wholly incorrect application of the rule stated in the Ashland case, supra, which is that in order to determine the lease value before the taking, the difference between the fair rental value and the actual rent being paid is to be ascertained.. Sixth, the instructions told the jury they could consider the “value” of the property to the lessees “in the operation of the business of a drive-in restaurant.” On no basis can this be considered a proper element of damage; not only does it get into the forbidden profit area but it invokes improper consideration of value to the particular owner as distinguished from fair market value. Seventh, the instructions authorized recovery of damages by the lessees for “reduction in entrance and exit,” which for reasons hereinafter discussed were not properly allowable. Eighth, the instructions authorized recovery by the lessees for loss of profits during the construction period. (The reasons why such a recovery cannot be had are discussed at a later point in this opinion.)

The Commonwealth did not in its objections to the instructions specifically pinpoint all of the errors we have noted above; however, some of the Commonwealth’s objections were well taken, and when the objections are considered with the theory of the case presented in the Commonwealth’s offered instructions we think the Commonwealth sufficiently raised the question of error in the instructions.

While we are reversing the judgment because of failure of the trial court to observe the existing rules of law in this jurisdiction applicable to eminent domain cases, we' have decided to reexamine those rules, abolish some of them, and state new rules that will govern in the event of another trial of this case, and will have application in other cases as stated at the end of this opinion.

DETERMINATION AND ALLOCATION OF DAMAGES FOR LEASED PROPERTY

As related to the leased parcel, and the determination of the respective damages of the landowners and the lessees, the evidence in this case was directed in a loose way towards application of the method outlined in City of Ashland v. Price, Ky., 318 S.W.2d 861. The key to this method is “to ascertain the present fair rental value, compare it with the rent stipulated in the contract and allow the aggregate difference for the period of the unexpired term of the le?se” (318 S.W.2d 863).

Aside from the fact that the foregoing method furnishes no criterion or basis for determining the lessee’s damages where only part and not all of the leased property is taken, we have come to the conclusion after thorough reconsideration that the method is completly unsound, unfair and unworkable.

Let us use an illustration that is not far afield from the actual facts of this case: The property as a whole, if sold free and clear of the lease, would have a value of $100,000. The fair rental value would be $12,000 per year (there is testimony in this case that 12% rent is fair for commercial property). The lessees have contracted to pay only $6,000 per year. Their lease has 20 years to run. The state condemns the entire tract. By applying the method outlined in the Ashland case, the lessees would be damaged $120,000 ($6,000 per year for 20 years) or $20,000 more than the whole property was worth. This is so patently absurd as to establish beyond any question the fallaciousness of the method. The foreging illustration is not at all inappropriate because in the instant case the lessees were paying $7,200 a year rent; they said the fair rental was $14,400 a year; their lease had 15 years to run; therefore their damage was $108,000. Yet they testified that the leased property -as a whole was worth only $120,-000 (one said it was worth only $105,000) and the state took less than one-fourth of the area and none of the structures.

We think that this Court was led into acceptance of the method advanced in the Ashland case by a failure to adhere to the basic touchstone of property damage measurement, namely, fair market value, and by a mistaken, vague idea that somehow a lease interest can be damaged more than outright fee interest.

As concerns the latter proposition, it would seem obvious that if 25% of the market value of property worth $100,000 is taken away from the fee owner, his damages can not exceed $25,000. If, then, the property is leased, how can the total damages rise above $25,000?

There seems to be some idea that the lessee is entitled to compensation for the “intrinsic” value of his lease, or for loss of business values, or for damages to the particular kind of business operation he is carrying on. The opinion in the Ash-land case so indicates. But the landowner himself is not entitled to loss of profits, Newport Municipal Housing Commission v. Turner Advertising Co., Ky., 334 S.W.2d 767. Nor is he entitled to any loss attributable to impairment of the particular business he has chosen to carry on; he is limited to loss of market value. For example, if the owner of land is carrying on a restaurant business and the state condemns such portion of the land as to make it no longer suitable for restaurant purposes, he cannot claim damages for loss of his restaurant business — he can claim only the depreciation in market value of the tract. See Commonwealth Dept. of Highways v. Smith, Ky., 358 S.W.2d 487. There is no reason why the same rule should not apply to leased property. If the condemnation taking makes the property unsuitable for the particular business of the lessee, the lease may still have market value for some other purpose, so the lessee has lost only the difference between the former market value of his lease and the after market value.

Some of the confusion seems to have arisen from the idea that leases ordinarily are not bought and sold, and therefore their market value is not ascertainable. We are not sure that this idea is correct, because many kinds of commercial leases are sold, but regardless of that, property often is sold subject to a lease, so the market value of the lease can easily be ascertained by determining what the whole property would sell for free of the lease, and what it would sell for subject to the lease — the difference is the value of the lease. (Of course, if the lease were disadvantageous to the lessee it would have no value, because the land would not sell for less subject to the lease, but for more.)

At this point we deem it necessary to warn against a possible misinterpretation of the opinion in Korfhage v. Commonwealth, Ky., 296 S.W.2d 476. It is that in valuing the property as a whole, as if in unqualified fee ownership, an actual existing lease should be considered as an element of the value of the land. That such is not the rule is shown by the quotation in that opinion from 2 Lewis on Eminent Domain (3rd Ed.), Sec. 716, p. 1253:

“When there are different interests or estates in the property the proper course is to ascertain the entire compensation as though the property belonged to one person and then apportion this sum among the different parties according to their respective rights. The value of the property cannot be enhanced by any distribution of the title or estate among different persons or any contract arrangements among the owners of different interests. Whatever advantage is secured by one interest must be taken from another, and the sum of all the parts cannot exceed the whole.” (Our emphasis)

Under the quoted rule we think that if the owner of land has negotiated a lease that is advantageous to him (at a rental higher than the fair rental value), and therefore the property would sell for more than its normal market value, the excess over the normal market value must be considered a profit for which he is not entitled to be compensated in condemnation proceedings. He must be restricted in recovery to fair market value of the fee; otherwise he is being allowed to enhance the value of the property by distribution of the title among different persons.

A comparable situation would be where the owner of land had contracted to sell the land to another person for more than its fair market value. If he were held entitled to damages based on the sale price the anomalous situation would be presented of his being compensated on that basis, but if the land were condemned from the buyer the latter could be compensated only on the fair market value. It is. our opinion that strict adherence must be had to the fair market value measure of damages in condemnation, regardless of any contracts affecting the amount of profit a particular person might realize from the property.

Returning to the question of apportionment of damages between the landowner and the lessee, we find that other courts have recognized that the proper measure for determining damages to a leasehold interest in condemnation proceedings is the difference in the fair market value of the leasehold before and after the taking. But because they have felt that the fair market value is difficult or impossible to ascertain they have invoked all kinds of formulas and theories in an effort to find an equivalent of fair market value or to reach “equitable” results. See Annotation, 3 A.L.R.2d 286. As hereinbefore indicated, however, we think that the fair market value of the leasehold (if any) can be ascertained by simply subtracting the fair market value of the land as a whole if sold subject .to the lease, from the fair market value of the land as a whole if sold free and clear of the lease. We also think that any departure from this strict rule of fair market value can result only in hopeless confusion.

After thorough deliberation we have worked out what we consider to be the most reasonably fair and workable method for determining compensation in cases of condemnation of property that is under lease. Under this method the proof should be directed towards showing, and the instructions should require the jury to find, only the following three values:

A.The fair market value of the leased tract as a whole immediately before the taking, giving consideration to the fact that it has rental value but evaluating it as if free and clear of the lease. (This will be factor A.)

B. The fair market value of the leased tract as a whole, immediately before the taking, if sold subject to the existing lease. (This will be factor B.)

C. The fair market value of so much of the leased tract as remains immediately after the taking, giving consideration to the fact that it has rental value but evaluating it as if free and clear of the lease. (This will be factor C.) (Of course, if the entire tract is taken by the condemnation, this value will be zero and need not be found by the jury, but for the purpose of the following computations C will be considered to be zero.)

After the jury has fixed the foregoing three values the judge will compute and apportion the damages as follows:

(1) Subtract C from A. The result is the total damages payable by the condemnor.

(2) If B is the same as or more than A, ignore B. In this situation all of the damages will go the landowner, because the leasehold had no value, by reason of the fact that the existence of the lease has not impaired the market value of the tract.

(3) If B is less than A, subtract B from A, and then divide the difference by A. The result will be the percentage of ownership interest the lessee is deemed to have had in the leased 'tract before the condemnation.

(4) Multiply the total damages, found under (1) above, by the percentage found under (3) above. The result will be the lessee’s share of the total damages. Subtracting his share from the total damages will leave the landowner’s share.

It is proper for the foregoing computations to be made by the judge because they involve only mathematical computations and not a determination of disputed facts. It would confuse the jury to require them to make the computations.

We believe the foregoing method is fair because it fixes a market value on the lease and then gives the lessee damages in the same proportion that the entire property is damaged. As pointed out by Nichols, “The award stands in the place of the land and the owners of each interest may recover out of the award the same proportionate interest which they had in the land condemned.” 4 Nichols on Eminent Domain, Sec. 12.42, p. 290. The method of course is based on the assumption that the lease value depreciates in the same ratio as the sale value of the entire property, which we feel is a legitimate assumption when it is considered that a commonly accepted method of determining property values is by capitalizing rental values. It is true that the lease value to the particular lessee for his special purposes might depreciate more, but the lessee can protect himself against loss from that factor by assigning the lease to someone who will rent the property for a different use.

The method is fair because if the lessee is compensated for the percentage of interest he had in the property taken, by virtue of his advantageous lease, he still retains the same percentage of interest in the remaining tract, which presumably he can realize upon by assigning his lease.

Under our view it is immaterial whether the lessee, after the condemnation, will be allowed a reduction in rent in proportion to the reduction in total value of the leased tract, or will be required to continue to pay the originally agreed rent, or will have the privilege of surrendering his lease and being relieved to rent entirely. By virtue of the condemnation, the lessee who originally had an advantage (or the equivalent of an interest in the property) by reason of a favorable rental price, will lose that advantage in the same percentage that the whole value of the leased tract is reduced, whether or not he is allowed a reduction in rent. If by operation of law or by special terms of his contract he is required to continue to pay the same rent he loses more (as between him and the landowner but not as between him and the condemnor), but to give him a larger share of the damages paid by the condemnor would be in effect to relieve him in part from his obligation to the landowner to pay full rent; therefore, it would be improper to give him a larger share. If the lessee exercises a privilege to surrender the lease and be relieved of rent entirely, the result will be that he has lost all of the original advantage he had from his favorable lease, instead of only a portion of such advantage, but the extra loss is due to his election to surrender the lease and not to the condemnation. (Presumably he could assign his lease, for a consideration, to another person who would have a use for the property in its changed condition, and thus avoid the extra loss.) The landowner cannot be damaged more in such a situation, because he has been freed of a lease that was disadvantageous to him.

Whether as a matter of law a lessee, after condemnation of part of the leased tract, should be allowed a proportionate reduction in rent is a matter we need not decide. However, see 32 Am.Jur., Landlord and Tenant, Sec. 492, p. 493; Annotations, 43 A.L.R. 1182, 3 A.L.R.2d 330; 1 Orgel on Valuation Under Eminent Domain, Second Ed., Sec. 121, p. 522.

We are dealing in the instant case with a short-term lease involving property the buildings on which were constructed by the landowner. However, we see no reason why the method or formula we have outlined would not work in case of a long-term (99-year) lease, or in a case where the lessee constructed a building which at the end of the lease term would revert to the landowner. (In the latter case the lessee would be paying a much lower rent than if the landowner had constructed the building, so the lessee’s advantage would be great in applying the formula.) Special complications might arise in a case where the lessee erected structures on the land which by express provisions of the lease he was entitled to remove at the end of the term, but we believe those complications could be met by requiring such structures to be valued separately from the land.

As a final word on this phase of the case we say that in applying the formula in the instant case the restaurant parcel should be treated as in independent tract, separate and apart from the remainder of the 12-acre tract. This is because the application of the formula would be confusing if the leased land and the land not leased were treated as a single unit.

SEPARATION OF TAKING AND RESULTING DAMAGES

It will be noticed that the method o£_for-mula hereinbefore outlined makes ¿mypro-vision for separately determining and stating the taking damages and the resulting damages. The omission is intentional. There could be several reasons for not making such a determination in cases involving leased property, one of which might be that attempts to separate taking damage to a lease interest from resulting damages to such interest almost inevitably will result in confusion, as illustrated by the verdict in the instant case which allowed the lessees $28,350 as damages for the portion of the leased property taken while allowing the landowners only $5,175 for that portion, and which awarded the lessees $4,150 as resulting damages whereas under the evidence all of the damages claimed by the lessees were really resulting damages. However, the conclusion we have reached, for the reasons hereinafter set forth, is that there should be no separate determination and fixing of taking and resulting damages in any condemnation case, whether involving leased property or not.

For a great many years the railroad condemnation statutes have required the commissioners in the county court, and the jury in circuit court, to determine and fix separately the taking damages and the resulting damages. KRS 416.02.0, 416.050. The highway condemnation statute makes such requirement of the commissioners in county court but not of the jury in circuit court. KRS 177.083, 177.087. However, it seems to have been assumed by the bar and the bench that the requirement does apply to juries in circuit court in highway condemnation cases. .

The requirement in the railroad law was made by the legislature at least as early as 1882, prior to the adoption of Section 242 of the present constitution. See Asher v. Louisville & N. R. Co., 87 Ky. 391, 8 S.W. 854. However, since the measure of damages where part of a tract of land is taken has always been the difference in market value of the tract before and after the taking (it being so held as early as Elizabethtown & Paducah R. Co. v. Helm, 8 Bush 681) there never was a reason to require a separate fixing of taking and resulting damages, except possibly as it might involve questions relating to the offsetting of benefits. But it appears that Kentucky has never followed the rule prevailing in some states (see 18 Am.Jur., Eminent Domain, Sec. 301, p. 946) that benefits may be set off against resulting damages but not against taking damages. The opinion in Broadway Coal Mining Co. v. Smith, 136 Ky. 725, 125 S.W. 157, 26 L.R.A.,N.S., 565, referring to decisions prior to the present Constitution, not only shows that Kentucky never permitted offsetting of benefits against damages under former Constitutions (except as to an illusory category of “consequential injury and inconvenience” —about which we shall have more to say later), but it states unequivocally that under the present Constitution, particularly Section 242, there can be no offsetting of benefits against damages.

Not only is there no discernible reason for a separate determination of taking damages and resulting damages, but in our opinion to require or permit the jury to make such a determination results in the use by the jury of approaches to the question of damages that depart from the true measure of damages (difference in market value) and which are not valid and sometimes are completely artificial. As to taking damages, it causes the jury to" attempt to put sale values on things that are never sold voluntarily, such as a 50-foot strip across the front of a farm, or, as in the instant case, a 25-foot strip across the front of a drive-in restaurant. As to resulting damages, it results in valuations based on costs of restoration or on vague considerations of the harm that has been done to the particular owner in his particular use of the property.

It appears that much of the trouble that has arisen in our condemnation cases has resulted from an attempt by this Court to compromise the true measure of damages (difference in market value) with the prescribed or assumed statutory requirement that the jury separately determine and state the taking damages and the resulting damages. The compromise has taken the form of prescribed instructions to the jury that the measure of damages is the difference in market value, but that the jury shall separately fix the taking damages and the resulting damages, the total of which shall not exceed the difference in market value. See Commonwealth v. Combs, 244 Ky. 204, 50 S.W.2d 497; Kentucky Water Service Co. v. Bird, Ky., 239 S.W.2d 66. The trouble with this is that it does not require the jury to fix the difference in market value. Verdicts simply stating the taking damages and the resulting damages have been accepted and upheld if the total allowance did not exceed the highest credible evidence of difference in market value. We think this is completely unsound, because the court cannot know what the jury really thought was the difference in market value. It seems clear that the difference in market value is a fact that must be found by the jury, and verdicts making separate awards for taking damages and resulting damages should not have been upheld simply because the total did not exceed what the jury could have found was the difference in market value. The simple fact is that the jury is not going to govern itself by the proper measure of damages unless the jury is required to return a verdict specifically applying that measure.

Orgel points out that attempts to separate taking damages from resulting damages, particularly where the courts have said (as this Court has said) that the land taken must be valued as a part of or in relation to the whole tract, result in the finding of nonexistent values and in the duplication of damages. Further, the attempted separation is based on the fallacy that the value of a whole can be spread out and apportioned. He says:

“This fallacy may be avoided in the partial-taking cases, however, for a way out of the difficulty is open, namely, the abandonment of the attempt to find the separate value of the part taken, in favor of the rule that recovery should be based on the difference between the value of the whole before and after the taking. The adoption by all courts of this rule should be far less confusing to a jury and would probably avoid a very practical objection that may be urged against the more popular rule of ‘value of the part taken plus damages to remainder’— the objection that a jury may include in ‘damages to the remainder’ a part of the very injury which it incorporates in ‘value of the part taken’.” 1 Orgel, Valuation Under Eminent Domain, Sec. 52, p. 238.

Orgel further states that the “before and after” rule is the only logical rule and that the rule requiring separation of taking damages and resulting damages is based upon “artificial dichotomy.” 1 Orgel, Valuation Under Eminent Domain, Sec. 51, p. 236. Also, he explains how adherence to the “before and after” rule would eliminate problems arising from claims that taking of “frontage” should be specially compensated for even though the landowner, after the condemnation, will still have the same amount of frontage. 1 Orgel, Valuation Under Eminent Domain, Sec. 64, p. 296.

Nichols says: * * * “the simplicity of the application of the before and after rule commends itself to the courts as the method most likely to attain a result that is fair both to the condemnor and the condemnee.” 4 Nichols on Eminent Domain, Sec. 14.232(1), p. 555. '

Our considered conclusion is that the jury should not he required, or even permitted, to fix separately the taking damages and the resulting damages. The true basis for this conclusion is that there really are not any such things as taking damages and resulting damages. The only damage is the difference in market value before and after the taking, and that is the only issue to be submitted to the jury. (We exclude such things as temporary construction easements, which are in a separate category.)

This conclusion does not mean that evidence may not be introduced as to various factors that will reduce the value of the remaining land. But these factors are merely to be considered as they may affect the difference in market value before and after the taking. See Greenup County v. Redmond, Ky., 335 S.W.2d 335. Evidence of factors bearing on diminution of value should be addressed to how they will affect market value and not how they will hurt the owner or make less advantageous the use of the property for his particular purposes, or create conditions that he would like to remedy. And no price should be put on the individual factors. Commonwealth Dept. of Highways v. Stamper, Ky., 345 S.W.2d 640; Commonwealth, Dept. of Highways v. Tyree, Ky., 365 S.W.2d 472 (decided March 1, 1963).

We consider that the form of the verdict in condemnation cases is "a matter of procedure and not of substantive law. Under Chapter 18 of the Acts of 1952 (KRS 447.154, 447.156) the legislature has recognized the supreme authority of this Court in the field of judicial procedure. Accordingly, the statutory requirement in the railroad condemnation law that the jury in circuit court shall separately fix the taking and resulting damages (there is no such express requirement in the highway condemnation law) must yield to the determination of this Court,' here made, that such is improper procedure. Furthermore, it is our opinion that’ thé statutory requirement tends to produce verdicts awarding more than “just” compensation and thus is in violation of Sections 13 and 242 of the Constitution, which are designed to protect the condemnor as well as the condemnee. See Chesapeake & O. Canal Co. v. Key, 3 Cranch, C.C. 559, Fed.Cas.No.2,649, where Chief Justice Cranch said: “Just compensation means a compensation that would be just in regard to the public, as well as in regard to the individual; * *

FENCING

While we are on the subject of the form of the verdict we deem it proper to say that there is no valid reason for perpetuating the old rule that fencing is to-be handled as a separate item. We recognized in Greenup County v. Redmond, Ky., 335 S.W.2d 335, that there is no logical basis for such a rule, but decided to continue to recognize it by reason of its long period of existence, growing out of . early railroad condemnation statutes. Under the rule promulgated in this opinion, that only before and after values are to be considered, there is no place for a separate allowance for fencing. Certainly the landowner is not entitled to fencing costs on top of an allowance for the total diminution of value of his property. The present railroad condemnation statutes, KRS 416.020 to 416.080, say nothing about fencing. But a special statute, KRS 416.110, relating to condemnation by a fiscal court for road purposes, still provides for separate allowance for fencing and for “the value of trees or shrubbery taken”. We hereby abolish the old fencing rule and we hold that the provisions of KRS 416.110 for separate fixing of damages for fencing, trees and shrubbery are inoperative, for the same reason as stated above why statutory provisions requiring the separate fixing of taking and resulting damages are inoperative.

OFFSETTING BENEFITS

Because the question of offsetting benefits against damages is entangled with the question of whether taking damages should be separated from resulting damages, we consider it necessary to reexamine the question of offsetting benefits. Also, the question is specifically in issue in this case because the instructions authorized offsetting benefits against resulting damages to the landowners (but not to the lessees).

We take as our starting point the decision in Broadway Coal Mining Co. v. Smith, 136 Ky. 725, 125 S.W. 157. It was there held, unequivocally, that benefits may not constitutionally be offset against either taking damages or residting damages. Reference was made to some earlier decisions, such as Asher v. Louisville & N. R. Co., 87 Ky. 391, 8 S.W. 854, where the same rule had been announced, but which purported to recognize a third category of damages— “incidental damage” or “consequential inconvenience or injury” — (in addition to taking damages and direct resulting damages) against which benefits could be offset. (The opinion in the Asher case recognized the illusory character of this third category in saying, 8 S.W. 856, that it was “difficult to define the meaning of the words ‘incidental damage’ ”.) However, the opinion in the Broadway Coal Mining Co. case held specifically that questions of “consequential” injuries or prospective benefits should not be submitted to the jury because both are too remote- and speculative. So it would seem clear that the case abolished the purported third category of damages.

Thorough research on our part has failed to disclose any case in this jurisdiction undertaking to define “consequential inconvenience or injury” or “incidental damage,” or holding that any particular kind of injury or damage fell in that category. So we have come to the conclusion that the purported third category was never anything more than a myth. It is difficult to conceive how a property owner could suffer damage of a permanent nature in addition to the diminution in market value of his property, and even if there were such kind of damage, why it should be offset against an enhancement of value.

Despite the ruling in the Broadway Coal Mining Co. case that there can be no offsetting at all, some careless language in later opinions gave Nichols the impression that under Kentucky law benefits might be offset against damages for “consequential injury and inconvenience.” 3 Nichols on Eminent Domain, Sec. 8.6211. This in turn led this Court, in Commonwealth Dept. of Highways v. Evans, Ky., 361 S.W.2d 766, to give continued credence to this erroneous conception, although in the Evans case nothing in the category of “consequential injury or inconvenience” was found to be present.

It is our conclusion that there is no such thing as “consequential injury or inconvenience,” or “incidental damage,” as distinguished from diminution in market value. Therefore the basis for the purported right of the condemnor to have benefits set off against such injuries or damage was nonexistent.

Confusion has been introduced by statements in such cases as Music v. Big Sandy & K. R. R. Co., 163 Ky. 628, 174 S.W. 44, Louisville & N. R. Co. v. Hargis, 230 Ky. 806, 20 S.W.2d 991, and East Kentucky Rural Electric Coop. Corp. v. Smith, Ky., 310 S.W.2d 535, to the effect that benefits may be set off against “incidental damages.” If these statements meant that benefits could be set off against resulting damages they were in direct contradiction of the Broadway Coal Mining Co. case and a host of other Kentucky cases. On the other hand, if they meant to perpetuate the old purported third category of damages they not only ignored the Broadway Coal Mining Co. case but failed to appreciate that such category was a fantasy.

Further confusion has been caused by the opinion in Frenel v. Commonwealth, Ky., 331 S.W.2d 710, which in addition to saying that benefits may be set off against resulting damages, gives as the reason for such rule that the right to resulting damages is only statutory, whereas the right to taking damages is constitutional. Under the former decisions hereinbefore discussed the statement in the Frenel case that benefits may be set off against resulting damages was erroneous. The Frenel case further erred in saying that the right to resulting damages is only statutory, because as pointed out in the Broadway Coal Mining Co. case, Section 242 of the Constitution requires payment of just compensation for property taken, injured or destroyed.

We have undertaken up to this point to clarify the status of the existing law of Kentucky on the matter of offsetting benefits against damages. Our research has led us, however, now to question whether that existing law is sound.

We return in discussion to the Broadway Coal Mining Co. case, which undertakes to set forth all of the reasons why benefits can not be set off against damages. Four reasons are discernible from the opinion. One, based on quotations from a previous decision, is that the owner should be entitled to decide for himself whether the public improvement has benefited his land, and “the public ought not to decide for any citizen how far, or whether at all, he will be pecuniarly benefited by a public work.” Another is that when land is taken involuntarily from an owner for a public improvement which he is opposed to, somehow he should be paid for the indignity he has suffered. Obviously, neither of these reasons has any merit or any acceptance in other judicial decisions. As concerns the first, certainly if the “public” in the form of a jury is qualified to decide how much the property has been reduced in value, it is qualified to decide whether and how much it has been enhanced in value. As concerns the second, it is the firmly established, though admittedly somewhat harsh rule, that all the owner is entitled to is the diminution in market value of his property, without regard to any infringement of his desires not to part with his property.

A third reason found in the Broadway opinion is that benefits are too remote and speculative to be entitled to consideration. We agree that speculative estimates or remote benefits should not be submitted to the jury. But we do not agree that all benefits necessarily are too remote and' speculative. We see no reason why the testimony of a qualified witness with knowledge of land values along improved highways in the community, that the particular property will sell for a specific price, taking into consideration the improvement of the highway on which it abuts, is any more speculative than the testimony of a similar witness as to the value of the property before the taking, or its value after the taking without considering the improvement.

The fourth, and probably main reason stated in the Broadway case is that the Constitution requires that the landowner be paid for the property taken from him in money, and he cannot be compelled to accept benefits in lieu of money. The fallacy in this is that it begs the question: What property has been taken?

The Supreme Court of the United States has held that there is no violation of the Fifth Amendment to the United States Constitution, which prohibits the taking of private property for public use “without just compensation,” by a statute requiring that benefits be offset against both taking and resulting damages. Bauman v. Ross, 167 U.S. 548, 17 S.Ct. 966, 42 L.Ed. 270. This holding has found acceptance in a number of state courts. See Rudder v. Limestone County, 220 Ala. 485, 125 So. 670, 68 A.L.R. 776; Annotation, 68 A.L.R. 784.

The reasoning of the Supreme Court was, in substance, that the “property” of a landowner is a value unit, and when a portion of the land is taken, and perhaps the remainder damaged, the only question is: How much has the unit been reduced in value, without regard to what physical components may have been taken from the unit? In other words, “property” within the meaning of constitutional eminent domain provisions is value and not tangible substances. The owner’s “property” is taken in condemnation only to the extent he has lost value. We think this view is sound.

The rule in a number of jurisdictions seems to be that benefits may be offset against resulting damages but not against taking damages. 18 Am.Jur., Eminent Domain, Sec. 299, p. 944. We see no sense in this rule, because it simply means that benefits may be set off against loss of an intangible but not against loss of a tangible. The reality of the loss is the same in either case, so we can find no basis for the distinction. Orgel says that the courts observing this distinction do not “pursue logic.” 1 Orgel, Valuation Under Eminent Domain, Sec. 7, p. 48.

Both Orgel and Nichols recognize that logically, under the “before and after” rule, benefits should be set off against damages. 1 Orgel, Valuation Under Eminent Domain, Sec. 7, p. 39; 3 Nichols on Eminent Domain, Sec. 8.6206(1), p. 67. Nichols says, “ * * * there is no answer in legal theory to the logic that special benefits can be set off from the entire compensation.” (Sec. 8.6206(1), p. 67) Orgel suggests that the rules of various courts prohibiting or restricting the setting off of benefits grew out of the multitude of railroad condemnations in the late 1800’s, and the attitude of the public towards private, profit-making corporations. 1 Orgel, Valuation Under Eminent Domain, Sec. 7, pp. 43 to 46. Nichols indicates his belief that the rules are attributable to fears of the courts that juries would be overly optimistic as to benefits and thus would not award adequate damages. 3 Nichols on Eminent Domain, Sec. 8.6206(1), p. 67. In view of present day attitudes of juries we may say that such fears seem now to be wholly groundless.

The argument has been made that it is unfair to set off the benefits of a highway improvement against the damages to farmer A, a part of whose property has been taken for the highway, when farmer B, across the road, none of whose land has been taken, receives the benefit of full enhancement of the value of his land without any setoff. We think the answer to this argument has to be that the Constitution not only guarantees to the property owner that he will be paid just compensation for the property taken from him, b.ut it limits the compensation to the loss sustained. Chesapeake & O. Canal Co. v. Key, 3 Cranch, C.C. 559, Fed.Cas.No.2,649. If in truth and in fact the owner’s loss has been reduced by an enhancement in value of his remaining land it would violate the Constitution to pay him compensation without regard to the enhancement. The fact that some other citizen is at the same time getting a free enhancement is just one of the inescapable inequities of society, and it is no reason why the condemnor must pay more than the loss sustained by the person whose property was taken.

A problem is presented by the statutes, KRS 177.083, 416.020, 416.050, which provide that benefits shall be set off against resulting damages only. If these statutes are valid, we are faced with the necessity of requiring to be done what at an earlier point in this opinion we have held should not be done, namely, determining and separating taking damages and resulting damages, because otherwise there would be no way of offsetting benefits against resulting damages only. It is our opinion, however, that a proper construction of the Constitution, Sections 13 and 242, requires that benefits be taken into consideration in determining the total loss of value the owner has sustained. This means that the statutes, in so far as they provide that benefits can be set off only against resulting damages, are unconstitutional.

Our ultimate conclusion on this phase of the case is that in cases where part of a tract of land is taken by condemnation the only fact for the jury to determine (as concerns damages) is the difference in market value of the tract before and after the taking. (In cases involving leased property there will be the additional fact, hereinbefore indicated, of value subject to the lease. Temporary easements also are a separate matter.) The jury should he instructed that in determining the value after the taking they shall take into consideration any enhancement in value growing out of the improvement that is attributable to the advantageous relation of the property to the improvement, as distinguished from general enhancement of values in the community generally to property not even abutting on the improvement. (This qualification will restrict consideration to special benefits as distinguished from general benefits. See 18 Am.Jur., Eminent Domain, Sec. 298, p. 942.) No questions of taking damages or resulting damages shall be submitted to the jury.

TRIAL OF ALL ISSUES TOGETHER WHERE LEASED PROPERTY IS INVOLVED

Turning now to another question, the Commonwealth maintains that in cases involving condemnation of leased property the issues between the Commonwealth on the one side and the landowner and lessee on the other side should be confined to the determination of damages to the land as a whole, without regard to any allocation between the landlord and tenant, and that the allocation should be tried separately and later (perhaps before the same jury). There was a motion to that end in this case, which was overruled. We are inclined to agree with the Commonwealth's argument that under the method formerly in use for determining compensation for leased property the Commonwealth was placed in a prejudicial position, mainly because the method operated in practice in such a way as to enable the combined awards to the landlord and tenant to exceed the total damage to the property as a whole. But we are of the opinion that under the new formula here prescribed there is little danger of prejudice to the Commonwealth from trying all of the issues together, because the major fact determinations will relate to value of the property as a whole, before and after the taking, and the allocation between landlord and tenant will be mainly a matter of mathematical computation by the court.

DAMAGES FOR LOSS OF BUSINESS DURING CONSTRUCTION PERIOD

There is another serious error in the case, in addition to error in the instructions, which requires reversal of the judgment. It arises from the fact that over the objections of the Commonwealth the lessees of the restaurant were allowed to assert a claim, and were awarded damages of $8,-500, for loss of profits during the period the highway was under construction.

We have had no reported cases in Kentucky specifically deciding the question of whether recovery may be had by an abutting property owner for damages for loss of business resulting from the temporary closing or obstruction of a highway during a period of construction work on the highway. However, the prevailing rule in other jurisdictions is that such damages are not recoverable. See 18 Am.Jur., Eminent Domain, Sec. 142, p. 770; Annotation, 68 A.L.R. 340; 4 Nichols on Eminent Domain, 3rd Ed., Sec. 13.32, p. 272; 29 C.J.S. Eminent Domain, § 113, p. 925; 29 C.J.S. Eminent Domain § 162, p. 1032. Our research indicates that in those cases where recovery has been allowed there has been some element of an unnecessary closing or interference. See Wine v. Commonwealth, 301 Mass. 451, 17 N.E.2d 445, 120 A.L.R. 889; Annotation, 120 A.L.R. 900.

The reasoning behind the majority rule seems to be that the abutting owner has no property right in the continued maintenance of the highway. This is in accord with the rule in this jurisdiction that the abutting owner’s right in the highway is only the right of reasonable access to the highway system. Commonwealth Dept. of Highways v. Carlisle, Ky., 363 S.W.2d 104. This has to mean that he has only the right of access to such highways, and of such surface con•dition, as the state chooses to provide in the reasonable administration of its highway system. The abutting owner certainly has no property right to have a highway of a particular surface or pavement.

The evidence in the instant case shows that on only four occasions during the eight-month construction period was access to the restaurant from the highway blocked. The evidence does not show what period •of time was involved on each occasion, but presumably it was only a matter of hours. We think that such comparatively insignificant blocking of access cannot be considered ■a compensable interference with the owner’s right of reasonable access, because the right must yield some to the necessities of highway construction work.

It is clear that the basis of the ■claim for damages here is loss of business resulting from the torn-up condition of the surface of the highway, rather than interference with access to the highway. Such loss is not compensable because it differs only in degree, and not in kind, from the loss suffered by the public generally from highway construction work. Cf. Department of Highways v. Jackson, Ky., 302 S.W.2d 323.

The so-called “reverse condemnation” cases relied upon by the lessees here, such as Commonwealth v. Kelley, 314 Ky. 581, 236 S.W.2d 695, are not applicable because they involved a taking of property, whereas here there is no such taking because the abutting owner has no property right in the continued maintenance of the particular highway. Standiford Civic Club v. Commonwealth, Ky., 289 S.W.2d 498, on the point for which the appellees cite it, was overruled by Department of Highways v. Jackson, Ky., 302 S.W.2d 373.

EFFECT OF CURBS ON ACCESS

Several other questions require discussion. One relates to claims asserted in this case for damages resulting from interference with access attributed to the construction of curbs along the edge of the new highway. Prior to the construction of the new highway there was no curb along the level 125-foot frontage north of the restaurant parcel. However, the only entrance-way actually in use on this frontage was a 14-foot wide driveway leading back to the residence. The new highway will have a curb along the frontage except where the driveway enters the highway. The landowners claim that in order to develop their farm for subdivision purposes it will be necessary to have a wider driveway, perhaps 60 feet, and that the subdivision value of the land has been destroyed because by the curb their access is limited to 14 feet.

A similar claim is made by the restaurant lessees. Before the construction of the new highway there was access to the highway along the entire 150-foot frontage of the restaurant parcel, except for places at which the lessees had placed guard posts, a sign, and some shrubbery. The new highway will have , a curb along the frontage of the restaurant parcel except for the spaces of a 50-foot entrance and a 29-foot exit.. The lessees claim damages from alleged reduction of access by reason of the curb.

We think neither of the claims is valid, for the reasons stated in Commonwealth Dept. of Highways v. Carlisle, Ky., 363 S.W.2d 104. The Commonwealth has not undertaken to condemn any rights of access. The curbs are not absolute and permanent bars to access, but may be removed with permission of the Highway Department upon a showing of a reasonable necessity for further access. If the Department refuses to permit further access under claimed authority of the police power the question of whether such refusal is justified may be litigated in an appropriate action. There is no issue of access rights in the present case because the Commonwealth has not taken any access rights.

PROBATIVE VALUE OF TESTIMONY-EXCESSIVE DAMAGES

Our views on the matter of the probative value of the testimony of the condemnees’ witnesses in this case, concerning which the Commonwealth makes a detailed argument, are fully set forth in Commonwealth, Dept. of Highways v. Tyree, Ky., 365 S.W.2d 472, (decided March 1, 1963).

As concerns any question of excessiveness of the damages awarded in this case we express no opinion, since upon another trial the damages will be determined upon an entirely different basis.

LISTING OF WITNESSES BEFORE TRIAL

One final question remains for our consideration. It arises out of the fact that the Commonwealth, in response to interrogatories submitted by the condemnees a week or two before the trial, listed the names of the witnesses the Commonwealth intended to use on the trial, including some engineers and appraisers. Upon the trial, however, the Commonwealth undertook to use two appraiser witnesses who had not been listed, in place of two who had been listed. Upon objection’s being made by the condemnees the court refused to permit the unlisted witnesses to testify. The Commonwealth maintains that the court erred in so ruling.

The question is a difficult one, and is a new one in this jurisdiction. See Clay, CR, 26.02, Comment 3, pp. 269, 270; Grauman, Deposition and Discovery, 47 Kentucky Law Journal 175. We feel that we should not answer the question until it is squarely presented. It is not necessary to answer it in this case because we are reversing the judgment on other ■ grounds and the question may not arise on another trial. In our opinion, even if the listing that was made was properly held to be binding on the Commonwealth at the first trial, that particular listing, because of lapse of time, could not be binding at a second trial. Whether the question will arise at the second trial will depend upon whether there is a new request for a listing of witnesses, whether that request is honered or refused, and whether, if honored, the party of whom the request was made undertakes to use an unlisted witness at the trial.

OVERRULING — PROSPECTIVE APPLICATION

By way of.conclusion, we note that in this opinion we have laid down three new sets of rules that depart from former rules of this jurisdiction; one relating to determination and allocation of damages in condemnation of leased property; another abolishing the separate fixing and stating of taking damages and resulting damages (and special damages such as for fencing, trees and shrubbery) and establishing the simple “before and after” rule; and another authorizing the offsetting of benefits against damages. The former decisions of this Court cited in this opinion (and all others of similar import) that are in conflict with these new rules are overruled to the extent of the conflict.

As concerns the first rule (relating to leased property) we see no reason why the rule should be given prospective effect only, because the former rules on this subject were not complete and had no substantial period of existence or experience of application. However, the former rules relating to separation of taking and resulting damages (and the separate treatment of fencing), and prohibiting the offsetting of benefits, have been in existence in Kentucky for such a long period of time and have had such experience of application that in our opinion the new rules replacing them should not be held applicable to trials occurring before the issuance of the mandate on this opinion.

To avoid any possible misunderstanding, we wish to'make clear that the judgment in the instant case is being reversed not for failure to observe the new rules herein laid down, but for failure to comply with the formerly existing rules.

The judgment is reversed for further proceedings in conformity with this opinion.


source: Caselaw Access Project

author: MORRISON, Judge.

license: Public Domain

text:
    Daniel V. ESPARZA, Appellant, v. The STATE of Texas, Appellee.
    No. 35751.
    Court of Criminal Appeals of Texas.
    May 22, 1963.
    Daniel V. Esparza, pro se.
    James E. Barlow, Dist. Atty., James E. Hope, Asst. Dist. Atty., San Antonio, and Leon B. Douglas, State’s Atty., Austin, for the State.
   MORRISON, Judge.

The offense is felony theft, with a conviction for an offense of like nature alleged for enhancement; the jury found appellant guilty of the primary offense only and assessed his punishment at five years.

The witnesses Mauldin and Ramsey were residing at the YMCA in San Antonio on the night in question and were up quite late at night; they observed a Ford automobile drive into a parking lot adjacent thereto and approach a Mercury automobile which was parked on the lot. The men who got out of the Ford pulled on the doors of the Mercury, which the witnesses recognized as the property of one Victor Munguia, another resident at the YMCA. One of the men drove away; they observed the other pushing the Mercury, awakened Munguia, called the police and descended the fire escape. After they reached the Mercury, the police arrived and questioned appellant.

Officer Norton testified that, in response to a call, he drove to a parking lot next to the YMCA, saw appellant push the Mercury 15 or 20 feet and then jump into the driver’s seat, but the motor did not function, and, in answer to his questions, appellant said the Mercury belonged to his brother-in-law, but that when Mauldin and Ramsey arrived and informed him of the ownership of the Mercury he placed appellant under arrest.

Munguia testified that he was awakened and descended to the parking lot, where he found appellant and the parties heretofore named. He testified that his automobile had been moved “a car and a half away from where I had it”; that the ignition wires had been cut and, in answer to a question as to its market value, stated that he paid $695.00 for it in 1960.

Appellant did not testify in his own behalf but called one Grauke, an inmate of the prison system, who testified that he had met appellant for the first time on the night in question; that appellant reported to him that he had run out of gasoline and asked him if he had an automobile to push him to a service station. He stated that he had seen the Mercury earlier in the night and told appellant that if he would walk with him to the parking lot he would get his automobile; that they did so and when they arrived at the Mercury he told appellant his key would not work and then cut the ignition wires in an effort to start the motor. He stated that during the process of such effort he told appellant he needed a pair of pliers, left the scene, and when he returned found that the police had appellant in tow and, because he was a “five time loser,” departed.

Appellant also called his sister, who testified that she loaned appellant her automobile on the night in question and that it was recovered the next morning with the gasoline tank empty.

The court instructed the jury to acquit if they had a reasonable doubt that appellant believed the automobile belonged to Grauke and that he (appellant) had a right to use it, and we find the evidence sufficient to support the conviction.

Only two serious questions are presented by this record. While the proof as to value leaves much to he desired, we do find, in addition to the injured party’s testimony, that Officer Hassman testified the Mercury had a reasonable market retail value of $190.00 on the day in question. When it was discovered that he was testifying from a book put out by the Automobile Association and not from personal observation, the objection was interposed that such evidence was hearsay, but no motion to strike his prior testimony was made. While the evidence was hearsay, such is proper proof as to value. Holmes v. State, 126 Tex.Cr.R. 587, 72 S.W.2d 1092.

The second question is the sufficiency of the evidence to show that appellant had the automobile under his dominion and control so as to make him guilty of theft. Bryant v. State, 122 Tex.Cr.R. 385, 55 S.W.2d 1037, and the cases there cited support the holding that appellant, by pushing the automobile away from the place where he had found it, had exercised sufficient dominion and control over the same to support a conviction for the theft thereof.

No reversible error appearing, the judgment of the trial court is affirmed.


author: BELCHER, Commissioner.

text:
    Antonio Parra PINEDA, Appellant, v. The STATE of Texas, Appellee.
    No. 35783.
    Court of Criminal Appeals of Texas.
    May 8, 1963.
    No attorney on appeal, for appellant.
    Leon B. Douglas, State’s Atty., Austin, for the State.
   BELCHER, Commissioner.

The conviction is for murder; the punishment, forty-three years.

Elodia Ontiveras testified that while in her home she heard voices and looked across the street where she saw five men beating a man who was lying on the ground; that she ran screaming to the men to quit hitting the man on the ground; that she got “very close” and saw the appellant hitting him with a car jack but she did not know what the others were using. When they continued heating the man she ran to a nearby residence to notify the police. Upon returning she saw the five men leaving in a car; that the man on the ground was unrecognizable because he was covered with blood; and she found a chair leg on the ground. She gave to the police a description of the car in which the five men left.

Ricardo Galaviz testified that he, the deceased and others were together when the deceased suddenly ran as five men approached. They pursued the deceased who soon fell and the men jumped on him and began beating him; that he saw the appellant hitting the deceased with a bumper jack and saw one of the other five men with a knife.

The license number of the car in which the five men left was noted by Carmen Avina and given to the police.

The officers, on arrival at the scene, found Francisco Puente lying on the ground critically wounded. They obtained a description of the car and of one of the five men who left in it, and put out a radio spot broadcast.

Officers O’Leal and Craig testified that they stopped a car of the description given on the spot broadcast and one of the five men in it also fit the description of the man given on the broadcast. There was blood on appellant’s shirt sleeve and the blood on his trousers was not dry. The bodies of the five men had scratches and cuts and their clothes were bloody. The officers found three knives and a car jack in the car and two of the knives still had fresh blood on them.

The evidence shows that the deceased suffered multiple stab wounds, that there were four deep stab wounds of a total of about twenty, and that his death was caused by multiple stab wounds in the body.

The written statement of the appellant was introduced in evidence and in part it reads as follows:

“ * * * We had all been drinking tequila at my house; we all went out looking for Francisco Puente. When we left the house, I found a piece of a chair in the alley, and I picked it up. Juan Jimenez had a silver kitchen knife that had been sharpened in his pocket. It had black tape on the handle. There was a yellow-handled letter opener in the glove compartment. We were all out to get Puente and hurt him. We drove around and found him * * *. We started fighting and I was hitting Puenta with a piece of chair leg on the head and all over. Juan Jimenez had a kitchen knife and was after him with it. I didn’t actually see him cut him with the knife, but it had blood on it when we got done. I don’t know which of the other guys had the letter opener and the broken knife, but they were all using them in the fight with Jimenez and me. I was too busy hitting Puente with the piece of chair to see for sure who was stabbing him. Puente fell down and was bleeding and we all jumped back into the car and left. We drove out Paisano Drive where the police stopped us. All of us that I mentioned were in the fight and we beat and cut on Puente. I don’t know how bad he was hurt and I don’t care. This is all the truth. * * * ”

The appellant did not testify but offered a letter of the County Psychiatrist which stated that he had examined Alfonso Perez and he expressed the opinion that Perez could not differentiate -between right and wrong and should be confined in a state hospital.

The evidence shows that Perez was a co-defendant and had been granted a severance when his case was called for trial. The testimony further shows that the deceased had given Perez a beating shortly before the offense Here charged occurred.

There were no objections to the charge of the court or any requested charges.

No formal bills of exception appear m the record. The informal bills in the statement of facts of the evidence on the main trial have been considered and they do not show error. No brief has been filed in behalf of the appellant.

The evidence is sufficient to support the conviction and no error appearing, the judgment is affirmed.

Opinion approved by the Court.


text:
    Dennis NEWTON, Appellant, v. The STATE of Texas, Appellee.
    No. 35800.
    Court of Criminal Appeals of Texas.
    May 22, 1963.
    No attorney on appeal.
    Stanley Kirk, Dist. Atty., Timothy D. Eyssen, Asst. Dist. Atty., Wichita Falls, and Leon B. Douglas, State’s Atty., Austin, for the State.
   MORRISON, Judge.

The State has filed a motion to dismiss this appeal and accompanies it with an affidavit showing that appellant has escaped jail. The motion is granted. The appeal is dismissed.


author: McDonald, judge.

text:
    B. J. PITCOCK, Appellant, v. The STATE of Texas, Appellee.
    No. 35794.
    Court of Criminal Appeals of Texas.
    May 22, 1963.

      Marvin F. Foster, Jr., Corpus Christi, for appellant.
    Leon B. Douglas, State’s Atty., Austin, for the State.
   McDonald, judge.

The conviction was for misdemeanor theft, under an indictment charging felony theft, with a prior felony conviction alleged for enhancement; the punishment, confinement in jail for one year.

The indictment alleged the theft of thirteen items, having an aggregate value of over fifty dollars. Proof was offered as to only nine of these. The property not being of uniform value, there must be proof of each item alleged. Anderson v. State, 166 Tex.Cr.R. 337, 314 S.W.2d 603, and cases therein cited.

In passing, we note that should the appellant again offer to fully stipulate as to the prior conviction, the state should not be allowed to introduce evidence on this point. Our holding in Thompson v. State, Tex.Cr.App., 339 S.W.2d 209, to the extent of being in conflict herewith, is modified. The jury has no choice in imposing punishment if it finds the appellant guilty and that he has been previously convicted. Thus, if accused stipulates the prior conviction, that issue is resolved and the question of guilt is all that remains. Salinas v. State, Tex.Cr.App., 365 S.W.2d 362. To allow its introduction, after such stipulation, resolves no issue and may result in prejudice to the accused.

For the reason stated, the judgment is reversed and the cause is remanded.


text:
    Randle LANGLEY, Appellant, v. The STATE of Texas, Appellee.
    No. 35803.
    Court of Criminal Appeals of Texas.
    May 22, 1963.

      Ronald Matthews, John Shirley, Texas City, for appellant.
    Leon B. Douglas, State’s Atty., Austin, for the State.
   BELCHER, Commissioner.

This is an appeal from an order revoking probation.

The appellant entered a plea of guilty before the court on February 10, 1961, to the offense of conspiracy to wilfully burn insured property. He was found guilty and his punishment was assessed at a term of three years. The imposition of sentence was suspended and probation was granted.

Among the conditions of his probation was that he commit no offense against the laws of this state.

On December 10, 1962, the District Attorney filed a motion to revoke probation alleging certain violations of the law and certain convictions. The proof on the hearing January 4, 1963, supported the allegations of the motion, and the court specifically found and recited in its order of revocation that appellant had committed four named offenses in violation of the penal laws of Texas. According to the record the Probation Officer did not in any manner participate in the proceedings to revoke.

The sole contention urged for reversal is that the trial court abused its discretion in revoking the probation granted to the appellant. He relies on the failure of the Probation Officer appointed by the court to report any violation of the conditions of probation by the appellant, or the failure of the court to require such a report or to consult with him about the activities of the appellant before entering an order of revocation.

In Williams v. State, 157 Tex.Cr.R. 25, 245 S.W.2d 493, this Court said:

“While the duty plainly rests upon the probation and parole officer to make a report, we cannot agree that it is jurisdictional. The judge has the power to require compliance with Section 5 (now Sec. 8, Art. 781d) on the part of his probation and parole officer, if he so desires, but we find no limitation on the power of the judge to inquire into the matter and act independent of such report.”

The trial court having jurisdiction to hear and determine the revocation, notwithstanding the non-participation of the Probation Officer, did not from a consideration of the evidence introduced on the hearing abuse its discretion in revoking the order granting the appellant probation.

The judgment is affirmed.

Opinion approved by the Court.


author: MORRISON, Judge. McDonald, judge.

text:
    Gus E. SHELTON, Appellant, v. The STATE of Texas, Appellee.
    No. 35212.
    Court of Criminal Appeals of Texas.
    April 10, 1963.
    Rehearing Denied May 22, 1963.
    M. Gabriel Nahas, Jr., Houston, King O. Haynie, Houston (on motion for rehearing only), for appellant.
    Frank Briscoe, Dist. Atty., Carle E. F. Dally and Jon N. Hughes, Asst. Dist. Attys., Houston, and Leon B. Douglas, State’s Atty., Austin, for the State.
   MORRISON, Judge.

The offense is murder; the punishment, 7 years.

Our two prior opinions are withdrawn, and the following is substituted in lieu thereof. In view of our disposition of the case, the facts will not be set forth. We overrule appellant’s contention that the charge on accident as given by the court was erroneous and point out that where, as in this case, the defense is accident, there is no occasion to charge on negligent homicide. Beasley v. State, Tex.Cr.App., 346 S.W.2d 123, and Simmons v. State, 145 Tex.Cr.R. 619, 170 S.W.2d 742.

Our attention has now been directed to two portions of the argument of the prosecutor contained in the statement of facts. At one juncture, the prosecutor said, “He (appellant’s son) knew his father well enough to know he had murdered this woman.”

The objection that such constituted un-sworn testimony of the prosecutor was overruled.

Thereafter, the prosecutor said, “He (appellant’s son) knew what he (appellant) was capable of doing. He knew he was a dangerous and violent person.”

The same objection was made and overruled.

In such ruling, the court was clearly in error, and such error requires a reversal of this conviction.

The second motion for rehearing is granted, the judgment of affirmance is set aside, and the judgment is now reversed and the cause remanded.

ON STATE’S MOTION FOR REHEARING

McDonald, judge.

This cause was reversed for improper j'ury argument.

The State points out in its brief that Presiding Judge Woodley is committed to the proposition that such complaint to argument is not properly before this Court unless certified by the trial court. Judge .Woodley’s views are reflected in: Kinnebrew v. State, 168 Tex.Cr.R. 198, 324 S.W.2d 554; Wells v. State, 168 Tex.Cr.R. 228, 324 S.W.2d 860; Lookabaugh v. State, 171 Tex.Cr.R. 613, 352 S.W.2d 279; Scott v. State, 170 Tex.Cr.R. 237, 340 S.W.2d 52.

The State also points out in its brief that Judge MORRISON is committed to the opposite view and suggests that inasmuch as the trial judge approved the transcript of arguments in Smith v. State, Tex.Cr.App., 353 S.W.2d 456, the writer had not written on the point presented in their motion for rehearing.

It is the State’s contention that the informal bill is not sufficient for the reason that the statement of facts containing the arguments of counsel was not certified by the trial judge.

While it is true that the trial judge did approve the transcript of arguments in Smith, supra, he did not approve the transcript in Lookabaugh, supra. While the writer has only written on this question in Smith, supra, he did approve the opinion in Lookabaugh, supra.

It is the view of the writer that the amendment to Article 759a, Section 2(c), enacted by the Legislature in 1955, alleviates the necessity of the action of the trial judge in approving the statement of facts as set forth in Article-667, Vernon’s Ann.C.C.P., which was last amended in 1953, and that we are bound by the terms of the 1955 amendment to Article 759a, as shown by Section 1, subd. E and Section 4 thereof.

The writer is convinced that the complained of argument is properly before us.

Accordingly, the State’s motion for rehearing is overruled.


author: HUGHES, Justice.

text:
    C. R. BUTLER et al., Appellants, v. Eleuterio LOPEZ et al., Appellees.
    No. 11080.
    Court of Civil Appeals of Texas. Austin.
    May 1, 1963.
    Rehearing Denied May 22, 1963,

      Perkins, Floyd, Davis & Oden, Lloyd, Lloyd & Dean, Alice, for appellant.
    Mann, Fisher & Castillon, Laredo, for appellee.
   HUGHES, Justice.

This appeal is from an order overruling the pleas of privilege of appellants C. R. Butler and L. L. Williams to have this suit transferred to Jim Wells County, the county of their residence, and overruling the plea of privilege of appellant J. B. Vassey to have the suit transferred to Bee County, the county of his residence.

The residences of appellants were stipulated as indicated, and the location of the land involved was stipulated to be in Zapata County, the county of suit.

Appellees Lauro Lopez, Independent Executor of the Estate of Eleuterio Lopez, deceased, and Eva Pena de Lopez, seek to sustain the order of the Trial Court under the provisions of Subd. 14, Art. 1995, Vernon’s Ann.Civ.St. providing, in substance, that suits for the recovery of lands or damages thereto, or to remove incumbrances upon the title to land, or to quiet the title to land, must be brought in the county where the land is located.

Under this subdivision the only essential venue facts to be established are (1) the nature of the suit (2) the location of the land. The nature of the suit is established by examination of the pleadings and is a question of law for the Court. If they reflect a suit coming within the class of suits named in this subdivision no additional evidence as to its nature and no evidence establishing the cause of action alleged is required. Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428.

Appellees’ controverting affidavit adopted, and made a part'of it, their first Amended Original Petition which was the current pleading when the hearing below was held.

This petition alleges that on June 16, 1943, Eleuterio Lopez owned in fee 1280 acres of land in Zapata County and that on such date he and his wife, Eva Pena de Lopez, executed and delivered an oil and gas lease on such land to Stanley G. and Clyde C. Marshall and Don H. Marsh. It was alleged that such lease was modified by an agreement with J. B, Vassey on December 1, 1959, when Vassey owned such lease, a copy of such amendment being attached to the petition. The fee ownership of such land was alleged to have remained in Mr. Lopez until his death and that Mrs. Lopez succeeded to such title under her husband’s will.

The First Count of such petition alleges, “Plaintiffs suing under the provisions of the Declaratory Judgment Act as set out in the Revised Civil Statutes of Texas allege that in their opinion the above described oil, gas and mineral lease, as amended, has heretofore expired by its own limitations in that at the present time neither oil, gas nor other mineral is being produced therefrom in paying quantities. However, it is the position of the defendants that such lease has not expired by its own limitations and is still in force and effect.”

In their Second Count, Appellees alleged, “That independent of the cause of action declared upon in such foregoing First Count and regardless of whether such oil, gas and mineral lease is now in force and effect, defendants C. R. Butler, L. L. Williams and J. B. Vassey, jointly and severally, are liable to plaintiffs in damages in the following amounts by reason of the hereinafter set out facts, namely: * * * ”

Following.the above allegation are several lettered paragraphs in which specific allegations are made for the recovery of damages. In paragraph b, it is alleged:

“b. Referring to Subparagraph B. of Paragraph 7 of Exhibit B Plaintiffs allege that since December 1, 1959 two additional wells have been drilled on the above survey; that it was necessary in connection with drilling each of these to place a slush pit on such land; that each of such slush pits has heretofore dried out but Defendants have failed and refused to fill such slush pits and restore the land to substantially the same condition in which it was prior thereto to Plaintiff’s damage in the sum of $100.00.”

The Exhibit B, referred to, is the agreement or amended lease made with J. B. Vassey, and subparagraph 7B provides, “As to all slush pits which may hereafter be placed on such land Lessee agrees, as same dry out, to fill same and restore the land to substantially the same condition to which same was in prior thereto.”

Appellees alleged in paragraph c:

“c. Referring to Subparagraph C of Paragraph 7 of Exhibit B Plaintiffs allege that said Defendants have not used reasonable care and diligence in holding to a minimum the damage to above land from salt water, but on the contrary have caused additional lands in such Survey to be damaged by salt water to the extent of 28.56 acres to Plaintiff’s further damage in the sum of $1713.60 being on the basis of $60.00 an acre called for in such Subpara-graph C.”

By Sub-paragraph C of Paragraph 7 of Exhibit B, lessee agreed “to use reasonable care and diligence in holding to a minimum the damage to the above land from salt water.” It was agreed that lessee should pay lessor $50.00 per acre for lands rendered unfit for grazing purposes. In the event the parties could not agree on the quantity of land so affected, then arbitration was provided.

Appellees alleged in Paragraph d:

“d. That by reason of the failure and refusal of defendants to comply with the requirements of such Sub-paragraph C Plaintiffs have also been damaged an additional $1500.00 by reason of salt water being permitted to run into a fresh water tank used for watering livestock on such land making the water in such tank so salty that the cattle cannot drink same.”

In Paragraph e it was alleged:

“e. That at the present time there are only three wells on such lease which are producing any oil, which oil is not now in paying quantities; that the Defendants Butler and Williams are negligently operating such lease in that they only have a man go to such lease about every third day who only remains on the lease for a short time. That on May 18, 1962 when such wells were not attended by anyone the large metal tank from which the production of oil and salt water (mostly salt water) is pumped from such wells became full and started overflowing, thereby discharging on said land of Plaintiffs large amounts of salt water and of oil thereby further damaging the said lands of Plaintiffs. * * *
In this connection Plaintiffs further allege that the size and strength of the retaining walls of such salt reservoir are such that there are liable to be additional breaks therein at any time, particularly as a result of a heavy rain or rains, which heavy rains are likely to occur during the next few weeks, to plaintiff’s further damage in the amount of $1700.00.”

In Paragraph-f it was alleged:

“f. That each of the acts of commission and omission herein alleged constitute negligence on the part of defendants, and each is a proximate cause of the injuries and damages herein complained of.”

The prayer of the petition was for a declaratory judgment to the effect that the lease had expired for non-production and for its cancellation as a cloud on the fee title, and for damages.

It is our opinion that venue was properly laid in the county of suit and that the order appealed from should be affirmed.

The term “damages to land” as used in Sub. 14 of Art. 1995, means “an injury to the possession, or to the freehold or estate.” Knight v. Houston & T. C. Ry. Co., 93 Tex. 417, 55 S.W. 558. It is evident from the allegations of appellees’ petition which we have copied that injury to the freehold from salt water is pleaded, and we do not understand appellants to controvert this. It is their contention, as to this, that the suit is in personam since it is based upon a contract (amended oil and gas lease), and, hence, is not a suit for damages to land. To sustain this position, appellants rely upon Houston Lighting & Power Co. v. Jenkins, 5 S.W.2d 1030, 1031, by this Court, and Batex Oil Co. v. La Brisa Land & Cattle Co., 352 S.W.2d 769, San Antonio Civil Appeals, writ dism.

In Jenkins this Court held that a suit on contracts conveying an easement for an electric transmission line which authorized the destruction of trees necessary to the purposes of the easement and obligating the assignee to pay damages therefor was a suit in contract and not a suit for damages to land, the Court saying, * * * the damages to the trees do not arise from tort, but arise solely from and under express terms of the contracts, which fix the damages agreed upon at the reasonable value of the trees destroyed or injured.”

The above decision is undoubtedly correct. No act of negligence was averred. The easement owner had a contractual right to cut and injure the trees. No tort was committed. The sole question in that case was the amount of damages under the contract, and such case is not in point here.

Neither is the decision in Batex applicable here on the point being discussed, That suit did not involve a claim for damages for injury to the freehold estate or to the land.

A breach of contract may be tortious. Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 204 S.W.2d 508, Liles v. Winters Ind. School District, 326 S.W.2d 182, Austin Civil Appeals. In Montgomery Ward the Supreme Court quoted, with approval, the following from 38 Am.Jur., Sec. 20, p. 662:

“A contract may create the state ot things which furnishes the occasion of a tort. The relation which is essential to the existence of the duty to exercise care may arise through an express or implied contract. Accompanying every contract is a common-law duty to perform with care, skill, reasonable expedience and faithfulness the thing agreed to be done, and a negligent failure to observe any of these conditions is a tort, as well as a breach of the contract. In such a case, the contract is mere inducement creating the state of things which furnishes the occasion of the tort. In other words, the contract creates the relation out of which grows the duty to use care. Thus, a person who contracts to make repairs can be held liable for his negligence in doing the work. * * * The sound rule appears to be that where there is a general duty even though it arises from the relation created by, or from the terms of a contract, and that duty is violated, either by negligent performance or negligent nonperformance, the breach of the duty may constitute actionable negligence.”

Under these authorities, it is our opinion that appellees have well pleaded a cause of action for damages to land negligently caused by appellants within Sub. 14 of Art. 1995, the contract, amended lease, constituting the occasion for the commission of the tort.

Appellants’ last point is that since the lease contained a provision for arbitration of any dispute regarding the amount of land rendered unfit for grazing by reason of salt water produced under the oil lease, that no cause of action is stated by appellees since they have not pleaded compliance with this provision.

This is a defensive matter which has no pertinency to the issue of venue, the sole issue before us. Tex.Jur., Vol. 43-B, Venue, Sec. 152, p. 365. Bradley v. Trinity State Bank, 118 Tex. 274, 14 S.W.2d 810.

We express no opinion on other grounds advanced for sustaining venue in the Court below.

The judgment of the Trial Court is affirmed.

Affirmed.


author: MURRAY, Chief Justice.

text:
    Ben NOBLE, Sr., et al., Appellants, v. TEXACON INDUSTRIES, INC., et al., Appellees.
    No. 14086.
    Court of Civil Appeals of Texas. San Antonio.
    April 24, 1963.
    Rehearing Denied May 22, 1963.

      ■Levey & Goldstein, Foster, Lewis, Lang--ley & Lewis, San Antonio, Bryan, Suhr & Bering, Houston, for appellants.
    Mayo Galindo, Josh H. Groce, San Antonio, for appellees.
   MURRAY, Chief Justice.

This is a venue case. The suit was filed in the District Court of Bexar County, Texas, by Texacon Industries, Inc., of Harris County, against Electrical Distributing Company, Inc., of Bexar County, and Ben Noblé, Sr., and Lew Todes, Jr., both of Harris County, alleging that on June 11, 1962, Electrical Distributing Company, hereinafter called Electrical Company, entered into a contract with Ben Noble, Sr., and Lew Todes, Jr., for the sale of its stock or' assets, as witnessed by the following Tetter:

“6812 Staffordshire
Houston 25, Texas
June 8, 1962
“Mr. E. S. Richardson
Electrical Distributing Company
102 West Josephine Street
San Antonio 6, Texas, and
“Texacon Industries, Inc.
2122 Welch
Houston 19, Texas
Subject: Offer to purchase the
Electrical Distributing Co.
“Gentlemen:
“We hereby offer to purchase all of the stock or the assets of the Electrical Distributing Co.,. 102 West Josephine Street, San Antonio, Texas, on the following terms:
Total purchase price $230,000.00
Cash on closing $130,000.00
Balance $100,000.00
“The balance of $100,000.00 is to be paid in fourteen (14) semi-annual installments represented by secured notes bearing interest at the rate of five and one half (5½%) per cent per annum as follows: * * *
“As evidence of our sincerity and in accordance with standard practice, we submit herewith our check in the amount of $10,000.00 as escrow deposit of earnest money which said amount shall represent part of the cash payment of $130,000.00 as specified above. We would like to effect this transaction as of June 30, 1962.
“This offer is subject to acceptance on or before June 12,1962.
“Very truly yours,
/s/ Ben Noble, Sr.
/s/ Lew Todes, Jr.
“ACCEPTED:
Electrical Distributing Co.
/s/ E. S. Richardson, President
“DATED: 6-11-62”.

Texacon Industries, Inc., hereinafter called Texacon, acted as broker in this transaction. The $10,000.00 was placed in escrow with Texacon in the form of a check payable to E. S. Richard son and Texacon.

It is the contention of Noble and Todes that this letter was never properly accepted because only the stockholders could agree to sell all of their stock and all of the assets of the corporation, and that the signature of E. S. Richardson as President of Electrical Company was not a valid acceptance.

On June 14, 1962, Noble and Todes refused to go through with this alleged contract and demanded the return of the $10,-000.00. Texacon alleges it is holding the $10,000.00 in escrow and that it is confronted with conflicting claims by Electrical Company, on the one hand, and Noble and Todes, on the other, for this $10,000.-00. It tenders the $10,000.00 into the registry of the court and asks that these conflicting claims be determined by the court. The evidence shows that there exists between Texacon and Electrical Company an agreement that they are to share equally in such sums as may be recovered by Electrical Company.

The pleas of privilege of Noble and Todes came on to be heard in the 73rd District Court of Bexar County on July 31, 1962, and the trial court, after hearing the evidence and argument of counsel for both sides, pronounced in open court judgment sustaining the pleas of privilege. This judgment was reduced to writing but was never signed or approved by the trial court or entered in the regular minutes of the court.

On September 12, 1962, the trial court set aside his judgment of July 31, 1962, and rendered judgment overruling the pleas of privilege. Noble and Todes have prosecuted this appeal from that judgment.

The first question to be here decided is whether the judgment of July 31, 1962, had become final and therefore not subject to being set aside by the trial court on September 12, 1962. As we understand the holding pf the Supreme Court-in,the recent case of Ex parte Godeke, Tex., 355 S.W.2d 701, a judgment is not rendered until it has been reduced to writing, signed and approved by the trial court. The judgment pronounced by the trial court on July 31, 1962, had not become final on September 12, 1962, at which time it was effectively set aside by the trial court. Thus, after setting aside the first judgment, the-trial court had jurisdiction to render the-judgment of September 12. See Rules 3G6ai and 329b, Texas Rules of Civil Procedure.

In rendering the judgment overruling the plea of privilege, the trial court announced that it was governed by the opinion of this Court in Reid v. Uhlhorn, 359 S.W.2d 278. In that case, this Court held that for an interpleader action to be proper it was only required that there be a reasonable doubt, either of fact or law, as to which one of the claimants was entitled to receive the funds held by the interpleader. This undoubtedly is a correct statement of the law of this State with reference to the filing of interpleaders as provided for by Rule 43, T.R.C.P.

We must determine whether there is a reasonable doubt as to which claimant herein is entitled to recover the $10,000.00. Davis v. East Texas Savings & Loan Ass’n, Tex., 354 S.W.2d 926. We conclude that appellants, Noble and Todes are clearly entitled to recover the $10,000.00, and that Electrical Company has no right to same. The letter does not provide that in the event of a breach of the contract, the $10,-000.00 is to be forfeited to Electrical Company as liquidated damages. The alleged letter contract was repudiated by Noble and Todes on June 14, 1962. There was no attempt made to consummate the contract. Noble and Todes never undertook to take over the stock or the assets of Electrical Company, and under the circumstances it had no -claim to the $10,000.00. Stidham v. Laurie, Tex.Civ.App., 133 S.W. 1082; Kellam v. Hampton, 58 Tex.Civ.App. 484, 124 S.W. 970.

Appellees have cited a- number of cases in support of their contention that Noble and Todes should not be permitted to recover the $10,000.00. In the first case cited, Estes v. Browning, 11 Tex. 237, the purchaser went into possession of the land, gave notes for the purchase price and made a number of payments on these notes. He remained in possession of the land until his death. The Court held that his legal representatives could not .recover that part of the purchase price which he had paid while occupying the land. Here Noble and Todes never went into possession of either the stock or the assets of Electrical Company. The $10,000.00 was not paid to Electrical Company, but placed in escrow with Texacon.

Appellees next cite the cases of Davenport v. Sparkman, Tex.Com.App., 208 S.W. 658; Lieber v. Nicholson, Tex.Com.App., 206 S.W. 512; and Champion v. Taylor, Tex.Civ.App., 229 S.W. 627. These cases are all clearly distinguishable from Stidham v. Laurie and Kellam v. Hampton, supra.

The law does not favor forfeitures, and where earnest money is placed in escrow, not with the vendor but with a third person, and there is no provision for a forfeiture as liquidated damages, it is to be regarded as a penalty and not as liquidated damages.

It will be borne in mind that this is a venue case. All the parties to this suit are domiciled in Harris County except Electrical Company. Brushing away matters of form and looking only to the substance of things, this suit is really one by Texacon and Electrical Company against Noble and Todes to recover the $10,000.00 placed in escrow by them. Venue in Bexar County must rest alone upon the fact that Electrical Company is domiciled in Bexar County. The evidence shows that there is no controversy between Texacon and Electrical Company. They have entered into a written agreement that whatever is recovered from Noble and Todes will be divided equally between them. Texacon and Electrical Company are in truth and in fact co-plaintiffs against the defendants Noble and Todes. Texacon is aligned with Electrical Company in a common fight to recover what they can from Noble and Todes. Under the provisions of our venue statute, Art. 1995, Vernon’s Ann.Civ.Stats., Noble and Todes have a right to have this suit tried in Harris County. The mere fact that the suit is styled an “Interpleader” should not be sufficient to deprive them of their very valuable right, given them by the venue statute, to be sued in the county of their residence.

We find it unnecessary to pass on other points presented. Accordingly, the judgment of the trial court will be .reversed and venue of this case ordered transferred to the District Court of Harris County, Texas, in keeping with the provisions of Rule 89, T.R.C.P.