text:
    F. G. KINGSLEY et al., Appellants, v. WESTERN NATURAL GAS COMPANY et al., Appellees.
    No. 14498.
    Court of Civil Appeals of Texas. Houston.
    June 24, 1965.
    Rehearing Denied Sept. 9, 1965.

      Childress, Port & Crady, Virgil Child-ress, Houston, Wood, Boykin & Wolter, Ralph R. Wood and Marshall Boykin, III, Corpus Christi, for appellants.
    Liddell, Austin, Dawson & Sapp, Dwight H. Austin and Willis Witt, Houston, for Western Natural Gas Co.
    George Wear, Fort Worth, for Continental Oil Co.
   WERLEIN, Justice.

This suit was brought by appellants, F. G. Kingsley and Roger Milliken, for damages allegedly resulting from breach of an implied covenant by appellees, Western Natural Gas Company and Continental Oil Company, hereinafter sometimes called “Western” and “Continental”, to take gas from the well and leases of appellants and their co-owner, ratably with the quantities of gas taken from the wells and leases of Reynolds Metal Company, and Reynolds Mining Corporation, hereinafter referred to jointly as “Reynolds”, all such gas being produced from the Common A-2 Reservoir in the Lamar Field area in Aransas County, Texas. Appellants’ gas was purchased and/or taken by Western and Continental during the period August 1, 1957 to June 1, 1960 under a written contract dated March 13, 1953 between Burdette Graham and H. C. Heldenfels, appellants’ predecessors in title, et al, as “Seller” and Western and Continental as “Buyer.”

At the conclusion of the evidence the trial court on appellees’ motion withdrew the case from the jury and entered judgment that appellants take nothing. From such judgment appellants have perfected their appeal.

In their first group of points appellants contend in substance that the trial court erred in holding that under said Burdette Graham contract, by the terms of which Buyer agreed to purchase or take the gas from all of appellants’ properties in the Lamar Field in Aransas County, appellees as a matter of law, did not impliedly covenant and were not impliedly obligated to take gas ratably upon a reasonable allocation formula from appellants’ well and leases with the quantities of gas produced and/or take from the wells of Reynolds produced from the same common reservoir; and in holding that, as a matter of law, appellees had not breached such implied covenant by taking during said period of time from the wells and leases of Reynolds with a total of allocated productive acreage, as located by Reynolds, of only 51.-5341 acres with actual productive acreage of only 29.9268 acres, 3,938,610,000 cubic feet of gas while taking during the same period from said common reservoir only 1,145,058,000 cubic feet of gas produced from said common reservoir from appellants’ Coloma Heard Unit No. 1-c Well with productive acreage of 143 acres allocated to it by appellants’ operator, Coloma Well & Gas Corporation, sometimes called herein “Coloma”, which corporation appellants wholly owned, with actual productive acreage of 175.51 acres, to appellants’ damage in the sum of $287,314.58.

In their Fourth Amended Original Petition, the trial petition, appellants alleged that they were the owners of an undivided 2/^rds interest in certain oil, gas and mineral leases covering 253.2 acres of land, which they described, and a corresponding interest in all gas, including condensate produced from or underlying said leases; that their interest in said leases and wells were operated for them and their co-owner of the remaining rd interest by Coloma, and that said leases were located partly in the Lamar Field and partly in the Fulton Beach Field as the limits of such fields are defined respectively by the Railroad Commission of Texas. Appellants further alleged that their interest in such leases and all production therefrom was acquired on August 1, 1957, subject to that certain gas sales contract dated March 13, 1953 by and between Burdette Graham, H. C, Heldenfels, trustee, and Pratt-Hewitt Oil Corporation, as “Seller” and appellees as “Buyer”, and that appellants acquired as of August 1, 1957 all of the Seller’s rights under said gas sales contract. They also alleged that under such contract Seller agreed to sell and deliver to Buyer and Buyer agreed to purchase, take and receive from Seller the gas produced from Seller’s leases for the term March 13, 1953 to September 12, 1972, a period of more than 19 years.

The contract in question, referred to herein as Graham or Burdette Graham contract, executed on March 13, 1953, by appellants’ predecessors in title and under which appellants acquired all rights on August 1, 1957, contains the following pertinent provisions which must be considered in determining whether or not there was an implied covenant inherent in such contract to take gas ratably as contended by appellants.

Article I, Sec. 1 of said contract provides that the Seller agrees to sell and deliver to Buyer and Buyer agrees to purchase and receive from Seller the gas produced from all of the Seller’s properties in the Lamar Field in Aransas County, Texas. Section 2 of such Article provides in substance that during each billing period during the term of the contract the Seller shall sell and deliver to Buyer and Buyer shall purchase and receive from Seller a quantity of gas at least equal to 1,000,000 cubic feet per day multiplied by the number of wells covered by the agreement on the first day of the billing period; “provided, however, that Buyer shall not be obligated to pay for any gas which is not tendered to Buyer by Seller.” Buyer shall have the right, at its option, to purchase and receive additional quantities of gas up to but not exceeding that quantity each day which the wells then covered by the agreement can lawfully produce, less 1,000,000 cubic feet per well. Seller’s delivery obligations shall be subject to the ability of Seller’s wells to lawfully produce when operated in accordance with sound field practice.

Article II, Section 5, provides in substance that the gas covered by the agreement shall be delivered by Seller to Buyer or for Buyer’s account into the pipeline owned and operated by St. Charles Pipeline Company, which pipeline runs from the St. Charles Field in Aransas County, Texas, to the aluminum plant owned and operated by Reynolds in San Patricio County, Texas. The points of delivery on said pipeline shall be determined by agreement among Buyer, Seller and St. Charles Pipeline Company.

Article III, Sec. 1, provides in part that the Seller shall, at its sole cost and expense, construct, own, operate and maintain all gathering lines, pipelines, meter stations and other equipment necessary in order to deliver to the delivery points the gas covered by the agreement and to measure the quantities thereof for hilling purposes.

Article VI, Sec. 1, of said contract provides in substance for a minimum take based upon a restudy of reserves at the option of either party not oftener than once every five years during the term of the contract. The provisions of this Section were never invoked by appellants or by appellees. For this reason appellants allege that such provisions are immaterial to the issues involved in this suit. Appellees, on the other hand, contend that such provisions are quite material in determining the intention of the parties and whether any implied covenant to take ratably exists by virtue of the provisions of the contract.

Article VII, Sec. (c), provides:

“The control, management and operation of the properties subject to this contract shall be and remain the exclusive right of Seller. Seller may, in its sole uncontrolled discretion and as it deems advisable, drill new wells, repair or rework old wells, renew or extend in whole or in part any lease or unit, and abandon any well or surrender, terminate or release all or any part of any lease not deemed by Seller capable under normal production methods of producing gas in paying or commercial quantities.”

Article X, Sec. 2, reads as follows:

“It is understood that Buyer has made arrangements for the gas to be purchased by Buyer from Seller under the provisions of this agreement to be delivered and sold to Reynolds Metals Company under the provisions of a certain contract between Buyer and Reynolds Metals Company, dated January 13, 1951, and that Buyer presently has no other market for said gas. Accordingly, any provision of this agreement to the contrary notwithstanding, the quantities of gas to be purchased by Buyer from Seller from time to time under the provisions of this agreement shall not, without Buyer’s consent, exceed the quantities of gas actually delivered from time to time under Buyer’s said contract with Reynolds Metals Company, less the quantities of gas heretofore contracted to be purchased by Buyer from time to time from oth-er_ for delivery under the said contract with Reynolds Metals Company and so delivered.”

Appellees assert, and the court impliedly found and concluded, that the provisions of the contract in question defined the obligations of Buyer with respect to the taking of gas, and that therefore there was no implied covenant on the part of the Buyer to take ratably gas from the wells and leases of appellants and gas from the wells of Reynolds produced from the same common reservoir.

The principal question for determination is whether under the provisions of the Graham contract there was an implied covenant on the part of the Buyer to take gas ratably from appellants’ wells and Reynolds’ wells, produced from the same common reservoir, even though the contract expressly obligated Buyer to purchase only one million cubic feet of gas per day per well, with the option to take in excess of such quantity. The parties stipulated that “During the period from August 1, 1957 to June 1, 1960, Western-Continental fully performed and fully complied with all obligations imposed upon them by the express (written) terms of the Burdette Graham contract, including, without limitation, the gas purchase obligations imposed on them in Article I of such contract.” It is appellees’ contention that there can be no implied covenant to take gas ratably for the reason the contract provides expressly and specifically with respect to the gas that the Buyer was required to take. We have not found nor been cited to any case directly in point. The general rule is that there can be no implied covenant with respect to the exploration and development of mining properties when there are express covenants in the lease or grant specifically covering the matter.

In Freeport Sulphur Co. v. American Sulphur Royalty Co., 117 Tex. 439, 6 S.W.2d 1039, several tracts of land were conveyed for development and operation for sulphur with provision for the payment of royalty to the grantors. The deeds and a contract expressly provided that the grantees should within a certain time erect and put in operation on the land a complete plant of one unit in accordance with a certain process. The plant was built within the time specified and other plants were later erected and put in operation, four in all, as the demands of the market required. The owner of the royalty sued for damages for the failure of the grantees and their assigns to develop and operate the sulphur mines in good faith and with reasonable diligence, the plaintiff contending that there was an implied covenant for the full development of the property. It was held that no implied covenant for the full and general development of the property existed “for the reason that the provision * * * for the erection of a one-unit plant was an express provision for development, and negatives an implication for development.” The court held, however, that the provision in the contract for the erection and operation of a complete plant of one unit carried with it a very necessary implication for continued operation of such plant for the purposes of the contract regarding royalties to be paid.

In Gulf Production Co. v. Kishi, Tex.Com.App.1937, 129 Tex. 487, 103 S.W.2d 965, the oil and gas leases expressly provided for the time for drilling oil wells and the number of wells to be drilled upon the leased premises. Suit was brought by the lessors on the ground that the lessees had not used reasonable diligence to develop the premises, and that despite the provision as to the number of wells that should be drilled there was an implied covenant on the part of the lessees to further develop the property and drill additional wells. The court held that a covenant for reasonable development of land leased for the purpose of producing oil and gas is always implied and always exists unless there is in the lease an express agreement that the lessee shall not use reasonable diligence to develop the premises or an express stipulation or covenant so absolutely irreconcilable with the implied covenant as to destroy it. The court said:

“The true rule is that the implied covenant arises only out of necessity and in the absence of an express stipulation with respect to development of the leased premises. When the parties have not exercised their right to make express provision for the development of the land after production is obtained, a covenant for reasonable development is implied in order that the purpose for which the lease is made, the production of oil and gas with payment of royalty to the lessor, may be accomplished.”

The court held that the parties expressed in the lease their agreements and intentions as to the number of wells required to be drilled by the lessee in the development of the premises covered by the two leases, and as to the time when the wells should be drilled, and that this being true there was no necessity for the implication of a covenant for development with reasonable diligence, and that to imply such covenant would be to make an agreement for the parties upon a subject about which they had in their written contracts expressly agreed. The court said: “Thus the parties expressly contracted with respect to the drilling of wells for exploration and there was no field for the operation of an implied agreement for the beginning of an exploratory well or wells.” The court further said: “It follows that the existence of an implied covenant for development is not to be assumed and that it becomes necessary first to examine the leases under consideration to ascertain whether the parties have expressly agreed or stipulated as to the number of wells to be drilled in the development of the premises.”

The following statement from Mills & Willingham’s Law of Oil & Gas with respect to reasonable development, Section 108, page 154, was quoted by the court with approval in Gulf Production Co. v. Kishi, supra:

“ ‘It is seldom that a lease provides for the number or the depth of the wells that shall be drilled after discovery of oil or gas in paying quantities. When it does, however, the express covenant is binding upon the question of diligence of operation and no further covenant will be implied, in the absence of drainage.’ ”

In the instant case the parties stipulated that appellants (plaintiffs below) do not and will not assert or contend that any well or lease mentioned in their petition, or any reservoir underlying it, was drained or damaged by virtue of the quantities of gas produced from the five Reynolds wells, and thereafter transported by appellees in the St. Charles pipeline to Reynolds. In Foster v. Atlantic Refining Company, 5 Cir. 1964, 329 F.2d 485, the lease provided for an offset well when a well was drilled within 650 feet of the Foster lease. The Fosters contended that they were entitled to two offset wells to prevent drainage. The court held that because of the express agreement on offset obligations, it would not imply any different offset obligations. The court further held that obligations to develop reasonably and to drill offset wells, whether they be expressed or implied, are two separate matters.

It is appellants’ contention that appellees were under an implied duty to take the gas from their one well ratably with the gas from the five wells of Reynolds, although the Graham contract contains an express provision with respect to the gas which the Buyer was obligated to take. The law is well settled that where a contract contains an express covenant upon a subject, no implied covenant can exist as to the same subject. Simms Oil Co. v. Flewellen, Tex.Com.App.1941, 138 Tex. 63, 156 S.W.2d 521, opinion adopted by Supreme Court; Freeport Sulphur Co. v. American Sulphur Royalty Co., supra; Foster v. Atlantic Refining Co., supra; Gulf Production Co. v. Kishi, supra; Crawford v. Thomas, Tex.Civ.App., 229 S.W.2d 80, writ ref. The court, in Danciger Oil & Refining Co. of Texas v. Powell, 1941, 137 Tex. 484, 154 S.W.2d 632, in refusing to imply a covenant to develop, said:

“In the outset it should be noted that when parties reduce their agreements to writing, the written instrument is presumed to embody their entire contract, and the court should not read into the instrument additional provisions unless this be necessary in order to effectuate the intention of the parties as disclosed by the contract as a whole. An implied covenant must rest entirely on the presumed intention of the parties as gathered from the terms as actually expressed in the written instrument itself, and it must appear that it was so clearly within the contemplation of the parties that they deemed it unnecessary to express it, and therefore omitted to do so, or it must appear that it is necessary to infer such a covenant in order to effectuate the full purpose of the contract as a whole as gathered from the written instrument. It is not enough to say that an implied covenant is necessary in order to make the contract fair, or that without such a covenant it would be improvident or unwise, or that the contract would operate unjustly. It must arise from the presumed intention of the parties as gathered from the instrument as a whole.”

Since the instant case was withdrawn from the jury and the trial court rendered judgment, we must view the evidence in the light most favorable to the losing party, and must indulge against the court’s action every inference that may properly be drawn from the evidence. Dunagan v. Bushey, 1953, 152 Tex. 630, 263 S.W.2d 148, and cases cited. In applying the foregoing rule, we have arrived at the conclusion that no covenant to take gas ratably can be implied in the instant case in view of certain provisions of the contract which clearly indicate that the original parties to such contract never intended or contemplated that there would be any ratable taidng of gas from appellants’ well.

The Graham contract is not a lease or grant but a contract for the sale and purchase of gas. Even if the rules applicable to the reasonable exploration and development of oil and gas leases or grants be applied, the express covenants contained in such contract negate the existence of an implied covenant to take more gas or to take gas in a different manner or under different conditions than expressly stipulated in the contract which clearly shows the intention of the parties with respect to the quantity of gas the buyer would be required to take and also the conditions and circumstances under which the buyer could be required to take more gas or in a different manner. It specifically states that Seller shall sell and deliver to Buyer and Buyer shall purchase and receive from Seller a quantity of gas at least equal to one million cubic feet per day multiplied by the number of wells covered by the agreement on the first day of the billing period.

Article VII, Section C, supra, provides that the control, management and operation of the properties shall be and remain the exclusive right of the Seller. Furthermore, the Seller is given the right in its sole uncontrolled discretion to drill new wells, and to repair or rework old wells. The quantity of gas that the Buyer agreed to buy was at least equal to one million cubic feet per day multiplied by the number of wells covered by the agreement. The contract gives appellants the right to drill additional wells and to require the Buyer to take one million cubic feet of gas per day from each additional well. It gives appellants the right to deliver from the common reservoir, if they desired to do so, more than the minimum of one million cubic feet of gas per day by the simple expedient of drilling more wells.

The contract was written to protect both the Seller and the Buyer. For the protection of the Buyer the contract recited that the Buyer had made arrangements for the gas to be purchased by Buyer from Seller to be delivered and sold to Reynolds, and that the Buyer presently had no other market for such gas. It further provided that the quantities of gas to be purchased by Buyer from Seller under the agreement shall not, without Buyer’s consent, exceed the quantities of gas actually delivered from time to time under Buyer’s said contract with Reynolds Metals Company, less the quantities of gas “heretofore contracted to be purchased by Buyer from time to time from other_ for delivery under said contract with Reynolds Metals Company.” Subject to such provision, however, appellants were given the right to drill additional wells, and the right to require Buyer to take one million cubic feet of gas per day from each additional well drilled. Thus they were given the right to produce from the common reservoir and sell to Buyer additional gas if they were not satisfied with the amount of gas that was being taken from their one well.

The contract not only provides as to the minimum amount of gas that Buyer was required to take per day from each well of appellants, but further provides that the Buyer shall not be obligated to pay for any gas which was not tendered to the Buyer by Seller. There is no evidence in the record before us that the Seller ever tendered more gas to Buyer than the amount actually delivered to and paid for by Buyer. The contract further states that the Buyer shall have the right, at its option, to purchase and receive additional quantities of gas up to but not exceeding that quantity each day which the wells then covered by the agreement can lawfully produce, less one million cubic feet per day per well. This provision might well conflict with an obligation on the part of Buyer to take appellants’ gas ratably with the gas of others. It also indicates that it was not the intention of the parties that the Buyer could be forced to take and pay for more than one million cubic feet per day from each well, regardless of the amount of gas that appellants’ wells could lawfully produce. The contract having expressly provided for the purchase of additional gas at the option of appellees, no covenant may be implied requiring and obligating appellees to purchase gas in excess of the contractual minimum. Danciger Oil & Refining Co. of Texas v. Powell, supra; Cowden v. Broderick & Calvert, Inc., 1938, 131 Tex. 434, 114 S.W.2d 1166.

Since the contract in question is not ambiguous and expressly sets out the obligations of both Seller and Buyer with respect to the sale and purchase of gas, the quantities of gas the Seller could require Buyer to take, the conditions under which more or less gas might be delivered or purchased, and other matters related thereto, it will be presumed that the writing contains the whole agreement of the parties, and hence not subject to being varied or contradicted by showing a presumed intention of the parties different from their intention as gathered from the instrument as a whole. Danciger Oil & Refining Co. of Texas v. Powell, supra; Lewis v. East Texas Finance Co., 136 Tex. 149, 146 S.W.2d 977; Natural Gas Dist. Corp. v. Williams, Tex.Civ.App., 355 S.W.2d 194, writ ref., n. r. e.; 23 Tex.Jur.2d, Evidence, Section 342.

The provisions of Article VI, Sec. 1 of the contract which were not invoked by either party thereto provide in substance that not more often than once every five years the Buyer and Seller, at the request of either of them, shall conduct a joint study of the gas reserves of Seller committed to the agreement to determine the quantity of recoverable gas contained therein and to arrive at a new “contract minimum” which can be produced in satisfaction of Seller’s delivery obligations under the contract; and that if the contract minimum determined upon the basis of the last joint study be less than one million cubic feet of gas multiplied by the number of wells then covered by the agreement, the Buyer shall be obligated to purchase and receive from Seller while such condition exists, only a quantity of gas equal to the contract minimum multiplied by the number of days in such billing period. It is our view that this provision corroborates the construction placed upon the contract by this Court, and further indicates Buyer’s obligations with respect to the purchase of appellants’ gas.

In Weil v. Ann Lewis Shops, Inc., Tex.Civ.App., 281 S.W.2d 651, writ ref., the court quoted with approval the rules summarized in Cousins Inv. Co. v. Hastings Clothing Co., 45 Cal.App.2d 141, 113 P.2d 878, controlling the exercise of judicial authority to insert implied covenants, as follows:

“(1) The implication must arise from the language used or it must be indispensable to effectuate the intention of the parties; (2) it must appear from the language used that it was so clearly within the contemplation of the parties that they deemed it unnecessary to express it; (3) implied covenants can only be justified on the grounds of legal necessity; (4) a promise can be implied only where it can be rightfully assumed that it would have been made if attention had been called to it; (5) there can be no implied covenant where the subject is completely covered by the contract.”

Keeping in mind the above rules, we find nothing in the language of the Graham contract to support appellants’ contention that there was an implied covenant to take gas ratably or that any such covenant was indispensable to effectuate the intention of the parties or that any such covenant was so clearly in contemplation of the parties that they deemed it unnecessary to express it. The contract in question covers the subject with respect to the production, delivery and taking of gas, and various matters relating thereto, and hence no covenant for ratable taking can be implied. We find nothing in the contract from which an intention of the parties to take ratably can be presumed. There is no reference or suggestion in the contract with reference to proportionate buying, division among various producers, acreage allocation, common reservoir, fair share of gas or any language which could give rise to an implied covenant to purchase ratably. The contract contains clear and unambiguous language with reference to the taking of gas and recalculation provisions with respect thereto. Appellees are given the option to take more gas without reference to the quantity of gas they might take from other parties. Furthermore, the contract expressly gives control of the operation of the property to Seller and the right to drill additional wells and thus to increase the amount of gas that appellees could be required to take. It is our view that the foregoing provisions of the Graham contract negate any intention on the part of the parties thereto to take appellants’ gas ratably with gas from the wells of others.

At the time the contract was entered into the field was an unregulated field. The undisputed evidence from appellants’ own witness is that only the Railroad Commission of the State of Texas is empowered with the right to establish field rules imposing the ratable taking of gas and it only has the power and authority to prorate productions of gas from other people’s property. In the instant case appellants could have asked the Railroad Commission to issue special orders for the Fulton Beach and Lamar South Segment Fields, and thus establish a formula for the ratable taking of gas. This they did not do.

There is in the record some testimony with respect to certain formulas and custom for the ratable taking of gas in unregulated fields. There is, however, no testimony with respect to such alleged custom or business practice covering a contract such as the one in this case which contains specific and definite provisions with reference to the sale and the taking of gas. In any event, since there is no ambiguity in the Graham contract with respect to the production, delivery and taking of gas, and the provisions with reference thereto are express, specific and spelled out in detail and plainly state the rights of the parties, proof of general custom or practice is neither necessary nor proper in the construction of the contract, the intention of the parties derived from the language used where its meaning is clear and unambiguous. Government Personnel Mutual Life Ins. Co. v. Wear, Tex.Civ.App., 247 S.W.2d 284, 288, aff’d & modified on other grounds, 151 Tex. 454, 251 S.W.2d 525. In Miller v. Gray, 136 Tex. 196, 149 S.W.2d 582, 141 A.L.R. 1237, our Supreme Court said:

“We call attention, however, to the fact that evidence of custom is admissible only to explain an ambiguous contract or to add to it an element not in contravention of its terms; but such evidence is never admissible to contradict the plain unambiguous covenants and agreements expressed in the contract itself.”

J. R. Gray Company v. Jacobs, Tex.Civ.App., 362 S.W.2d 167, error ref., n. r. e.; 13 Tex.Jur.2d, p. 305, Sec. 129, Contracts.

In their Points 7 and 8 appellants complain that the court erred in excluding certain exhibits consisting of a summation of calculations as to which their witness, R. C. Haggins, had testified. Appellants have not briefed such points, and hence have waived the same. Said witness testified fully, however, with respect to the matters in such exhibits, and hence the exclusion of such exhibits, if it was error, did not result in harm. Furthermore, in view of our holding we find it unnecessary to further discuss such points or the other points contained in appellants’ brief, although we have carefully considered them all.

Judgment of the trial court affirmed.


source: Caselaw Access Project

author: BELL, Chief Justice.

license: Public Domain

text:
    CITY OF HOUSTON et al., Appellants, v. SOUTH PARK BAPTIST CHURCH OF HOUSTON, Appellee.
    No. 14601.
    Court of Civil Appeals of Texas. Houston.
    July 8, 1965.
    Rehearing Denied Sept. 9, 1965.

      John Wildenthal, Jr., City Atty., Homer T. Bouldin, Trial Supervisor, Houston, for appellants.
    Dougal C. Pope, Houston, for appellee.
   BELL, Chief Justice.

The City of Houston and Houston Independent School District assessed taxes against appellee for the years 1962 and 1963 on Lot 25, Block 4, South Park Addition, Section 2. Appellee filed suit against appellants asking for a declaratory judgment as to whether the property was exempted from taxation under Article 7150 Vernon’s Ann.Tex.Civ.St., it being property owned by the church which was used exclusively as a dwelling place by its “Education Minister.” The petition also sought a cancellation of the alleged tax lien. The trial court sustained appellee’s motion for summary judgment and rendered judgment that the assessment was void, cancelling the lien and declaring the property was exempted from taxation so long as it continued to be used as a parsonage for one of its ministers by appellee.

From the motion for summary judgment, its supporting affidavit and appellee’s petition we find it undisputedly established that appellee owns title to the property in question and that it is used exclusively as a place of residence by its minister of education. We further find that appellee also owns title to an entirely separate piece of property on which is located a residence that is used exclusively by its pastor as a dwelling place. This tract is recognized by appellants as being exempted and no assessment has been made against it. The two tracts of land on which the dwelling places are situated aggregate in area less than one-half an acre of land. Neither tract contains more area than is reasonably necessary for the dwelling located thereon. Neither yields any revenue to the appellee. Appellee followed the procedure prescribed by statute to obtain the exemption if the property is the subject of an exempted status.

We have reached the conclusion that the trial court was in error in holding the property to be exempted.

Under Article VIII, Section 1 of the Constitution of Texas Vernon’s Ann. St. it is in substance provided, with a few exceptions not necessary to notice, that all property in the State, whether owned by natural persons or corporations, shall be taxed in proportion to its value. The philosophy therein expressed is that it is but just and equitable that the property of all persons should bear the burdens of government equally. This has led to the well established rule in Texas and in most other jurisdictions that provisions of law purporting to grant exemptions from taxation will be given a strict and narrow construction and exempted status will not be extended to property unless the controlling law clearly shows such was intended. River Oaks Garden Club v. City of Houston, 370 S.W.2d 851 (S.Ct.); Radio Bible Hour, Inc. v. Hurst-Euless Independent School District, 341 S.W.2d 467 (Tex.Civ.App.), ref., n.r.e.

Article VIII, Section 2 of the Constitution is the organic law of our State authorizing the Legislature to extend exempted status to specified property of churches or religious societies. Prior to 1928 this Article and Section provided that the Legislature might exempt “actual places of religious worship.” It was held in the case of Trinity Methodist Episcopal Church v. City of San Antonio, 201 S.W. 669 (Tex.Civ.App.), writ ref., that this did not exempt the residence belonging to the church and used by its pastor as a home. In 1928 the people adopted Article VIII, Sec. 2 in its present form. Insofar as material here it provides as follows:

“ * * *; but the legislature may, by general laws, exempt from taxation * * actual places of religious worship, also any property owned by a church or by a strictly religious society for the exclusive use as a dwelling place for the ministry of such church or religious society, and which yields no revenue whatever to such church or religious society; provided that such exemption shall not extend to more property than is reasonably necessary for a dwelling place and in no event more than one acre of land; * * * and all laws exempting property from taxation other than the property above mentioned shall be null and void.”

We hold that this constitutional provision authorizes the Legislature to exempt only one dwelling place for the ministry of the church.

If the phrase “any property owned by a church or by a strictly religious society for the exclusive use as a dwelling place for the ministry of such church or religious society” stood alone, it might be interpreted to be purely descriptive of the character of use that must be made of the property and not a statement of the number of such places that could be held. This is particularly true since the word ministry is a term meaning “ministers of religion, collectively; the clergy.” Yet it is also subject to the interpretation that only one dwelling place was intended though it could afford housing for more than one minister assigned to or employed as a minister by the church. When we consider all of the material parts of the section, however, we think it was intended to exempt only one dwelling place. Following the phrase above quoted we find this proviso: “ * * * such exemption * * * shall not extend to more property than is reasonably necessary for a dwelling place and in no event more than one acre of land.” The term “a dwelling place” as used in this proviso can in reason be but interpreted to mean one dwelling place. The limitation as to acreage cannot be reasonably interpreted to mean there may be more than one dwelling place so long as they together do not occupy more than one acre because the section also provides the exemption “shall not extend to more property than is reasonably necessary for a dwelling place.” This means the dwelling place site may be no larger than is reasonably necessary to accommodate the dwelling furnished, but in no event shall it exceed one acre of land. It is noted the singular “a dwelling place” is here used. There are churches that have more than one member of the clergy administering the sacraments, ordinances and rites of the particular church that furnish a multiple occupancy dwelling for them. This might require a larger site. Too, in rural areas much larger land areas frequently attach to the actual dwelling place to be used in a manner customary for rural homes, such, for example, a garden or orchard, or a few domestic animals for family use. Too, while the term “ministry” refers to the body of the clergy collectively, the general term was used instead of the specific designation of pastor, minister, priest, parson, etc., because the Legislature was trying to take care of every church and religious society, and different churches and religious societies use different designations for the clergy. By the use of the term “ministry”, the exemption would thus be understood to extend to a dwelling place for the members of the clergy of a particular church whatever title or designation the particular church used.

Article 7150 provides for the exemption of any property owned by the church or religious society “for the exclusive use as a dwelling place for the ministers * *; provided that such exemption as to the dwelling place for the ministers shall not extend to more property than is reasonably necessary for a dwelling place * * *.” This is substantially the same language as in the Constitution and differs only in the use of the plural term “ministers” instead of the collective term “ministry,” but it is significant that it uses, as does the Constitution, the terms “a dwelling place” and at one point “the dwelling” place. Nowhere does it use the plural “dwelling places” or its equivalent.

Article 7150b is also relied on in its brief by appellee. It provides nothing different from the Constitution and Article 7150 except to provide the use of the dwelling place by the minister of a portion of the dwelling as his study, library or office shall not prevent the property from being considered as being used exclusively as a dwelling place. It also defines “ministry of such church” to include those persons whose principal occupation is in serving in the clergy, ministry, priesthood or presbytery of an organized religion whether assigned to a local church parish, synagogue, cathedral or temple or some larger unit of the church organization and whether they perform administrative functions or not.

There is nothing in this Article at variance with our construction of the Constitution and Article 7150.

If there were any variance between the statutes and Article VIII, Sec. 2 of the Constitution, the latter would control. While the Constitution gives authority to the Legislature to provide for exemptions, it defines the limits beyond which the Legislature may not go. Dickison v. Woodmen of the World Life Insurance Company, 280 S.W.2d 315 (Tex.Civ.App.), writ ref.

It is argued that the term “any property” when considered with the other provisions leads to the conclusion that more than one dwelling place is exempted. We do not agree. This term, we think, is used to mean wherever it is located, that is, whether as a part of the premises used for religious worship or wholly away from it. We are lead to this conclusion when we consider that in many places the clergy’s residence was on the premises used also for religious worship, but some of them were elsewhere. Too, as above stated, some denominations had a dwelling designed for multiple occupancy. Here the Legislature wanted to make certain no matter where the dwelling was located and no matter whether it was for multiple occupancy, it would be exempted if occupied exclusively as a residence by the ministry of the church.

Applying the strict rule of construction, as we must, we hold the property involved was not exempted.

We do not reach the question as to whether the “Educational Minister” comes within the term “ministry” within the meaning of the Constitution.

The judgment of the trial court is reversed and the cause is remanded. We do not render judgment because appellants filed no motion for summary judgment.

Reversed and remanded.


author: HIGHTOWER, Chief Justice.

text:
    John W. SMITH, Sr., and John W. Smith, Jr., Appellants, v. Marva Ann JONES, Appellee.
    No. 6727.
    Court of Civil Appeals of Texas. Beaumont.
    July 1, 1965.
    Rehearing Denied Sept. 8, 1965.
    Orgain, Bell & Tucker, Beaumont, for appellants.
    Stephenson, Stephenson & Thompson, Orange, for appellee.
   HIGHTOWER, Chief Justice.

This is an appeal from an order overruling separate pleas of privilege urged by appellants, John W. Smith, Sr., and John W. Smith, Jr.

Plaintiff, Marva Ann Jones, brought suit in the District Court of Orange County, Texas, against Tary Kelly Owens, James Tartt, John W. Smith, Sr., and John W. Smith, Jr., seeking damages for personal injuries alleged to have been sustained on January 20, 1962, when the vehicle in which she was a passenger and operated by Fred L. Mitchell, collided with a vehicle allegedly driven by John W. Smith, Jr., and owned by John W. Smith, Sr. Defendant Smith’s vehicle was alleged to have been pushing a 1957 Plymouth operated by Tary Kelly Owens and owned by James Tartt. The accident occurred in the State of Louisiana. All defendants, with the exception of James Tartt, were alleged to be, and they were, at all times residents of Jefferson County, Texas. Defendant James Tartt was the only Orange County resident.

Each Smith defendant timely filed separate pleas of privilege to be sued in Jefferson County. The pleas were duly controverted, plaintiff claiming venue in Orange County under Art. 1995, Section 4, Vernon’s Ann.Civ.St., on the ground that James Tartt was a resident of Orange County, and the suit could be properly maintainable against all defendants in such county. The pleas were overruled.

To maintain venue in Orange County against appellants’ pleas of privilege under Art. 1995, Section 4, supra, it is well settled that appellee had to both plead and prove a bona fide cause of action against the resident defendant, James Tartt. King v. Jones, Tex.Civ.App., 307 S.W.2d 851.

Plaintiff alleged that the accident occurred in the State of Louisiana at approximately 3 a. m. when she was a passenger in a 1959 Ford driven by Fred L. Mitchell, which ran into the rear of a 1960 Mercury automobile driven by appellant, John W. Smith, Jr., and owned by appellant, John W. Smith, Sr. She alleged that this Mercury automobile was pushing a 1957 Plymouth "being operated by the defendant, Tary Kelly Owens” and owned by the defendant, James Tartt. It was alleged that James Tartt was the owner of the 1957 Plymouth and that “ * * * the said Tary Kelly Owens was at all times herein mentioned a careless and reckless driver of said Plymouth automobile; that James Tartt, knowing that Tary Kelly Owens was such a careless and reckless driver of said automobile, negligently allowed and permitted the said Tary Kelly Owens to drive said automobile; that at and immediately prior to the time the collision hereinabove referred to, the defendant, Tary Kelly Owens, was driving said automobile with the consent, knowledge and permission of the defendant, James Tartt. At the times herein mentioned, defendant Tary Kelly Owens was driving and operating said automobile under the express direction and for the use and purpose of the defendant, James Tartt, the owner thereof, who at the time herein mentioned was actually seated in said automobile with the defendant, Tary Kelly Owens.” It was further plead that all the acts and omissions alleged constituted negligence and the proximate cause of appellee’s injuries. It was stipulated that Tartt was the owner of a 1957 Plymouth which was involved in an accident in Louisiana on January 20, 1962.

Fred Leon Mitchell, the driver of the car in which appellee was riding, was the only witness appearing. He testified that he and appellee were in Louisiana returning to Orange on January 20,1962, at about 2 a. m. when the collision occurred; that the visibility was poor and that before he realized it, he recognized a car in front of him and struck it. This car, which was pushing another car under 15 miles per hour, did not have any warning lights, tail lights or stop lights on it. The weather was foggy and it probably had been raining. Further, he stated on direct:

“Q. Can you tell me who all was in the front cars, or the two cars ?
“A. I don’t know who was in which car but there were three young men there. From what I gathered, the car that I actually hit was pushing the car that belongs to Tartt.
“Q. Did ygu talk to these boys at the scene of the accident?
“A. Yes, briefly, because I had to leave to go to the hospital and I managed to find out that they were driving the car and that they lived in Port Arthur, and that they were trying to help Tartt, whose car had stopped for some reason or other.
“Q. You found this out, there talking to the boys at the scene of the accident ?
“A. Uh-huh. And then I left and went to the hospital.
% 5}í Sjí ‡ 5|S
“Q. Did you ascertain, from talking to the boys, who was driving the cars?
“MR. TUCKER: We object to that as being hearsay, Your Honor;
“MR. GRAVES: If I may rephrase the question, I will ask if you found out at the scepe of the accident, who was driving the two cars?
“MR. TUCKER: We’ll still object to it as hearsay.
“MR. GRAVES: I will submit it’s part of the res gestae, it happened at the scene of the accident.
“THE COURT: It will be overruled.
“THE WITNESS:
“A. I don’t recall.
“Q. You don’t recall who was driving which car?
“A. No.
“Q. But you did ascertain James Tartt was there and he owned one of the cars?
“A. One of the cars.”

It is obvious from the quoted portion of appellee’s pleading that she sought to establish liability of defendant Tartt on the theory of negligent entrustment of his automobile to defendant Owens. The testimony of Mitchell fails to establish such to have been the case. It did establish that Tartt was at the scene of the accident and that he owned one of the automobiles involved. Also, it established that two other young men were at the scene of the accident and that they had been driving one or both of the cars involved. It failed to establish that defendant Owens was involved in the collision by way of Tartt’s permission, consent or negligence, as alleged, or otherwise. Thus, appellee has failed to meet her burden of proof under her pleaded theory of negligent entrustment. We pretermit discussion of other errors referred to in appellants’ brief, as they need not again occur.

We hold that the trial court erred in overruling each of the appellants’ pleas of privilege. Rather than reverse and render the case as prayed for by appellants, we reverse and remand the same to the trial court, it appearing that the case was not there fully developed.

Reversed and remanded.


author: COLEMAN, Justice.

text:
    ROBERTSON TANK LINES, INC., Appellant, v. Tony J. PAVLOCK, Appellee.
    No. 14585.
    Court of Civil Appeals of Texas. Houston.
    July 8, 1965.
    Rehearing Denied Sept. 9, 1965.

      Butler, Binion, Rice, Cook & Knapp, Quinnan H. Hodges, Steven C. Oaks, Houston, for appellant.
    Brown, Kronzer, Abraham, Watkins & Steely, Bill Allen, Houston, for appellee.
   COLEMAN, Justice.

This is a suit for damages by reason of personal injuries sustained by appellee when he was struck by the dome lid of a tank trailer which was being unloaded under air pressure.

The jury found that appellant was negligent in failing “to maintain the dome lid mechanism fastening device on the tank trailer in question in such a condition as the same would have been maintained by a person of ordinary prudence in the exercise of ordinary care under the same or similar circumstances.” The jury also found that appellant was negligent in failing to provide proper inspection of the dome lid fastening device. By their findings the jury absolved appellee of all claimed contributory negligence, and found damages in a substantial sum. Judgment was rendered on the verdict.

Appellant relies for reversal on points charging that the answers made by the jury to all issues were either supported by no evidence or were so contrary to the great weight and preponderance of the evidence as to be clearly wrong.

The tank trailer in question was used to transport hydrochloric acid, diluted to approximately thirty-three (33%) per cent pure acid, to industrial establishments. From time to time loads of used acid with a strength of from two (2%) per cent to six (6%) per cent would be hauled from the Wah Chang Tin Smelter to the Northside Sludge Disposal Plant of the City of Houston, where appellee was employed. On the day in question, January 2, 1962, three loads of the thirty-three (33%) per cent solution were delivered before the trailer was loaded with the weaker solution. McKnight, appellant’s driver, testified that he put the dome lid in place after the loading operation was complete and properly tightened a wing nut on a bolt securing a hinged cross bar on top of the lid. It appears that the bolt was fastened to the trailer by a hinge so that it was not necessary to remove the nut in order to loosen the cross bar and remove the lid. He testified that the acid was corrosive and that the nut and bolt, as well as the guide hinges attached to the lid itself, showed evidence of corrosion, but that the nut and bolt tightened properly and appeared to be in good condition.

McKnight then drove the truck and trailer to the Sludge Plant, placed it and connected the outlet line to the city tank and air line to the city air pressure line. Since the city tank was not empty, the trailer could not be unloaded at that time. As was customary he then left intending to return the next day to pick up the truck and empty trailer.

Some two hours later appellee, pursuant to his duty as assistant operator at the plant, turned off the outtake valve at the city tank, opened the intake valve, and turned on the air pressure valve. After observing the operation proceed normally for fifteen minutes, he went in a nearby room to get out of the cold, and to proceed with his other work. Thirty-five minutes later he heard an unusual noise and went back to the trailer and found that liquid was running down both sides of the truck. He then took his flashlight and climbed on top of the truck to see exactly where the liquid was escaping so that he could report the trouble intelligently. He testified that he found nothing wrong at the unloading compartment, and walked past it toward the loading compartment. Just as he neared the dome lid, he saw liquid escaping and the lid blew off and hit him causing him to fall to the ground unconscious. He testified that he did not touch the lid or the fastening mechanism. He was taken to a hospital.

The lid was found on the ground some distance from the dome. The wing nut was found on the ground by a city employee who preserved it, and it was introduced into evidence. McKnight was notified and removed the truck and trailer to the shop of appellant.

Appellant’s answers to written interrogatories were introduced into evidence. In response to a request for the names of all of appellant’s personnel who looked at the fittings on top of the tank trailer following the accident until and including the time any repairs were made, appellant answered, “Bill C. McKnight and R. V. Snodgrass.” In reply to the question of the identity of the persons by whom all repairs were made and supervised, appellant answered, “R”. V. Snodgrass.” Appellant answered that the bolt and wing nut were replaced, and that the repairs were made on January 3, 1962, between 3:45 a. m. and 6:45 a. m. Best, appellant’s vice-president, testified that Snod-grass, on the morning immediately following the accident, gave him the bolt, and that he kept it in his office, but he was unable to find it during the trial. He testified later that he had the bolt removed a day or so after the accident and had the bolt examined by Dr. Tonn, who did not testify. Snodgrass testified at the trial that he did not remember cutting off the bolt, but conceded that he couldn’t definitely say that he didn’t remove it. No employee was produced who recalled removing the bolt. Both Best and McKnight testified that the bolt appeared normal and in good condition after the accident.

There was testimony that if the dome lid was loose pressure could not build up and that if it became loose while the pressure was on, the air would escape. There was also testimony that pressure in the tank would tighten the bolt and wing nut, but that it could be loosened by a man without tools, possibly by kicking it.

The wing nut produced at the trial was not scored or appreciably deteriorated on the inside. Appellant produced testimony to the effect that if the nut was forced off the bolt by pressure there would be evidence of damage to the threads. There was a nick in the fifth thread that prevented the nut from being tightened past that point on a new bolt produced at the trial.

The testimony showed that the truck was built to withstand pressures of fifty pounds. While one witness testified that the gauge on the city pressure line had a maximum reading of sixty pounds, the testimony of other witnesses make it appear that he was mistaken and that the maximum reading on the guage was thirty pounds. No witness placed the maximum pressure ever obtained at the plant higher than 35 pounds, and tests conducted the day following the accident produced a maximum of 26 pounds.

Appellant contends that the evidence establishes that the wing nut could not have been removed from the bolt unless appellee removed it, and appellee denied touching it. The testimony of McKnight was impeached by an employee of the City who testified that McKnight told him a few days after the accident that “corrosion had eaten the bolt.” It is undisputed that the bolt was subjected to the corrosive effect of the thirty-three (33%) per cent acid solution during the loading operations daily. The jury was entitled to place its own construction on the answers made to the written interrogatories and to disregard the explanations ' offered.

There was sufficient evidence from which an inference that the fastening mechanism was so corroded as to be defective could be drawn. Since this device was used each day by appellant’s employees, and since a corroded condition of the bolt would be readily apparent, appellant would be charged with knowledge of the condition of the bolt. The jury’s answers to the first series of issues on negligence and proximate cause are supported by evidence of probative force. We do not find these answers to be so contrary to the weight and preponderance of the evidence as to be clearly wrong.

We think it unnecessary to discuss at length the second series of negligence issues. Unless the evidence is sufficient to support a finding that the fastening mechanism was defective, a failure to inspect would not be a proximate cause of the accident under the evidence in this case. If the mechanism was defective, as found by the jury, the evidence was clearly sufficient to show that appellant’s employees either knew, or reasonably should have known, of the condition. Either the first series of issues is supported by the evidence or neither series is supported.

The evidence did not compel findings of contributory negligence. There is no more than a scintilla of evidence that excessive air pressure was present. The weight of the evidence is to the contrary. We cannot say as a matter of law that appellee’s failure to turn off the air pressure before mounting the truck was negligence. There was little apparent danger since the solution in the trailer was not explosive and would not burn. There was testimony that the source of the leak could not be discovered unless the pressure was maintained. There was testimony that appellee had to get on top of the truck to see what the trouble was. There was no testimony that any such trouble had been encountered before or that any rules covering such a situation had been promulgated for his guidance. It was necessary that he make a report and it is reasonable that he report the specific trouble.

In view of the preceding review of the evidence, and of our holdings concerning the effect of the evidence, it follows that we are of the opinion that the jury’s finding that the occurrence in question was not the result of an unavoidable accident was properly supported by the evidence in this case.

The judgment of the trial court is affirmed.


author: WERLEIN, Justice. COLEMAN, Justice

text:
    EMPLOYERS CASUALTY COMPANY, Appellant, v. Herbert E. HOLM, Appellee.
    No. 14602.
    Court of Civil Appeals of Texas. Houston.
    July 8, 1965.

      Fulbright, Crooker, Freeman, Bates & Jaworski, William H. Payne, Charles Boston, Houston, for appellant.
    William R. Powell, Foreman, Dyess, Prewett, Henderson & Cantey, Houston, of counsel, for appellee.
   WERLEIN, Justice.

Appellee, Herbert E. Holm, brought this suit against Employers Casualty Company to recover for damage to his home under a policy which insured appellee against “all risks of physical loss” to his home except as excluded in that part of the policy pertinent hereto providing that the insurance shall not cover, among other things:

“i. Loss caused by inherent vice, wear and tear, deterioration; rust, rot, mould or fungi; dampness of atmosphere, extremes of temperature; contamination; vermin, termites, moths or other insects;
“k. Loss under coverage A caused by settling, cracking, bulging, shrinkage, or expansion of foundations, walls, floors, ceilings, * * * ”
“ * * * and Exclusions i, j and k shall not apply to ensuing loss caused by * * * water damage * * * provided such losses would otherwise be covered under this policy.”

The case was submitted to the trial court on a stipulation of facts which was adopted by the court. The court entered judgment for appellee based on the stipulation of the parties and certain conclusions of law to the effect that all items of loss sued for were covered by the insurance policy in question. It was stipulated among other things:

“HI.
“The house insured by the policy in question, at 8833 Chatsworth Drive, Houston, Texas, was constructed without a shower pan under the shower stall.
“IV.
“Neither the insurer nor the insured knew at the time the contract of insurance was made that there was no shower pan beneath the shower floor.
“V.
“The construction and installation of the tile shower floor and drain pipe in the insured’s house was inherently defective in that it was inevitable that without the intervention of any fortuitous or chance occurrences, water would pass through the floor and/or drain into and onto the cement base on which the tile floor was laid. This, in fact, is what occurred in the insured’s house.
“VI.
“The absence of the shower pan made it inevitable that the water which passed into and onto the cement below the shower would pass laterally into and under the wood and cork flooring of the assured’s house. This, in fact, is what occurred in the insured’s house.
“VII.
“The water passing into and under the wood flooring of the insured’s house caused same to rot and deteriorate to the point where good judgment dictated its replacement.
“VIII.
“Had a shower pan been installed in the insured’s shower stall, the damage to the surrounding floor of insured probably would not have occurred.
“IX.
“The sum of $180.00 was the sum expended for the plumbing work involved in tearing out the tile floor, breaking into the concrete slab on which the house was built for the purpose of installing a new lead waste line, and installing a lead shower pan and in looking for the cause of the leak. The actual cost of the pan is not claimed in this action and is not included in the $180.00 figure. This plumbing operation was directed solely at finding the cause of the leak and at stopping the passage of water into surrounding floor. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.
“X.
“The sum of $165.00 was expended by the insured in having the tile torn out by the plumber replaced. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.
“XI.
“The sum of $355.00 is the amount which will be required to replace the damaged floor. If this expense is found to be covered by the policy in question, the amount thereof is not an issue.”

The loss resulted from the construction of the shower stall without a shower pan. This constituted an inherent defect unknown to either party but one which would and did inevitably cause water to pass laterally into and under the wood and cork flooring of the insured’s house thereby causing the same to rot and deteriorate to the point where the damaged floor had to he replaced at an expense of $355.00. The policy excludes loss caused by inherent vice, deterioration and rot as shown in exclusion “i.” supra, so that there can be no recovery by appellee unless the loss comes within the exception to the exclusion. The exception is that exclusion “i.” shall not apply to ensuing loss caused by water damage — provided such loss would otherwise be covered under the policy.

In McKool v. Reliance Insurance Company, Tex.Civ.App., 1965, 386 S.W.2d 344, dism., the loss was due to chipping and cracking of ceramic tile affixed to the walls of a swimming pool caused by freezing of water in the pool. The policy contained the same pertinent provisions as the policy in the instant case. The insured contended that the damage was caused by ice which is solidified water, and therefore caused by “water damage”, thus making inapplicable the exclusions of loss by “extremes of temperature” and by “cracking.” The court held that the tile having cracked because of the extreme cold or ice, there could be no recovery therefor, but if water had entered through the cracks thus caused, the ensuing losses (meaning losses which follow or come afterwards as a consequence) caused by the entry of water would be recoverable, since that would be loss caused by water damage ensuing after the uninsured cracking of the tile. The judgment of the trial court denying recovery was affirmed.

In Aetna Casualty & Surety Co. v. Yates, 5 Cir. 1965, 344 F.2d 939, the plaintiffs discovered that the joists, sills and subflooring of their home were almost completely rotted away due to the fact that the “crawl space” under the house was inadequately supplied with vents. Contact between air trapped in the crawl space and subfloors and sills which had been chilled by air conditioning, produced condensation of moisture and consequent rotting. The court in ordering the complaint dismissed said that the rot may have ensued from water but not from water damage, and the damage ensuing from the rot was not the damage from the direct intrusion of water conveyed by the phrase “water damage.”

The instant case is distinguishable from the McKool and Yates cases cited by appellant. The parties in the present case stipulated that the water passing into and under the wood flooring of appellee’s house caused same to rot and deteriorate. It is a matter of common knowledge that the more or less continual application of water to and against the wooden flooring of a house would cause warping and cracks and water damage thereto which finally would result in rot and deterioration. The loss which ensued or followed the water damage grew out of and was caused by water damage. Hence the exception or exclusion to the exclusion (i) should apply. The water damage in this case would be covered by the policy since it is not within exclusion (d) which excludes certain other kinds of water damage. It thus comes within the proviso in the exception to the exclusion in that the water damage loss would otherwise be covered under the policy. See Sabella v. Wisler, 1963, 59 Cal.2d 21, 27 Cal.Rptr. 689, 377 P.2d 889.

Appellant contends that the loss was caused by inherent vice which constitutes ah exclusion under (i). The parties stipulated that the construction and installation of the tile shower and drain pipe in the house was defective. The inherent vice was in the shower stall. No recovery was allowed by the trial court for the cost of the shower pan which was installed. Recovery was allowed for replacing the damaged floor. No contention is made that there was any inherent vice in the floor which suffered water damage. It is true that the parties, stipulated that the inherent defect in the shower made it inevitable that water would pass into and onto the cement below the shower and into and onto the wood and cork flooring of the assured’s house. But the loss was not caused by inherent vice in the floor but by inherent vice in another part of the house for which no recovery was allowed. For example, if it be assumed that there was an inherent vice in the roof of the house, no recovery could be had for such defective roof or the repair thereof. If, however, water should leak through such roof and damage the floor of the house and the insured’s furniture, there could be recovery therefor because there would be water damage not excluded by provision (d). The term “inherent vice” as a cause of loss not covered by the policy, does not relate to an extraneous cause but to a loss entirely from internal decomposition or some quality which brings about its own injury or destruction. The vice must be inherent in the property for which recovery is sought. Mayeri v. Glens Falls Ins. Co., Sup., 85 N.Y.S.2d 370; see Texas & P. Ry. Co. v. Prunty, Tex.Civ.App., 233 S.W. 625; Richards on the Law of Insurance, Fifth Edition, 1952, Vol. 2, p. 721, Sec. 212.

The parties stipulated that the plumbing operation for which the court allowed $180.00 “was directed solely at finding the cause of the leak and at stopping the passage of water into surrounding floor.” It is our view that this item of damage as well as the item of $165.00 expended by the insured in having replaced the tile that was torn out, are recoverable as damages necessarily incident to the restoration of the floor and to protect the property from further damage as required by the insurance policy. It was certainly necessary to discover where the water was coming from in order to correct the water damage and to prevent a recurrence thereof. Teeples v. Tolson, D.C.1962, 207 F.Supp. 212.

The trial court in its conclusions of law concluded that the policy in question covers all risks of physical loss except as specifically excluded; that the loss resulting from water damage is a risk of physical loss not otherwise excluded by the terms of the policy; that the rot and deterioration of appellee’s wood flooring resulted from water leakage and exclusion (i) under perils insured against, does not bar the recovery because the policy further provides that exclusion (i) shall not apply to water damage; and that the loss involved in this suit may have been an inevitable occurrence rather than a fortuitous event did not remove it from the risk insured against because neither party, at the time the insurance contract was executed, had certain knowledge that this damage was inevitable.

It is our view that the judgment of the trial court should be affirmed. We are not unmindful of the fact that the court in McKool v. Reliance Insurance Company, supra, held that the foregoing provisions of the policy are not ambiguous. They appear to be sufficiently clear in their application to the facts of the McKool case. We are of the opinion, however, that as applicable to the facts of the instant case, such provisions are obscure and ambiguous, or at least susceptible to more than one construction, and that they should, therefore, be construed liberally in favor of the insured and strictly against the insurer. United Service Automobile Ass’n v. Miles, 139 Tex. 138, 161 S.W.2d 1048; Wood v. Southern Casualty Co., Tex.Civ.App., 270 S.W. 1055, writ dism. The effect of a “comprehensive” policy is generally to broaden the coverage. The expression in the policy in question, “all risks of physical loss” except those excluded, covers an almost unlimited field. Exceptions and words of limitation are construed against the insurer. The courts will not write a limitation into a policy where none exists. Millers Mutual Fire Insurance Co. v. Murrell, Tex.Civ.App., 362 S.W.2d 868, writ ref., n.r.e. Providence Washington Ins. Co. v. Proffitt, 1951, 150 Tex. 207, 239 S.W.2d 379.

In the Murrell case the insurance company argued that it was certain from the day the house was built that the damage in question would happen and hence the risk was not fortuitous but was inevitable, and therefore no “risk” as that term is commonly understood, existed. The court did not agree. The same argument is made in the instant case by appellant. We also do not agree. It is true that when the cause of damage to the floor was finally discovered, it then became apparent that the initial defect was such that water would inevitably pass through the floor and/or drain into and onto the cement base of the shower stall and pass laterally into and under the wood and cork flooring of the assured’s house. The parties stipulated, however, that neither the insurer nor the insured knew at the time the contract of insurance was made that there was no shower pan beneath the shower floor. Under these circumstances we are of the opinion that the damage was not inevitable in the sense that the peril was not a risk but a certainty that could not be insured against. Furthermore, the policy does not exclude damage because it was not fortuitous but inevitable.

In one sense, the damage was fortuitous since neither party knew or contemplated that there was any defect of any kind in the shower stall or that any damage would result therefrom to the flooring of appellee’s house. So far as the parties were aware at the time the policy was issued any loss such as that sued for herein, would be dependent upon chance. We quote from Restatement of the Law, Contracts, Sec. 291 “a” as follows: “A fortuitous event within the meaning of the present and subsequent Sections is an event which so far as the parties to the contract are aware, is dependent on chance. * * * ; it may even be a past event, as the loss of a vessel, provided that the fact is unknown to the parties.” In Aetna Casualty & Surety Co. v. Yates, supra, the court denied recovery under the facts of the case, but said that if water coming from a burst pipe flooded the house and in turn caused rust or rot, such rust or rot so caused would be a loss ensuing on water damage. We would agree with the court even though the pipe which burst was so rusty and defective when installed that it was inevitable that the pipe would burst when water was turned into the pipe, provided the parties to the insurance contract were not aware of its defective condition when the policy was issued. We see no valid distinction between the case of a defective pipe that will burst and flood the house and a defective shower stall that will repeatedly flood part of the house. In either case the event would be fortuitous as to the parties to the contract who had no conception that any such event would occur when they entered into the contract of insurance.

Judgment affirmed.

COLEMAN, Justice

(dissenting).

The policy insures against all risks of physical loss with certain exceptions including loss caused by inherent vice. That part of the loss, resulting from water damage, ensuing from the inherent vice, is covered, provided such part of the loss would otherwise be covered under the policy. The first question to be determined is the meaning of “ensuing loss * * * caused by water damage.” The “ensuing loss” involved here is the cost of repair of the shower stall, to prevent further damage, and the cost of replacing the damaged floor covering, and rotten wood flooring. This is an ensuing loss caused by water. This type of water damage is not within exclusion “d” dealing with water damage caused by such risks as wind driven rain or flooding. Since the insurer has specifically excepted loss caused by rot, inherent vice or bulging of floors, except ensuing loss caused by water damage, this loss is clearly covered if it is a “loss otherwise covered.” It is “otherwise covered” if it is a “risk of physical loss.”

In Black’s Law Dictionary, 4th Edition, the word “risk”, as used in insurance law, is defined: “the danger or hazard of a loss of the property insured; the casualty contemplated in a contract of insurance; the degree of hazard; a specified contingency or peril; * * *”

Logically an insurance policy insuring against “all risks of physical loss” contemplates all “casualties.” Casualty is defined in Black, supra, as: “Accident; event due to sudden unexpected or unusual cause; event not to be foreseen or guarded against; inevitable accident; misfortune or mishap; that which comes by chance or without design. * * * ”

Most of these definitions involve some element of chance. Loss caused by an inherent defect does not. If loss caused by water damage resulting from a defective shower stall is covered, then loss caused by water damage resulting from an improperly installed roof would likewise be covered.

While I recognize that where an insurance policy is subject to more than one construction, that construction most favorable to the insured will be adopted. In this case it is my opinion that a reasonable construction of the policy would exclude liability on part of the insurer for any loss which will surely be sustained by reason of an inherent defect in the house insured.

I respectfully dissent.


text:
    Geraldine Ann OXSPRING, Appellant, v. Harold OXSPRING, Appellee.
    No. 14591.
    Court of Civil Appeals of Texas. Houston.
    June 10, 1965.
    Rehearing Denied July 8, 1965.
    Second Rehearing Denied Sept. 9, 1965.
    Joe S. Moss, Houston, for appellant.
    John M. Robinson, Houston, for appellee.
   COLEMAN, Justice.

This is a suit for divorce tried before the court without a jury. The trial court was requested to make findings of fact and conclusions of law, but they do not appear in the transcript. There is no showing that the failure to file these findings, if there was such a failure, was called to the attention of the court, as required by the Rules of Civil Procedure, and no point is presented by appellant’s brief referable to such findings of fact. The case is before this Court as if no findings of fact were requested.

Appellant contends that the evidence is not of such full and satisfactory character as to support the award of a divorce on the ground of cruel treatment.

Only the parties to the action testified. There is evidence that appellant failed and refused to perform ordinary housework, and refused to share appellee’s bed for extended periods of time. There was testimony that for many years relations between the parties were stormy arising out of the relationship between the parties and their children by former marriages. There is testimony that the constant quarreling affected appellee’s health adversely. There is testimony that appellant designedly embarrassed appellee by criticizing him to his fellow employees, by refusing to attend social gatherings important to appel-lee’s career as a bank executive, and by deliberately absenting herself from home when relatives, business associates and friends were expected for visits. Appellant explains that this conduct was caused by poor health, and in some instances by appellee’s conduct toward her, but this explanation was not accepted by the trial court. The evidence is sufficient to support the implied finding of the trial court that appellant’s conduct was such as to make appellee’s living with her, in the relationship of husband and wife, insupportable.

Appellant also urges that the evidence establishes the defenses of condonation and recrimination as a matter of law. Appellant did not plead condonation or facts presenting this defense. Condonation is an affirmative defense and should be pled specially. Rule 94, Texas Rules of Civil Procedure; Barta v. Barta, Tex.Civ.App., 283 S.W. 201; Crittenden v. Crittenden, Tex.Civ.App., 214 S.W.2d 670; Thomason v. Thomason, Tex.Civ.App., 332 S.W.2d 148. The case last cited suggests that the evidence should be examined to determine whether or not condonation is raised in the absence of the required pleading. See Bostwick v. Bostwick, 73 Tex. 182, 11 S.W. 178. In the Crittenden case this Court said that it would not hold that the trial court erred in refusing to sustain an affirmative defense which was not pled considering the state of the record. The evidence of con-donation is weaker in this case and is not sufficient for us to hold that the defense was established as a matter of law.

To establish the defense of recrimination the evidence must establish conduct on the part of the one seeking a divorce of the same general character as that of the defendant and such as would be reasonably calculated to have provoked the misconduct charged against the defendant. McNabb v. McNabb, Tex.Civ.App., 207 S.W. 129; Hutt v. Hutt, Tex.Civ.App., 76 S.W.2d 567. The acts which are alleged to have established this defense must have been induced by, or in retaliation of, the conduct of the other party. Ward v. Ward, Tex.Civ.App., 352 S.W.2d 513. We cannot say that the evidence establishes such conduct on appellee’s part as a matter of law.

The judgment of the trial court is affirmed.

On Motion for Rehearing

In her motion for rehearing, appellant properly has pointed out that her answer contained a general pleading sufficient to raise the defense of condonation in the absence of special exceptions.

The trial judge granted the divorce, thereby impliedly finding that the evidence was not sufficient to establish that defense. As stated in our original opinion, the evidence was not such as to establish condonation as a matter of law. The fact issue has been determined by the trial court on sufficient evidence.

The motion for rehearing is overruled.


author: WILSON, Justice.

text:
    Paula R. SALINAS et al., Appellants, v. BROWNSVILLE SAVINGS AND LOAN ASSOCIATION et al., Appellees.
    No. 4397.
    Court of Civil Appeals of Texas. Waco.
    Aug. 12, 1965.
    Rehearing Denied Sept. 2, 1965.
    R. M. Bounds, L. A. Ashcroft, McAllen, for appellants.
    Jackson Littleton, Kelley, Looney, McLean & Littleton, Edinburg, C. S. Eidman, Jr., Brownsville, for appellees.
   WILSON, Justice.

Appellant and the heirs of her deceased husband sought to enjoin a sale of land by the trustee under the power in a deed of trust, and to remove the cloud from title alleged to exist because of the deed of trust and a mechanic’s lien contract. The trial court sustained appellee’s motion for instructed verdict made after appellants rested, and rendered a take-nothing judgment.

The property described in the instruments, purporting to bear her signature, was the homestead of the widow and her deceased husband. Appellants pleaded, and the widow testified, that she did not sign the instruments. There was evidence she was illiterate; that she could not sign her name; and that she ordinarily used an X-mark when her signature was required on other occasions.

The acknowledgments are regular. A certificate of acknowledgment, absent fraud or imposition, is ordinarily conclusive of the facts stated therein, including the recital that the grantor acknowledged execution of the instrument. Kocourek v. Marak, 54 Tex. 201; Williams v. Pouns, 48 Tex. 141; 1 Tex.Jur.2d, Sec. 107, p. 432.

Even where the land involved is the homestead, the testimony of the wife “that she did not execute these papers was not sufficient to destroy the probative force of the acknowledgments.” Southwest Bitulithic Co. v. Martinez, 135 Tex. 347, 143 S.W.2d 116, 118.

The judgment is affirmed.


author: STEPHENSON, Justice.

text:
    Alton STEWART, Appellant, v. The ENTERPRISE COMPANY, Appellee.
    No. 6781.
    Court of Civil Appeals of Texas. Beaumont.
    July 1, 1965.
    Rehearing Denied Sept. 8, 1965.
    John L. Fulbright, Beaumont, for appellant.

      Orgain, Bell & Tucker, Beaumont, for appellee.
   STEPHENSON, Justice.

This is an action for libel. Trial was by jury and judgment was instructed for defendant at the close of plaintiff’s testimony. The parties will be referred to here as they were in the trial court.

This action arises out of an article which was published by defendant in the Beaumont Enterprise newspaper January 1st, 1963. A part of such article read as follows :

“ARRESTS END CRIME SURGE
“12 Burglaries, Felony and Misdemeanor Thefts Solved
“Twelve burglaries, six felony thefts and several misdemeanor thefts have been cleared up with the arrests, beginning last Thursday, of six persons, Sheriff’s Capt. Carl Moon said yesterday.
“A seventh member of the alleged burglary and theft ring is still at large.
“Charged in justice courts here and in Port Arthur with either burglary, felony theft or receiving and concealing stolen property, he said, are:
“Prentice Edward Gibson, 28, and Nettie Rae Giles, 41, both of Nederland; Billy Gene Couch, 31, and Alton Stewart, Jr., both of Groves; Donald Lee Mikesell, 29, of Port Neches; and Roy David Harwell, 40, of Port Arthur.
“The burglaries and thefts, which were committed over a period of four or five months, netted the ring approximately $3,000 in stolen merchandise, Capt. Moon said. He said some $1,000 worth of this property has been recovered by investigating officers.
“Among the stolen items that have been recovered are two outboard motors, two water pumps, a silver Christmas tree, colored revolving lights, various types of boots, two car tires (one of which was stolen in Orange County) and a transistor radio.
íjí $1 5j« íj« Sjí 5jí
“Receiving and concealing stolen property charges have been filed against Couch and Stewart, Capt. Moon said.
% jjc s-c iK
“Capt. Moon said Couch and Har-well sold cigarettes at the club which had been stolen by the other members of the ring. He said that Stewart served as ‘fence’ for the stolen water pumps by carrying them to Louisiana.”

Plaintiff contends the trial court erred in instructing a verdict for defendant because the evidence raised material fact issues for the jury to determine. The statements made in the newspaper article were libelous per se. The words written would injuriously affect the business of the plaintiff, and were actionable unless privileged, or unless true. The language used, giving its plain, ordinary and natural meanings charged the plaintiff with being a member of an alleged burglary and theft ring and as serving as a fence for the stolen water pumps by carrying them to Louisiana. These statements amounted to charges of the commission of crime and were libelous per se. We do not find this language ambiguous.

Plaintiff admitted the complaint of receiving and concealing stolen property had been filed against him and also that he had bought two water pumps and carried them to Louisiana. However, plaintiff denied he was a member of a burglary and theft ring and that he had served as a fence. The truth of the objectionable charges published in the newspaper were not established as a matter of law. Viewing the evidence in its most favorable light to plaintiff, as we are required to do where the trial court has instructed a verdict for defendant, we find that the evidence raised issues of fact for the jury to determine.

Article 5432, Vernon’s Ann.Civ.St., provides that certain articles in newspapers are privileged. Defendant contends the trial court did not err in this case because the article was privileged under Sections 1 and 4 of this statute. We do not find this statute to be applicable to the facts of this case.

Reversed and remanded.


text:
    Ora Leona SMITH et al., Appellants, v. KINSEL MOTORS, INC., et al., Appellees.
    No. 6750.
    Court of Civil Appeals of Texas. Beaumont.
    June 17, 1965.
    Rehearing Denied Sept. 8, 1965.
    Ernest L. Sample, Beaumont, for appellants.
    Orgain, Bell & Tucker, Beaumont, for appellees.
   STEPHENSON, Justice.

This is an action for damages based upon negligence, breach of implied warranty and breach of express warranty. Trial was by jury and judgment was rendered for defendants upon the jury verdict. The parties will be designated here as they were in the trial court.

Plaintiffs alleged that Mr. and Mrs. D. H. Smith were trying out one of defendant’s used cars when a tire blew out resulting in a one car collision in which Mr. Smith was killed and Mrs. Smith injured. Mrs.-Smith brought this action for her injuries, and also together with the children and parents of Mr. Smith brought this action for his death.

The jury made the following findings: When the automobile in question was driven from defendant’s lot the right front tire was broken and had a boot in it; that such condition rendered the vehicle unsafe for highway operation; that such condition caused a blowout; that defendant knew or in the exercise of ordinary care should have known of such condition; that defendant’s act in sending said automobile out on the highway in such condition for demonstration purposes was negligence; that such act was a proximate cause of the fatal accident in question; that the failure of defendant to warn Mr. Smith of such condition was negligence; that such negligence was a proximate cause of such fatal accident; that defendant did not tell Mr. Smith that the automobile had been inspected by its mechanics; that defendant failed to install reasonably safe tires on such automobile, which was negligence and a proximate cause of the accident; that defendant exchanged the tires on such car without making a proper inspection which was negligence and a proximate cause of the accident; that Mr. Smith was operating the car in a reasonable manner; that Mr. Smith’s operation of the car was not unreasonable; that Mr. Smith drove the vehicle at an excessive rate of speed, which was a proximate cause of the accident; that Mr. Smith drove the car at a speed in excess of 60 miles per hour, which was a proximate cause of the accident; that the accident was not unavoidable.

Plaintiffs’ first point is that the trial court erred in overruling plaintiffs’ motion for judgment non obstante and in entering judgment in favor of defendant. There is no statement of facts in this record. Rule 301, T.R.C.P., provides in part as follows:

“Provided, that upon motion and reasonable notice the court may render judgment non obstante veredicto if a directed verdict would have been prop-jj: t)

A directed verdict in this case would have been proper only if there had been no evidence to support the findings of the jury. In the absence of a statement of facts we must presume that sufficient evidence was introduced to support the findings of the jury and the judgment of the court. Lane v. Fair Stores, 150 Tex. 566, 243 S.W.2d 683. The point is overruled.

Plaintiffs’ second point is that the trial court erred in overruling plaintiffs’ motion for mistrial based upon a conflict in the findings of the jury. It is argued that the findings of the jury that Mr. Smith was guilty of contributory negligence in driving at an excessive rate of speed and in driving at a speed in excess of 60 miles per hour were in conflict with the findings of the jury that Mr. Smith was operating the car in a reasonable manner and that his operation of the car was not unreasonable. A reading of the issues together with the instructions demonstrated this is not a valid argument. The issues with the instructions were as follows:

“SPECIAL ISSUE NO. 24
Do you find from a preponderance of the evidence that the said D. H. Smith was operating the automobile on the occasion in question in a reasonable manner ?
ANSWER ‘YES’ OR ‘NO’
ANSWER: YES
In connection with the preceding Special Issue No. 24 you are instructed that by the words ‘reasonable manner’ as used in this issue, is meant the operation of the vehicle in a manner and speed as could have been reasonably foreseen and anticipated by Kinsel Motors, Inc.”
“SPECIAL ISSUE NO. 25
Do you find from a preponderance of the evidence that under the circumstances the manner in which the said D. H. Smith was operating the automobile, on the occasion in question, was unreasonable ?
ANSWER ‘YES’ OR ‘NO’
ANSWER: NO
In connection with the preceding Special Issue No. 25 you are instructed that by the word ‘unreasonable’ is meant the operation of a vehicle in a manner and at a speed which, under the circumstances, was not, or in all reasonable probability, would not have been anticipated or foreseen by Kinsel Motors, Inc.”
“SPECIAL ISSUE NO. 29
Do you find from a preponderance of the evidence that D. H. Smith, on the occasion in question, drove the vehicle at an excessive rate of speed?
ANSWER ‘YES’ OR ‘NO’
ANSWER: YES
By the term 'excessive rate of speed’, as used herein, is meant the operation of the vehicle, by D. H. Smith, at a speed in excess of which a person of ordinary prudence and care, under the same or similar circumstances, would have operated the vehicle.”
“SPECIAL ISSUE NO. 31
Do you find from a preponderance of the evidence that immediately prior to the accident in question, D. H. Smith was operating the vehicle in question at a speed in excess of 60 miles per hour?
ANSWER ‘YES’ OR ‘NO’
ANSWER: YES

It is apparent that even though the words “reasonable” and “unreasonable” were used in Special Issues 24 and 25, that the court was not intending to inquire of the jury whether the actions of Mr. Smith constituted acts of negligence, as no attempt was made to establish the standard of care applied in negligence cases. The instructions given in connection with those issues refer only to the foreseeability on the part of defendant. We find no conflict in these issues. Traywick v. Goodrich (Tex.), 364 S.W.2d 190. The point is overruled.

Judgment affirmed.