author: MAUGHMER, Commissioner.

text:
    Cyrus SEE, Jr., Respondent, v. Loren KELLY, Appellant.
    No. 23507.
    Kansas City Court of Appeals. Missouri.
    Oct. 1, 1962.
    Motion for Rehearing or to Transfer to Supreme Court Denied Dec. 3, 1962.

      Jack B. Robertson, Rogers, Field & 'Gentry, Kansas City, for appellant.
    Clifford Jarrett, Walter A. Raymond, Kansas City (Raymond, West & Cochran, Kansas City, of counsel), for respondent.
   MAUGHMER, Commissioner.

This case arose out of two automobile collisions which involved three vehicles. Plaintiff Cyrus See, Jr., driver of one car, sought damages from the other two drivers for personal injuries which he allegedly sustained. The verdict and judgment was for plaintiff in the sum of $7500 against the defendant Loren Kelly, but for the defendant William Audsley. The only appeal is by Loren Kelly.

One of appellant’s main contentions on appeal is that his motion for directed verdict should have been sustained because the only issue of negligence submitted was “failure to keep a constant and careful lookout”, and there was no evidence to authorize such submission. The rule for appellate determination of this point was stated in Daniels v. Smith, Mo., 323 S.W.2d 705, 706:

“In order to determine whether the court erred in ruling the motion presented at the close of all the evidence a review of the evidence favorable to plaintiff is required. We shall state the evidence in the light most favorable to plaintiff, give him the benefit of all favorable inferences arising therefrom and disregard defendant’s evidence unless it aids the plaintiff’s case. Mincielli v. Sloan’s Moving & Storage Co., Mo.Sup., 303 S.W.2d 17, 19; Wattels v. Marre, Mo.Sup., 303 S.W. 9, 10 [66 A.L.R.2d 433].”

We shall therefore summarize the evidence from the viewpoint of plaintiff. The accident occurred at about 5:00 p. m., November 27, 1958, within the city limits of Liberty, Clay County, Missouri. The plaintiff Cyrus See, Jr., 32 years of age, resident of Kansas City, Missouri, and employed as a foreman by Benson Manufacturing Company, was driving his Mercury automobile from Richmond, Missouri, to his home in Kansas City. His wife was sitting in the front seat and his 14 year old daughter in the back seat. When they left Richmond the weather was cloudy but there was no precipitation. As they neared Excelsior Springs, snow began to fall. This snowfall increased in intensity as they reached the vicinity of the Flamingo Motel on Highway 69 near Kansas City. The highway at this place runs generally north and south and has two lanes of pavement each way with shoulders and a median strip in the center. At the time of the accident snow had accumulated and the highway was slippery. Plaintiff said he had been driving about 25 miles per hour, but had slowed somewhat; that his brakes and windshield wipers were functioning properly and he had his lights on. Plaintiff testified that as he reached a point near the Flamingo Motel he noticed “three or four people out flagging”. He saw them “about 300 feet away”. He slowed down, saw “cars stalled across the highway” and pulled left off the pavement and stopped. They sat there — talked a little and he was about to get out .when his daughter shouted: “Oh, daddy, we’re going to get hit”. He glanced in his mirror and saw headlights approaching from the rear and “something hit me”. It was his testimony that his car was struck on the right rear by the green Chevrolet driven by the defendant Kelly. Plaintiff said' the blow drove his car onto the highway, headed southeast, and that “around a minute or something like that later”, it was struck on the left rear quarter panel by a 1958 blue Chevrolet driven by the original codefend-ant William Audsley. Mrs. See and the daughter Judy gave substantially similar testimony.

Plaintiff called as a witness police officer John Kerr, who had arrived on the scene at 6:15 p. m. It was then “snowing real hard and it was awfully slick”. Officer Kerr said he was told by defendant Kelly that Audsley’s car hit Kelly’s car and then Kelly’s car hit plaintiff’s vehicle. He also stated that Audsley told him the same thing. At the trial Audsley testified that he hit the plaintiff’s car, but did not strike Kelly’s, and denied that he had told Officer Kerr that he had hit the Kelly car. It was defendant Kelly’s testimony that when he was two or three car lengths to the rear of plaintiff’s Mercury, he was struck in the rear by Audsley and thereby propelled into plaintiff’s automobile.

Appellant contends that plaintiff is bound by Officer Kerr’s testimony and says that if Kelly was driven into See by Audsley, then there is no evidence authorizing either a finding or a submission that Kelly negligently failed to keep a lookout or that he negligently caused the collision and plaintiff’s resultant injuries.

We note but do not rule upon the admissibility of Kerr’s testimony as to (a) what defendant Kelly told him at the scene and (b) what he was there told by defendant Audsley. However, we do rule that plaintiff is not conclusively bound by such testimony and the jury might, if it chose (and it did so choose) accept the other version of what transpired; that is, that Kelly’s car hit plaintiff, and that Audsley’s car later also struck plaintiff’s car. We agree with the following statement found in 32 C.J.S. Evidence § 1040, p. 1106:

“Accordingly, a party calling a witness is not necessarily or absolutely bound by his testimony; he is not bound where the testimony is contradicted, either expressly or by inference, by other evidence or circumstances, as where the circumstances or the evidence of other witnesses would warrant the trier of facts in disregarding the testimony or drawing a contrary inference.”

See also, Giambelluca v. Missouri Pacific R. Co., Mo., 320 S.W.2d 457, 474, 475.

We believe that the evidence of plaintiff, his wife and his daughter and Mr. Audsley is amply sufficient to support a finding that Kelly’s car struck plaintiff’s car without having first been struck in the rear by Audsley. We hold that defendant’s motion for a directed verdict was properly denied.

Appellant says there is no evidence-that Kelly failed to keep a lookout, and. therefore it was error to submit by Instruction #1 defendant’s alleged “failure to keep-a constant and careful lookout”. Kelly says, that he was watching and that he saw plaintiff’s car. Kelly’s trial defense seems to-have been that he struck plaintiff because-he was first hit by defendant Audsley. The-jury refused to accept this version. Plaintiff testified that he saw the flagman and the-cars involved in the other accident about 300 feet away. Whether or not a driver-is actually alert and looking is usually not-susceptible of ready affirmative proof but in a proper case it may he inferred from the-attending surroundings and circumstances. We believe the law was correctly declared.' in Rohmann v. City of Richmond Heights, et al., Mo.App., 135 S.W.2d 378, 383:

“It is the duty of a motorist to keep a lookout on the highway in the direction the car is going. He is not only required to look but to look in such an: observant manner as to enable him fo-see the conditions which a person in the exercise of due care and caution for his own safety and the safety of others would have seen under like or-similar circumstances, and it is as much negligence to fail to see that which can: be observed by due care as it is negligence not to look at all. Kaley v. Huntley, 333 Mo. 771, 63 S.W.2d 21. Not to see what is plainly visible when: there is a duty to look constitutes negligence. Alexander v. St. Louis-San Francisco R. Co., 327 Mo. 1012, 38 S.W.2d 1023; Woods v. Moore, Mo.App., 48 S.W.2d 202.”

Plaintiff was entitled in. his instruction to hypothesize his own version of' the evidence and his theory of defendant’s. liability providing it was actually based on the evidence and presented a sound theory •as to liability. We rule the instruction to "be good, sufficient and proper under the evidence. We have examined the cases submitted by appellant on this point and we .are not persuaded differently. In Levin v. Caldwell et al., Mo., 285 S.W.2d 655, cited by appellant, which involved a lookout instruction in an intersection collision case, all the evidence showed that because of shrubbery at the corner, a side approaching car could not have been seen until it was within five feet of the intersection. Hence it was held that there was no substantial evidence from which a jury could ■reasonably find the car could have been seen earlier and therefore failure to look could not have caused the accident. In our case defendant could see 300 feet. The cases are .not alike.

The third and fourth assignments are first, the verdict is excessive and second, it was error to give Instruction No. 3 .because there was no causal connection between plaintiff’s injuries and defendant’s negligence and no evidence that plaintiff suffered any permanent injuries. Instruction No. 3 is set out:

“The Court instructs the jury that if you find the issues for the plaintiff ¿nd against one or both of the defendants on the evidence and under the' instructions herein, then you should, in determining his damages, take info consideration the mental and physical pain and.suffering endured by him since said injuries and in consequence thereof, if any, and whether they are temporary or permanent, and find for him in such sum as in your judgment under all the facts and circumstances in evidence will be a fair and reasonable compensation to him for whatever injuries and disabilities he has sustained, if any, as a direct result of the negligence of the defendants”.

Plaintiff, soon after the accident, drove his car into North Kansas City and then went to Memorial Hospital, where his wife and daughter had previously been taken by ambulance and he there saw Dr. Paul Re-vare, who gave him a sedative. He then went home, but said he “had a burning” from his shoulders up. The next day there was soreness in his back and neck — also a headache and a pain in his eye. He went back to Dr. Revare that morning, was x-rayed and given some tablets. He was also placed on a table with a weight, stretching his neck and vertebrae for 20 or 30 minutes. Mr. See returned to his work but took heat treatments thereafter. On the following Monday morning he left his work and again saw Dr. Revare. He still had pains in his neck, arm and eye. He received more therapy, traction and heat. He continued the traction treatments intermittently for about a year — two or three times a week part of the time and sometimes about once a month. In December, 1958, Dr. Revare sent plaintiff to Dr. Revis Lewis, who put him in a collar for 9 to 12 weeks. Plaintiff said he still had the pain at the time of trial.

Dr. Paul Revare, M.D., North Kansas City, testified. He said he saw plaintiff on the evening of November 27, 1958, and found a sprain of the neck which was difficult to evaluate as to severity, plus soreness of the neck, shoulders and an area at the base of the skull. The next day the neck was x-rayed. He saw the patient 8 times during December and continued therapy, traction and heat treatments. On December 17, Dr. Revare referred plaintiff to Dr. Lewis because the pain — particularly in the eye continued. Dr. Revare saw plaintiff 8 or 9 times a month through the winter of 1958-1959. During the following summer he saw him about 3 or 4 times each month and the pain continued with some limitation of motion. In February, 1960, his eye and right arm were his major complaints. The sharp and burning pain in his eye seemed to be relieved by a few minutes of traction. On the occasion of his last examination in February, 1960, Dr. Revare diagnosed the condition as cervical sprain which “is semi-permanent, at least”. The x-rays taken were read as normal by all the doctors.

Dr. Revis C. Lewis, mentioned above, a neurosurgeon, also testified. He first examined plaintiff on January 30, 1956 (2 years and 10 months before the accident). Plaintiff was at that time complaining of pain and stiffness in his neck. Physical therapy was prescribed and carried out. His diagnosis was “Occipital Cervical Syndrome largely on a postural basis with some arthritic changes”. There was no history of injury at that time. Dr. Lewis saw plaintiff again in December, 1958, at the request of Dr. Revare. At that time he found “almost a hump back”, faulty posture, thoracic kyphosis, and limitation of neck motion. It was his conclusion the patient “had incurred a soft tissue injury of the neck which was superimposed on some pre-exist-ing arthritic and postural changes”. He was given a similar examination in February, 1959, with substantially the same findings except neck muscle spasms were present. Plaintiff was fitted with a collar, which he wore. An examination on April 3, 1959, showed no appreciable change. After seeing him in May, 1959, he was released to Dr. Revare, Dr. Lewis feeling “his condition would remain about the same”. Dr. Lewis saw plaintiff last on February 11, 1961, found his condition about the same except there was more numbness in the right neck which indicated nerve root irritation. Dr. Lewis expressed the opinion plaintiff would permanently continue to have these symptoms but “perhaps somewhat to a better degree”. We rule against appellant’s assignment of error in the giving of Instruction No. 3.

We are not impressed by appellant’s suggestion that there is no proof that plaintiff’s injuries, even if actually sustained, were incurred in the first collision with the Kelly car, rather than as a result of the second collision with the Audsley car. If plaintiff had not been first hit by Kelly and pushed onto the pavement, he would not have been in the path of the second car.

There was substantial evidence that plaintiff was injured. He so testified. He promptly sought medical attention and continued with it for a long period. The medical testimony shows at least an aggravation of a pre-existing weakened spine and neck condition. The doctors described the condition as permanent or at least semi-permanent.

As the courts have many times said but using different phraseology, there is no exact measuring stick by which the proper or maximum award which the evidence in a case will support, can be determined. Each case must stand on its own facts. The current purchasing power of the dollar must not be overlooked. The jury and the trial court are in a better position to measure the reasonableness of the award than is the appellate court, where it should not be reduced unless as a matter of law, the amount is more than the evidence will support. Burr v. Kansas City Public Service Co. et al., 365 Mo. 115, 276 S.W.2d 120; Honeycutt v. Wabash R. Co., Mo., 337 S.W.2d 50; Pope v. St. Louis Public Service Co., Mo., 341 S.W.2d 123.

The plaintiff here is a comparatively young man. He received injuries which have long been painful and will likely continue to be so. There is a limitation of neck and arm motion and a nerve root irritation. We are unwilling to hold as a matter of law that the verdict for $7500 is excessive.

We find no reversible error and the judgment is affirmed.

SPERRY, C., concurs.

PER CURIAM.

The foregoing opinion by MAUGHMER,. C., is adopted as the opinion of the Court.

All concur.


source: Caselaw Access Project

author: WILLIAMS, Judge. MONTGOMERY, Judge

license: Public Domain

text:
    Edward MEADER, Appellant, v. COMMONWEALTH of Kentucky, Appellee.
    Court of Appeals of Kentucky.
    May 18, 1962.
    Rehearing Denied Jan. 18, 1963.
    Daniel W. Davies, Newport, E. H. Walton, Covington, for appellant.
    John B. Breckinridge, Atty. Gen., Ray Corns, Asst. Atty. Gen., for appellee.
   WILLIAMS, Judge.

The grand jury of Kenton County returned two indictments against the appellant Edward Meader, each charging the offense of setting up and operating a gambling contrivance in violation of KRS 436.230. By agreement the two indictments were tried together in the Kenton Circuit Court and a jury returned verdicts of guilty, with punishment fixed at a fine of $500.00 and confinement in the state penitentiary for a period of one year. From the judgment entered on those verdicts this appeal is prosecuted.

The Commonwealth proved that on April 2, 1960, appellant was owner of premises located in Kenton County, Kentucky, known as the “Teddy Bear Lounge.” On that date a game of cards called black-jack and a game of dice called beat-the-dealer were being operated on the premises. In the black-jack game the appellant or one of his employees dealt the cards. The rules of the game provided that the dealer won if he tied with the player. The object of the dice game called beat-the-dealer was for the player to roll a higher number than the operator. Betting was done with chips which were redeemable in cash at any time the player so desired. The appellant took no cut or commission from either game other than that remuneration which chance and the percentages allowed him.

Appellant offered no proof. He demurred to each indictment at the inception of the trial, and he moved for a peremptory instruction of not guilty at the conclusion of the case for the Commonwealth. Each indictment accused the appellant of setting up and operating a gambling contrivance. One indictment described the offense as follows:

“ * * * did unlawfully and knowingly with compensation, set up, operate or conduct a game of cards, to-wit, black-jack, a contrivance ordinarily used in gambling whereby money or other thing of value may be bet, won or lost, contrary to the statute made and provided in Kentucky Revised Statutes 436.230 * * *.”

The other indictment described that offense in the following language:

“ * * * did unlawfully and knowingly, with or without compensation, set up, manage, operate or conduct a game or contrivance, to-wit: a game of beat-the-dealer, a contrivance ordinarily used in gambling, etc.”

The statute contemplates two circumstances each of which is equally condemned:

“(1) Any person who, with or without compensation, sets up, keeps, manages, operates or conducts or assists in setting up, keeping, managing, operating or conducting a keno bank, faro bank or other machine or contrivance used in betting whereby money or anything of value may be won or lost, * * * »
“(2) * * * or any person who, for compensation, percentage or commission, sets up, keeps, manages, operates or conducts a game of cards, oontz or craps, whereby money or anything of value may be won or lost, * *

Appellant complains that each indictment charges one offense in the accusatory part and another offense in the descriptive part. It is true that both indictments used the word “contrivance,” but in each the alleged offense is specifically set out and defined. The test of the sufficiency of an indictment is, that when read and considered as a whole, if it fairly and reasonably apprises the accused of the offense and substantially complies with the Criminal Code specifying matters material and necessary to be contained therein, it will be deemed a good indictment. Maggard v. Commonwealth, 287 Ky. 787, 155 S.W.2d 228; Commonwealth v. Wiman, 308 Ky. 565, 215 S.W.2d 283; and Knuckles v. Commonwealth, Ky., 261 S.W.2d 667. Considering each indictment in .its entirety, there can be no'question but that the appellant is charged in the one with operating for compensation a game called black-jack and in the other with operating with or without compensation a contrivance called beat-the-dealer.

It will be noted from the heretofore quoted section of the statute that a person who operates a contrivance may be found guilty when he does so with or without compensation, whereas to be found guilty of operating a game of cards it must be shown that he did so for compensation, percentage or commission. The indictment which accused the appellant of operating a game of beat-the-dealer specified that such was done with or without compensation. In order to sustain the verdict of guilty under that indictment it is necessary to determine that the operation described is a contrivance as contemplated by the legislature. Appellant insists that it is merely a game which employs the use of dice. This Court has adopted the view that a broad interpretation should be given the use of the word “contrivance” as applied to the gaming laws. In Gilley v. Commonwealth, 312 Ky. 584, 229 S.W.2d 60, 19 A.L.R.2d 1224, it was said:

“ * * * Recognizing that the intent of the Legislature was to stop all forms of gambling, this court will give a broad interpretation to the word ‘contrivance’ as used in the two statutes to which reference has just been made. ⅜ ⅝ ¾: )i

In that case it was held that duplicate “numbers slips” are a gambling device or contrivance. From Webster’s New International Dictionary we find that a contrivance may be a mechanical device or a scheme, plan or artifice. Recognizing in this instance that the intent of the legislature was to prohibit organized gambling, we are of the opinion that the operator of a dice game called beat-the-dealer is in fact operating a contrivance used in betting whereby money or anything of value may be won or lost as denounced by KRS 436.-230.

We turn now to the black-jack indictment which specifically states that the appellant operated that game with compensation. It was proven that no commission or cut was taken from the players and no compensation was required before a player could participate in the game. It was incumbent upon the Commonwealth to prove that the appellant did receive compensation for the operation of the blackjack game. It should be stated here that, although this Court does not profess to be skilled in the art of gambling, nor to be advised of the relative odds of winning and losing in a black-jack game, nevertheless we are reasonably acquainted with basic arithmetic. We calculate that the percentage of times a dealer will win in a blackjack game when he has the advantage of being the winner in case of a tie, is greater than the percentage of times he will lose. Over a period of time we have no doubt that he is amply compensated for his time spent and labor involved in dealing the cards. We are struck by a statement made by this Court in the case of Harper v. Commonwealth, 93 Ky. 290, 19 S.W. 737:

“ * * * for it is not at all probable, but highly improbable, that the appellant, not being an idiot or feeble-minded, would devote his time to running that game, as it was run, for mere pastime or accommodation; * *

The word “compensation” as employed by the subject statute was defined in Palmer v. Commonwealth, 240 Ky. 175, 41 S.W.2d 936, to mean “a consideration or remuneration in any form whatsoever.” As heretofore stated, this statute shall be interpreted liberally, and we are of the opinion that the jury had the right to infer that appellant did receive compensation for operating the game of black-jack.

The appellant also alleges that the instructions given by the court did not give the whole law of the case. There was no proof offered by appellant, and the only proof offered by the Commonwealth pertained to the offense denounced by KRS 436.230. The court instructed in accordance with evidence heard and in the language of the statute. Such instructions were properly given and appellant was not prejudiced thereby. See Hensley v. Commonwealth, Ky., 271 S.W.2d 891.

Finally, the trial court prepared two form verdicts under each indictment, one to be used if the jury found appellant guilty and the other if it found him not guilty. After deliberating, the jury returned to the court room and the court discovered the foreman had signed both the guilty and the not guilty verdicts. Thereupon the court directed the jury back to the jury room with the admonition to make a verdict according to the written instructions. The jury later returned with a verdict of guilty under each indictment. The court did not err in requiring the jury to return a proper verdict. It is well established that an incorrect verdict should he corrected before the jury is discharged, and it is not error for the court to require such correction. Crockett v. Commonwealth, 100 Ky. 389, 38 S.W. 676; Williams v. Commonwealth, 140 Ky. 34, 130 S.W. 807.

On the whole case we find no error prejudicial to the appellant’s rights.

The judgment is affirmed.

MONTGOMERY, Judge

(dissenting)..

I disagree with the definitions of “contrivance” and “with compensation” in the majority opinion. Granted that the purpose of KRS 436.230 is worthy and should he liberally construed, it still does not justify stretching the meaning of the phrases beyond their ordinary and accepted uses. Thompson v. Bracken County, Ky., 294 S.W.2d 943. A game, whether played with cards as “black-jack” or with dice as “beat-the-dealer,” does not become a mechanical device or a scheme, plan, or artifice, the definition given in the majority opinion, whether played in the “Teddy Bear Lounge” or in a home or club. The definition given would apply to 'games in'the'latter places as well as in the former; I do not conceive that the General Assembly so intended.

Further, the language of the statute describes two separate offenses and thus distinguishes the game of cards from a betting contrivance which is described synonymously as “keno bank, faro bank or other machine.” The definition of “with compensation” under the majority opinion . applies equally to all card games. The statute uses the phrase “for compensation, percentage or commission.” Undoubtedly the General Assembly intended to condemn the operation of a gambling game, whether with cards or dice, which is set up and operated by someone for the purpose of obtaining what is commonly referred to as a “cut.” This is indicated by the synonymous use of the three words.

The majority opinion says that the compensation received from the black-jack game arises because there was no change in the deal. This was simply one of the rules by which the game was played and merely influenced the profit or loss resulting from the fortunes of the game. If such a definition stands, it is equally applicable to any card game.

For these reasons I do not think the Court is justified in giving meanings to ordinary words which were never so intended.


author: WALKER, Justice.

text:
    COMMERCIAL STANDARD INS. CO. et al., Petitioners, v. Alfonse MARTIN, Respondent.
    No. A-8766.
    Supreme Court of Texas.
    Oct. 24, 1962.
    As Amended on Denial of Rehearing Jan. 16, 1963.
    Keith, Mehaffy, McNicholas & Weber, Dewey J. Gonsoulin, Beaumont, for petitioners.
    Sample & Walker, Beaumont, for respondent.
   WALKER, Justice.

Alfonse Martin, respondent, brought this suit against J. C. Dishman et al., petitioners, to recover for personal injuries sustained by respondent when he fell or was thrown from a tractor while in the course of his employment by petitioners as a farm laborer. Commercial Standard Insurance Company was originally named as one of the defendants, but the suit was discontinued as to that company when the first amended original petition was filed. The trial court instructed a verdict for petitioners at the close of respondent’s evidence. Having concluded that there are issues of fact as to whether the accident was proximately caused by the negligence of petitioners, the Court of Civil Appeals reversed and remanded the cause for trial. 350 S.W.2d 664. We reverse the judgment of the Court of Civil Appeals and affirm that of the trial court.

The accident occurred while respondent was going back to the field after eating dinner. He was driving a Ford tractor which petitioners had purchased new about seven weeks before. Attached to the tractor was a slip or blade used for moving dirt and which was raised and lowered by an hydraulic-lift mechanism controlled by hand levers. After closing a gate through which he had driven, plaintiff got back on the tractor and proceeded along a road through the field. At a point where the road was rough and rutted, the tractor began bouncing up and down and pulling off the ground. Respondent was thrown off and injured, and the unattended tractor continued across the field, jumping irrigation ditches and rice levees, until it finally stopped.

Extensive repairs were made to the tractor after the accident. Among other items, a leak in the hydraulic system was repaired, and it is respondent’s theory that this leak caused the accident. He testified that the blade was raised when he closed the gate. According to the expert testimony which he offered, the blade would have remained in that position in the absence of a defect in the hydraulic system unless it was lowered with the controls. If it had been lowered with the controls and the hydraulic system was operating properly, the blade would have stayed down. A leak in the system would cause the pressure to fall and permit the blade to bounce up and down. Respondent testified that there was a gash in the earth about six paces back from the place where he fell, and that the blade was bouncing up and down as the tractor went across the field after the accident.

At the time petitioners purchased the tractor they received from the dealer an owner’s manual published by the manufacturer. It was there recommended that the tractor be returned to the dealer after fifty hours of operation for the free inspection, checks and adjustments authorized by the owner’s service policy. At another place in the manual the owner was advised that the oil in the hydraulic system should be changed after the first fifty hours of operation and every six hundred hours thereafter. The dealer from whom petitioners purchased the tractor testified that the hydraulic system is checked in the course of the fifty-hour inspection to ascertain whether it has control. Another witness stated that loose bolts and gaskets are tightened during the inspection, and that any small shavings which have worked loose in the hydraulic system will probably drain out when the oil is changed.

We agree with respondent that the evidence will support an inference that the accident was caused by a leak in the hydraulic system. Although petitioners argue to the contrary, we assume without deciding that the trier of fact might properly conclude from the evidence: (1) that the tractor had been operated for more than fifty hours within the meaning of the manual, and (2) that the petitioners in the exercise of ordinary care should have foreseen that a failure to have the tractor inspected as recommended in the manual might result in injury to the operator. Petitioners are not insurers of respondent’s safety, however, and they are not legally responsible for his injuries unless their negligence was a proximate cause of the accident.

Respondent cites Gammage v. Gamer Co., Tex.Com.App., 209 S.W. 389, in support of the holding of the Court of Civil Appeals. There the plaintiff was injured when a machine on which he was working started unexpectedly. The machine could be set in motion by shifting a moving belt from a loose pulley to a tight pulley. It was alleged that the lever used for shifting the belt was out of repair and not properly secured so as to hold the belt on the loose pulley, that the loose pulley was worn and would wobble and carry the belt on to the fixed pulley, and that the loose pulley by friction and negligent failure to oil would become heated and tighten on the shaft, thereby starting the machine. The opinion of the Commission of Appeals states that the plaintiff introduced testimony “pointing out the three possible defects in detail, any one of which could have caused the machine to start, and the existence, discovery, and prevention of all of which depended upon the degree of care used by the defendant in inspecting, repairing and oiling the machine.” A jury verdict for the plaintiff was upheld because the court concluded that the character of the accident, and the circumstances in proof attending it, were such as to lead reasonably to the belief that without negligence it would not have occurred. Although it was said that res ipsa loquitur had no application, the statement of such doctrine made by Chief Justice Erie in Scott v. London & St. Katherine Docks Co., 3 H. & C. 596, 159 E.R. 665, was quoted in the opinion as the principle underlying the liability of the defendant.

Other courts have applied res ipsa lo-quitur in cases involving the sudden and unexplained starting of machinery, Ross v. Double Shoals Cotton Mills, 140 N.C. 115, 52 S.E. 121, 1 L.R.A.,N.S., 298; Chiuccariello v. Campbell, 210 Mass. 532, 96 N.E. 1101, 44 L.R.A.,N.S., 1050, Ann.Cas.l912D, 510, but it is unnecessary for us to determine at this time whether the Gammage case was correctly decided. The accident in the present case is not one which in the light of ordinary experience gives rise to an inference that it was caused by petitioners’ negligence.

The court in the Gammage case also said that where the evidence raises an issue as to whether the machine was ever inspected, the question of whether the defect had existed for a sufficient length of time to be discovered upon a proper inspection does not arise, and that in such cases it is a question of fact for the jury as to whether the defendant is free from negligence. That is ordinarily true in so far as the negligence issue is concerned, but the nature of the defect and the time it has existed are usually materiá'l considerations in determining whether it would have been discovered and corrected, if a proper inspection had been made.

We are assuming foreseeability, and the narrow question is whether there is any evidence to support the conclusion that the failure to have the tractor inspected was a cause in fact. As pointed out by the Court of Civil Appeals, the tractor was less than two months old and had given no previous indication of being defective. The record is completely silent as to which part of the hydraulic system was found to be leaking after the accident. A leak was repaired, but we find nothing to indicate the nature of the repairs that were made. There was no testimony that would enable the trier of fact to determine what caused the leak or how long it might have existed. The existence of the defect at the time of the accident must itself rest upon an inference, and the evidence does not establish any fact or circumstance from which it can fairly be inferred that the leak would have been prevented or discovered and repaired if the inspection had been made. It is a matter of pure speculation as to whether the leak was caused by a loose bolt which probably would have been tightened during the inspection, by a latent defect in the metal wall of the oil container which developed into a crack while the tractor was being driven back to the field just prior to the accident, or by some other defect. Since there is no evidence to support a finding that the accident was proximately caused by petitioners’ failure to have the inspection made, the trial court properly instructed a verdict in their favor.

The judgment of the Court of Civil Appeals is reversed and that of the trial court is affirmed.


text:
    The YOUNGSTOWN SHEET & TUBE CO., Petitioner, v. Henry W. PENN et al., Respondents.
    No. A-8984.
    Supreme Court of Texas.
    Nov. 21, 1962.
    Rehearing Denied Jan. 16, 1963.

      L. L. James, Tyler, for petitioner.
    Morrison, Dittmar, Dahlgren & Kaine, San Antonio, for respondents.
   WALKER, Justice.

This is a summary judgment proceeding. The Youngstown Sheet and Tube Company, petitioner, brought suit against Texita Oil Company on a sworn account and for foreclosure of materialmen’s liens on the Mallard “A” and Mallard “B” leases in Atascosa County. Petitioner’s claim is for labor and materials which it furnished to Texita. The second amended original petition alleged that Texita was a partnership composed of Gordon W. Johnson, I. A. McNab, Morris Cannan, Henry W. Penn, J. K. Stark, and J. P. Hale. It was also alleged that the defendants were partners in the development and operation of the two leases. Johnson and McNab answered that they were partners engaged in business under the name of Texita Oil Company and had been discharged in bankruptcy. Penn, Stark and Hale, respondents, filed a verified answer denying that they were partners in Texita, and further denying that they had engaged in a partnership with Texita in the development and operation of the leases. Respondents’ motion for summary judgment was granted by the trial court, and the Court of Civil Appeals affirmed. Tex.Civ.App., 355 S.W.2d 239.

The judgment entered by the trial court expressly disposes of all parties named in the petition except Cannan. So far as can be determined from the record, Cannan was never served with citation and did not answer, and there is nothing to indicate that petitioner ever expected to obtain service upon him. In these circumstances the case stands as if there had been a discontinuance as to Cannan, and the judgment is to be regarded as final for the purposes of appeal. See Moody v. Smoot, 78 Tex. 119, 14 S.W. 285; Mabry v. Lee, Tex.Civ.App., 319 S.W.2d 125 (wr. ref.); Varrs v. Faulkner, Tex.Civ.App., 138 S.W. 789 (no writ).

Respondents filed a number of affidavits in support of their motion for summary judgment. One of these was made by Gordon W. Johnson, who stated that he and' I. A. McNab were engaged in business as partners under the name of Texita Oil Company and that respondents were never partners in such business. Petitioner recognizes that Texita was a partnership composed of Johnson and McNab, but it contends that respondents were partners with Texita in the operation of the leases.

Attached to respondents’ original answer is a photostatic copy of an operating agreement dated March 1, 1957, purportedly executed by respondents and Texita. The Johnson affidavit states that in connection with the Mallard “B” lease described in the original petition, “Texita Oil Company and the defendants, Henry W. Penn, J. K. Stark and J. P. Hale, executed a written operating agreement dated March 1, 1957, effective as of such date, a copy of which is attached to the original answer filed by such defendants in the above named proceeding and which is made a part hereof by reference as if fully rewritten herein.” If this operating agreement and the facts disclosed by the several affidavits were properly considered by the trial court, we agree with the Court of Civil Appeals that the record shows that there is no genuine issue as to any material fact and that respondents are entitled to judgment as a matter of law in so :ar as the claim for labor and materials furnished in connection with the operation of the Mallard “B” lease is concerned.

Petitioner insists that the affidavits are fatally defective because they do not comply with Rule 166-A, Texas Rules of Civil Procedure, in the following respects: (1) the affidavits do not state that they are made on the personal knowledge of the affiants; (2) the affidavits do not show affirmatively that the affiants are competent to testify to the matters stated therein; (3) sworn or certified copies of the papers referred to in the affidavits were not attached thereto or served therewith; and (4) each affidavit is based, in part, upon conclusions and hearsay. None of these objections was made in the trial court.

Paragraph (e) of Rule 166-A provides that “Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions or by further affidavits.” Although there is no express requirement that the affidavits state that they are made on the personal knowledge of the affiant, we think this in the in-tendment of the rule. Hearsay may not be made the basis of a summary judgment, and the trial judge should not be required to speculate as to whether the affiant could establish the facts stated in his affidavit if he were testifying from the witness stand.

We also agree with petitioner that Rule 58, Texas Rules of Civil Procedure, which authorizes statements in a pleading to be adopted by reference in a different part of the same pleading, in another pleading or in any motion, does not apply to an affidavit filed in support of or opposition to a motion for summary judgment. The affidavit is not a pleading or motion but constitutes “proof” upon which the motion will be either granted or denied.

It thus appears that the affidavits in this case were subject to exception in the trial court because they do not show affirmatively that they are made on personal knowledge and that the affiants are competent to testify to the matters stated therein, and also because verified or certified copies of the operating agreements were not attached to or served with the Johnson affidavit. While the affidavits do contain certain conclusions, the summary judgment with respect to the Mallard “B” lease is supported by the factual statements made therein when considered in connection with the provisions of the operating agreement attached to the answer. There is no merit then in the fourth objection urged by petitioner.

Rule 166-A was taken from Federal Rule 56. The Federal courts have held that the failure to attach certified copies or to state clearly and unambiguously that the affidavits are made on personal knowledge affords no basis for disturbing a summary judgment on appeal if the record shows that the moving party is entitled to prevail, at least where the objection was not urged in the trial-.court. Lawson v. American Motorists Ins. Corp., 5th Cir., 217 F.2d 724; Whelan v. New Mexico Western Oil & Gas Co., 10th Cir., 226 F.2d 156. See also Mellen v. Hirsch, D.C., 8 F.R.D. 248 (affirmed per curiam, 4th Cir., 171 F.2d 127). This is the position taken by at least two of our Courts of Civil Appeals. Womack v. Allstate Ins. Co., Tex.Civ.App., 286 S.W.2d 308 (reversed on other grounds, 156 Tex. 467, 296 S.W.2d 233); Lobit v. Crouch, Tex.Civ.App., 293 S.W.2d 110 (wr. ref. n. r. e.). Another intermediate court has held that an affidavit is fatally defective in the absence of an affirmative showing that it is made on personal knowledge and that the affiant is competent to testify, Lawyers Surety Corp. v. Sevier, Tex.Civ.App., 342 S.W.2d 604 (no writ); Anderson v. Hake, Tex.Civ.App., 300 S.W.2d 663 (no writ)., but that an objection to documentary evidence attached to an affidavit on the ground that the instruments are not sworn to or certified comes too late when raised for the first time on appeal. Farmers & Merchants Compress & Warehouse Co. v. City of Dallas, Tex.Civ.App., 335 S.W.2d 854 (wr. ref. n. r. e.).

In Gardner v. Martin, Tex., 345 S.W.2d 274, we said that to entitle the moving party to summary judgment, there must be strict compliance with the provisions of Rule 166-A. The defendant’s motion for summary judgment in that case was granted on the basis of the trial court’s conclusion that a former judgment was res adjudicata of the claims asserted by the plaintiff, but the defendant failed to attach to his motion either sworn or certified copies of the pleadings and judgment in the earlier suit. Since there was nothing in the record that would enable an appellate court to determine whether the motion was properly granted, it was held that the judgment could not stand.

Here a copy of the operating agreement was attached to respondents’ answer, and the Johnson affidavit states that this instrument was executed by the parties and attempts to incorporate the same by reference. All of its provisions are disclosed by' the record, and petitioner could not have failed to understand that such agreement was relied upon by respondents in urging and b'y the trial court in granting the motion for summary judgment. Unlike the case of Box v. Bates, Tex., 346 S.W.2d 317, the factual statements made in the affidavits are not obviously based on hearsay. The information regarding the affi-ants set out therein and the nature of the facts stated iridicate that each affiant probably has personal knowledge of and is competent to testify to such facts. If petitioner was in any doubt as to these matters or if it was prejudiced in any way by the fact that sworn oir’ certified copies of the operating agreements were not attached to or served with the Johnson affidavit, it should have excepted to the affidavits at or prior to the hearing. The deficiencies which it now urges appear to be purely formal, and it may be assumed that they would have been corrected upon proper exception in the trial court. We hold that objections of this kind may not be raised for the first time on appeal when it fairly appears from the record that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.

This disposes of the claim and lien asserted for labor and materials furnished to Texita in connection with the operation of the Mallard “B” lease, but the situation with respect to the Mallard “A” lease is quite different. Petitioner alleged that such lease was owned by Texita and Penn. Although the motion for summary judgment and the Johnson affidavit disclose that a written agreement for the operation of the lease was executed by Texita and Penn, a copy of the instrument was not attached to the motion or any of the pleadings or affidavits and does not appear in the record now before us. The affidavit and motion indicate that such agreement was similar to the one covering the Mallard “B” lease, that the printed provisions of the two instruments are identical, and that only the typed portions are different. It thus appears that the parties executed an agreement for the operation of the Mallard “A” lease, but the trial court could not properly determine its provisions from the motion, pleadings, depositions, admissions and affidavits. Respondents did not discharge their burden of showing that they are entitled to judgment as a matter of law on this phase of the case. Gardner v. Martin, supra.

Since the two causes of action alleged by petitioner are severable, the judgment of the Court of Civil Appeals is modified so as to provide: (1) that the judgment of the trial court, in so far as it decreed that petitioner take nothing with respect to the claim and lien asserted for materials, supplies, equipment and services furnished in connection with the Mallard “A” lease, be reversed and that this part of the case be remanded to the district court; and (2) that the judgment of the trial court is otherwise affirmed. As so modified, the judgment of the Court of Civil Appeals is affirmed.


author: PER CURIAM.

text:
    Frank M. TORREZ, Appellant, v. MARYLAND CASUALTY COMPANY, Respondent.
    No. A-9261.
    Supreme Court of Texas.
    Nov. 28, 1962.
    Rehearing Denied Jan. 16, 1963.
    Scarborough, Black & Tarpley, Abilene, A. C. Cooke, Post, for petitioner.
    Crenshaw, Dupree & Milam, Lubbock, Cecil Kuhne, Jr., Lubbock, for respondent.
   PER CURIAM.

This is a plea of privilege case. The Court of Civil Appeals has held that Subdivision 27 of Article 1995, Vernon’s Ann.Tex.Stats. is unconstitutional in that it denies to foreign corporations the equal protection of the law guaranteed by the Fourteenth Amendment to the Constitution of the United States. 359 S.W.2d 559. No-dissenting opinion was filed in the lower appellate court, consequently our jurisdiction depends entirely upon there being a conflict of decisions, that is, the application for writ of error must show that the Court of Civil Appeals has held differently from a prior decision of another Court of Civil Appeals, or of the Supreme Court, upon a question of law material to a decision of the case. Article 1728. Articles 1728 and 1821 relating to the jurisdictions of the Supreme Court and the Courts of Civil Appeals were amended in 1953. The primary objective of the amendments was “to substitute the comparatively simple writ of error for the complicated mandamus-certified question practice in certain types of cases, such as divorce and slander cases and appeals from interlocutory orders, including those sustaining or overruling pleas of privilege.” The actual appellate jurisdiction of the Supreme Court was left substantially unchanged. See Commentaries under Rule 474, Vernon’s Ann.Tex.Rules, 16 Texas Bar Journal 602.

When a conflict of decisions is relied upon for Supreme Court jurisdiction the application should briefly and pointedly show wherein the decisions are in conflict. The conflict must be apparent from the face of the opinions and must relate to a question of law. “Generalized conflicting statements from two opinions do not create a jurisdictional conflict.” Calvert, “The Application for Writ of Error”— Commentaries under Rule 469, Vernon’s Ann.Tex.Rules.

It is asserted that the decision in the present case conflicts with Southwestern Greyhound Lines v. Day, Tex.Civ.App., 238 S.W.2d 258, no wr. hist., Pacific Finance Corporation v. Robert F. Ramsey, Tex.Civ.App., 305 S.W.2d 297, no wr. hist., Andretta v. West, Tex.Civ.App., 318 S.W.2d 768, wr. ref. n. r. e., and Kansas City Title Ins. Co. v. Atlas Life Ins. Co., Tex.Civ.App., 336 S.W.2d 204, no wr. hist. In these cases it appears that decision as to the venue of suits against foreign corporations was based upon the statutory wording embraced in Subdivision 27 of Article 1995, but it does not appear that the question of the constitutionality of the subdivision was raised in any of the cases cited. It follows that such decisions cannot be construed as directly holding that said subdivision 27 of Article 1995 is constitutional. It cannot be said, therefore, that there is a direct conflict of decisions appearing on the face of the opinions which relates to a question of law material to the decision of the case.

We should not be understood as implying that said subdivision 27 is unconstitutional or that the contrary is true. We simply hold that this Court is without jurisdiction to decide the constitutional question in this case. Garitty v. Rainey, 112 Tex. 369, 247 S.W. 825; Dockum v. Mercury Ins. Co., 134 Tex. 437, 135 S.W.2d 700; State of Texas v. Wynn, 157 Tex. 200, 301 S.W.2d 76.

The application for writ of error is dismissed for want of jurisdiction.


author: HAMILTON, Justice. NORVELL, Justice

text:
    UNITED FOUNDERS LIFE INSURANCE COMPANY, Petitioner, v. Glynda Bruce CAREY et vir, Respondents.
    No. A-8519.
    Supreme Court of Texas.
    Nov. 28, 1962.
    Rehearing Denied Jan. 16, 1963.

      Upton, Upton, Baker & Griffis, San Angelo, for United Founders Life Ins. Co.
    Snodgrass, Smith & Rose, San Angelo, for Carey and husband.
   HAMILTON, Justice.

This is a suit upon an alleged contract of life insurance, based upon an application to United Founders Life Insurance Company for life insurance and a “binding receipt” issued by such company, as distinguished from a suit upon a life insurance policy. The applicant, Billy Gene Bruce, died before any insurance policy was issued. Trial was to a jury and on the jury’s verdict judgment was entered for respondent Glynda Bruce Carey, the surviving but remarried wife of the deceased applicant. The Court of Civil Appeals has affirmed that judgment. 347 S.W.2d 295.

.On July 27, 1958, the applicant, Billy Gene Bruce, who was then an insurance salesman for the petitioner insurance company, applied to it in writing for life insurance on himself as a standard risk for $25,-000, naming his wife, the respondent here, as his beneficiary. This application provided that the company would incur no liability until the application had been received, approved, and a policy issued and delivered while applicant was in good health, but had the further proviso, “However, if the full first premium specified in the application on the policy applied for is paid on the date of this application and receipt bearing the same serial number as this application is issued to the applicant, then the liability of the company shali be as stated in the receipt.” The premium mentioned was paid by the applicant and petitioner issued a receipt therefor containing this provision:

“ * * * The insurance under the policy for which application is made shall be effective on date of this receipt or the date of completion of the medical examination (if required) whichever is the later date, if in the opinion of the authorized Officers of the Company at its Home Office in Oklahoma City, Oklahoma, the Proposed Insured is insurable and acceptable for insurance under its rules and practices on the plan of insurance, for the amount of insurance and at the premium rate set in the application, exclusive of any amendments in the space for ‘Home Office Additions or Correction.’ * * ”

The trial court submitted the following issue to the jury, which answered it as indicated :

“Do you find from a preponderance of the evidence that prior to Billy Gene Bruce’s death in the opinion of the proper official of United Founders Life Insurance Company Billy Gene Bruce was insurable and acceptable for insurance under its rules and practices on the plan of insurance, for the amount of insurance, and at the premium rate set in his application for life insurance?
“Answer yes or no.
“Answer: Yes.”

The petitioner complains that there was no evidence to support the answer given by the jury to this issue. On this point we reverse the judgments of the Court of Civil Appeals and the trial court, but in the interest of justice we remand the cause for a new trial. Rule 505, Texas Rules of Civil Procedure.

In May or June of 1958 Mr. Bruce, the applicant, began employment as an agent of petitioner insurance company for the purpose of selling life insurance. His immediate supervisor, the general agent in San Angelo for petitioner company, was Mr. Gerald Stewart. As such agent and salesman Mr. Bruce attended the company school in Oklahoma City shortly after the beginning of his employment to familiarize himself with life insurance and the sale of life insurance, and with the rules and practices of his own company. These practices, with which Mr. Bruce became familiar at this school and through his own selling efforts, included the necessity and requirement by petitioner for “reinsurance” in every case where application was made to petitioner for insurance in excess of $5,000. By such procedure when an application for insurance in excess of $5,000 was received by petitioner, the company secured through its agent a medical examiner’s report and a credit or inspection report. Petitioner company submitted these items, together with the application, and its own application for reinsurance, to its reinsurer, Republic National Life Insurance Company, for the latter’s underwriting action, its consideration, and for either approval or refusal of the application for reinsurance. In every application for more than $5,000 it was the practice of petitioner to always rely on its re-insurer, Republic National Life Insurance Company, to pass upon the insurability and acceptability of the applicant before any determination was made by petitioner. In forming its opinion petitioner invariably followed the recommendation of Republic on such matters.

As was the usual procedure, petitioner submitted the application, the credit report and the medical examiner’s report of Bruce to Republic on September 5, 1958. Bruce’s application and medical report were never submitted to petitioner’s medical director, because the coverage requested exceeded $5,000 and the application was considered as a reinsurance matter.

On September 8, 1958, Republic wired petitioner’s underwriting department that the application of Mr. Bruce was approved as a standard risk subject to “statement of any doctor consulted within past five years regarding nervous disorder.” An interoffice memorandum of September 9, 1958, advised petitioner’s general agent, Gerald Stewart, that regarding the insured “it will be necessary that we have a statement from any doctor you have consulted during the past-five years regarding nervous disorder before we can complete the processing of this application for life insurance.” A report in response to this memorandum was made by Dr. Valton Sessums on September 29, 1958, and was received by petitioner on October 1, 1958. This report, among other facts, revealed that the doctor had viewed electrocardiograms of Bruce which showed his heart condition to be normal.

On October 6, 1958, petitioner’s chief underwriter advised its general agent that the report from Dr. Sessums had been received and forwarded to its reinsurance company on October 1, and that she had on October 6 received a wire from the reinsurer requesting a review of the electrocardiograms made by Dr. Sessums, and that a loan of them from Dr. Sessums had been requested.

On October 16 petitioner’s underwriter by interoffice memorandum to Bruce requested a follow-up on the last request made to Dr. Sessums. On October 18 Bruce was critically injured in an automobile accident, and died from such injuries on October 23.

On October 21 Dr. Sessums wrote to petitioner, advising it that the electrocardiograms were not made in his office, hut were made by two physicians in Odessa, Texas, and a physician from Ballinger, Texas. This letter was received by petitioner on the date that Bruce died.

By letter dated November 18, 1958, from William D. Curlee, assistant secretary and treasurer <pf United Founders Life Insurance Company, to respondent, liability was denied, the letter saying in part:

“The policy applied for was not issued .and never became effective because, upon medical grounds, it was determined that Mr. Bruce was not insurable and acceptable under the company’s rules and practices on the plan of insurance for the amount and at the premium rate set in the application.”

On the question of whether or not an opinion had been formed as to the insur-ability or acceptability of Billy Gene Bruce at the time of his death, we have the testimony of Mrs. Helen Smith, chief underwriter and only officer authorized to pass upon the question of insurability and acceptability of an applicant, and also of Mr. Brunswick, the secretary of the reinsurance department of Republic National Life Insurance Company, the officer who passed on reinsurance matters for that company. The testimony of Mrs. Helen Smith in regard to that matter is as follows:

“Q. Is the only reason you are denying this claim is because you never did accept it ?
“A. This application on Billy Gene Bruce had never been completed. It had never been accepted or rejected. It was still in a pending status. We were still trying to secure the information.
“Q. Did you pursue any further the the attempts to secure the EKGS [electrocardiograms] after Mr. Bruce was killed ?
“A. Not after I knew Mr. Bruce was deceased.
******
“Q. Is that your answer, you never did have any opinion at all, never formulated any opinion at all?
“A. I hadn’t completed making an opinion. We were still trying to secure information.
“Q. You actually stopped, though, when he died?
“A. Yes, I did.”
Mr. Brunswick’s testimony is as follows
“A. * * * We were waiting, we felt that in a review of the previous history, what we did know about the case, in order to make a fair appraisal we would need the electrocardiograms to be reviewed by our physicians, and at that point we were not sure how we would rate that case.
* * * * * *
“Q. Now then assuming that the E K G’s would have come back—
“A. Uh, huh.
“Q. —and your medical staff would have reviewed them, and they would have found it to be within normal limits, then that would have meant a standard risk?
“A. It is possible.
“Q. It is probable, isn’t it?
“A. It is possible; it is probable.
‡ * * * *
“Q. My question is, has Republic National made any attempt themselves, other than the one request to United Founders to obtain the E K G’s subsequent to Mr. Bruce’s death?.
“A. No.”

We think this evidence shows not only that the proper officer of the petitioner company had not formed any opinion as to the insurability and acceptability of Billy Gene Bruce before his death, but that up until that time they were diligently investigating his medical history in a good faith attempt to reach an opinion. We likewise are of the opinion that there is no evidence that any opinion was formed after the death of Billy Gene Bruce that he was insurable and acceptable. In fact, the letter quoted from above affirmatively states that it had been determined that he was not acceptable and insurable. But the letter does not foreclose the matter if the receipt delivered to Bruce was intended to provide him with temporary insurance from the date of his medical examination. If it was so intended, the opinion that he was not insurable and acceptable must have been a good faith opinion. Colorado Life Co. v. Teague, Tex.Civ.App., 117 S.W.2d 849, writ dismissed. The crucial question, then, is whether the parties intended that the receipt should provide temporary insurance from the date of the medical examination until final action of petitioner in issuing or refusing to issue a policy of insurance.

Whether a receipt of the general nature of that issued to Bruce affords temporary insurance has been the subject of considerable controversy and contrariety of opinion. See annotations contained in 2 A.L.R. 2d 943, 107 A.L.R. 195, and 81 A.L.R. 332. In the courts of a majority of the states the wording of the particular receipt in controversy controls the conclusion reached. The author of the annotation in 2 A.L.R.2d 943 classifies variously worded receipts in four classes. The author of an article in 44 Yale Law Journal 1223 divides the various receipts into two more general and comprehensive classes, the first class being those which provide for insurance to be in force from the date of medical examination “providing the application be approved and accepted as applied for,” and the second class being those which provide that the insurance shall be effective as of the date of the medical examination “if the company shall be satisfied that on that date the applicant was an insurable risk and the applicant was otherwise acceptable under the company’s regulations for the amount and plan of the policy applied for.” The Court of Civil Appeals stated that the receipt in this case “clearly falls within the first classification.” If that conclusion be correct, the receipt did not provide Bruce with temporary insurance because approval and acceptance of his application was a condition precedent to effectiveness of the contract. Beaty v. Southland Life Ins. Co., Tex.Civ.App., 28 S.W.2d 895, writ dismissed. Moreover, such a contract is not violative of the public policy of this State. Southland Life Ins. Co. v. Vela, 147 Tex. 478, 217 S.W.2d 660. However, we do not agree with the Court of Civil Appeals’ conclusion.

The receipt before us does not necessarily fall into either of the two classes outlined by the author of the Yale Law Journal article. It does not by its express terms fall into the first classification because it does not make approval of the application or issuance of a policy a condition precedent to effectiveness of the insurance on the date of completion of the medical examination. It does not by its express terms fall into the second classification because it does not state that the insurance shall be effective on completion of the medical examination if in the opinion of the proper officer the applicant was insurable and acceptable on that date. However, a careful analysis of the receipt convinces us that it was the intention of the parties to provide Bruce with temporary insurance from the date of completion of his medical examination if in the opinion of the proper officer he was insurable and acceptable, as provided in the receipt, on that date.

The receipt is obviously ambiguous, and the rule is well settled that ambiguities in insurance contracts are to be construed against the insurer. Trahan v. Southland Life Ins. Co., 155 Tex. 548, 289 S.W.2d 753; Providence Washington Ins. Co. v. Proffitt, 150 Tex. 207, 239 S.W.2d 379.

One thing we may say with certainty is that the receipt is intended to provide temporary insurance for some period of time. That conclusion necessarily follows from the express provision of the receipt that the insurance is to be effective upon completion of the medical examination if in the opinion of the authorized officers the applicant is insurable and acceptable rather than upon acceptance of the application or upon issuance or delivery of a policy. The opinion must be formed before the application is approved and a policy issued. There is no way of knowing how long in advance of approval of the application or issuance of a policy the requisite opinion will be formed, whether thirty minutes or three months, but in no event is the applicant to be without insurance until the application is accepted and the policy is issued. Petitioner seems to agree, for if it were otherwise liability could have been defeated by rejecting the application because of the applicant’s death.

Assuming, then, that the receipt does provide temporary insurance for some period of time, we are confronted with the question of when it becomes effective. It is on this question that the receipt is particularly ambiguous. It provides that the insurance is to be effective on the date of the “receipt or the date of completion of medical examination (if required) whichever is the later date.” What is meant by completion of medical examination? Does it mean completion of the medical examination by the doctor to whom the applicant is referred? Or does it mean completion of that examination and any further investigation the insurer decides to make of an applicant’s medical history? Resolving the doubt against petitioner, we think it means the former. Provision that the temporary insurance is to become effective if in the opinion of the authorized officers the applicant “is” insurable and acceptable would indicate that the temporary insurance is not to become effective until those officers have completed such investigation of the applicant’s medical history as they deem necessary to the formation of a good faith opinion of insurability and acceptability. But the receipt does not speak of investigation; it speaks only of examination. A medical examination imports a physical examination as distinguished from a medical history investigation. Moreover, the receipt fixes the effective date of the temporary insurance as the date of completion of medical examination if required. We think the meaning of the words “if required” in the context in which they are used is “if required of the applicant.” This strengthens the view that the words “medical examination” refer to a physical examination.

There is yet another reason for our construction. The formation of an opinion is purely a subjective process. No one but the officer to whom the decision is entrusted can know when an opinion is reached. It is unreasonable to suppose that it is intended, once an opinion of insurability and acceptability is announced, that the date of the effectiveness of the insurance should be so uncertain. Surely it is intended to fix a definite date, ascertainable by the applicant as well as the insurer, as the date for effectiveness of the insurance.

If doubt remains of a proper construction of the language of the receipt, it is resolved by petitioner’s own construction thereof. Instead of denying liability on the ground that Mr. Bruce had died before its investigation was complete and therefore before the temporary insurance could become effective, it denied liability, according to its own letter, “because, upon medical grounds, it was determined that Mr. Bruce was not insurable and acceptable.” The letter shows that petitioner interpreted the receipt to require it to proceed to the formation of an opinion of Bruce’s insurability and acceptability even though it knew Bruce was dead. That belief is inconsonant with the idea that the temporary insurance would not become effective until its investigation of Bruce’s medical history was complete. There is no stronger rule for construing a contract of doubtful meaning than that which gives effect to the parties’ own interpretation. Lone Star Gas Co. v. X-Ray Gas Co., 139 Tex. 546, 164 S.W.2d 504; James Stewart & Co. v. Law, 149 Tex. 392, 233 S.W.2d 558, 22 A.L.R.2d 639.

We thus conclude that the receipt issued to Bruce did provide for temporary insurance and that the insurance was to be effective on the date of completion of his physical examination if in the opinion of the authorized officers of petitioner he was on that date insurable and acceptable according to the terms of the receipt. We have stated that the formation of an opinion by the proper officers of petitioner of Bruce’s insurability and acceptability was a condition precedent to the existence of temporary insurance. They could not defeat his right to temporary insurance by arbitrarily refusing to proceed to the formation of an opinion after his death. We have also stated that an opinion that he was not insurable and acceptable could not be reached arbitrarily because of his death but that it must have been reached in good faith. Petitioner was certainly entitled to make any reasonable investigation as a basis for reaching a good faith opinion. The testimony set out above indicates that petitioner was in the course of making such an investigation when Bruce died, but that it promptly discontinued its investigation and thereafter wrote that it had been determined, on medical grounds, that Bruce was not insurable and acceptable. Inasmuch as the case is to be remanded for retrial, it may be well to indicate our views of the issues to be tried if supported by present or amended pleadings.

The burden is on respondents to prove that the temporary insurance provided by the receipt was in force when Bruce died. They must thus prove that in the opinion of the proper officers of petitioner Bruce was insurable and acceptable on the date of completion of his medical examination. They are confronted with the letter from petitioner stating that it had determined that Bruce was not insurable and acceptable. If respondents are to prevail they must obtain a fact finding that the determination was not made in good faith. In addition, they must obtain a fact finding from a preponderance of the evidence that a reasonably prudent and careful authorized officer of petitioner company, acting in good faith, would, on the evidence available, find that Bruce was on the date of the completion of his medical examination insurable and acceptable for insurance under petitioner’s rules and practices on the plan of insurance, for the amount of insurance and at the premium rate set in his application for life insurance. An answer to this issue should be required only if it is found that the actual determination made by petitioner was not made in good faith. If this issue is raised and reached on retrial it will likely be determined from evidence of the actual condition of Bruce’s health on the date of his medical examination.

Petitioner asserts that the evidence raised an issue of fraud practiced on it by Bruce. In view of our remand of the cause that issue may also be tried on retrial if raised by the evidence.

We agree with the Court of Civil Appeals’ holding that respondents are not entitled to recover attorney fees. We approve the holding made by the court on the same question in Colorado Life Co. v. Teague, Tex.Civ.App., 117 S.W.2d 849, writ dismissed.

The judgments of the Court of Civil Appeals and the trial court are reversed and the cause is remanded to the trial court.

GRIFFIN and NORVELL, JJ., dissenting.

NORVELL, Justice

(dissenting).

While the form of receipt involved in this case may be undesirable from a number of standpoints and its use in the insurance field may be against the “public interest,” nevertheless, as no policy was issued, the receipt is the contract upon which the respondents must recover if they are to recover at all. The Court reaches the conclusion that this cause should be remanded by construing the provisions of the receipt in a way to bring about results that I cannot justify from the wording of the contract. I am in general agreement with the construction placed upon the provisions of a similarly worded receipt by the Dallas Court of Civil Appeals in Debenport v. Great Commonwealth Life Insurance Company, Tex.Civ.App., 324 S.W.2d 566, no wr. hist. I would follow the Debenport case and render judgment here for the insurance company. Accordingly, I respectfully dissent from the Court’s order remanding the cause.

GRIFFIN, J., joins in this opinion.


author: CALVERT, Chief Justice. GREENHILL, Justice

text:
    Walter R. MILLER et al., Petitioners, v. RAILROAD COMMISSION of Texas et al., Respondents.
    No. A-8924.
    Supreme Court of Texas.
    Nov. 28, 1962.
    Rehearing Denied Jan. 16, 1963.

      Lanham & Hatchell, Austin, for petitioners.
    Will Wilson, Atty. Gen., Austin, Leon F. Pesek and Marvin Sentel, Asst. Attys. Gen., Albert G. Walker, Sr., and Albert G. Walker, Jr., Austin, for respondents.
   CALVERT, Chief Justice.

This is a suit by Walter R. Miller and others to set aside a Railroad Commission Order which granted Lively Trucking Contractors a Specialized Motor Carrier Certificate to transport certain roadway construction materials in various areas in Texas. Petitioners assert that the order does not recite findings of fact in the manner prescribed by Article 911b, Sec. 5a(d), Vernon’s Annotated Texas Civil Statutes, and is not supported by substantial evidence. The trial court upheld the order of the Commission and its judgment was affirmed by the Court of Civil Appeals, 353 S.W.2d 930. We reverse.

This appeal presents two questions for determination: (1) Does the recital of the findings stated in the Commission’s order sufficiently comply with statutory requirements ? (2) Is the order supported by substantial evidence?

Article 911b, Sec. 5a(d), Vernon’s Annotated Texas Civil Statutes, which authorizes the issuance of certificates of convenience and necessity, reads as follows:

“The Commission shall have no authority to grant any application for a certificate of convenience and necessity authorizing operation as a ‘Specialized Motor Carrier’ or any other common carrier unless it is established by substantial evidence (1) that the services and facilities of the existing carriers serving the territory or any part thereof are inadequate; (2) that there exists a public necessity for such service, and (3) the public convenience will be promoted by granting said application. The order of the Commission granting said application and the certificate issued thereunder shall be void unless the Commission shall set forth in its order full and complete findings of fact pointing out in detail the inadequacies of the services and facilities of the existing carriers, and the public need for the proposed service.”

The statute prescribes, in mandatory language, the scope and extent of the findings of fact which must be made and included in the order. They must be “full and complete” and they must point out the inadequacies of the services and facilities of the existing carriers and the public need for the proposed service “in detail.”

There is purpose in the statute. One purpose no doubt is to restrain any disposition on the part of the Commission to grant a certificate without a full consideration of the evidence and a serious appraisal of the facts. Another is to inform protestants of the facts found so that they may intelligently prepare and present an appeal to the courts. Still another is to assist the courts in properly exercising their function of reviewing the order. If an order is to accomplish these purposes, it must contain findings of basic facts as distinguished from mere factual, or mixed factual and legal, conclusions. Findings of basic facts cannot be presumed from findings of a conclusional nature. Thompson v. Railroad Commission, 150 Tex. 307, 240 S.W.2d 759, 760. In this respect orders under this statute differ from administrative orders in other fields where there are no statutory requirements for express findings of facts other than the ultimate facts. One of the reasons for striking down the Commission’s order in Thompson v. Railroad Commission, 150 Tex. 307, 240 S.W.2d 759, 762, was because of the conclusional nature of certain required findings.

On this phase of the case, respondents assert that Alamo Express v. Union City Transfer, 158 Tex. 234, 309 S.W.2d 815, in which an order of the Commission was upheld, is authority for the sufficiency of the findings in the instant order. We disagree. The findings in that case as revealed in the opinion of the Court of Civil Appeals in 298 S.W.2d 914, 923-924, indicate a reasonable compliance with the statutory requirement.

In the instant order the findings which are said to comply with the statutory requirement are in this sentence: “The Commission further finds as a fact from the evidence that the existing specialized motor carrier service is inadequate in that the service is not available when needed, and further, that trucks and facilities are not available when needed.” This sentence follows another which recites that the Commission finds as a fact that the type of service proposed is not rendered by regular route common carrier motor carriers or the rail lines.

We hold that the findings do not meet the requirements of the statute. The statements that “service is inadequate in that the service is not available when needed” and “trucks and facilities are not available when needed” do’ not provide sufficient findings of basic facts from which the courts can determine if reasonable grounds existed for issuance of the order. This court has neither the right nor the ability to lay out a precise form of findings to be made by the Commission. They should be such that a court upon reading them can fairly and reasonably say that they either do or do not support the required ultimate statutory findings of inadequacy of the services and facilities of existing carriers and a genuine public need for the proposed service. Brinker Trucking Co. v. Illinois Commerce Commission, 19 Ill.2d 354, 166 N.E.2d 18. The sufficiency of findings to meet the requirements of the statute must be related to the issues and the evidence in each case separately. Writings in 33 Texas Law Review 650, 146 A.L.R. 209 and Davis on Administrative Law, Vol. 2, p. 444, et seq. are informative.

We hold also that the order granting the certificate is invalid for lack of support by substantial evidence. Inasmuch as we have held the order invalid because it does not contain the required statutory findings, we see no need to write at length on this question. Our conclusion has been reached from a review of the entire record, Shupee v. Railroad Commission of Texas, 123 Tex. 521, 73 S.W.2d 505; Alamo Express v. Union City Transfer, 158 Tex. 234, 309 S.W.2d 815, and with recognition that the burden was on petitioners to offer evidence establishing the order’s invalidity. Board of Firemen’s Relief, etc. v. Marks, 150 Tex. 433, 242 S.W.2d 181, 183, 27 A.L.R.2d 965; White v. Bolner, Tex.Civ.App., 223 S.W.2d 686, 689, writ refused; Collins v. Board of Firemen, etc., Tex.Civ.App., 319 S.W.2d 174, writ refused.

The evidence adduced by petitioners established, prima facie, that the services and facilities of the existing specialized motor carriers for transporting roadway construction materials were adequate and that there was no public necessity for the proposed service. The only evidence adduced by the applicant-respondent to rebut the prima facie showing made by petitioners was the testimony of two witnesses, one of whom was in and one of whom had been employed by a road construction materials business, that on some occasion or occasions they had difficulty in securing haulers, each admitting, however, that he had not sought on such occasions to obtain services from other carriers known by him to be certified. We conclude that there is in the record no substantial evidence supporting the Commission’s findings that there is a public need for the proposed service or that the services and facilities of existing carriers are inadequate in this transportation field.

The judgments of the Court of Civil Appeals and the trial court are reversed and judgment is here rendered vacating the order of the Commission.

GREENHILL, Justice

(concurring).

The opinion of the Court does not mention or pass upon the point that the order of the Railroad Commission was a printed form containing “standard” findings of fact for the granting of a certificate. The Legislature carefully prescribed that the Commission shall make “full and complete findings of fact.” This is part of the “due process” prescribed. In passing upon an application of this character, the Commission is acting in a quasi-judicial capacity. After the Commission rules, its findings are presumed to be valid; and the losing party must bear the heavy burden of overcoming its findings under the substantial evidence rule. For the Commission to print in advance and use forms containing its fact findings upon which the order is based, filling in the date, the names of the parties, and the authority granted, in a contested case, is itself, in my opinion, a lack of procedural due process of law.

We know that the Commission has a very heavy burden and is not overstaffed. There may be, and probably are, many occasions when standard printed forms, in whole or in part, are adequate and permissible. But, in my opinion, the use of preprinted fact findings under the circumstances here presented does not fulfill the requirements of the statute.

I agree with the Court that there is not substantial evidence to support those findings which do appear in the printed form. So I concur with the result reached.