text:
    Catherine HARRIS, Appellant, v. BAPTIST MEMORIAL HOSPITAL, Appellee.
    Supreme Court of Tennessee.
    Dec. 18, 1978.
    Sammie Fletcher Kennard, Memphis, for appellant.
    Max Shelton, Maniré, Harris, Shelton & Dunlap, Memphis, for appellee.
   OPINION

BROCK, Justice.

This is a workmen’s compensation case. On December 16, 1975, Catherine Harris, a nurse’s aide at Baptist Hospital, alleges that she heard something pop in her neck as she assisted in lifting a patient, that she continued to work that day and complained to her supervisor about pain in her neck and lower back but did not otherwise report the injury at that time. The next day she went to see a private physician, Dr. Porter. She returned to work on December 18, but experienced greater pain. Thereafter, she remained off work. On December 30, 1975, Mrs. Harris formally reported the injury sustained on December 16. The hospital refused to pay compensation benefits, but paid Mrs. Harris “sick benefits” pursuant to the contract of employment until January, 1977. This action under the Workmen’s Compensation Act was filed in September, 1976. The hospital persisted in its refusal to pay and filed a counterclaim for a setoff for the amount of sick benefits paid to Mrs. Harris. After hearing only the opening statements of counsel, the trial judge, sua sponte, dismissed the action. No evidence was presented by either side. There is no bill of exceptions.

The question presented is whether the trial court is authorized to dismiss an action, sua sponte, after hearing only the opening statements of counsel, no evidence or stipulation having been received. We find no Tennessee case in point. In some other jurisdictions the court may do so, but only under limited circumstances, i. e., where there are no questions of fact, where the action raises only questions of law, or where it is clear that the plaintiff is not entitled to recover or that the defendant has no defense. See Annot., 5 A.L.R.3d 1405 (1966).

I

First, we consider whether the trial judge is authorized to act sua sponte in ordering the involuntary dismissal of an action. Pri- or to the adoption of the Tennessee Rules of Civil Procedure, it was held in several cases that a Chancellor, trying a case without a jury, was authorized to act sua sponte in dismissing an action when he found no equity in the case. Connor v. Frierson, 98 Tenn. 183, 38 S.W. 1031 (1886); Mengle Box Co. v. Lauderdale County, 144 Tenn. 266, 230 S.W. 963 (1921); Frazier v. Lindsey, 162 Tenn. 228, 36 S.W.2d 436 (1930). In each of these cases, however, the Chancellor heard the evidence offered by the parties before ordering the involuntary dismissal. We note that Rule 41(b) of the Federal Rules of Civil Procedure, after which Rule 41.02 of the Tennessee Rules of Civil Procedure is patterned, has been construed to authorize a trial judge, sua sponte, to dismiss an action upon adequate grounds. Link v. Wabash Railway Co., 370 U.S. 626, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962); 24 Am.Jur.2d Dismissal, Discontinuance, and Nonsuit § 69 (1966) and cases there cited.

Although Rule 41.02 does not expressly so provide, we are of the opinion that a trial court may under certain circumstances and upon adequate grounds therefor, sua sponte order the involuntary dismissal of an action. However, this power must be exercised most sparingly and with great care that the right of the respective parties to a hearing shall not be denied or impaired. It must be remembered that Rule 41.02(3), Tennessee Rules of Civil Procedure, provides that all dismissals, except those for lack of jurisdiction, improper venue or lack of an indispensable party, shall operate as an adjudication upon the merits unless the court in its order of dismissal otherwise provides. In short, the occasions for the proper exercise of this power are considered by this Court to be few indeed.

II

We are of the opinion, however, that the trial judges of this State are not authorized to order the involuntary dismissal of an action at trial upon the sole basis of the opening statements of counsel. Such a practice was not recognized in this State prior to the adoption of the Tennessee Rules of Civil Procedure and we find nothing in those rules to countenance such a practice now. The applicable rule is Rule 41.02(2), governing involuntary dismissals at trial, which provides:

“After the plaintiff, in an action tried by the court without a jury, has completed the presentation of his evidence, the defendant, without waiving his right to offer evidence in the event the motion is not granted, may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. The court as trier of the facts may then determine them and render judgment against the plaintiff or may decline to render any judgment until the close of all the evidence; in the event judgment is rendered at the close of plaintiff’s evidence, the court shall make findings of fact if requested in writing within three days after the announcement of the court’s decision.”

Clearly, this rule contemplates that the plaintiff’s evidence shall be heard and evaluated by the court prior to an involuntary dismissal order at trial. We note also that Rule 50.01 governing the granting of a directed verdict in a jury trial also limits the power of the court to do so to that point in the trial “ . . . at the close of the evidence offered by an opposing party or at the close of the case.”

Of critical importance here is the nature of opening statements. They are intended merely to inform the trial judge and jury, in a general way, of the nature of the case and to outline, generally, the facts each party intends to prove. Such statements do not amount to stipulations and certainly are not a substitute for the pleadings or for evidence. See 75 Am.Jur.2d Trials § 202 (1974). It is easy to see that an involuntary dismissal upon the basis of the opening statements of counsel alone may effectively deny the litigants the opportunity to be heard or to fully present the facts and evidence in the case. For this reason, we are unwilling to expand the provisions of Rule 41.02 to authorize trial judges to order involuntary dismissals upon opening statements only.

In the instant case the complaint and the answer made up issues of disputed fact which should have been resolved only through the introduction and consideration of evidence, not upon the opening statements of counsel. We, therefore, reverse the judgment of the trial court and remand this cause for trial upon the merits.

HENRY, C. J., and FONES, COOPER and HARBISON, JJ., concur.


source: Caselaw Access Project

author: HENRY, Chief Justice. BROCK, Justice,

license: Public Domain

text:
    Albert SANTI, Petitioner, v. Wade CRABB d/b/a Wade’s Dry Wall Service, Respondent.
    Supreme Court of Tennessee.
    Dec. 18, 1978.

      Thomas D. Yeaglin, Armstrong, Allen, Braden, Goodman, McBride & Prewitt, Memphis, for appellant.
    Lewis K. Garrison, Memphis, for respondent.
   OPINION

HENRY, Chief Justice.

This civil action involves the right of an unlicensed general contractor, dealing with the owner of property, to recover from the owner for the value of his services. The trial judge sustained the owner’s motion for summary judgment; the Court of Appeals reversed and remanded. We are of the view that this controversy is controlled by Farmer v. Farmer, 528 S.W.2d 539 (Tenn.1975). Accordingly, we reverse the Court of Appeals and affirm the trial judge.

Petitioner owned a tract of real estate located and situated on Princeton Avenue in the City of Memphis. In the process of constructing a three-family dwelling thereon, at a total cost of approximately $105,-000.00, he contracted with respondent to do certain sheetrock work at a cost of approximately $4,000.00. Petitioner did not utilize the services of a general contractor. Instead, he dealt directly with various persons and entities whose services were needed or required for various portions of the construction.

The motion for summary judgment interposed by the owner was predicated upon the fact that respondent did not have a general contractor’s license.

§ 62-601, T.C.A., as it existed at all times pertinent to this action, defined the term “general contractor” as “any person, firm, or corporation who, for a fixed price, fee, commission, or gain” undertakes to erect any structure.

The Court of Appeals held that:

[t]hat definition would certainly include an owner who acts as “general contractor.” Once an owner assumes the position of “general contractor” under the statute he may not, at will or convenience, revert to a position of “owner” under the statute.
We hold that when an owner assumes the role of a general contractor during construction, he is to be considered as such under § 62-601 and not as an owner. The fact that under certain circumstances he may or may not be exempt from obtaining a license (see T.C.A. § 62-602), the exemption does not alter his status under T.C.A. § 62-601 as “general contractor.”

Prom this reasoning the Court of Appeals holds that, because respondent dealt with the “general contractor” and was not engaged in certain excepted pursuits under the statute, he needed no general contractor’s license.

We reject this reasoning. § 62-601, T.C.A. makes an implicit distinction between a general contractor and an owner. An owner, building on his own premises, and utilizing the service of various persons or entities normally designated as sub-contractors, is not a general contractor and is not required to have a license.

Moreover, this line of reasoning completely overlooks the concluding portion of Sec. 62-601, T.C.A.:

but if the cost of the entire project exceeds twenty thousand dollars ($20,000), then any person, firm or corporation engaged in any part of the construction such as plumbing, heating, wiring, decorating, painting and so forth, and contracting with the owner or his lessee, agent or representative, shall be treated as a general contractor in his line of work and shall be required to have a license hereunder.

Respondent dealt with the owner. There was no general contractor. The cost of the entire project exceeded $20,000.00. It necessarily follows that respondent was “a general contractor in his line of work.”

It therefore results that respondent may not recover, his suit being precluded by his failure to have the required general contractor’s license.

That this construction may be harsh under the circumstances does not alter the rule that has long obtained in this jurisdiction. In Farmer, supra, we quoted with approval from Stewart v. Hammond, 78 Wash.2d 216, 471 P.2d 90, 92 (1970) as follows:

The statute was designed for protection of the public. The overriding public policy must not be defeated by an attempt to accommodate one who has violated its specific provisions, albeit unwittingly. The law will be nullified if noncomplying contractors are permitted to evade the statute by a claim of “unwitting violation” or “undue loss” or by a claim that the other contracting party will be “unduly enriched”. Every noncomplying contractor could raise one or all of the suggested defenses. The remedy for those who find themselves in the position of appellant lies with the legislature. 528 S.W.2d at 542

We reverse and remand to the trial court for further proceedings as indicated by this opinion.

COOPER and HARBISON, JJ., concur.

BROCK, Justice,

dissenting.

I most respectfully dissent from the decision of the majority. I do not agree that the decision of this Court in Farmer v. Farmer, Tenn., 528 S.W.2d 539 (1975) controls our decision in this case and dictates that we turn the contractor away without remedy; but, if I am wrong about that, I would overrule Farmer and its predecessors and allow a recovery by the contractor in this case.

Our statutes require that general contractors be licensed but they do not provide either expressly or by implication that a contractor who has performed valuable services in the faithful performance of his contract shall forfeit the value of those services to the landowner. This forfeiture rule which is invoked and applied by the majority in this case was traced in the Farmer opinion back to its origins in the last century and shown to be the product of judges, not the Legislature. In the Farmer opinion, this Court stated:

“We are not unmindful that an injustice may occur where a contractor has faithfully and fully performed his contract and no complaint is made as to his skill or workmanship.” 528 S.W.2d at 542.

Again, in the majority Opinion in the instant case, this Court states:

“That this construction may be harsh under the circumstances does not alter the rule that has long obtained in this jurisdiction.”

These statements demonstrate the consciousness of this Court that this rule of forfeiture operates to deny justice to the unlicensed contractor. How then, can the continued recognition and enforcement of this rule be justified? Certainly not in the name of necessity, for the Legislature in 1976 by Chapter 882, Section 21, Public Acts of 1976, now codified as T.C.A., § 62-621, has provided that:

“Any person who undertakes contracting, as defined in § 62-602, without a license as required by § 62-603 shall be liable to a fine of not less than one thousand dollars ($1,000) nor more than five thousand dollars ($5,000) or imprisonment for three (3) months, or both.”

This severe penalty which did not exist when this Court handed down the Farmer opinion in 1975 should be punishment enough to deter offenders. Moreover, T.C.A., § 62-623, provides for enforcement of the licensing requirements by injunctive process at the instance of the Contractors Licensing Board.

In my opinion a much more enlightened and equitable policy is that followed by the highest court of New York in John E. Rosasco Creameries v. Cohen, 276 N.Y. 274, 11 N.E.2d 908 (1937). The issue in that case was whether an unlicensed milk dealer should be permitted to recover approximately $11,000 as the agreed and reasonable value of milk sold and delivered to certain defendants who were also milk dealers. In that opinion, the court stated:

“The statute involved does not expressly provide that contracts made by unlicensed milk dealers shall be unenforceable, although it does make a violation of the so-called milk control law a misdemeanor punishable by a fine of not less than $25 nor more than $200 or by imprisonment for not less than one month nor more than six months, or both. In the case at bar, if the contract is declared unenforceable, the effect will be to punish the plaintiff to the extent of a loss of approximately $11,000 and permit the defendants to evade the payment of a legitimate debt. .
“We have here a statute which provides milk dealers shall not sell milk unless duly licensed. The statute imposes penalties for its violation by way of fine and imprisonment, but it does not expressly provide that contracts made by milk dealers shall be unenforceable. Nothing in this statute reveals an implied intent to deprive unlicensed dealers of the right to recover the reasonable value of the milk sold by them, and where the wrong committed by the violation of the statute is merely malnum prohibitum, and does not endanger health or morals, such additional punishment should not be imposed unless the legislative intent is expressed or appears by clear implication.” 11 N.E.2d at 910.

For the reasons stated, I respectfully dissent. I am authorized to state that Justice FONES joins in this dissent.


author: FONES, Justice.

text:
    William KELLY, Petitioner, v. CHEROKEE INSURANCE COMPANY, a corporation, Respondent.
    Supreme Court of Tennessee.
    Dec. 18, 1978.

      Jess D. Ewing and W. Ray Jamieson, Ewing, Jamieson & Miles, Memphis, for petitioner.
    Fred E. Ivy, Jr., and Ronald E. Cardwell, Nelson, Norvell, Wilson, McRae, Ivy & Sevier, Memphis, for respondent.
   OPINION

FONES, Justice.

William Kelly, plaintiff below and petitioner here, was awarded a judgment of $25,000 in a prior lawsuit for personal injuries resulting from bullet wounds and blows to the body with a shotgun. The defendant in that case was Joe A. Hemphill, who was a named insured in a homeowner’s policy issued by Cherokee Insurance Company. Cherokee denied coverage of Hemphill and advised him that legal counsel would not be provided to defend the suit. Hemphill did not defend, a default judgment was entered, and the trial judge, sitting without a jury, found Kelly’s damages to be $25,000. After a nulla bona return on execution issued to collect the judgment from Hemphill and Cherokee’s denial of liability under the homeowner policy, this suit was brought.

The trial judge granted plaintiff’s motion for summary judgment, giving no reason other than that there was no genuine issue as to any material facts. The Court of Appeals reversed and remanded the case for trial, relying upon Grundy County v. Dyer, 546 S.W.2d 577 (Tenn.1977), and Banks v. City of Mason, 541 S.W.2d 143 (Tenn.1976). We agree with the result but do not agree that Dyer and Banks are relevant authorities.

Cherokee’s denial of coverage was based on a policy exclusion providing no coverage for “bodily injury or property damage which is either expected or intended from the standpoint of the insured.”

The facts as presented by opposing affidavits are in sharp dispute. Plaintiff had been living with his daughter, Mattie, and son-in-law, Joe Hemphill. One version of the events of August 4, 1972, was that Hemphill had been intoxicated, had been arguing with his wife, and got out his pistol and fired a number of shots, three of which struck plaintiff. Another version was that he had not been intoxicated, had been engaged in an argument with plaintiff over the amount of money Hemphill had borrowed but had not repaid, that plaintiff pulled a shotgun on Hemphill, who fled into another room, got his pistol and fired all the shots in self-defense. There were other disputes with respect to where the parties had been standing and what they had been doing at various critical times. There was general agreement that Hemphill struck plaintiff several times with the shotgun after the shots had been fired, but the reason for that and the circumstances under which the blows were struck were disputed.

Clearly there existed in this record genuine issues of material fact concerning the question of whether or not the injuries inflicted by Hemphill upon plaintiff were either expected or intended by Hemphill. It follows that plaintiff was not entitled to a summary judgment, unless as a matter of law Cherokee was absolutely bound by the prior judgment against Hemphill and foreclosed from litigating the question of coverage based upon the applicability of the policy exclusion.

In the present posture of this lawsuit the controlling issue is whether or not Cherokee is estopped, or otherwise precluded from litigating the question of whether Hemp-hill’s acts that injured Kelly were expected or intended, because of the adjudication in the prior suit that Kelly’s injuries were directly and proximately caused by Hemp-hill’s negligence.

Plaintiff’s principal argument in support of his insistence that Cherokee is precluded from “relitigating” the issue of whether Kelly’s injuries were negligently or intentionally inflicted is that Cherokee was obligated to defend Hemphill, and in refusing to do so Cherokee is bound by the prior judgment in the tort action, which was explicitly decreed to be predicated upon negligence. We have no quarrel with the general rule that in the absence of fraud or collusion an insurer, who has the duty to defend, has timely notice and defends or elects not to defend, is bound by the judgment in such a case as to issues which were or might have been litigated therein. See, e. g., Pyle v. Bituminous Cas. Corp., 42 Tenn.App. 145, 299 S.W.2d 665 (1956). But, it is our view that this case does not come within the purview of that general rule. The precise issue upon which coverage depends, to wit, whether the insured Hemp-hill’s acts that inflicted the injuries were “expected or intended” was not and could not have been litigated in the tort case. Defense of the insured in the tort action would cast the insurer and the insured in the untenable position of attempting to cooperate when their interests are adverse, and in the absence of an identity of interest judgment by estoppel does not apply. If in the tort action the insurer sought to exculpate itself from policy coverage by showing that its insured acted intentionally, that position would breach its duty to contest any liability and could render insured liable for punitive damages. That result would strip insured of coverage for compensatory damages, as well as punitive damages. See Glens Falls Ins. Co. v. American Oil Co., 254 Md. 120, 254 A.2d 658 (1969) and Farm Bureau Mut. Automobile Ins. Co. v. Hammer, 177 F.2d 793 (4th Cir. 1949), cert. denied, Beverage v. Farm Bureau Mut. Automobile Ins. Co., 339 U.S. 914, 70 S.Ct. 575, 94 L.Ed. 1339 (1950).

There are cases that have extended the general rule of estoppel by judgment to instances involving coverage controversies concerning whether acts were intentional or expected from the standpoint of the insured. That line of cases is exemplified by Miller v. United States Fidelity & Cas. Co., 291 Mass. 445, 197 N.E. 75 (1935), wherein the rationale was expressed as follows:

“The object of the policy is protection against law suits and legal liability. This object could not be attained if the insured were compelled to try over again in an action against the insurer the same issues upon which he has been found liable in the original action. Where an action against the insured is ostensibly within the terms of the policy, the insurer, whether it assumes the defense or refuses to assume it, is bound by the result of that action as to all matters therein decided which are material to recovery by the insured in an action on the policy.” 197 N.E. at 77.

We think the better view and the reasons therefor are aptly expressed in Farm Bureau Mut. Automobile Ins. Co. v. Hammer, supra, wherein Judge Soper, writing for the Court of Appeals for the Fourth Circuit, disagreed with the holding in Miller v. United States Fidelity & Cas. Co., supra, and said, in part:

“We are, however, unable to follow it because, in our opinion, it extends the principle to a situation to which it does not apply and overlooks the true ground on which the principle is based. The underlying purpose of the doctrine is to obviate the delay and expense of two trials upon the same issue — one by the injured party against the indemnitee and the other by the indemnitee, or the injured party against the indemnitor. This is possible because it is assumed that the interests of the parties to the contract of indemnity in opposing the injured person’s claim are identical; and it is accomplished by giving the indemnitor an opportunity to appear in the first suit on behalf of the indemnitee so that everything that can be offered in exculpation of the indemnitee by either party to the indemnity contract may be presented. The indemnitor may not be under a contractual obligation to defend, but if he fails to assume the burden of the defense he takes the risk for he is bound by any judgment against the indemnitee where their interests in the defense of the suit are identical.
It is, however, obvious that the binding effect of a judgment against the insured does not extend to matters outside the scope of the insurance contract, and that the Insurance Company is neither obligated to defend nor bound by the findings of the court if the claim against the insured is not covered by the policy. To hold otherwise would be to estop the Insurance Company by the acts of parties in a transaction in which it has no concern and over which it has no control, and to deprive it of its day in court to show that the transaction is foreign to the contract of insurance.
It is obvious that the Insurance Company was not qualified to undertake the defense of the insured in the suits by the injured parties against him, and that this disqualification was due to the insured’s own conduct. It was not possible for the company in these suits to defend the insured, and at the same time to protect its own interests. It could not exculpate itself by showing that the injurious acts of the insured were beyond the scope of the policy, for this showing would establish the liability of the insured to the injured parties to an even greater extent than that claimed in the complaints. See Pfarr v. Standard Oil Co., 165 Iowa 657, 671-672, 146 N.W. 851, L.R.A.1915C, 336.- ” 177 F.2d at 799-801.

Alabama Farm Bureau Mut. Cas. Ins. Co. v. Moore, 349 So.2d 1113 (Ala.1977), involved a homeowner’s policy exclusion of “expected or intended” injury identical to that in the instant case. Moore, the insured, brought a declaratory judgment action to require Farm Bureau to pay a $25,-000 judgment rendered against him in a prior tort action by Ms. Strickland for negligently knocking her through a plateglass window. Farm Bureau refused to defend the tort action that was brought in two counts, one alleging assault and battery and the other alleging negligence. On the day of the trial the assault and battery count was withdrawn. The Supreme Court of Alabama recognized a line of cases imposing liability on insurance companies based upon the contractual duty to defend and the view expressed in Miller v. United States Fidelity & Cas. Co., supra, but rejected both. The Court noted that the insurer’s duty to defend is more extensive than its duty to pay; viz, it may be obligated to defend groundless, false and fraudulent suits. The Court also noted that the duty to pay turns upon coverage and may not be predicated upon a breach of the duty to defend, citing Ladner & Co. Inc. v. Southern Guar. Ins. Co., 347 So.2d 100 (Ala.1977). It is our opinion that the attempt by Kelly to predicate liability upon Cherokee’s refusal to defend is obviously less tenable in a suit upon the policy than if pursued by Hemphill, the insured.

The Alabama Court held that collateral estoppel would not prevent litigation of the coverage question, for the additional reason that that doctrine as applied in these circumstances is based upon (1) the binding effect of a judgment on parties and their privies, but without identity of interest there is no privity and (2) the judgment must have been rendered upon the identical point in issue in the suit on the policy. Because the question of whether the injury was expected or intended had not been the issue in the tort action, the judgment was not rendered on that identical point. These same observations are applicable to Kelly’s contentions in this case. The Alabama Court’s rationale is in accord with Farm Bureau Mut. Automobile Ins. Co. v. Hammer, supra, and Glens Falls Ins. Co. v. American Oil Co., supra. Similar results for similar reasons were reached in Travelers Ins. Co. v. Godsey, 260 Md. 669, 273 A.2d 431 (1971); Granite State Ins. Corp. v. Mountain States, etc., 117 Ariz. 432, 573 P.2d 506 (App.1977) and Maryland Casualty Co. v. Peppers, 64 Ill.2d 187, 355 N.E.2d 24 (1976). See also, Restatement of Judgments § 107(a) (1942), as modified by Comment g.

The Court of Appeals held that Hemphill was a necessary party and should have been brought before the Court pursuant to T.R.C.P. § 19.01, citing Dillingham v. Tri-State Ins. Co., 214 Tenn. 592, 381 S.W.2d 914 (1964), and Clark v. Hartford Accident and Ind. Co., 61 Tenn.App. 596, 457 S.W.2d 35 (1970). Hemphill is not a necessary party under T.R.C.P. § 19.01. The insurance contract in this case authorizes any person who has secured a judgment against the insured to recover “to the extent of the insurance afforded under this policy.” It is elementary that such a policy provision entitles a judgment creditor of an insured to bring a direct action against the insurer predicated upon the judgment alleged to be within the coverage of the policy without joinder of the insured. Cf. Pyle v. Bituminous Cas. Corp., supra; Horton v. Employers’ Liability Assur. Corp., 179 Tenn. 220, 164 S.W.2d 1016 (1942); Annot. 85 A.L.R. 20, 41 et seq. (1933); Annot., 106 A.L.R. 516, 520 et seq. (1937). Dillingham and Clark are inapposite.

We think it relevant to state, in view of the contentions of the parties before this Court on brief and in oral argument, that the applicability of the exclusion of expected or intended injury is to be determined upon actual facts, not on the allegations in the complaint filed in the tort action. See Granite States Ins. Corp. v. Mountain States, etc., supra. Nevertheless, that pleading is subject to any use that may be available under the rules of evidence.

This case is remanded to the Circuit Court of Shelby County for trial on the merits.

Costs are adjudged against petitioner, William Kelly.

HENRY, C. J., and COOPER, BROCK and HARBISON, JJ., concur.


author: HARBISON, Justice.

text:
    STATE of Tennessee, Petitioner, v. Terry Allen JOHNSON, Respondent.
    Supreme Court of Tennessee.
    Dec. 18, 1978.

      Robert A. Grunow, Asst. Atty. Gen., Nashville; Brooks McLemore, Jr., Atty. Gen., Nashville, for petitioner.
    J. Mike Mosier, W. Anthony Helm, Henderson, for respondent.
    Jerry P. Black, Jr., George Wm. Jenkins, III, University of Tenn. Legal Clinic, Knoxville, for amicus curiae.
   OPINION

HARBISON, Justice.

This case presents the question of whether a juvenile, in appealing to the circuit court from a finding of delinquency pursuant to T.C.A. § 37-258(a), must exercise a demand for a jury trial pursuant to Rule 38 of the Tennessee Rules of Civil Procedure. The Court of Appeals held that this was not necessary and that the juvenile was entitled to a jury trial without demand under civil procedural rules.

After careful consideration of the contentions of the parties, we affirm the decision of the Court of Appeals.

A finding of delinquency is not equivalent, in legal theory, to conviction of a crime, “and does not impose any civil disability ordinarily resulting from a conviction or operate to disqualify the child in any civil service application or appointment.” T.C.A. § 37-233(a).

Further, persons found to be delinquent are not subject to the laws applicable to infamous crimes and are not to be rendered infamous by the judgment of the juvenile court in which they are tried. T.C.A. § 37-233(c).

One of the stated purposes of the statutes creating the juvenile court system is:

“Consistent with the protection of the public interest, to remove from children committing delinquent acts the taint of criminality and the consequences of criminal behavior and to substitute therefor a program of treatment, training and rehabilitation; . . .” T.C.A. § 37-201(2).

Despite this stated purpose and the theory underlying the juvenile court system, however, courts in recent years have emphasized that in practical effect persons involved in juvenile proceedings may be deprived of their liberty. Increasingly, concepts of the criminal law, and in particular constitutional principles designed to protect the rights of individuals charged with crime, have been deemed to be applicable to proceedings involving juvenile offenders.

In the leading case of Arwood v. State, 62 Tenn.App. 453, 463 S.W.2d 943 (1970), the Court of Appeals held that a juvenile defendant charged with an offense which would be classified as a felony under the penal code was entitled to a jury trial on his appeal to the circuit court. In the present case the State makes no issue on that point.

In State v. Jackson, 503 S.W.2d 185 (Tenn.1973), this Court held that statutes purporting to permit the State an appeal from the acquittal of an accused juvenile were invalid on principles of double jeopardy, under both the federal and the state constitutions.

In the foregoing cases, the courts cited and discussed recent decisions of the United States Supreme Court which made applicable to proceedings involving juvenile offenders many of the safeguards surrounding adult criminal trials.

In the instant proceeding, respondent was accused of an offense which, in the case of an adult, would have amounted to a charge of the felony of arson. T.C.A. § 39-501. Prom an order of the juvenile judge finding him to be delinquent, respondent appealed to the circuit court, as provided in T.C.A. § 37-258(a). He did not timely demand a jury trial under the provisions of Rule 38, T.R.C.P. On the day of his trial in the circuit court his counsel did request a jury, but this motion was denied. The circuit judge proceeded to try the case de novo, without a jury.

In this regard, we agree with the Court of Appeals that error was committed. Although juvenile proceedings do, in many ways, partake of civil rather than criminal proceedings, the juvenile has a right to counsel, confrontation and cross-examination of witnesses, the privilege against self-incrimination and the right to have guilt established beyond a reasonable doubt. See In re Gault, 387 U.S. 1, 87 S.Ct. 1428, 18 L.Ed.2d 527 (1967); In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970).

It is settled law that an adult criminal defendant facing a felony charge may waive a jury trial pursuant to T.C.A. § 40-2504. See Seale v. Luttrell, 221 Tenn. 548, 428 S.W.2d 312 (1968). Unless he executes such waiver, however, he is entitled, as a matter of right, to have a jury empaneled to try the case.

We are of the opinion that similar procedure should be followed when a juvenile, charged with an offense which would constitute a felony under the penal code, appeals to the circuit court for trial de novo under T.C.A. § 37-258(a). A jury trial may, of course, be waived, and we do not hold that the strict statutory formalities for such waiver, as set out in T.C.A. § 40-2504, must necessarily be followed in a juvenile delinquency appeal. On the other hand, we are of the opinion that the requirements of the rules of civil procedure for demanding a jury do not apply and should not be invoked by the State or by the trial judge.

The judgment of the Court of Appeals is affirmed, and the cause is remanded for a new trial, at the cost of the State.

HENRY, C. J., and COOPER, FONES and BROCK, JJ., concur.


author: SANDERS, Judge.

text:
    CHRISTMAS LUMBER COMPANY, INC. v. Malcolm L. SHELL and wife, Jewell B. Shell.
    Court of Appeals of Tennessee, Eastern Section.
    Feb. 28, 1978.
    Certiorari Denied by Supreme Court Aug. 7, 1978.
    Thomas Privette, Jr., of Privette & Pri-vette, Knoxville, for appellant.
    William A. Newcomb, Harriman, for ap-pellee.
   OPINION

SANDERS, Judge.

The Defendants have appealed from a Chancery decree awarding a personal judgment against them for materials sold to an independent contractor and incorporated in a house being built for the Defendants.

The Plaintiff-Appellee, Christmas Lumber Company, Inc., filed suit in the Chancery Court against the .Defendants-Appellants, Malcolm L. Shell and wife, Jewell B. Shell. The complaint alleges, in effect, the Plaintiff sold materials to Defendants’ contractor for the construction of a residence. The value of the materials furnished was $11,729.85. “The Defendants’ house burned on April 2, 1974, and they received a substantial sum from their insurance carrier, Safeco Insurance Company, which included compensation for the materials furnished to the Defendants’ house by the Plaintiff; that the Defendants have not paid any part of this amount to the general contractor or to the Plaintiff and have been unjustly enriched.”

The Defendants, in their answer, say they knew the Plaintiff had furnished materials to their general contractor. They had paid the general contractor and assumed he had paid the Plaintiff. They also plead res adjudicate based on a former unsuccessful suit by the Plaintiff to enforce a material-man’s lien on their property. They denied they had been unjustly enriched.

The case was heard before the Chancellor who found the issues in favor of the Plaintiff and awarded judgment in the amount of $10,568.35.

The Defendants have appealed and assigned error. The Defendants have assigned six assignments of error but we think the controlling issue is whether or not it was error for the Court to find the Defendants had been unjustly enriched and holding them personally liable for the indebtedness of the general contractor.

There is little dispute concerning the material issues in the case. The Defendants entered into a contract with Bill Rice to construct them a house for $45,000. When the house was in advanced stages of construction but before it was completed it was destroyed by fire. At the time of the fire the Defendants had paid Mr. Rice a total of $33,750 on the contract price. During this period of time Mr. Rice had purchased from the Plaintiff $10,568.35 worth of materials to be incorporated in the Defendants’ house for which it had not been paid. The Defendants had taken out a fire insurance policy on the property for $47,000. As applicable to the Defendants’ coverage, the policy covered replacement costs of the building up to the face amount of the policy. The record isn’t entirely clear as to how the replacement cost of the house was arrived at, but the Defendants were paid the face amount of the policy.

It is the theory of the Plaintiff that the Defendants collected approximately $11,000 more in insurance than they had paid on the house. The materials furnished by the Plaintiff for which it had not been paid made this possible, resulting in an unjust enrichment of the Defendants. The Plaintiff says, in its brief, “The materials furnished by Christmas Lumber Company, Inc. to appellants were used to negotiate a settlement with the insurance company. The Court found that the appellants were unjustly enriched in the amount of Ten Thousand Five Hundred Sixty Eight and 35/100 ($10,568.35) Dollars through the receipt of the insurance proceeds based on the value of materials furnished by appellee”.

The Defendants, however, insist they had expenses in addition to what they paid the contractor, which made their total expenditures $42,316.62. These items include liens of creditors not paid by the general contractor, attorney's fees for defense of litigation resulting from the contractor’s failure to pay creditors, finance charges and clearing away the debris from the fire.

Prior to 1966 it appeared to be the rule in this jurisdiction that without privity of contract with the owner a materialman was not entitled to a personal judgment against the owner. Jordan v. Deitz, 201 Tenn. 77, 296 S.W.2d 866; Taylor v. Tennessee Lumber Co., 107 Tenn. 41, 63 S.W. 1130.

In the case of Paschall’s, Inc. v. Dozier, 219 Tenn. 45, 407 S.W.2d 150 (1966) the Supreme Court clarified this rule, holding it was not the intention of the court to preclude recovery on quantum meruit or unjust enrichment. In the Paschall’s case the ma-terialman had extended credit to the daughter of the property owner for materials to add a bathroom to the residence. The daughter and her son lived in the home with the owner. The materialman did not perfect a lien on the property and the daughter filed bankruptcy listing him as a creditor. The materialman sued the owner on the theory of unjust enrichment. The chancellor sustained a demurrer to the plaintiff’s bill. The Supreme Court reversed. The Court, at page 153 of 407 S.W.2d, quoted with approval the Supreme Court of Minnesota:

‘Aside from unjust enrichment, which is an element not involved here, it is generally recognized that, other than the statutory right to a mechanic’s lien or other special statutory remedies, subcontractors and materialmen have no right to a personal judgment against the owner where there is no contractual relation between them.’ (Emphasis added.)”

The Court, in reversing the chancellor, made it clear the doctrine of unjust enrichment would not be applicable in every case. Each case must be decided on its own merits. The Court said, at page 155 of 407 S.W.2d:

“We wish to make it clear that recovery on such an action may not be had in every instance where a subcontractor or materialman has furnished materials or labor which benefit a third person. Our decision in this case is limited to affirming the propriety of quasi contract as a remedy in such factual situation. Each ease must be decided according to the essential elements of quasi contract, to-wit: A benefit conferred upon the defendant by the plaintiff, appreciation by the defendant of such benefit, and acceptance of such benefit under such circumstances that it would be inequitable for him to retain the benefit without payment of the value thereof.
“The most significant requirement for a recovery on quasi contract is that the enrichment to the defendant be unjust. Consequently, if the landowner has given any consideration to any person for the improvements, it would not be unjust for him to retain the benefit without paying the furnisher. Also, we think that before recovery can be had against the landowner on an unjust enrichment theory, the furnisher of the materials and labor must have exhausted his remedies against the person with whom he had contracted, and still has not received the reasonable value of his services.” (Emphasis ours.)

The Defendants entered into a contract to have the house rebuilt after the first one had been destroyed by fire. The Court sustained an objection by the Plaintiff as to the amount of the second contract. The Plaintiff made an offer of proof which is a part of the record.

While we agree with the Court that the cost of the second house is not at issue in the case at bar, we think it is competent to support the theory of the Defendants that construction costs had increased substantially during the interim of the original contract and the fire. The proof shows that, as a result of the first house’s being destroyed by fire, it cost the Defendants some $24,000 more to replace it than the contract price of the first house. Even if this factor were not considered, the Defendants would still fall within the exclusion of the unjust enrichment rule.

The Defendants’ assignment of error is sustained. There are other assignments of error but our holding on this assignment is controlling and they are pretermitted.

The decree of the Chancellor is reversed and the complaint dismissed.

The costs of this appeal, together with the costs of the Trial Court, are taxed to the Appellee.

PARROTT, P. J., and GODDARD, J., concur.


author: TODD, Judge.

text:
    Joe E. McGEE b/n/f Joe R. McGee, Plaintiff-Appellant, v. COUNTY OF WILSON et al., Defendant-Appellee.
    Court of Appeals of Tennessee, Middle Section.
    Oct. 27, 1978.

      Gary D. Copas, Lebanon, for plain tiff-appellant.
    Richard D. Taylor, Nashville, for defendant-appellee.
   OPINION

TODD, Judge.

The plaintiff, Joe E. McGee, has appealed from a summary judgment dismissing his suit against the defendant, County of Wilson, for alleged wrongful acts of a deputy sheriff of said county.

On March 4, 1977, plaintiff filed his complaint against County of Wilson, Jerry D. Lee, Sr., a deputy sheriff and United States Fidelity and Guaranty Company, surety upon Lee’s official bond.

The complaint alleged that, on March 5, 1976, defendant Lee falsely arrested plaintiff without probable cause, warrant or other lawful grounds, and did unlawfully imprison plaintiff in a jail cell; that, after being detained several hours, plaintiff was released by Lee; and that Lee unlawfully caused to be published certain information concerning plaintiff.

On December 3, 1977, the Trial Judge entered the following order:

“Upon application by the Plaintiff to non-suit with prejudice the Defendant, United States Fidelity & Guaranty Company, in the above-captioned case, and it appearing to the Court that said Defendant has withdrawn its motion heretofore filed for judgment on the pleadings, and that said Defendant would not be prejudiced by such voluntary non-suit;
IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that the Defendant, United States Fidelity & Guaranty Company, is hereby dismissed from the above-styled case with prejudice thereby relieving and discharging said Defendant from any liability to the Plaintiff, Joe E. McGee, and to his next friend and father, Joe R. McGee, resulting from the occurrences and causes of action giving rise to this litigation, with costs taxed against the Plaintiff.” (Emphasis supplied)

On the same date, a “judgment” was entered approving a compromise settlement of the liability of Jerry D. Lee, Sr., awarding judgment in favor of plaintiff and against Jerry D. Lee, Sr., for $1,000.00 and providing:

“3. The defendant, Jerry D. Lee, Sr., shall pay the judgment of $1,000.00 to the Clerk of this Court and upon such payment is hereby relieved and discharged from any further liability to the plaintiff, Joe E. McGee, and to his next friend and father, Joe R. McGee, resulting from the occurrences and causes of action giving rise to this litigation.” (Emphasis supplied)

As supplemented, the record in this cause contains a certified copy of the execution docket of the Trial Clerk evidencing payment of the $1,000.00 mentioned in the above quoted judgment.

On September 19, 1978, the defendant, County of Wilson, filed a motion for summary judgment based upon the proposition that the plaintiff’s release of the alleged wrongdoer, Jerry D. Lee, Sr., was an effective release of any vicarious or derivative liability of the defendant county for the wrongdoing of Lee.

As stated, the Trial Judge sustained the motion and dismissed the county; and plaintiffs have appealed.

There are two assignments of error, each of which complains of the Trial Judge’s finding of a relationship of master and servant between the county and Jerry D. Lee, Sr. and/or that the doctrine of respon-deat superior was applicable to the relationship.

Appellant appears to concede the general rule that release of a servant for his tort will release his master from derivative liability for the same tort. Stewart v. Craig, 208 Tenn. 212, 344 S.W.2d 761 (1960) and authorities cited therein.

Appellant insists that T.C.A. § 8-833 basically contemplates a direct action against the county citing Grundy County v. Dyer, Tenn.1977, 546 S.W.2d 577. Said authority does hold that an action may be instituted directly against the county without the joinder of the actual wrongdoer; but this is of no assistance in the present case. It has long been the general law that superiors may be sued for derivative liability without joinder of the actual wrongdoer. Neither the statute nor the cited case changed the general law. The rule was simply made applicable to counties.

The question in the present case is whether plaintiffs have the right to proceed against the county after releasing the actual, active, guilty wrongdoer.

Appellant next insists that Jerry D. Lee, Sr., was not an employee or servant of the county because the usual incidents of an employer employee relationship did not exist (hiring, firing, direction of activities).

It is true, as insisted by appellant, that determination of the existence of an employer-employee relationship as a matter of fact depends upon proof of existence of the necessary indicia of relationship. However, this is not determinative in the present case because such relationship has been imposed by law to the extent of liability of the county for the acts of Lee. Thus, for purposes of this suit the relationship is established as a matter of law by T.C.A. § 8-333, and the usual indicia need not be existent.

Moreover, appellant takes too narrow a view of the doctrine of vicarious or derivative liability for the tort of another. There are numerous relationships other than master and servant which subject a perfectly innocent party to liability for the wrongful act of another. Among these are indemnity agreements, principal and agent, and others. In each such instance, the innocent party who is required to pay for the acts of the wrongdoer is entitled to reimbursement.

In Carter v. E. T. & W. N. C. Transp. Co., 35 Tenn.App. 196, 243 S.W.2d 505 (1951), Carter was a subcontractor hauling freight for the transportation company which had been required to pay damages to a third party resulting from negligence of Carter. This Court affirmed a decree requiring Carter to reimburse the transportation company and said:

“[3] In the Restatement of the Law ‘Restitution’, beginning at page 331, it is said: ‘See. 76. A person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity from the other, unless the payor is barred by the wrongful nature of his conduct.’ ”

In 83 C.J.S. Subrogation § 16 p. 616, it is stated that:

“As a general rule, any person who, pursuant to a legal obligation to do so, has paid, even indirectly, for a loss or injury resulting from the wrong or default of another will be subrogated to the rights of the creditor or injured person against the wrongdoer or defaulter, .
Where recovery is obtained against a master under the theory of respondeat superior for the tort or negligence of his servant, the master is subrogated to the rights of the injured person against the servant; and, where recovery is obtained against the owner of a motor vehicle for injury caused by its negligent operation, the owner is subrogated to the rights of the injured person against the operator of the vehicle. Similarly, where a municipality is compelled to pay compensation for an injury caused by the negligence of the owner of property abutting on a public street, it will be subrogated to the rights of the injured person against the property owner.”

Since the rights of the subrogee (the person held liable) would be identical to the rights of the subrogor (the injured person), the subrogee would have no right of subro-gation if the injured party had released his rights against the wrongdoer.

In the present ease, the injured parties have released and discharged their rights against the wrongdoer, Jerry D. Lee, Sr. Thereby plaintiffs have destroyed the rights of county to recover from Lee any amount paid by the county to plaintiffs.

It would be unjust, inequitable and wrong to permit plaintiffs to recover from the county after destroying the county’s right to reimbursement from the wrongdoer.

This is doubtless the foundation of the rule that release of employee is a release of an innocent employer, but the rule is broader. It includes all situations in which an injured party seeks recovery from an innocent defendant solely on the basis of vicarious or derivative responsibility.

Thus, regardless of whether Lee was an employee of the county in every sense of the word, plaintiffs seek to hold the county liable because it is legally liable for the wrongdoing of Lee. Having released Lee and thereby destroyed the right of the county to subrogation against Lee, plaintiffs cannot recover from the county.

The judgment of the Trial Judge is affirmed. Costs of this appeal are taxed against appellant.

Affirmed.

SHRIVER, P. J., and LEWIS, J., concur.


author: DANIEL, Justice.

text:
    Lillie VALDEZ, Petitioner, v. Olga RAMIREZ and Tomas Valdez, Jr., Respondents.
    No. B-7272.
    Supreme Court of Texas.
    July 26, 1978.
    Rehearing Denied Dec. 13, 1978.

      James M. Heidelberg, San Antonio, for petitioner.
    Mitchell, Stewart & Hemmi, Kirk Patterson, San Antonio, for respondents.
   DANIEL, Justice.

The issue presented by this case is whether a husband’s community interest in his surviving wife’s civil service retirement benefits is inheritable upon his death by adult children of his former wife. We hold that it is not.

Lillie Valdez had worked as a United States Civil Service employee for 352 months prior to her retirement in 1971. For 340 months of her employment she was married to Tomas Valdez, Sr. Based on her 352 months of service she began receiving retirement benefits in 1971 under the Federal Civil Service Retirement Act. 5 U.S. C.A. § 8331, et seq. In 1973, Tomas, Sr., died intestate, leaving Olga Ramirez and Tomas Valdez, Jr., his adult children by a previous marriage, as the heirs to his half of the community estate.

Olga and Tomas, Jr., brought this suit to recover a portion of Lillie’s retirement benefits based on Tomas, Sr.’s, community interest in the benefits. After a non-jury trial, the trial court rendered judgment for Olga and Tomas, Jr., awarding them one-half of 340/352 of the retirement benefits that Lillie has received since Tomas, Sr.’s, death and that she will receive in the future. The Court of Civil Appeals affirmed. 558 S.W.2d 88. We reverse the judgments of the courts below and render judgment that plaintiffs take nothing against Lillie Valdez.

A settled marital property rule in Texas is that a spouse has a community property interest in that portion of the retirement benefits of the opposite spouse earned during their marriage. Taggart v. Taggart, 552 S.W.2d 422 (Tex.1977); Cearley v. Cearley, 544 S.W.2d 661 (Tex.1976); Busby v. Busby, 457 S.W.2d 551 (Tex.1970). In each of the above cases, the non-employed spouse was alive, and we dealt with the question only as it concerned fixed or contingent rights in a division of the community asset upon divorce. We found no conflict between our application of Texas’ community property law and federal laws which provided such benefits.

The question in this case is different and is one of first impression in this State. It calls for a decision of whether the interest of a spouse who died prior to any division or divorce should pass to his heirs under the Texas Probate Code § 45, or should be paid to the living and earning spouse in accordance with a joint survivorship option which she had exercised under the Federal Civil Service Retirement Act. 5 U.S.C.A. § 8339.

At the outset, it is recognized that under ordinary circumstances, where there is no contract or provision of law to the contrary, Section 45 of the Texas Probate Code would govern the distribution of a deceased spouse’s interest in the community property as the Court of Civil Appeals has ruled.

On the other hand, however, there are at least four categories of assets known as non-probate assets, not subject to disposition by will and not subject to the rules of intestate distribution. Examples are (1) property settled in an intervivos trust, where title remains in the trustee notwithstanding the settlor’s death; (2) property passing by right of joint survivorship, as in a valid joint bank account; (3) property passing at death pursuant to terms of a contract, such as provided in life insurance policies, and under contributory retirement plans; and (4) property passing by insurance or annuity contracts created, funded and distributed as directed by federal statutes. In the context of the Texas community property system, this disposition of such nonprobate assets is governed by lifetime transfer rules, not by death-time transfer rules of the Probate Code. See Johanson, Revocable Trusts and Community Property: The Substantive Problems, 47 Texas L.Rev. 537 (1969).

Lillie Valdez’s retirement benefits were provided for by her contract of employment as a civil service employee of the United States Government. United States v. Price, 288 F.2d 448, 450-51 (4th Cir. 1961). The terms and considerations of her employment and compensation are set out in Part III of the Civil Service Act, 5 U.S.C.A. §§ 2101-8913. Included in that portion of the Act is a comprehensive program providing retirement benefits for civil service employees. 5 U.S.C.A. §§ 8331-8348. Upon retirement, employees are paid benefits under the Act based on their contributions to the retirement program and length of government service. United States v. Price, supra. See 5 U.S.C.A. §§ 8334, 8339.

The Civil Service Act specifies which persons are entitled to receive retirement benefits. Provisions are made only for payment to the employee, or, in the case of the employee’s death, to the surviving spouse and the employee’s children under 18 years of age (with age exceptions for incapacitated children and students). 5 U.S.C.A. § 8341. The Act provides for no payment to persons outside of the employee’s immediate family. It would be contrary to the whole contract, policy, and plan of the Retirement Act for nearly one-half of Mrs. Valdez’s monthly payments to be taken from her and awarded to her deceased husband’s adult children. This would subvert the underlying purpose of the Act, which is to provide financial support and security to aged employees and their immediate families. See United States v. Price, supra. It is also contrary to the election made by Mrs. Valdez under § 8339(j) for a joint survivor annuity for the benefit of herself and her husband.

While Lillie Valdez was employed by the federal government and earning future rights to a retirement annuity, those contingent rights were community property, but such inchoate rights are characterized by the Family Code as “special community” under the wife’s sole management and control. Section 5.22(a) of the Texas Family Code provides:

“During marriage, each spouse has sole management, control and disposition of the community property that he or she would have owned if single, including but not limited to:
“(1) personal earnings;
“(4) the increase and mutations of, and the revenue from, all property subject to his or her sole management, control and disposition.”

Thus, while being earned, the right to a future Civil Service retirement annuity was the special community of Lillie Valdez, subject to her sole management, control and disposition. As manager of this “special community” asset, she had the contract right to select a mode of payment. As indicated, she selected the joint and surviv- or option in accordance with 5 U.S.C.A. § 8339. Although this option provided a lower monthly payment to her and her husband while both were living, and a lower payment to her if she survived him, it also created in the husband a right to an annuity if he survived her. 5 U.S.C.A. § 8341. At the time of the exercise of this option, the inchoate and contingent right of the community to future retirement annuity payments was fixed by federal statute. By virtue of Lillie Valdez’s election to take a joint and survivor annuity, this annuity constituted community income during their joint lives. Mr. Valdez along with Mrs. Valdez had full enjoyment of this matured community asset during their joint lives. Had Mr. Valdez survived his wife, he would have succeeded to full enjoyment of the survivor portion of the annuity payments; no interest therein would have been included in Mrs. Valdez’s probate estate to pass under her will or by intestacy. Since Mr. Valdez predeceased Mrs. Valdez, we hold that she succeeded to the survivor portion of the annuity benefit as set forth in the terms of the contract with her employer, the United States Government. These annuity benefits should continue to be paid to her in accordance with the terms of the Civil Service Retirement Act.

Accordingly, the judgments of the courts below are reversed and judgment is here rendered that plaintiffs take nothing from Lillie Valdez.

ON MOTION FOR REHEARING

In their motion for rehearing Respondents Ramirez and Valdez, Jr. make two attacks on our treatment of the Civil Service Retirement benefits in this case as a joint survivorship annuity payable solely to Petitioner Lillie Valdez after the death of her husband.

First, Respondents argue that no joint and survivorship annuity option or payment is provided for by 5 U.S.C.A. § 8339, et seq. of the Civil Service Retirement Act. While the Act does not use the explicit term, the effect is to permit the creation of a joint and survivorship annuity, and that is precisely the term and intent which Congressional Committees have applied to the plan since its inception.

The first joint and survivorship provision was added to the Civil Service Retirement Act by P.L. 76-263, 53 Stat. 1200, effective January 1, 1940. In reporting on the proposed amendment (S. 281), the Senate Committee on Civil Service explained the relevant section 3 as adding “a provision to the existing law permitting an employee to select one of two joint-survivorship annuity plans . . . ” The House Civil Service Committee made similar comments in its Report on S. 281. The Conference Committee of the two Houses agreed upon the following language which was enacted as Sec. 2(d) of P.L. 76-263:

“(d) Any employee retiring under the provisions of section 1 of this Act may at the time of his retirement elect to receive in lieu of the life annuity described herein a reduced annuity payable to him during his life, and an annuity after his death payable to his beneficiary, duly designated in writing and filed with the Civil Service Commission at the time of his retirement, during the life of such beneficiary (a) equal to or (b) 50 per centum of such reduced annuity and upon the death of such surviving beneficiary all payments shall cease and no further annuity shall be due or payable. The amounts of the two annuities shall be such that their combined actuarial value on the date of retirement as determined by the Civil Service Commission shall be the same as the actuarial value of the single life increased annuity with forfeiture provided by this section: Provided, That no election in lieu of the life annuity provided herein shall become effective in case an employee dies within thirty days after the effective date of retirement, and in the event of such death within this period, such death shall be considered as a death in active service.”

Between 1940 and the time of Mrs. Valdez’s retirement in 1971, Congress made several amendments to the above provision. Each time the legislative history shows that it was described as “a joint and survivorship annuity.” The first of these amendments was contained in Sec. 4(b) of P.L. 80-426, 62 Stat. 48, effective April 1, 1948. It limited the option of a married person’s joint sur-vivorship annuity to his spouse and to an amount equal to 50 percent of the reduced life annuity, with termination on the death or remarriage of the surviving spouse. A subsequent amendment in 1956 left the 1948 provision substantially the same except for dividing the annuity payment provision into two sections, Sec. 9(g) and Sec. 10 of P.L. 84-854, 70 Stat. 736, 752, effective October 1,1956. The annuity provision in existence at Mrs. Valdez’s retirement in 1971 and codified in 5 U.S.C.A. § 8339(i) and § 8341 was enacted in P.L. 87-793, 76 Stat. 832, 868, effective October 11, 1962. This last change consisted of an increase in the surviving spouse’s annuity payments from 50% to 55% of the basic joint annuity and a provision making the survivorship annuity automatic if the retiring married employee elected in writing not to receive the larger single life annuity and not to prevent the survivorship annuity from becoming effective.

The reason for detailing this congressional history of the relevant provisions of the Act is .to demonstrate that Congress has long permitted a retiring federal employee spouse (a) to elect to receive the higher maximum single life annuity (which terminates at death), or (b) to elect, in lieu thereof, to receive a reduced amount as a joint and survivorship annuity which amount is used as the basis for the annuity payable to the retired married employee as long as he or she survives, and also as the basis for the other spouse’s portion of the joint annuity if that spouse should be the survivor. Finally, discussion of legislative history has shown that the provision in question has been consistently termed and treated by the Congress as a “joint and survivor annuity.” By electing to give up her maximum higher single life annuity which (even though community property) would absolutely terminate at her death, Mrs. Valdez received for herself and her husband a matured right to receive future income from the joint and survivor annuity under the terms of the Civil Service Retirement Act. Since he predeceased her, the Act provides that she shall continue to receive the payments during her lifetime.

Respondents’ second point urges that Mrs. Valdez could not elect to create a valid joint survivorship in this instance because community property cannot be the subject of a joint survivorship agreement under Texas law. Williams v. McKnight, 402 S.W.2d 505 (Tex.1966); Hilley v. Hilley, 161 Tex. 569, 342 S.W.2d 565 (1961). As indicated in our original opinion, we are dealing here with a type of joint and sur-vivorship annuity which was created by federal law. The Civil Service Retirement Act has a clearly declared federal purpose of providing a definite amount of financial support and security for retired federal employees, their spouses, and certain children of retired employees. A joint survivorship annuity clearly authorized by federal law to serve a federal purpose may preempt conflicting state laws in the absence of its use to perpetuate a fraud by one spouse on the other. Free v. Bland, 369 U.S. 663, 82 S.Ct. 1089, 8 L.Ed.2d 180 (1962). In the instant case there has been no suggestion that Mrs. Valdez made the election authorized by the Civil Service Retirement Act for any purpose other than to provide for herself and her husband the broadest possible joint and survivorship benefits payable under the federal Act.

The motion for rehearing is overruled.

      . Section 45 of the Texas Probate Code Annotated, states:
      “Upon the dissolution of the marriage relation by death, all property belonging to the community estate of the husband and wife shall go to the survivor, if there be no child or children of the deceased or their descendants; but if there be a child or children of the deceased, or descendants of such child or children, then the survivor shall be entitled to one-half of said property, and the other half shall pass to such child or children, or their descendants. But such descendants shall inherit only such portion of said property as the parent through whom they inherit would be entitled to if alive. In every case, the community estate passes charged with the debts against it.

      . Westerfeld v. Huckaby, 474 S.W.2d 189 (Tex.1971).

      . H. J. Mullins & Co. v. Thompson, 51 Tex. 7 (1879); Kirkland v. Kirkland, 359 S.W.2d 651 (Tex.Civ.App.1962, writ ref’d n. r. e.); Buehler v. Buehler, 323 S.W.2d 67 (Tex.Civ.App.1959, writ refd n. r. e.).

      . United States v. Price, 288 F.2d 448, 450-51 (4th Cir. 1961); Wissner v. Wissner, 338 U.S. 655, 70 S.Ct. 398, 94 L.Ed. 424 (1950).

      .The Act’s policy of retaining the benefits in the hands of the intended recipients is exhibited in the protections of 5 U.S.C.A. § 8346(a), which provides: “The money mentioned by this subchapter [the Civil Service Retirement Act] is not assignable, either in law or equity, except under the provisions of section 8345(g) of this title [which gives the Civil Service Commission the power to approve assignments], or subject to execution, levy, attachment, garnishment, or other legal process, except as otherwise may be provided by Federal laws.” Prior to 1975 the assignment prohibition of § 8346(a) was absolute.

      . The Civil Service Retirement Act approved May 29, 1930, originally provided for an annuity payable only to and during the life of the retired employee. As early as 1936 amendments were proposed for “a joint and survivor-ship annuity” which would give the retiring employee a choice of receiving the existing maximum life benefits or a lesser “joint and survivorship annuity” of “equivalent actuarial value” but with one-half of the annuity being continued throughout the life of a designated beneficiary. See H.R. 12717, 74th Cong., 2d Sess., 80 Cong.Rec. 9464, June 15, 1936.

      . Senate Report No. 122, p. 2, 76th Cong., 1st Sess. 1939. Appended to this Report was a letter from the President of the Civil Service Commission containing the following comment on Section 3, subsequently enacted as Sec. 2(d):
      “Referring to section 3 of the proposed amended bill, the Commission has repeatedly expressed itself in favor of joint and survivor-

        ship benefits which will authorize annuities on a reduced basis with continuation of payments to a designated beneficiary, the combined annuities to be the same as the actuarial value of an increased annuity on a forfeiture basis.” (Emphasis supplied).

      . House Report, No. 840, p. 6, House Committee on Civil Service, 76th Cong., 1st Sess. 1939.

      . See legislative history of P.L. 80 — 426, S.Rep. No. 746, 80th Cong., 2d Sess., reprinted in [1948] U.S. Code Cong. & Admin. News, pp. 1107, 1112; P.L. 84-854 discussed in S.Rep. No. 2642, 84th Cong., 2d Sess., reprinted in [1956] U.S. Code Cong. & Admin. News, pp. 3734-35, where plan is referred to as “a joint and survivorship annuity” six times; P.L. 87-793 discussed in S.Rep. No. 2120, 87th Cong., 2d Sess., reprinted in [1962] U.S. Code Cong. & Admin. News, pp. 3047-48, 3070.

      . Mrs. Valdez’s payments continued after her husband’s death on the same reduced basis which she elected upon retirement until Congress amended the Act in 1974 to provide that such payments to widowed retirees shall be recomputed and paid as if the annuity had not been reduced for each month that the retired employee remains unmarried. P.L. 93-474, 88 Stat. 1438, 5 U.S.C.A. § 8339(j).