author: KLINGEMAN, Justice.

text:
    Sam B. MARTIN, Appellant, v. DAVIS CONSTRUCTORS, INC., et al., Appellees.
    No. 15699.
    Court of Civil Appeals of Texas, San Antonio.
    May 25, 1977.
    Rehearing Denied June 29, 1977.

      R. L. House, House, Mercer, House, Brock & Wilson, San Antonio, for appellant.
    William C. Church, Jr., Kampmann, Church & Burns, Charles P. Haymore, San Antonio, for appellees.
   KLINGEMAN, Justice.

This is a suit by plaintiff, Sam B. Martin, against T. E. Davis, Davis Constructors, Inc., Ed Davis, Inc., and Daeom, Inc. for monies allegedly due under two letter agreements. Plaintiff sued for $2,186.21 under a letter agreement dated January 1, 1978 and for $85,219.82 under a letter agreement dated June 11,1978, as amended on January 11, 1974. Trial was to a jury, and based upon the jury’s findings to various special issues, judgment was rendered for plaintiff against T. E. Davis in the amount of $41,886.85, and that plaintiff take nothing against the other defendants.

In answer to the pertinent special issues here involved, the jury found:

1. Plaintiff was not entitled to any additional compensation for the Victoria Toll job.

2. It was the intention of plaintiff and defendant to deduct overhead in arriving at the percentage of net profits on the jobs under the June 11 letter agreement.

3. The jury found 33 items (out of 35) to be necessary overhead expenses in connection with the jobs covered by the June 11 agreement. The jury disallowed expenses for “bad debts” and “partnership losses.”

4. The usual and customary method of computing the percentage of overhead to be charged to a job in the commercial construction business is to divide the total overhead by the total direct job cost during a given period of time.

5. The jury made findings as to the total direct job cost on all jobs during the covered period; and on each job individually, the total income and total direct cost of such job.

Prior to January 1, 1973, Sam B. Martin and T. E. Davis had an oral agreement under which they operated which was reduced to writing by a letter agreement dated January 1,1973. This is a letter from T. E. Davis to Sam B. Martin, of which the material portions are as follows:

. I have agreed to furnish bonds, financing, bookkeeping, tools and equipment that I have available and any other items of material and home office labor that I would normally furnish any other job.
You have agreed to furnish estimating to obtain the job, except where I wish to estimate the job and then turn it over to you, and all general supervision to complete the job just as you would if you were doing the job as a completely independent contractor.
We will divide the profits of the job on the following basis: the first 8% will go to me, the remainder to you up to a total of 6%. Any profit over 6% will then be divided equally between us.
Any deviation from the above may be agreed upon at any time on an individual job basis.

On June 11,1973, a changed or new letter agreement was entered into. This is also in the form of a letter by Davis addressed to Martin. The pertinent portions of this letter may be summarized as follows:

You will assume complete responsibility for all supervision of jobs.
You will be paid a salary of $20,000.00 per year and a percentage of net profits on jobs of 20%. [on jobs handled 1/11/74 TED.]
Victoria Toll will continue to be handled as per our previous agreement so that the net profit accruing to Davis Constructors will not be included in the amount which you will participate in.
Jobs already completed this year will not be included.
Jobs in progress will be included according to the percentage incomplete.
You will continue to work with Jim in whatever manner we agree upon that will train him to later take over full supervision or qualify him to take a responsible job in the office.
You will provide me with a job status (economic) report as well as a progress schedule on each job each month.
To recap in general, you will build the jobs from start to finish so that I will not necessarily have to worry any about this aspect of the business and leave me free to pursue the acquisition of new business, etc.
This agreement will be subject to review and change at the end of one year or at any time we mutually agree that it is necessary.

Some time after the initial letter agreement was entered into, some areas of disagreement arose between Martin and Davis, and on June 11, 1973, the second letter agreement was entered into. Thereafter, some disagreement still continued, with Martin contending that he was not being properly paid and that he wasn’t getting certain information he wanted from Davis, and Davis contending that Martin failed to perform his duties properly, as provided for in the June 11 agreement. On or about May 5, 1975, Davis told Martin he wanted to terminate the agreement and Martin asked for an accounting. No agreement as to the amount allegedly due Martin was reached and thereafter this suit was filed by Martin.

Plaintiff asserts 48 points of error which encompass the following general areas:

1. As a matter of law, no overhead should have been charged on the jobs supervised by Martin in determining the amount due him.

2. In any event, the overhead charges found by the jury were incorrect. [Some 33 points of error complain of particular items of overhead expenses found by the jury.]

3. The trial court erred in submitting 35 items to the jury to determine what items, if any, were to be considered overhead expenses.

4. The two letter agreements must be read and construed together.

5. The interpretation and construction of such letter agreements is a matter for determination by the court and not by the jury-

6. Certain testimony should have been excluded from the evidence.

7. The jury erred in finding plaintiff was not entitled to any additional compensation on the Victoria Toll job.

8. The trial court erred in entering judgment against T. E. Davis alone and in not also entering judgment against Davis Constructors, Inc. and Ed Davis, Inc.

The testimony is detailed and comprehensive. Both parties testified as to the circumstances surrounding the making of such agreement, their intent, the construction placed upon the contract by them, and the discussion with regard to overhead. There was also testimony both by the parties and other witnesses as to whether or not the parties agreed that a deduction would be made for overhead in computing the amount Martin was entitled to, how the overhead was computed and allocated to the various jobs, areas of disagreement between the parties, testimony by accountants and contractors as to the meaning of the term “net profits” in the industry, and testimony as to the normal and customary methods of determining profits on particular construction jobs.

We will consider all of plaintiffs complaints together.

I

We first consider plaintiffs contention that: (a) the two letters must be read and construed together; and (b) the interpretation and construction of such letter agreements was for the court and not a jury.

In support of his contentions that the two letter agreements must be read and construed together, plaintiff relies on that line of cases holding that where several instruments executed contemporaneously or at different times pertain to the same transaction, they will be read together, even though they do not expressly refer to each other. Board of Ins. Com’rs v. Great Southern Life Ins. Co., 150 Tex. 258, 239 S.W.2d 803 (1951); McLean v. Hillman, 352 S.W.2d 310 (Tex.Civ.App.—Amarillo 1961, no writ). We have no disagreement with these cases; however, where the instruments are separate, distinct, and completely different, the first contract is not considered in construing the second.

In any event, we reach the same result herein, whether we read the two letters together or consider them separately. It is clear that the second letter materially changed the agreement and the relationship between the parties. The first letter does not provide for any salary. It sets up certain specific duties and obligations of each of the parties and provides that Martin will handle jobs supervised by him just as if he was an independent contractor; it does not refer to or mention “net profits,” but provides for a percentage of profits. The second letter provides for an annual salary and changes the relationship from that of an independent contractor type of relationship to that of an employee-employer type of relationship. The second letter provides that the additional compensation be based upon a percentage of net profits which is much less than the percentage of profits called for in the first letter. It also makes a differentiation between jobs already completed, those in progress, and future jobs. Even if we construe the two letter agreements together, it is clear that there has been a modification of the terms of the first contract by the parties.

We have concluded that the computation of net profits as to the jobs involved was correctly based upon the modified terms of the second letter agreement.

Plaintiff next contends that the construction and interpretation of such contracts was for the court and not the jury because there were no pleadings of fraud or ambiguity, and that no question of fact was presented for the jury.

It is true that the construction of the legal effect of an instrument is for the court and not the jury, and if the agreement is unambiguous, the meaning thereof is determined as a matter of law by the language used therein. Trinity Universal Ins. Co. v. Ponsford Brothers, 423 S.W.2d 571 (Tex.1968); Tower Contracting Co. v. Flores, 157 Tex. 297, 302 S.W.2d 396 (1957). However, the jury may resolve an ambiguous intent. Trinity Universal Ins. Co. v. Ponsford Brothers, supra. While plaintiff asserts that there are no pleadings of ambiguity, plaintiff did plead in the alternative that the June 11 letter agreement was ambiguous and that it does not state the real intentions of the parties at the time the contract was made. It is evident from the pleadings of both parties, and the evidence, that there is a genuine dispute between the parties as to the meaning and construction of the letter agreements and as to the intent of the parties. Both parties testified in some detail as to the circumstances surrounding the making of the letter agreement, their understanding of the agreement, their intent, and the construction placed by them upon the agreement.

Under the record, a construction and interpretation of the contract became necessary. In order to arrive at a proper construction it was necessary for the court to consider the circumstances surrounding the making of the contract, the intent of the parties, their understanding of the agreement and what was contemplated by the parties and the construction placed upon the contract by the parties thereto.

We have concluded that the trial court did not err in admitting testimony as to these matters. While some of the issues may involve mixed questions of law and fact, we have also concluded that the court did not err in submitting such issues to the jury under the pleadings here involved, the wording of the letter agreements, and the testimony. See G & W Marine, Inc. v. Morris, 471 S.W.2d 644 (Tex.Civ.App.—Beaumont 1971, no writ); City of Houston v. Howe & Wise, 323 S.W.2d 134 (Tex.Civ.App.—Houston 1959, writ ref’d n. r. e.).

II

Plaintiff further asserts that: (a) the trial court erred in not holding as a matter of law that no overhead was to be charged against the jobs supervised by Martin; (b) in submitting 35 items to the jury to determine what items, if any, were to be considered as overhead expenses; and (c) in any event, the jury’s answers to such items were incorrect and were not supported by the evidence.

In order to determine the percentage of net profits that Martin was entitled to under the letter agreements, a material question presented is whether overhead is to be charged, and if so, what are proper overhead charges.

The term “net profit,” standing alone and otherwise unexplained, has plagued the courts for many years and is the subject of varying interpretations and decisions. It has been said that the term to a large degree is self-explanatory and implies, generally speaking, what remains in the conduct of a business after deductions from its total receipts all the expenses incurred in carrying on the business. Dealers’ Granite Corp. v. Faubion, 18 S.W.2d 737 (Tex.Civ.App.—Austin 1929, no writ). Net profit has also been defined as the gross amount that would have been received pursuant to the business or investment, less the cost of running that business. 22 Am.Jur.2d § 178 Damages, at 253 (1965).

The term “profits,” as used in an agreement by which profits are included as a basis for compensation, should be construed in accordance with the language of the contract and the surrounding conditions and circumstances, and generally means that which remains of the gross receipts of the business after all legitimate expenses have been deducted. 56 C.J.2d Master and Servant § 112, at 548 (1948).

Appellant makes some contention that the addition of the words “on jobs handled” on January 11, 1974 to the letter agreement of June 11,1974, strengthens his position. It appears clear from the testimony in the record that these words were added to clarify the understanding that 20 percent of the net profits would be paid to Martin only from the jobs he was supervising, and not on jobs not supervised by him. Martin’s own testimony is that such words were added after Davis and he agreed that Jim Ford, another supervisor, would handle certain jobs alone, and that Martin would only get paid on the jobs he personally handled. Appellant argues that a proper construction of the entire letter, including the added words, is that net profits on the job means gross profits from such jobs minus only the direct expenses incurred on or at the job site and would not include overhead. While there is some testimony that supports his contention, there is ample testimony to the contrary. There is sufficient evidence in the record that “net profits on jobs handled” means gross income earned less direct costs and allowable overhead expended with respect to jobs supervised by Martin, and that the jury’s answers pertaining to overhead are sufficiently supported by the evidence.

We have concluded that overhead expenses were a proper and legitimate expense in determining the amounts payable to Martin, and that the trial court correctly held that overhead expenses were to be included in determining Martin’s share of the compensation. The court properly submitted to the jury for its determination what items, if any, were necessary overhead expenses. (Special Issue No. 4) The jury’s answers to the various items of overhead expenses are sufficiently supported by the evidence.

Ill

Plaintiff complains of the jury’s finding that plaintiff was not entitled to any additional compensation in the Victoria Toll job, and asserts that the trial court should have rendered judgment for him as a matter of law in the amount of $2,414.76, or in the alternative, $2,186.21 on the Victoria Toll job, because the undisputed evidence shows that plaintiff was entitled to such sums. We disagree. There is testimony in the record that plaintiff was overpaid on such job, although there is also conflicting testimony. Defendant’s CPA testified that expenses were incurred on this job after the job was closed and the income received, involving chiefly a refund that Davis made to the telephone company because the telephone company had accidentally paid for the same invoice twice. Such accountant also testified that the amount paid to Martin was $573.80 more than the amount of profits that he was entitled to.

Under the record: (a) there is sufficient probative evidence to support the jury’s finding that plaintiff was not owed any additional money on the Victoria Toll job; (b) the court did not err in refusing to enter judgment for Martin for the additional sum claimed by him.

IV

Plaintiff also complains that the court erred in allowing certain testimony of T. E. Davis and Charles Haymore pertaining to overhead charges. In reply thereto, defendant asserts that: (a) it was not error to admit such testimony; (b) such testimony was in answer to and in rebuttal to prior testimony of plaintiff; and (c) if there was any error, it was harmless error.

A review of the evidence complained of reveals that plaintiff, on direct testimony, testified in considerable detail as to overhead, testifying among other things, that it was agreed that no overhead was to be charged. Davis thereafter also testified as to overhead, rebutting some of the contentions made by plaintiff, and testifying in some detail as to discussions thereto. Davis denied that he ever stated that no overhead was to be charged and testified that Martin knew overhead was to be charged and made no complaint.

Haymore also testified in detail as to how the books were kept and how overhead was determined and charged, and much of it is in rebuttal of plaintiff’s evidence. Defendant’s Exhibit Z was introduced into evidence showing the various items of overhead charged and much of Haymore’s testimony was in connection with such exhibit. Haymore was cross-examined at length by plaintiff’s attorney about each individual item shown in Defendant’s Exhibit Z.

We overrule plaintiff’s points of error pertaining to the admissibility of the complained of evidence.

V

We agree with plaintiff’s contention that judgment should have been entered against Davis Constructors, Inc. and Ed Davis, Inc., in addition to T. E. Davis individually. There is nothing in the record to explain why these corporate defendants were omitted. Davis asserts in his brief that the original draft of such judgment included the corporate defendants, but that it was changed and revised at the request of plaintiff’s counsel. We have found nothing in the record substantiating this. In their brief, defendants state they have no objection to reforming the judgment to include such corporate defendants.

We have concluded that: (1) the trial court did not err in not holding, as a matter of law, that no overhead was to be charged in determining the amounts to be paid to Martin on the jobs involved; (2) the court’s submission of, and the jury’s answers to, Special Issue No. 4 (overhead expenses) was sufficiently supported by the evidence, and the wording of the court’s charge was not a comment on the weight of the evidence; (3) the trial court was correct in not rendering judgment for plaintiff with respect to the Victoria Toll job, and the jury’s findings that plaintiff was not entitled to any additional compensation on such job is sufficiently supported by the evidence; (4) judgment should have been entered against T. E. Davis, Davis Constructors, Inc., and Ed Davis, Inc., rather than against T. E. Davis alone.

The judgment is reformed so as to provide that judgment is entered against T. E. Davis, Davis Constructors, Inc., and Ed Davis, Inc., jointly and severally. As so reformed, the judgment is affirmed.

CADENA, J., not participating.

      . The words “on jobs handled” were added by mutual agreement of the parties on January 11, 1974.

      . Most of plaintiffs points of error center around and are connected with plaintiffs first point of error wherein he asserts that the court •erred in not withdrawing from the jury any question of overhead and in not finding as a matter of law that no overhead was to be charged against the jobs supervised by Martin.

      . The relevant testimony may be summarized as follows:
      Plaintiff, Sam Martin, testified that the January 1, 1973 letter agreement put into writing the previous oral agreement between Davis and himself; that Davis approached him thereafter about changing this agreement; that Davis told him the new agreement would be essentially the same, but that Martin was to be paid a salary of $20,000.00 a year and 20% of the net profits; that he agreed to such change with the understanding that Davis would, like before, furnish all of the overhead; that subsequently the June 11 letter agreement was entered into; and that by mutual agreement the letter agreement was amended on January 11, 1974 by adding the words “on jobs handled.” He stated that under such agreement he did receive his commission on some of the jobs, but that he did not know overhead was being deducted. He testified that on May 5, 1975 Davis told him he wanted to terminate the relationship when the current jobs were finished; that he insisted on an accounting, but that they failed to reach an agreement as to the amount Davis owed him.
      Two other witnesses for plaintiff testified with regard to the question of “net profits.” Martin’s son, an accountant, stated that net profit of a job would not include overhead; that overhead expenses are an expense of the business, not of a job. He conceded that the definition of “net profits” would normally be the total income less the total expenses, including overhead. Another CPA testified that “profit on the job” would be direct material and direct labor and indirect costs, but would not include general administrative expenses.
      Davis testified that sometime after the January 1, 1973 letter agreement was made, he wanted to change the agreement because of some dissatisfaction with the work and that the June 11 letter agreement was then entered into; that under the June 11 letter agreement Martin’s chief duty was to supervise out of town jobs, with some general supervision over in town jobs.
      Davis testified that prior to the making of the June 11 agreement, he and Martin thoroughly discussed the matter of overhead charges; that he knew from previous experience that overhead expenses would be about 5%, which was discussed with Martin; that Martin knew exactly what the agreement was, made no complaint in regard thereto, and knew overhead was to be deducted. He denied he ever told Martin that the 80% net profit which Davis was to receive under the June 11 agreement would cover all the overhead expenses. He further testified that certain costs, such as material, labor, insurance, and bonds are directly charged to individual jobs; that overhead is kept as a separate record and is prorated to the various jobs at the end of the year.
      He testified in some detail about the deterioration of the relationship between himself and Martin; that on May 5, 1973 he told Martin that after the Oaks Townhouses project was completed it would be a good time to terminate the agreement; that he agreed to work out the particulars and pay Martin what he had coming; that his CPA worked out the figures and a check was tendered to Martin; and that shortly thereafter he received notice from Martin’s attorney that a suit was going to be filed.
      Several employees of Davis testified as to general dissatisfaction with Martin’s work and some other witnesses, including architects, testified as to dissatisfaction with certain jobs.
      Charles Haymore, an attorney and CPA for Davis, testified in detail how Davis’ books were kept and as to how the items of overhead which were deducted against Martin’s jobs were computed. An exhibit (Defendant’s Exhibit Z) was introduced into evidence, which showed the overhead expenses charged on each job, and Haymore testified at length from such exhibit. He was cross-examined at length by Martin’s attorney about each individual overhead item shown on such exhibit.
      He testified that "net profit” was the gross income minus all other costs and expenses for operating jobs.
      Sam Bell, a CPA, gave his definition of gross profits and net profits, which supported Davis’ contentions, and stated that Davis’ accounting methods were the normal and customary methods of determining profit in construction work, and stated that overhead expenses should be charged against each of the various jobs or projects.
      Other testimony by employees of Davis supported Davis’ contention that Martin knew overhead was to be deducted. A supervisor for Davis testified that he had a somewhat similar agreement with Davis with regard to compensation in which he was paid a salary and an additional compensation based on a percentage between the difference between job income and job cost after overhead of 5% was deducted, and that he and another employee of Davis, and Martin, had discussions on several occasions pertaining to the overhead charges.

      . As a general rule, a contract that is modified and changed by mutual consent of the parties constitutes a new agreement that takes the place of the original contract. 13 T.J.2d § 272 Contracts (1960).

      . The Houston court said that the trial court, from the wording of the contract and the surrounding circumstances, determined that the contract was susceptible of more than one meaning and was therefore ambiguous. Extrinsic evidence, thereupon, became properly admissible to remove the ambiguity of the words used in the contract, and it was for the jury to resolve the issue as to the intent of the parties.


source: Caselaw Access Project

author: CHADICK, Chief Justice.

license: Public Domain

text:
    ST. LOUIS SOUTHWESTERN RAILWAY COMPANY, Appellant, v. James F. GREENE, Appellee.
    No. 8452.
    Court of Civil Appeals of Texas, Texarkana.
    May 31, 1977.
    Rehearing Denied June 28, 1977.

      Howard Waldrop, Atchley, Russell, Wal-drop & Hlavinka, Texarkana, Traylor Russell, Russell & Rolston, Mount Pleasant, for appellant.
    J. Donald Bowen, Houston, Tulley R. Flo-rey, III, Mount Pleasant, for appellee.
   CHADICK, Chief Justice.

This is a Federal Employers’ Liability Act (45 U.S.C.A., Sec. 51, et seq) case. On the basis of jury findings of fact the trial court awarded James F. Greene a recovery of compensatory damages for personal injury received in the course of employment. The award of $250,000.00, together with costs, was against his employer, St. Louis Southwestern Railway Company. The railroad brings this appeal.

In response to special issues submitted under instructions that are not now questioned, the jury found that: (Special Issue 3) the railroad failed to furnish Mr. Greene with reasonably safe equipment with which to do his work; and (Special Issue 5) the railroad failed to properly maintain the “old main line” switch in the Mt. Pleasant yard.

The railroad undertakes to avoid these findings on the ground, as its first and second points of error are construed, that the record discloses a complete absence of probative facts supporting the jury’s answer in each instance. The extent of negligence and the quantum of proof required to establish it in F.E.L.A. cases is said to have been reduced to the vanishing point. See Atlantic Coast Line Railroad Company v. Barrett, Fla.1958, 101 So.2d 37; W. L. Prosser, Law of Torts, pg. 560 (3rd ed. 1964). Sufficiency of evidence in an F.E.L.A. case is governed by federal standards. Rogers v. Missouri Pacific Railroad Co., 352 U.S. 500, 77 S.Ct. 443, 1 L.Ed.2d 493 (1957); Texas and Pacific Railway Company v. Roberts, 481 S.W.2d 798 (Tex.1972). However, in principle, the “no evidence” test in state practice cannot be distinguished from a similar test imposed by federal standards. Rogers v. Missouri Pacific Railroad Co., 352 U.S. 500, 77 S.Ct. 443, 1 L.Ed.2d 493 (1957); Texas and Pacific Railway Company v. Roberts, 481 S.W.2d 798 (Tex.1972). However, in principle, the “no evidence” test in state practice cannot be distinguished from a similar test imposed by federal standards. Both tests require valid findings of fact to be supported by more than speculation, conjecture and possibilities. Elgin, Joliet & Eastern Railway Co. v. Gibson, 355 U.S. 897, 78 S.Ct. 270, 2 L.Ed.2d 193 (1957); Calvert, “No Evidence” and “Insufficient Evidence”, Points of Error, 38 Texas L.Rev. 361 (1960). The test in the state practice that has been declared inappropriate in F.E. L.A. cases by both federal and state decision is the state “insufficient evidence”, including “great weight and preponderance”, test. The proscribed Texas test permits Courts of Civil Appeals to weigh and determine reasonableness of evidence while the federal act allots that function exclusively to the trial jury.

The limit of appellate review in both state and federal courts is indicated by this extract from Tennant v. Peoria & Pekin Union Railroad Co., 321 U.S. 29, 64 S.Ct. 409, 88 L.Ed. 520 (1944):

“It is the jury, not the court, which is the fact-finding, body. It weighs the contradictory evidence and inferences, judges the credibility of witnesses, receives expert instructions, and draws the ultimate conclusion as to the facts. The very essence of its function is to select from among conflicting inferences and conclusions that which it considers most reasonable. . . . That conclusion, whether it relates to negligence, causation or any other factual matter, cannot be ignored. Courts are not free to reweigh the evidence and set aside the jury verdict merely because the jury could have drawn different inferences or conclusions or because judges feel that other results are more reasonable.”

In Rogers v. Missouri Pacific Railroad Co., supra, it is said appellate review is limited “to the single inquiry whether, with reason, the conclusion may be drawn that negligence of the employer played any part at all in the injury . . .”

From any viewpoint, the evidence in this case of the several elements of negligence is weak, but the weakest link in the chain of proof pertains to actual or constructive knowledge of the railroad that the equipment furnished Mr. Greene was not reasonably safe and that the switch was not adequately maintained. Simply stated, the facts show a switchman should be able to operate with one hand the switching lever of a properly maintained switch. Mr. Greene testified that he could not so operate the switch in question, that he was unable to operate it with both hands and finally employed a foot in forcing the lever into position. (He claimed his back was injured in this unusual episode.) Evidence, including pictures, showed that a metal strap had been affixed above and across the bridle rod of the switch. This strap served to keep the rod from bowing upward under pressure, and possibly other purposes. The strap so placed was unusual, being the only one known to a witness familiar with the railroad yards at Mt. Pleasant and Dallas. The bridle rod in its back and forth motion during a switching maneuver rubbed against the strap. This metal against metal frictional bind was visible in pictures which disclosed frictional wear on the bridle rod.

May reasonable men draw inferences from the fact that the switch lever did not respond to one hand operation and the fact that the bridle rod rubbed against the hold-down strap during operation that the switch was unsafe and maintenance thereof inadequate and had been so for a sufficient length of time for the railroad to have discovered and corrected such faults? Under the cases cited this court is compelled to answer in the affirmative. It was for the jury to weigh credibility of the witnesses, draw conclusions as to the facts proved and select the inferences it considered most reasonable. This Court is not free in an P.E.L.A. case to set aside a jury verdict merely because the inferences are weak or one inference appears more reasonable than another or that the same inference may support contrary conclusions. The railroad’s first and second points of error are overruled.

The railroad claims the general damage award of $250,000.00 is erroneous because excessive. Mr. Greene sued for such amount and the jury agreed to the penny. Mr. Greene was twenty-five years of age at the time of the alleged injury and twenty-seven at the time of trial. His wage was $600.00 every two weeks prior to the claimed injury. In 1974 and 1975, during his absence from work, the brakeman immediately ahead of him on the seniority roster was paid $31,037.00 in wages and the brakeman immediately below received $32,-463.00. Both brakemen averaged more than $1500.00 per month in 1975. The evidence touching upon damages and disability, as well as medical and medically related facts, is voluminous and a summary is not feasible.

Middle ground was left unoccupied in development of this case. The railroad completely discounts Mr. Greene’s testimony and contends that as a result of testimony pertaining to Mr. Greene’s condition by medical experts the overwhelming weight of the evidence is that Mr. Greene suffered no damage caused by his alleged injury. If Mr. Greene’s testimony may be believed and the jury believed, there is proof of lost work time, disability in some degree permanent, medical expense, and past and probable future pain and suffering. The test of excessiveness by this Court is “ascertainment of what amount would be reasonable compensation for the injuries sustained”, and treatment of the balance as excess. Wilson v. Freeman, 108 Tex. 121, 185 S.W. 993 (1916), and Flanigan v. Carswell, 159 Tex. 598, 324 S.W.2d 835 (1959). The record does not convince this Court that the award is not reasonable compensation for the injuries sustained. The point is overruled.

In response to Special Issue No. 1, the jury found the railroad did not fail to provide Mr. Greene a reasonably safe place in which to work. The railroad prays for a reversal on the ground that the jury’s answers to Special Issues 3, 4, 5 and 6 are in conflict with such answer. The initial discussion herein shows that Special Issues 3 and 5 were primary negligence issues answered favorably to Mr. Greene. Special Issues 4 and 6 were conditionally submitted as subsidiary to Nos.. 3 and 5, respectively. In each instance, the jury was asked to find from a preponderance of the evidence whether the conduct (failure) inquired about was a cause in whole or in part of the plaintiff’s injuries. The jury responded affirmatively. It appears to be the railroad’s position that the broad general issue concerning failure to provide a reasonably safe place in which to work, overlaps or includes the issues of failure to furnish reasonably safe equipment with which to work and failure to properly maintain the switch; the favorable finding for the railroad thus being in fatal conflict with the favorable findings for Mr. Greene.

Mr. Greene’s trial petition alleged the railroad was negligent in the following ways:

“1. In failing to provide James F. Greene with safe equipment with which to work and a safe place in which to work and with adequate help in which to do his work;
2. In failing to properly inspect, maintain and repair the switch in question;
3. For having a switch that was hard to throw;
4. For requiring James F. Greene to work in cold, icy, snowy weather without taking any precautions to see that the switch in question would work properly.”

A railroad subject to the federal act, 45 U.S.C.A., Sec. 51, is liable in damages to an employee for injury occasioned by any “. . . defect or insufficiency, due to its negligence, in its cars, engines, appliances, machinery, track, roadbed, works, boats, wharves, or other equipment.” The place where work is to be performed means, unless the context in which the term is used indicates differently, the building or premises where an employee is required to perform his duties. 56 C.J.S. Master and Servant § 219. Such understanding of the word “place” is compatible with general usage. The federal act specifies a wide variety of instrumentalities and things which may well be a part of buildings or premises. The act imposes duties in relation to these specified instrumentalities or things, in addition to the employer’s general duty in relation to a place of work.

The railroad’s duty as to equipment, tools, machinery and appliances extends beyond merely providing such items in a safe condition, it also requires that the railroad employer maintain such items in a reasonably safe and proper condition for use by employees. Morgan v. State, 170 S.W.2d 648 (Tex.Civ.App. El Paso 1942), rev’d on other grounds, 170 S.W.2d 652 (Tex.Comm.App.1943, opinion adopted); International & G.N.R. Co. v. Trump, 42 Tex.Civ.App. 536, 94 S.W. 903 (1906), rev’d on other grounds, 100 Tex. 208, 97 S.W. 464 (1906). As a generalization it may be said that a railroad has a continuing, non-dele-gable duty and obligation to furnish a reasonably safe place for employees to work and a continuing, non-delegable duty to furnish employees safe and suitable instru-mentalities, equipment and appliances and to- inspect and maintain them so that the employee may carry on his work with reasonable safety. J. Weingarten, Inc. v. Higginbotham, 523 S.W.2d 450 (Tex.Civ.App. Beaumont 1975, writ ref’d n.r.e.). See also Farley v. M M Cattle Company, 529 S.W.2d 751 (Tex.1975); Beck v. Texas Co., 105 Tex. 303, 148 S.W. 295 (1912); Grubb v. Grubb, 525 S.W.2d 38 (Tex.Civ.App. El Paso 1975, writ ref’d n.r.e.).

In Texas & New Orleans Railroad Company v. Arnold, 381 S.W.2d 388 (Tex.Civ.App. Beaumont 1964), reviewed on other grounds and appeal dism’d, 388 S.W.2d 181 (Tex.1965), the trial court submitted separate issues on safe place to work and safe equipment, and the Beaumont Court of Civil Appeals upheld that submission over appellant’s objection that the issues submitted constituted a dual submission of the same theory, and an over-emphasis and comment on the evidence. The Beaumont Court held that the safe place to work and suitable equipment were separate duties owed the employee. The point on conflict is overruled.

Finally, complaint is made that the jury was not instructed that in arriving at its answer to the damage issue it might consider the fact that any sum recovered by Mr. Greene was not subject to federal income taxes. The impropriety of such instruction under the Texas practice is settled. It should not be given as it introduces a wholly collateral matter into the damage issue. Missouri-Kansas-Texas Railroad Co. v. McFerrin, 156 Tex. 69, 291 S.W.2d 931 (1956); and John F. Buckner & Sons v. Allen, 289 S.W.2d 387 (Tex.Civ.App. Austin 1956, no writ). The Texas practice appears to be in step with decisions in the majority of the other jurisdictions.

Since the record discloses no reversible error or the imposition of excessive damages, it becomes the duty of this Court to affirm the judgment of the trial court. It is so ORDERED.

       For what it may be worth, Justice Greenhill, now Chief Justice, indicated no disagreement with the Beaumont Court’s view in his remarks in the first paragraph of his dissent from the Supreme Court’s action in dismissing the appeal.


author: CORNELIUS, Justice.

text:
    Billy J. FOX, Chief, Texarkana, Texas Fire Department, Appellant, v. Ronald CARR, Appellee.
    No. 8443.
    Court of Civil Appeals of Texas, Texarkana.
    May 31, 1977.

      Paul B. Higgins, City Atty., Gregory S. Torrance, Asst. City Atty., Texarkana, for appellant.
    Carolyn Lee Whitefield, Texarkana, Ark., for appellee.
   CORNELIUS, Justice.

Chief Billy J. Fox of the Texarkana, Texas Fire Department appeals from a judgment of the district court which reversed a three-day disciplinary suspension which he had imposed upon Ronald Carr, a captain in the department. The three-day suspension was ordered on March 19, 1976. At the time of the suspension, appellant notified appellee that he had ten days within which to file a written appeal with the Texarkana Civil Service Commission.' The appellee filed such an appeal, a hearing was held, and the order of suspension was affirmed by the commission. The appellee then filed his petition in the district court seeking to have the order of suspension set aside. The appellant answered by general denial, and trial was to the court without a jury. The trial court found that the action of the commission in sustaining the suspension was not supported by substantial evidence, and reversed the order.

Appellant asserts that the trial court erred in ruling that the decision of the civil service commission was not supported by substantial evidence, and he also asserts for the first time that the district court had no jurisdiction because no appeal lies from the imposition of a disciplinary suspension.

The Firemen’s and Policemen’s Civil Service Law, Tex.Rev.Civ.Stat.Ann. art. 1269m, provides in part as follows:

Indefinite suspensions Sec. 16. The Chief or Head of the Fire Department . . . shall have the power to suspend indefinitely any officer or employee under his supervision or jurisdiction for the violation of civil service rules, but in every such case the officer making such order of suspension shall, within one hundred and twenty (120) hours thereafter, file a written statement with the (civil service) Commission, giving the reasons for such suspension, and immediately furnish a copy thereof to the officer or employee affected Said order of suspension shall inform the employee that he has ten (10) days . within which to file a written appeal with the Commission. The Commission shall hold a hearing and render a decision in writing within thirty (30) days after it receives said notice of appeal. Said decision shall state whether or not the suspended officer or employee shall be permanently or temporarily dismissed . or be restored to his former position . (Parenthesis supplied.)
Appeal to district court
Sec. 18. In the event any Fireman . is dissatisfied with the decision of the Commission, he may, within ten (10) days after the rendition of such final decision, file a petition in the District Court, asking that his order of suspension or dismissal or demotion be set aside, . and such case shall be tried de novo. .
Demotions
Sec. 19. Whenever the head of the Fire Department . . . may desire the demotion . . . of an officer or employee under his supervision or jurisdiction, such Department head may recommend in writing to the Commission that such employee be so demoted, giving his reasons therefor, and requesting that the Commission make such order of demotion, . . . Said Commission shall have the authority to refuse to grant said request for demotion. If, however, said Commission feels that [probable] cause exists for said demotion, they shall give such employee ten (10) days advance written notice to appear before them at a time and place specified . . . and said employee shall have the right to a full and complete public hearing upon such proposed demotion. The Commission shall not demote any employee without such hearing.
Disciplinary suspensions
Sec. 20. The head of either the Fire or Police Department shall have the power to suspend any officer or employee under his jurisdiction ... for disciplinary purposes, for reasonable periods, not to exceed fifteen (15) days; provided, that in every such case, the department head shall file with the Commission within one hundred and twenty (120) hours, a written statement of action, and the Commission shall have the power to investigate and to determine whether just cause exists therefor. . . . The Commission shall have the power to reverse the decision of the department head and to instruct him immediately to restore such employee to his position. .

From the quoted excerpts it may be seen that the statute requires a full and complete hearing before the civil service commission in case of a demotion, and, if requested by the employee, in case of an indefinite suspension. In such cases, the commission is required to make a final decision and notify the employee of such decision. Section 18 then provides for a right of appeal by the employee from the final decision of the civil service commission to the district court. But Section 20, which authorizes a department head to order disciplinary suspensions of less than fifteen (15) days, provides only that, on receiving notice of such a disciplinary suspension, the civil service commission shall have the “power to investigate and to determine whether just cause exists therefor”, and may reverse the order. There is no provision requiring a full and complete hearing in the case of disciplinary suspensions, as is provided in Sections 16 and 19 for indefinite suspensions and demotions.

Considering the statute in its entirety, it appears to have been the intention of the legislature to allow an appeal to the district court only when a hearing before the civil service commission is required and when that body, after receiving and considering evidence, has rendered a final decision as a result of that hearing. As no hearing before the civil service commission is required in the case of disciplinary suspensions, the intent apparently was to allow no appeal from such a temporary order, but to leave the imposition of such a penalty in the discretion of the department head, subject only to reversal if the commission chose to investigate and disagreed with the action of the department head. Dictum of the court in City of Wichita Falls v. Harris, 532 S.W.2d 653 (Tex.Civ.App. Fort Worth 1975, writ ref’d n. r. e.), supports this view. We recognize that Section 18 of the act, which pertains to appeals, refers generally to orders of suspension without making any distinction between disciplinary suspensions and indefinite suspensions, but a harmonizing of all the provisions of the statute supports the conclusion that “suspensions,” as used in Section 18, refers to indefinite suspensions and not those which are disciplinary and less than fifteen (15) days’ duration. If the legislature did not intend to treat indefinite suspensions and disciplinary suspensions differently with regard to their appealability, it is difficult to understand why it would have treated them differently at all.

No right of appeal from the action of an administrative body or a civil service department exists unless it is provided by statute, or the action complained of violates a constitutional right. Otherwise, such actions are final, and the mere fact that the legislature has denied judicial review does not invalidate them or constitute a denial of due process. City of Amarillo v. Hancock, 150 Tex. 231, 239 S.W.2d 788 (1951). The temporary suspension of appellee for disciplinary reasons did not constitute the deprivation of a property interest protected by the Fourteenth Amendment to the United States Constitution. Compare Bishop v. Wood, 426 U.S. 341, 96 S.Ct. 2074, 48 L.Ed.2d 684 (1976); City of Amarillo v. Hancock, supra.

Appellee contends that even if the statute did not require that the civil service commission conduct a hearing relating to his disciplinary suspension, the commission nevertheless did hold such a hearing, and that having done so, a right of appeal to the district court arose. We do not agree. The action of the civil service commission in holding a hearing was surplusage, and its voluntary action in doing so could not create a right of appeal which did not otherwise exist under the provisions of the statute.

Although appellant did not raise the issue below, a court’s lack of jurisdiction of the subject matter of a controversy is fundamental error and a plea to such effect is subject to review although first presented on appeal. Texas Employment Commission v. International U. of E., R. & M. Wkrs., 163 Tex. 135, 352 S.W.2d 252 (1961).

As the district court lacked jurisdiction, the judgment must be reversed and the cause dismissed. It is so ORDERED.


author: REYNOLDS, Justice.

text:
    GENERAL TELEPHONE COMPANY OF the SOUTHWEST, Appellant, v. CITY OF PERRYTON, Texas, Appellee.
    No. 8777.
    Court of Civil Appeals of Texas, Amarillo.
    May 31, 1977.
    Rehearing Denied June 27, 1977.

      Preston, Holt, Harper & Hightower, San Angelo, Wayne L. Goodrum, Lexington, Ky., for appellant.
    Lemon, Close, Atkinson & Shearer (R. D. Lemon), Perryton, for appellee.
   REYNOLDS, Justice.

The trial court summarily and permanently enjoined a telephone company from unilaterally increasing its rates for extended area service in violation of a city’s contractual right to regulate the rates. Without regard to whether or not the contractual right existed, the original judicial jurisdiction to adjudicate the matter terminated when the Public Utility Commission of Texas assumed jurisdiction of all telecommunications in this state before the judgment became final. Reversed and dismissed.

For a number of years, General Telephone Company of the Southwest furnished local telephone service within the City of Perryton, Texas, by virtue of a franchise granted it by the city. In 1968, General Telephone proposed, subject to approval of increases in the rates then authorized, the installation of extended area service by which telephone calls between the cities of Perryton and Booker, Texas, would be made without payment of a toll charge. The governing bodies of Perryton and Booker acquiesced in the proposal, and the official action by Perryton is evidenced by Ordinance No. 405 passed and approved on 15 October 1968. The ordinance authorized increased telephone rates within the corporate limits of Perryton upon the establishment of extended area service between Per-ryton and Booker, provided that no other type of local service will be offered, and declared that nothing in the ordinance shall affect the city’s right, under the law, to regulate the rates charged by General Telephone within the city.

Subsequently on 17 February 1970, the City Council of Perryton enacted Ordinance No. 424 as a franchise agreement between the city and General Telephone for a period of five (5) years from and after 27 February 1970. A cash consideration was fixed, and has been paid annually by General Telephone, to indemnify the city for any damage to its streets, alleys and public grounds caused by the placement of telephone equipment and for the city’s superintendence of the agreement. By the fifteenth section of the ordinance “it is mutually understood and agreed that the rates to be charged to inhabitants of the City of Perry-ton, Texas, for extended area service (in lieu of strictly local exchange service) shall be fixed and regulated by the governing body of said City of Perryton, Texas (provided such City, at such time, retains statutory rate-making authority), in accordance with the statutes and laws of the State of Texas.”

Three days before the expiration of the five-year franchise, the Perryton City Council, in response to General Telephone’s request for a rate increase, passed and approved its 24 February 1975 Ordinance No. 502 authorizing, effective 16 March 1975, a rate increase within the corporate limits of Perryton for extended area telephone service, and declaring that nothing in the ordinance shall affect the city’s right and power under law to regulate the rates within the city. In October of that year, General Telephone requested new rates. On 2 March 1976, the city denied the request. By its 7 April 1976 letter, General Telephone notified the city that since the expiration of the five year period provided by Ordinance No. 424, there is no contract in force which confers any right upon the city to regulate the extended area service rates and that, effective 15 April 1976, the telephone company would place new rates in effect. The city resolved on 15 April 1976 that it would institute legal action unless General Telephone retracted its proposed rate increase and agreed in writing to continue the present rate for a period of three years.

General Telephone increased its rates; the city filed this suit. The city pleaded jurisdiction “over extended area telephone service provided within the City of Perry-ton” by virtue of both statutory authorization and an express or implied contract affected by Ordinances Nos. 405 and 502. The city sought judicial declarations that: it has rate making jurisdiction of General Telephone’s rates “for extended area service within the City of Perryton, Texas; ” General Telephone cannot increase such rates without first obtaining the consent of the city or setting aside, by successful legal action, the rate schedule in Ordinance No. 502; General Telephone be permanently enjoined from unilaterally increasing its rates for extended area service within Perryton’s city limits; and that General Telephone refund all unauthorized rates charged.

General Telephone answered with a general denial and pleaded as affirmative defenses that the city had neither statutory authority nor a present contractual right to regulate extended area service rates. Conditioned on the court’s determination that the city has the right or power to regulate rates for extended area service, General Telephone counterclaimed for a permanent injunction, enjoining the city from interfering with the telephone company’s charging and collecting fair and reasonable rates for extended area telephone service rendered within the corporate limits of the City of Perryton until such time as the city shall prescribe fair and reasonable rates and charges therefor.

Subject to its motion to dismiss or abate General Telephone’s counterclaim, the city answered and then moved for summary judgment. To the latter motion was attached the affidavit of the city manager detailing the events and conduct of the parties which we have outlined. General Telephone, relying on the same affidavit, filed its motion for summary judgment.

Severing General Telephone’s counterclaim, the trial court denied the telephone company’s motion for summary judgment and partially granted the city’s summary judgment motion. In rendering summary judgment on 26 August 1976, the court declared that the city has no statutory authority, but does have a contractual right, to regulate General Telephone’s extended area service rates within the city. The court then permanently enjoined General Telephone “from making further unilateral increases of its rates for extended area service within the Plaintiff’s city limits,” and ordered General Telephone to refund or credit, with interest at the rate of nine per cent (9%) per annum, all unauthorized rates charged.

General Telephone appeals. It submits, in four points of error, that the court erred in rendering summary judgment for the city and in failing to render summary judgment for the telephone company. Under its fifth point, General Telephone urges that the cause is now moot for the reason that the trial court’s judgment conflicts with the regulatory authority of the Public Utility Commission of Texas.

The city responds that mootness is not a factor, for the trial court’s judgment was entered before the Public Utility Commission of Texas assumed regulatory jurisdiction. And the summary judgment is sustainable, the city argues, because the city discharged its burden of proving a contractual right to regulate the telephone rates for extended area telephone service provided, as the city emphasizes, within the City of Perryton, Texas.

Despite the frequent references to “within the city limits,” the extended area telephone service over which the city asserts a regulatory right is, by definition, not isolated within the city limits; rather, it obviously is an integration of local and intrastate telephone service.' Be that as it may, and without regard to whether the summary judgment proof establishes as a matter of law that there is no genuine issue as to the presence or absence of a contractual right of regulation, we, without belaboring the points, must reverse the judgment and order the proceedings dismissed for the reasons to be now stated.

A city has no inherent power to regulate a utility. Southwestern Bell Telephone Company v. Houston Independent School District, 397 S.W.2d 419, 421 (Tex.1965). Fixing and regulating utility rates is a governmental function inherent in the state. The function is legislative in character, and the legislature may delegate the power to rate making governmental agencies or to municipal corporations as to utilities operating within the limits of such municipal corporations. Kousal v. Texas Power & Light Co., 142 Tex. 451, 179 S.W.2d 283, 285 (1944).

Early and in lieu of a comprehensive regulatory system, the legislature conferred on the governing bodies of all incorporated cities and towns the power to regulate, by ordinance, all utility rates, including telephone rates. Vernon’s Ann.Civ.St. Art. 1119, et seq. However, the delegated power of regulation was confined to the municipality’s territory. City of Arlington v. Lillard, 116 Tex. 446, 294 S.W. 829, 830 (1927). Consequently, a city, while empowered to regulate local telephone service by franchise, was not statutorily granted rate regulatory powers over intrastate calls, City of Weslaco v. General Telephone Company of the Southwest, 359 S.W.2d 260, 261 (Tex.Civ.App.—San Antonio 1961, writ ref’d n.r. e.); and, absent regulation by some authorized body, a telephone company could prescribe its own rates subject to the dictates of reasonableness and justice. Southwestern Bell Telephone Company v. Houston Independent School District, supra at 422.

Nevertheless, where a city and a telephone company contracted for the city’s regulation of extended area service — i. e., local service, which the city had statutory authority to regulate, combined with intrastate service, which the city had no statutory authority to regulate — the telephone company would be bound by its contract. General Telephone Company of the Southwest v. Cities Littlefield, 498 S.W.2d 375, 378-79 (Tex.Civ.App.—Amarillo 1973, writ ref’d n.r.e.). And, yet, because such contracts necessarily are made subject to the paramount constitutional authority of the legislature to regulate utilities, they have a congenital infirmity, City of Wink v. Wink Gas Co., 115 S.W.2d 973, 976 (Tex.Civ.App.—El Paso 1938, writ ref’d), in that they may be modified or superseded by the legislature or its authorized agency at any time. 86 C.J.S. Tel. & Tel., Radio & Television § 84 at p. 103. See, also, Fink v. City of Clarendon, 282 S.W. 912 (Tex.Civ.App.—Amarillo 1926, no writ).

With the law so structured, the legislature enacted, effective 1 September 1975, the Public Utility Regulatory Act, V.A.C.S. art. 1446c (Supp. 1976), to establish a comprehensive system for regulating public utilities, one of which, as defined in Section 3(c)(2)(a) of the Act, is a telephone system. As it affects this appeal, the Act created the Public Utility Commission of Texas [Sec. 5] with exclusive original jurisdiction over all telecommunication in the state [Sec. 18], the jurisdiction over rates and services to be assumed on 1 September 1976 [Sec. 87(b)]. Repealed effective 1 September 1976 were V.A.C.S. art. 1119 et seq., and all other laws and parts of laws in conflict with the Act [Sec. 90(a)]. Although municipalities were to continue to regulate each local utility inside their boundaries and all rules and regulations pertaining thereto were to remain in effect until the Commission assumed jurisdiction [Sec. 22; Sec. 90(b)], the Act does not contain a savings clause.

The Act became fully effective five days after the court rendered the summary judgment which, because of the appeal, did not grant any final relief. Cf. National Carloading Corporation v. Phoenix-El Paso Express, Inc., 142 Tex. 141, 176 S.W.2d 564, 568 & 570 (1943), cert. denied, 322 U.S. 747, 64 S.Ct. 1156, 88 L.Ed. 1578 (1944). Thus, the legislature’s exercise of its constitutional authority to vest exclusive original jurisdiction over all state telecommunications in the Public Utility Commission of Texas terminated the regulatory power, both statutory and contractual, theretofore held by municipalities over telephone systems. Therefore, absent any savings clause in the Act, any right the City of Perryton had to regulate General Telephone’s rates and service ceased on 1 September 1976 when the Commission assumed exclusive original jurisdiction of these matters. In a like manner, the operation of the Act deprives the courts of original jurisdiction to determine these pending questions and moots the cause, Southwestern Bell Telephone Company v. City of Kountze, 543 S.W.2d 871 (Tex.Civ.App.—Beaumont 1976, no writ), and authorities there cited, because any right which might be determined by this appeal could not be effectuated in the manner now provided by law. Sterling v. Ferguson, 122 Tex. 122, 53 S.W.2d 753, 761 (1932).

Accordingly, the summary judgment is reversed and the cause is dismissed. Danciger Oil & Refining Co. of Texas v. Railroad Commission of Texas, 122 Tex. 243; 56 S.W.2d 1075 (1933). Costs are assessed one-half against each party.


text:
    Edith G. GARWOOD, Appellant, v. William E. LOCKE et al., Appellees.
    No. 15748.
    Court of Civil Appeals of Texas, San Antonio.
    June 1, 1977.
    Rehearing Denied June 29, 1977.

      Karl Dorr, Southers, Goldberg, Lyons & Huson, San Antonio, for appellant.
    Michael M. de Shelter, Corpus Christi, for appellees.
   KLINGEMAN, Justice.

This suit arises out of an unsuccessful sterilization operation. Edith G. Garwood sued Dr. Locke and Dr. Brown for damages allegedly suffered by her in connection with the birth of a normal healthy child after a tubal ligation had been performed on her by the doctors. The parties will be herein referred to as they were in the trial court. Plaintiff alleged that the defendants were negligent (a) in failing to communicate to her the inherent and potential hazards of the proposed operation; (b) in failing to inform her of the risks, failure, and possible adverse results; (e) in failing to inform her of the nature and degree of the risk; (d) in failing to secure her informed consent to the procedure; (e) in failing to perform appropriate surgical procedures; and (f) in failure to properly perform the surgical procedure.

Plaintiff seeks damages for (a) medical expenses incurred; (b) loss of earnings; and (c) physical pain and mental anguish, past and future. Defendants denied liability and filed a motion for summary judgment asserting that (a) no such cause of action exists in Texas; (b) the damages sought are not a foreseeable consequence of the negligent conduct alleged; (c) the damages are purely speculative; (d) such character of damages in this State are barred by considerations of public policy; and (e) there is no genuine issue of material fact. The trial court granted defendants’ motions for summary judgment and decreed that plaintiff take nothing against defendants.

The only summary judgment evidence is contained in an oral deposition of plaintiff. Plaintiff is a registered occupational therapist and has worked with both adult and child mental retardates. In 1962 she had a child born who was normal and healthy and there were no medical complications; except plaintiff testified that she experienced extreme trauma and it was a terrifying experience. A second child was thereafter born, who was also a normal healthy child, and there were no complications with regard to the birth. After the birth of the second child, she had problems with taking birth control pills, including bleeding, hypertension, and general depression. She discussed with her family doctor, who is not a party defendant here, her fear that she would become pregnant again, which fear, to a certain extent, was related to the type of work she was in. He suggested that she do something permanent and referred her to one of the doctors here involved, who thereafter brought in the other doctor here involved.

She testified that she told Dr. Locke she was 34 and that she worked with retarded children; that she was afraid of having a defective child; and that she did not want any more children. She testified that she discussed with Dr. Locke the question of a tubal ligation, but that Dr. Locke at no time told her there was a certain percentage of failure with respect to tubal liga-tions. In June of 1973 she had the operation performed and was in the hospital approximately 2½ days, but had no serious consequences from surgery.

The following September she found out that she was again pregnant. The child born thereafter was normal and healthy. She testified that while she had a normal convalescent period, that mentally and emotionally she had problems. She testified that she cried a great deal during the pregnancy and thereafter; and that she worried that such child would be mentally retarded. She stated that the baby was an unwanted child and the baby cried for hours and hours; that she went to a clinical psychologist who had been treating her for approximately a year and a half and that she was also treated by a psychiatrist. She testified that thereafter she had a hysterectomy and that the doctor who performed this operation told her in connection with her tubal ligation that the left tube was not done properly and that there was a hole there. She also testified that she had lost approximately four months’ of work because of her pregnancy, which was equivalent to about $2,000.00 in wages.

Both plaintiff and defendants rely basically on the same cases, but each reach different conclusions as to the result and effect of such cases. One of such cases is Terrell v. Garcia, 496 S.W.2d 124 (Tex.Civ.App.—San Antonio 1973, writ ref’d n. r. e.), cert. denied, 415 U.S. 927, 94 S.Ct. 1434, 39 L.Ed.2d 484. This case contains a comprehensive discussion of cases and authorities from various jurisdictions with regard to the issue of liability for performance of unsuccessful sterilization operations. The narrow question presented in Terrell was whether the parents of an unwanted but normal child, conceived after an unsuccessful sterilization on the mother, may recover from the negligent doctor for the financial expenses of the care and maintenance of such child, plaintiff having waived all other items of damages. The majority of the Court affirmed the summary judgment of the trial court, pointing out the insurmountable problems of proof of benefits under our present standards of proof for damages; and held that public sentiment recognizes that the benefit to the parents outweigh their economic loss in rearing and educating a healthy normal child. This case does not hold that no cause of action exists or can exist in Texas for damages arising out of an unsuccessful sterilization operation and did not speak to the question of whether there was a cause of action; but only as to whether certain types of damages could be recovered.

In Hays v. Hall, 477 S.W.2d 402 (Tex.Civ.App.—Eastland 1972), reversed by the Supreme Court in 488 S.W.2d 412, plaintiff sought various types of damages, including medical and hospital expenses of two pregnancies, physical pain and suffering, loss of consortium, mental anguish, and the monetary expenses of raising, caring, and educating the last child, who was a normal healthy child, arising out of an unsuccessful sterilization operation. The Court of Civil Appeals held that the two-year statute of limitations barred any recovery, but also overruled a point of error pertaining to the recovery of the economic cost of raising, caring, and educating the last child, stating that to allow damages for the care and upbringing of a normal child would mean that a doctor would have to pay for the satisfaction, joy, and affection which normal parents would ordinarily have in the rearing and education of a healthy child.

The Supreme Court reversed and remanded the case for a trial on the merits, discussing only the limitations point and stating:

One who undergoes a vasectomy operation, and then after tests is told that he is sterile, cannot know that he is still fertile, if that be the case, until either his wife becomes pregnant or he is shown to be fertile by future tests. If the limitation period is measured from the date of the operation and if the discovery of fertility and therefore the injury is not made until after the period of limitations has run, the result is that legal remedy is unavailable to the injured party before he can know that he is injured. A result so absurd and so unjust ought not to be possible.

Defendants assert that the Court of Civil Appeals, in such case, held unequivocally that damages are not available to a plaintiff where a normal healthy child is born; and argues that since the Supreme Court reversed the case solely on the grounds of limitations, without discussing the matter of damages, the effect was to leave the holding of the Court of Civil Appeals intact, and was tantamount to a holding that damages are not available to a plaintiff where a normal healthy child is born. We disagree. It is not logical to assume that if the Supreme Court felt that no cause of action existed or could exist in connection with a negligently performed sterilization operation, they would have remanded such case for a trial on the merits. As hereinbefore noted, the Supreme Court spoke in terms of “legal remedy.”

In Jacobs v. Theiner, 519 S.W.2d 846 (Tex.1975), the Supreme Court had before it a case where a mother had contracted rubella during her pregnancy and subsequently gave birth to a deformed child. The alleged negligence of the doctor was the failure to diagnose the rubella and failure to advise plaintiff of the attendant risk and damages. Damages were sought for the medical expenses for treatment and care of the child, and for their own emotional suffering. The trial court granted the doctor’s motion for summary judgment and the Court of Civil Appeals affirmed. The Supreme Court reversed and remanded, stating that the plaintiffs had stated a cause of action against the doctor, and that the suit for recovery of expenses reasonably necessary for the care and treatment of their child’s physical impairment, is not barred by consideration of public policy. The Supreme Court discussed both the Terrell v. Garcia case and the Hays v. Hall case and pointed out, in connection with the Hays v. Hall case, that the suit was dismissed on the grounds that limitations had run, and that this was the issue discussed in the opinion; but that the case was remanded for trial without any suggestion that no cause of action was stated.

We must assume, for the purpose of this appeal from a take-nothing summary judgment, that the sterilization operation was negligently performed by the doctors. The remaining question is as to compensation for such negligence. Unlike Terrell v. Garcia, supra, which was limited to the narrow question of whether damages for the monetary expenses of the care and maintenance of an unwanted child could be recovered after an unsuccessful operation on the mother, plaintiff, in the case here before us, sought damages for (a) medical expenses incurred; (b) loss of earnings; and (c) physical pain and anguish, past and future. Under the summary judgment pleadings and evidence here and the authorities herein discussed, the matter of recovery of medical expenses is clearly put in issue. We do not pass on the recoverability of the other elements of damages sought.

The trial court erred in granting the summary judgment here involved. The judgment is reversed and remanded for a new trial.


author: SPURLOCK, Justice.

text:
    Donald PACK, et ux., Appellants, v. CITY OF FORT WORTH, Texas, Appellee.
    No. 17791.
    Court of Civil Appeals of Texas, Fort Worth.
    June 2, 1977.
    Rehearing Denied June 30, 1977.

      Yarborough & Pope, Inc., and Frank H. Pope, Jr., Bedford, for appellants.
    S. G. Johndroe, Jr., City Atty., John F. Gray, Asst. City Atty., Fort Worth, for appellee.
   OPINION

SPURLOCK, Justice.

Donald Pack signed a release for injuries suffered while in the course and scope of his employment for the City of Fort Worth. His suit for those injuries resulted in a summary judgment for the City.

We affirm.

On February 6, 1973, Pack, an employee of the public works department of the City, was repairing a heater suspended from the ceiling of a water department garage, approximately twenty feet above the floor. At the time of the accident he was working on a platform raised by a forklift to a height convenient for that work. Another City truck, being repaired nearby by another City employee, was moved forward with its hood up, blocking the vision of the mechanic who was repairing it, resulting in a collision with the forklift and knocking Pack from the platform to the floor, causing him to sustain serious personal injuries.

Following the fall, the City provided Pack with medical care and full salary for approximately one year.

In February, 1974 Park voluntarily filed an application to retire from employment with the City. The application was approved and he accordingly retired on or about March 31,1974. Following his execution of an “Employees’ Retirement Fund City of Fort Worth Retirement Certificate (Male Employee)” on or about April 8,1974, he began to receive (and continues to receive) monthly pension checks issued pursuant to the terms of the certificate and retirement ordinances of the City.

Pack later brought this suit against the City for the injuries sustained. He alleged that all proper notices as required by state law, the city charter, and the code and ordinances of the City of Forth Worth had been timely made and given. The City alleged that Pack had not complied with the notice provisions contained in the city charter. Pack replied that the City, by its con duct, in agreeing within the sixty-day period provided for the giving of notice to settle with him, and other conduct on the part of the City constituted estoppel and a waiver in regard to its notice provisions. Pack further relied upon the Texas Tort Claims Act, offering evidence that the accident occurred on city property; the City had immediate actual notice of the accident; a person from the personnel department, charged with the duty of investigating accidents, made a thorough investigation of it within a few days; and the City paid the medical expenses incurred because of the accident. Pack therefore contends the notice provision contained in Tex.Rev. Civ.Stat.Ann. art. 6252-19, known as the Texas Tort Claims Act, § 16 as amended (1973) had been complied with.

The City also pleaded that Pack’s cause of action had been compromised and settled and Pack had filed a full release, which barred this cause of action. In reply, Pack alleged that he thought he was obtaining his retirement pay and did not know the instrument had the effect of releasing his cause of action for personal injuries. The City filed its motion for summary judgment with supporting affidavits and other evidence, and, upon hearing, the trial court granted the City’s motion, from which Pack appeals.

Pack’s assignments of error all cluster around two main areas — release and notice — and will be treated accordingly.

The supreme court, speaking through Justice Greenhill, enumerated the rules governing summary judgment practice in Great American R. Ins. Co. v. San Antonio Pl. Sup. Co., 391 S.W.2d 41, 47 (Tex.Sup.1965). That court there stated: “Rule 166-A, Texas Rules of Civil Procedure, provides that summary judgment shall be rendered if it is shown that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The burden of proof is on the movant, and all doubts as to the existence of a genuine issue as to a material fact are resolved against him. (Citations omitted.) In other words, the evidence must be viewed in the light most favorable to the party opposing the motion.”

More recently, in Gibbs v. General Motors Corporation, 450 S.W.2d 827, 828 (Tex.Sup.1970), the supreme court speaking through then Chief Justice Calvert stated, “[T]he question on appeal, as well as in the trial court, is not whether the summary judgment proof raises fact issues with reference to the essential elements of a plaintiff’s claim or cause of action, but is whether the summary judgment proof establishes as a matter of law that there is no genuine issue of fact as to one or more of the essential elements of the plaintiff’s cause of action. . . . The provisions of Rule 166-A are applicable alike to defendants and plaintiffs who move for summary judgment; the judgment sought should be granted, and if granted should be affirmed, only if the summary judgment record establishes a right thereto as a matter of law.” (Emphasis the court’s.)

An examination of the pleadings and affidavits filed in support of and in opposition to the motion for summary judgment, reveals that Pack’s basic complaint is that he did not understand what the release meant. It is entitled “Employees’ Retirement Fund City of Fort Worth Retirement Certificate (Male Employee),” and it states it is a release from all claims for “ . . . all liability of the City of Fort Worth on account of your employment therewith and on account of your participation in the Employees’ Retirement Fund of the City of Fort Worth, . . . It does not point out that “all liability” includes personal injuries resulting from that employment. Because he does not allege fraud, we do not determine whether the city purposely misleads its employees, allowing them to lull themselves into holding a false belief, as Pack avers he held, that he “ . . . was releasing the City, Pension Fund, Board of Trustees, and Administrator from any other wage, employment (such as for wrongful termination, sick leave, vacation pay, or wages due claims) or retirement fund claims, and did not understand that [he] was releasing the City of Fort Worth, Texas, from liability for [his] injuries due to its negligence or negligence of its employees.” He avers only that he misunderstood the extent of the release, because its language is vague and ambiguous.

The rule as to a unilateral mistake, absent fraud, is articulated in Wheeler v. Holloway, 276 S.W. 653, 654 (Tex.Comm’n App.—1925, jdgmt adopted.) The court stated, “Some courts, as well as some of the text-writers, hold that neither law nor equity will relieve against a unilateral mistake of fact in the absence of fraud. .

“But there are some authorities which, under the broader rules of equity, do relieve against a unilateral mistake of fact, where the party making such mistake shows he used due diligence to avoid such a mistake. We quote as follows, in this connection, from the Supreme Court of the United States in the case of Grymes v. Sanders, 93 U.S. 55, 23 L.Ed. 798:

“ ‘Mistake, to be available in equity, must not have arisen from negligence, where the means of knowledge were easily accessible. The party complaining must have exercised at least a degree of diligence “which may be fairly expected from a reasonable person.” ’ ”

Did Pack make a showing that he used due diligence to understand what he was signing? We think not.

The key ordinance of the City, #5226, establishes and provides for a retirement plan for city employees. Section 22 thereunder provides, “ . . . it is expressly provided that no member of the Employees’ Retirement Fund of the City of Fort Worth shall have the right to sue said City for total disability sustained in line of duty, as heretofore defined, and by virtue of becoming a member he or she accepts the benefits provided by the Employees’ Retirement Fund of the City of Fort Worth in lieu of his or her right at law to sue the City for damages in a court of competent jurisdiction. ...”

Pack, like all other citizens, is presumed to know the ordinances of his City, which have the force of law. That ordinance is written in such a way that he could not have failed to understand the extent of his release, had he but read it.

One provision of the contract between Pack and the City is that he will receive these monthly payments for life. The City attached to its affidavit in support of its motion for summary judgment, copies of checks drawn on the Employees’ Retirement Fund account and endorsed by Pack, in amounts increasing from $150.00 to $153.00—one for each month from April 1974 through July 1975. In oral argument before this court, Pack’s attorney stated he still had no intention of returning the money—that he thought it was his right to accept the benefits of the agreement without having to live with its other consequences. Pack, then, is not trying to rescind the contract altogether, but only its negative aspects. He is trying to reform the contract to comport with his understanding of it—which in turn would require a rewriting of the City’s ordinance expressly disallowing the right to file suit and accept the benefits of the Employees’ Retirement Fund.

Clearly, Pack has ratified the transaction by his acceptance of its benefits, and cannot now be heard to complain about its terms just because he did not understand them.

One of the most firmly implanted working rules in the field of contracts is well-articulated in the Restatement of Contracts:

“The power of avoidance for fraud or misrepresentation is lost if the injured party after acquiring knowledge of the fraud or misrepresentation manifests to the other party to the transaction an intention to affirm it, or exercises dominion over things restoration of which is a condition of his power of avoidance,

Restatement of the Law of Contracts § 484 “Loss of Power of Avoidance by Affirming Transaction” (1932).

If that statement is true in the cases of fraud or misrepresentation, how much more true is it in the case of a simple unilateral mistake, which could not have occurred had the injured party exercised due diligence.

We overrule Pack’s points of error dealing with the release.

Because we find that as a matter of law Pack lost whatever cause of action he may otherwise have had by first signing the release and then continuing to accept the benefits of it, and by refusing to do equity by tendering to the City the money he had received under the terms of the contract, thereby ratifying the release, it is unnecessary to determine whether his attempts to notify the City of the accident were sufficient.

We affirm.