author: MURRAY, Justice.

text:
    CANNON BALL MOTOR FREIGHT LINES et al. v. GRASSO et al.
    No. 9013.
    Court of Civil Appeals of Texas. San Antonio.
    Feb. 22, 1933.
    Rehearing Denied April 12, 1933.

      Eskridge & Groce and Geo. T. Rice, all of San Antonio, for appellants.'
    Champe G. Garter, Randolph L. Carter, H. C. Carter, and Perry J. Lewis, all of San Antonio, for appellees.
   MURRAY, Justice.

Volker Grasso, appellee herein, brought this suit against the Cannon Ball Motor Freight Lines, a corporation, and the Universal Casualty Company, also a corporation. He sought damages for injuries sustained by him as a result of a collision between the automobile he was driving and a truck belonging to the defendant freight lines. Grasso further alleged that the casualty company had issued to the freight lines a casualty insurance policy required by the laws of this state, and the regulations of the Railroad Commission. He also alleged the insolvency of the freight lines.

A plea in abatement, setting up misjoinder of parties and causes of action by the casualty company, was overruled by the court below.

The first proposition made by appellants is as follows:

“Where, as was this one, a case is submitted to the jury on special issues, there being fourteen special issues relative to defendant’s negligence and plaintiff’s contributory negligence, it was error for the court to include in the charge just before the fifteenth special issue, being on the amount of damages, the following:

“ ‘If in response to the foregoing question you have answered that the defendant’s truck was operated in a negligent manner, and that such negligence, if any, caused the injury to the plaintiff, and if you have also answered that the plaintiff was not guilty of negligence contributing to the accident, then .you will answer the following question, otherwise you need not answer the following question.’
“The said matter having been duly objected to because the same informed the jury of the effect of their answers and is in effect ⅞ general charge.”

Articles 2189 and 2190, Revised Statutes 1925, construed together, provide, among other things, that, when the court submits a case upon special issues, he shall submit all the issues made by the pleading. Such special issues shall be submitted distinctly and separately. Each issue shall be answered by the jury separately. In submitting special issues, the court shall submit such explanations and definitions of legal terms as shall be necessary to enable the jury to properly pass upon and render a verdict on such issues.

Under these provisions it is veil settled that the giving of a general charge along with special issues is error. Kemper v. Police & Firemen’s Ins. Ass’n (Tex. Com. App.) 48 S.W.(2d) 254; St. Louis S. W. R. Co. v. Hudson (Tex. Com. App.) 17 S.W.(2d) 793; Radford Grocery Co. v. Andrews (Tex. Com. App.) 15 S.W.(2d) 218; Texas & Pac. Ry. Co. v. Perkins (Tex. Com. App.) 48 S.W.(2d) 249; Roberts v. King (Tex. Civ. App.) 49 S.W.(2d) 991, 992; Solo Serve Co. v. Howell (Tex. Civ. App.) 35 S.W.(2d) 474. In the case of Roberts v. King, supra, Chief Justice Fly uses the following language: “It is apparent that the charge is a flagrant violation of the law and the decisions, against the intermingling of the submission of special issues' and general charges.”

It is equally as well settled in this state that it is error for the court or counsel to inform the jury of the legal effect or ultimate result of their answers where they do not already know such result. In the same case of Roberts v. King, supra, Chief Justice Fly also uses this language: “In theory, at least, the jury is not supposed to know the ultimate result of their answers to special issues, and it is necessarily inappropriate and prejudicial to indicate the result of answers to questions propounded. The charge was fully excepted to by the appellants, and such exceptions have been duly presented to this court, and must be sustained.” There are many authorities upon this point; the following are some of them: Wichita Valley R. Co. v. Southern Casualty Co. (Tex. Com. App.) 284 S. W. 940; Humble Oil & Refining Co. v. McLean (Tex. Com. App.) 280 S. W. 557; McFaddin v. Hebert, 118 Tex. 314, 15 S.W.(2d) 213.

From the authorities above cited, it is apparent that, if the charge complained of was a general charge, or if it informed the jury of the effect of their answers to the special issues submitted to them, it was an improper charge. We feel that the exception was well taken to this charge, and that it should not have been given over appellant’s objection. In the first place, it was not necessary to tell the jury to answer issue No. 15 only in the event they found that appellant was guilty of negligence and that appellee was not guilty of contributory negligence. The jury could have answered the amount of damage appellee had suffered, regardless of whether he was guilty of contributory negligence or whether or not appellant was guilty of negligence. The question of negligence would have had an all-important effect upon the ultimate result of their answers, but could not assist them in any way in determining the amount of damages. Appellee seeks to justify this instruction by the court upon the ground that the jury may have already answered that the appellant was not guilty of negligence and that the appellee was guilty of contributory negligence, and then be unable to agree as to the amount of damages; thus resulting in a hung jury.

If a jury reports to a court that they have answered part of the issues, but are unable to agree upon the answer to some of the other issues, then it would become the duty of the court, if he regarded the jury as hopelessly hung, to instruct them to answer such questions as they were able to answer, to sign and return their verdict, and, if on examination it be found that they had answered sufficient questions to support a judgment, a mistrial would be averted. This charge was not a necessary instruction. The effect of it was to tell the jury that, unless they found that appellant was guilty of negligence, causing the collision, and appellee was not guilty of contributory negligence, they could not find for appellee in any amount. This is a general instruction, and also tells the jury of the ultimate effect of their answers to at least thirteen of the preceding fourteen special issues. It might be contended that this instruction coming after all but the last issue would not furnish them information until after such issues had been answered. We do not think this would keep the instruction from being harmful. In the first place, the judge is required to read the charge to the jury, and thus it will be seen that before they retire to deliberate they have heard the entire charge read. But we will say this made no impression upon them, and that in their deliberations they took up the issues in their, numerical order, answering them in the same order, then, before answering the fifteenth issue, they read this instruction, and are thereby directed to check back over their answers and ascertain whether or not they have found in a certain way on each issue, and, unless they have done so, there can be no amount of damages, then it is discovered that they have found that there was contributory negligence, and therefore they cannot answer the amount of damages. The jury could then change their answers so as to permit the party that they desired to win to recover judgment. This would destroy the very purpose of special issues, and is condemned by a long line of decisions, some of which are cited above.

Appellee points out that this instruction does not tell the jury not to state the amount in the event they have found that the collision was an unavoidable accident. This further illustrates that the instruction was unnecessary. If the jury was permitted to find the amount of damage, even though the collision was an unavoidable accident, they might as well do so, even though they had found that the defendant was not guilty of negligence and that the plaintiff was guilty of contributory negligence.

Appellants’ second proposition raises the question of misjoinder of parties and causes of action, in that the insurance company was joined with the alleged negligent party. It is plain from an examination of the record that the insurance policy involved in this case, by its terms, is one of indemnity and not of public liability. In the case of Cuellar v. Moore, an opinion by this court, reported in 55 S.W.(2d) 244, it is definitely settled that under insurance policies such as we have in this ease the insurance company cannot be joined with the alleged negligent party in a suit to establish the amount of damages. Ample authority is therein cited for this holding.

Appellees in their reply to appellants’ second proposition raise the question that the alleged negligent party, being a common carrier for hire and by the provisions of article 911b, § 13, Vernon’s Ann. Civ. St., is required to carry casualty insurance before it can secure a certificate of public convenience and necessity, and that such policy is required to be filed with the Railroad Commission of Texas; and allege that these are sufficient facts to take this cáse out of the general rule announced in the case of Cuellar v. Moore.

Section 13, art. 911b, provides, among other things: “That the obligor therein [meaning insurance policy] will pay to the extent of the face amount of such insurance policies and bonds all judgments * * ⅜ that such judgments will be paid by the obligor in said bonds and insurance policies irrespective of the solvency or insolvency of the motor carrier. * * * Provided further that in the event the insured shall abandon his permit or certificate and leave the State, a claimant, asserting a claim within the provisions of said bonds or policies, may file suit against the company * * * without the necessity of making the insured a party to said suit.”

It seems to us that a fair construction of this statute would be that the insurance company would only become liable after the amount of injury and damages had become fixed in a final judgment, except where the alleged negligent party had abandoned his permit or certificate and left the state, in which event the injured party could file suit directly against the insurance company without the necessity of making the insured a party to the suit. There is nothing in the statute which would make the insurance company directly responsible to third parties, with the one exception expressly set forth.

The disposition made of appellants’ first and second propositions renders the third proposition immaterial.

For the error pointed out, the judgment of the trial court is reversed, and the cause remanded.

On Motion for Rehearing.

The twelfth paragraph of appellee’s motion for a rehearing is as follows:

“This Court erred in holding that the portion of the Court’s charge just preceding the issue submitting the amount of damages
‘If in response to tlie foregoing question you have answered that the defendant’s truck was operated in a negligent manner, and that such negligence, if any, caused the injury to the plaintiff, and if you have also answered that the plaintiff was not guilty of negligence contributing to the accident, then you will answer the following question; otherwise you need not answer the following question:’ constituted reversible error, because in so holding the decision of this Court holds differently upon a question of law, and is in conflict with a prior decision of its own, and of other Courts of Civil Appeals, and of the Supreme Court in the following cases: D. & H. Truck Line v. Hopson (Tex. Civ. App.) 4 S.W.(2d) 1013; D. & H. Truck Line v. Lavallee (Tex. Civ. App.) 7 S.W.(2d) 661; Texas Landscape Company v. Longoria (Tex. Civ. App.) 30 S.W.(2d) 423; Ineeda Laundry v. Newton (Tex. Civ. App.) 33 S.W.(2d) 208, 211; Texas Employers’ Insurance Association v. Heuer (Tex. Civ. App.) 10 S.W.(2d) 756, 759; Missouri, O. & G. Railway v. Webb (Tex. Civ. App.) 178 S. W. 728.”

The three cases first cited do not discuss the question here raised in such a way as to disclose on the face of the opinion that this question was in these cases. Appellee, realizing this fact, has accompanied his motion for a rehearing with copies of briefs to disclose the fact that this question was actually raised in these three cases and either overruled without comment or ignored by the court. There is nothing said in these opinions which conflicts with what we have said in our original opinion.

Appellee next mentions Ineeda Laundry v. Newton; there the complaint was with reference to questions 11, 12, and 13. By question 11 the court inquired of the jury if ap-pellee received injuries in the collision with appellant’s truck; by question 12 the jury was asked whether or not the truck was being operated by an. agent or employee of appellant. Question 13 submitted to the jury, “What sum of money paid now would, in your judgment, compensate the plaintiff for the injuries, if any, received by her?” In connection with these questions, the court instructed the jury that, if they had answered questions 11 and 12 “No,” then not to answer question 13. There was of course nothing improper in this instruction. If there was no injury, it would have been confusing, and, on the weight of the evidence, for the court to require the jury to find the amount of damages when they had previously answered that there was no injury. In the case at bar the injury was undisputed. Grasso had lost an arm as a direct result of this collision and the jury could have properly stated the amount of his damages independent of the question of negligence. Texas Employers’ Ins. Ass’n v. Heuer (Tex. Civ. App.) 10 S.W.(2d) 756, 759, is a similar case to the Ineeda Laundry Case.

In Missouri, O. & G. R. Co. v. Webb (Tex. Civ. App.) 178 S. W. 728, the court said in effect that the giving of a general charge in a case submitted on special issues was harmless error. This opinion was rendered June 6, 1915, at which time submission of cases on general charges was rather the usual custom, and submission on special issues was rather new in this state. There are so many recent opinions which in effect overrule the opinion in that case, and the case on which it is based, Texarkana, etc., R. Co. v. Casey (Tex. Civ. App.) 172 S. W. 729, that we will not attempt to cite all of them. In addition to those cited in our original opinion, we add: McDaniel v. Morrison (Tex. Civ. App.) 42 S.W.(2d) 454; Tex. Ind. Ins. Co. v. Davis (Tex. Civ. App.) 32 S.W.(2d) 240; Kemper v. Police & Firemen’s Ins. Ass’n (Tex. Com. App.) 48 S.W.(2d) 254; Solo Serve Co. v. Howell (Tex. Civ. App.) 35 S.W.(2d) 474; Southwestern Land & Loan Co. v. Burr (Tex. Civ. App.) 285 S. W. 675, 678; Hovey v. See (Tex. Civ. App.) 191 S. W. 606; St. Louis Southwestern Railway Co. v. Osborne (Tex. Civ. App.) 270 S. W. 922, 923.

Appellee further contends that, even if the charge was error, it was harmless error, as no resulting injury was shown.

We cannot agree with this contention. When an erroneous instruction is given, then a reversal of the judgment must follow, unless it clearly appears that no prejudice resulted to the losing party by reason thereof. Walker v. Dawley (Tex. Civ. App.) 4 S.W.(2d) 159; Floyd v. Fidelity Union Casualty Co. (Tex. Com. App.) 39 S.W.(2d) 1091; Hewitt v. Buchanan (Tex. Civ. App.) 4 S.W.(2d) 169; article 2189, R. S. 1925.

In Humble Oil & Ref. Co. v. McLean (Tex Com. App.) 280 S. W. 557, 559, an opinion by the Commission of Appeals, and approved by the Supreme Court, Judge Harvey said:

“Every party litigant has the right to have his case tried in accordance with such statutory provisions. If this right be violated, over his objection, by the submission of instructions not authorized by statute, injury to the objecting party is presumed; and, unless it clearly appears that no injury or prejudice results to him, or his cause, he is entitled to a new trial. * * *
“In such a case, it is not required that the objecting party, in stating his objection, shall point out specifically in what particular way such a charge operates prejudicially to his cause, but it is sufficient that he directs attention to the fact that such charge is a general .one not authorized by the statutes, and that he bases his objection on that ground.”

Our attention is called to Commercial Standard Ins. Co. v. Paul M. Caster, by the Court of Civil Appeals for the Tenth District at Waco, decided March 30,1933, in which it is held that there is no error in the charge under consideration. The authorities cited in that opinion are D. & H. Truck Line v. Hopson, supra; D. & H. Truck Line v. Lavallee, supra; and Texas Landscape Co. v. Longoria, supra. As we said above, the opinions in these cases do not contain one word of discussion of this charge. We cannot agree with that opinion.

Appellee further contends that in our original opinion, wherein we held that there was a misjoinder of parties, we are in conflict with the following cases: Paul v. Dutton (Tex. Civ. App.) 55 S.W.(2d) 606; American Fidelity & Casualty Company v. Williams (Tex. Civ. App.) 34 S.W.(2d) 396, 402; Monzingo v. Jones (Tex. Civ. App.) 34 S.W.(2d) 662; Thurman v. Chandler (Tex. Civ. App.) 52 S.W.(2d) 315; American Auto Ins. Co. v. Struwe (Tex. Civ. App.) 218 S. W. 534, and Commercial Standard Ins. Co. v. Caster, supra. We are not in conflict with American Auto Ins. Co. v. Struwe, because the city ordinance under which the insurance policy was issued in that ease is sufficient to distinguish it from this ease, in that the ordinance required such insurance to inure to the benefit of the public. In Paul v. Dutton and Thurman v. Chandler, supra, the court makes it plain that they base their decisions on Monzingo v. Jones, so what we shall hereafter say with reference to this case will apply also to Paul v. Dutton and Thurman v. Chandler.

In American Fidelity & Casualty Co. v. Williams the injured party first secured judgment against the assured and then brought suit on this judgment against the insurance company. The facts are so different in that case from those in the case at bar that we do not deem it necessary to discuss the same further.

In Commercial Standard Ins. Co. v. Caster, supra, the court bases its holding largely on the Monzingo Case and Texas Landscape Co. v. Longoria, supra. If the Longoria Case is to be construed as holding that an insurance company can be properly joined with the assured under a policy such as we have in the present case, it has been in effect overruled by Cuellar v. Moore, supra, and the very recent case of Ray v. Maxon (Tex. Civ. App.) 56 S.W.(2d) 469. We feel that Cuellar v. Moore and Ray v. Maxon correctly state the law in cases where a private individual ‘is the assured in a policy, such as is described in those two cases, and especially is this true where the policy has what is known in legal parlance as a no-action clause.

This leaves just two other questions to be disposed of, which are: (1) Does the absence of a “no-action” clause in the policy change the rule? and (2) Does the statute with reference to bus companies and truck lines, to wit, section 11 of article 911a, and section 13 of article 911b, change the rule?

If we should follow the Monzingo v. Jones, Paul v. Dutton, and Commercial Standard Ins. Co. v. Caster Cases, we would answer these questions in the affirmative. We do not follow these eases. We agree with the holding on these questions in American Fidelity & Casualty Co. v. Jones Transfer & Storage Co. (Tex. Civ. App.) 46 S.W.(2d) 1054, and American Automobile Ins. Co. v. Cone (Tex. Civ. App.) 257 S. W. 961.

We do not feel that the no-aetion clause alone is the determining feature. The real question is, Does the policy by its terms expressed or implied give to injured parties a direct right to sue the insurance company, or are they required to first secure judgment against the assured before they can have a cause of action against the insurance company? We think that the provisions in the policy in the present case are sufficient to clearly show that the policy was strictly personal between the insurer and the assured ; that no other person had any claim against the assured until he had secured a judgment establishing the amount of his damages.

The court is bound by the language which the two contracting parties saw fit to use. It cannot write something into the contract of insurance that the parties themselves did not write. It is true that the provisions in an insurance policy are to be construed strictly against the insurance company because the language is selected by the insurance company. However, this rule does not apply to strangers to the contract.

What are the stipulations contained in the policy under investigation? The policy under consideration provides as follows:

(a) “To insure the assured named and described against direct loss by reason of liability imposed by law upon the assured.” '

Shall this be construed to mean liability not imposed by law, when it says liability imposed by law? We think not. Universal Auto Ins. Co. v. Denton, 185 Ark. 899, 50 S.W.(2d) 592; Engler v. Hatton (Tex. Com. App.) 12 S.W.(2d) 990; Owens v. Jackson-Hinton Gin Co. (Tex. Civ. App.) 217 S.W. 762; American Auto Ins. Co. v. Cone (Tex. Civ. App.) 257 S. W. 961; Hanson v. Haymann (Tex. Civ. App.) 280 S. W. 869; American Fidelity & Casualty Co. v. Jones, etc., Co. (Tex. Civ. App.) 46 S.W.(2d) 1054; In re Harrington Motor Co., [1928] 1 Ch. 105, 59 A. L. R. 1111; Fenton v. Poston, 114 Wash. 217, 195 P. 31; Duerler Mfg. Co. v. Dullnig (Tex. Civ. App.) 83 S. W. 889; Bowers v. Gates, 201 Mich. 146, 166 N. W. 880; Van Derhoof v. Chambon, 121 Cal. App. 118, 8 P.(2d) 925; New York Ind. Co. v. Ewen, 221 Ky. 114, 298 S. W. 182; Aplin v. Smith, 197 Iowa, 388, 197 N. W. 316; O’Neal v. Pocahontas Transp. Co., 99 W. Va. 456, 129 S. E. 478; Smith -Stage Co. v. Eckert, 21 Ariz. 28, 184 P. 1001, 7 A. L. R. 995; Small v; Morrison, 185 N. O. 577, 118 S. E. 12, 31 A. L. R. 1135; Atlas Hardwood Lumber Co. v. Georgia Life Ins. Co., 129 Tenn. 477, 167 S. W. 109; E'mbler v. Hartford, etc., Co., 158 N. Y. 431, 53 N. E. 212, 44 L. R. A. 512; Carter v. Aetna Life Ins. Co., 76 Kan. 275, 91 P. 178, 11 L. R. A. (N. S.) 1155; Travelers’ .Ins. Co. v. Moses, 63 N. J. Eg. 260, 49 A. 720, 92 Am. St. Rep. 663; Puget Sound Imp. Co. v. Frankfort, etc., Co., 52 Wash. 124, 100 P. 190; Bain v. Atkins, 181 Mass. 240, 63 N. E. 414, 57 L. R. A. 791, 92 Am.'St. Rep. 411; Frye v. Bath, etc., Co., 97 Me. 241, -54 A. 395, 59 L. R. A. 444, 94 Am. St. Rep. 500;- Charlton v. Van Etten (D. C. Minn.) 55 F.(2d) 418; Universal Auto Ins. Co. v. Denton, 185 Ark. 899, 50 S.W.(2d) 592.

(b) “In event a final judgment be rendered against the assured, to pay the same to an amount not exceeding the limit specified herein.”

Shall this language be construed as meaning that liability shall start before final judgment? In O’Neal v. Pocahontas Transportation Co., 99 W. Va. 450, 129 S. E. 478, 480, the West Virginia court, in construing a policy with such a provision, said: “The policy pleaded is a contract between the assured * * ⅜ and the insurance company, whereby it is,stipulated that it will pay and satisfy judgments finally establishing the assured’s liability in actions for damages. ⅜ * * There is no privity of contract between the injured person and the insurance company. The remedy, well established, is by a suit against the tort-feasor alone.”

We agree with this statement. Aplin v. Smith, 197 Iowa, 388, 197 N. W. 316. In Bowers v. Gates, 201 Mich. 146, 166 N. W. 880, 881, the court said: “Nothing in the contract gives him [the injured party] any right of action in tort, or otherwise, against the insurer of the alleged tort-feasor. The law upon that subject is elementary in principle.”

(e) “It is understood and agreed that the insolvency or bankruptcy of the assured shall not release the company from the payment of damages, for injuries or loss occasioned during the life of the policy. In case execution against the assured ⅜ * * is returned unsatisfied .in an action brought by the assured * * ⅜ an action* may be maintained by the injured person * * * against the company for the amount of the judgment of said action not exceeding the amount of the policy.”

Gan it be said that, because the insurer gave the alleged injured party a secondary right, thereby a stranger to the contract acquired a primary right? It has been well settled in a number of states that under this clause the injured party acquires ho primary rights. Universal Auto Ins. Co. v. Denton, 185 Ark. 899, 50 S.W.(2d) 592; New York Indemnity Co. v. Ewen, 221 Ky. 114, 298 S. W. 182; Edwards v. Fidelity & Casualty Co., 11 La. App. 176, 123 So. 162; Smith Stage Co. v. Eckert, 21 Ariz. 28, 184 P. 1001, 7 A. L. R. 995; Aplin v. Smith, 197 Iowa, 388, 197 N. W. 316; Van Derhoof v. Chambon, 121 Cal. App. 118, 8 P.(2d) 925; United States Fid. & Guaranty Co. v. Williams, 148 Md. 289, 129 A. 660.

(d)'“All rights hereunder are strictly personal to the assured named in this policy.”

Shall this language be construed to mean that all rights are not strictly personal to the assured? This stipulation should be given its plain and unmistakable meaning.

(e) “If a claim is made on account of any such accident, the assured shall give like notice thereof immediately after such claim is made with full particulars. If thereafter any suit is brought against the assured to enforce such claim, the assured shall immediately forward to the Company, or its authorized agent, every summons or other process as soon as the same shall have been served. Whenever requested by the Company, the assured shall aid in effecting settlement, securing information and evidence, the attendance of witnesses and in prosecuting appeals, and at all times render all possible cooperation and assistance. The assured shall not voluntarily assume any liability or interfere in any negotiations for settlement or in any legal proceedings, or incur any expense, or settle any claim, except at assured’s own cost without the written consent of the company previously given.”

It has been definitely held in other states that this stipulation confers no primary rights upon injured parties.

Justice Cardozo, in Coleman v. New Amsterdam Casualty Co., 247 N. Y. 271, 160 N. E. 367, 368, 72 A. L. R. 1443, says: “If the terms could be disregarded, insurers would be helpless to defend themselves against chicanery or covin. They might then be held, though there had been neither notice of the claim nor opportunity reasonably prompt to investigate the merits.” gee, also, Hynding v. Home Accident Insurance Co., 214 Cal. 743, 7 P.(2d) 999; Lorando v. Gethro, 228 Mass. 181, 117 N. E. 185, 1 A. L. R. 1374; Piper v. American Fidelity & Casualty Co., 157 S. C. 106, 154 S. E. 106; Smith Stage Co. v. Eckert, supra.

Under accepted rules for the construction of contracts, where a stranger contends that it was intended that the provisions of a contract should inure to his benefit, such intention must be clearly apparent. In the policy under consideration it does not clearly appear that the injured parties shall have primary rights against the insurer, but, on the contrary, it does appear, as above pointed. out, that there is to be no primary liability to injured parties. In Van Derhoof v. Chambon, 121 Cal. App. 118, 8 P.(2d) 925, 930, the court said: “Nowhere in the policy is there any express contract of direct liability to third persons. An intent to make an obligation inure to the benefit of a third party must clearly appear in the contract, and if there is any doubt' about it, it should be construed against such intent.” Leon v. Gulf Production Company (Tex. Civ. App.) 35 S.W.(2d) 1101; Hoffer Oil Corp. v. Hughes (Tex. Civ. App.) 16 S.W.(2d) 901; Miles v. Briggs (Tex. Civ. App.) 18 S.W.(2d) 850; Pennington v. Bevering (Tex. Com. App.) 17 S.W.(2d) 772; Southern Travelers’ Ass’n v. Wright (Tex. Com. App.) 34 S.W.(2d) 823; Blair v. Bird (Tex. Civ. App.) 20 S.W.(2d) 843; Sweetwater, etc., Ass’n v. Allison (Tex. Civ. App.) 22 S.W.(2d) 1107.

The only remaining question is, Did the Legislature in passing section 13, art. 911b, Yernon’s Annotated Statutes, intend that injured parties should have a right to join insurance companies in suits against truck lines for damages? Article 911b, dealing with truck lines, was passed by the Forty-First Legislature in 1929 (chapter 314). Article 911a, dealing with bus companies, was passed by the Fortieth Legislature in 1927 (chapter 270). The two articles are almost identical. It is a reasonable deduction that article 911b was largely copied from article 911a. When article 911a (then House Bill No. 50) was before the Senate, an amendment was adopted which read as follows: “The motor bus company and the insurance company carrying the insurance required by this Section may be sued jointly in any action for damages arising from injury to person or •property through the operation of any such motor bus or motor buses.”

This amendment was eliminated by a free conference committee and the bill finally passed without any such provision. Shall we presume that the Legislature intended that which it eliminated from the bill?

It is clear that neither from the face of the policy nor from the provisions of the ■statute can there be found authority which would justify the joining of the insurance company in a suit against the tort-feasor for •damages.

We therefore adhere to our former holding that the plea in abatement of the insurance company should have been sustained.

It is urged that the joinder of the insurance company should be allowed, to avoid a multiplicity of suits. It has been held that, where an insurance company comes into .a suit, furnishes its own attorneys to defend -the suit, examines and cross-examines witnesses, argues to the jury, and participates in the trial as fully as if it were a party, after the plaintiff has secured a favorable verdict from the jury, he may by motion in the original suit have judgment over and against the insurance company, as the law treats as parties all real parties to the litigation, whether technically parties or not. In other words, by participating in the proceedings, one is estopped by the judgment as to any question actually litigated and decided therein. Haines v. West, 101 Tex. 226, 105 S. W. 1118, 130 Am. St. Rep. 839; 15 R. C. L. §§ 481, 483. Thus it is not necessary to name the insurance company in the original suit to avoid a multiplicity of suits.

The question is raised as to what injury will result if the insurance company is joined. In Bergstein v. Popkin, 202 Wis. 625, 233 N. W. 572, 575, the court said: “Whether or not it is an indictment of our jury system, it is a fact recognized by everyone that the purpose of making the insurance company a party defendant is to increase the award of damages made against the insured. That it has that effect, no one familiar with the trial of cases can doubt.”

We have been asked to certify the questions herein to the Supreme Court, but, as a writ of error will lie to the Supreme Court in this ease, we have declined to certify as requested. Magill v. Brown, 20 Tex. Civ. App. 662, 50 S. W. 143, 642; Marnett Oil & Gas Co. v. Munsey (Tex. Civ. App.) 232 S. W. 867.

Appellee’s motion for a rehearing is overruled.

         Rehearing pending.


source: Caselaw Access Project

author: HICKMAN, Chief Justice. FUNDERBURK, Justice

license: Public Domain

text:
    GUARDIAN TRUST CO. et al. v. BROTHERS (BAKER et al., Interveners).
    No. 1088.
    Court of Civil Appeals of Texas. Eastland.
    April 7, 1933.
    Rehearing Denied April 28, 1933.

      ' Balter, Botts, Andrews & "Wharton, of Houston, and Grisham, Patterson & Grisham, of Eastland, for appellants.
    Conner & McRae, of Eastland, for appel-lee.
   HICKMAN, Chief Justice.

On June 29, 1926, appellants Guardian Trust Company and Mrs. Ella M. Corbett, joined by her husband, W. C. Corbett, executed an oil and gas lease covering 120 acres of land in Eastland county to L. F. Brothers, of which the following is all that is material to a decision of this case:

“That Guardian Trust Company, a Texas corporation domiciled in Houston, Texas, and Mrs. Ella M. Corbett, joined pro forma by her husband W. C. Corbett, both of Brazoria County, Texas (said above named parties being hereinafter referred to as ‘Lessors’), in consideration of the covenants and agreements hereinafter specified, .do hereby lease unto L. F. Brothers of the post office of Desdemona, Texas, (hereinafter called ‘Lessee’) the following described land. * * *
“The purpose of this lease is such that so long as it remains in force the Lessee shall have the exclusive right to prospect and drill on said land for oil, gas, and other minerals and remove the same therefrom; to erect and maintain thereon and remove therefrom all necessary or proper structures and equipment, including the right to pull easing from abandoned wells; and to install and maintain thereon and remove therefrom all tanks and other means of storage, and all pipes and other means of transportation; with full right of ingress and egress at all times for any of said purposes. And subject to the, royalties hereinafter reserved, all of the oil and gas in and under said land is hereby granted and conveyed to Lessee. * * *
“Lessee binds and obligates himself to commence a well for oil and gas on said land within sixty (60) days from the date of this lease, and to prosecute operations thereafter on said well with due diligence, in a faithful effort to discover and produce oil or gas in paying quantities, said well to be drilled to the general depth of the Desdemona sand, estimated to be about 2800 feet in the part of the field where said leased land is located, unless oil or gas in paying quantities be found and produced at a lesser depth.
“Should said first well be completed as a dry hole, the Lessee shall, nevertheless, have the right to continue efforts to discover and produce oil in paying quantities and may drill as many other wells as he pleases, (provided that until the discovery and production of oil in paying quantities not more than sixty (60) days elapses between the completion or abandonment of one well and the commencement of operations on another), and provided all such operations are conducted with reasonable diligence when begun; but if, prior to the production of oil or gas in paying quantities, more than sixty days should elapse after the completion or abandonment of one well before the commencement of another well, or if operations once begun on any well should not be conducted with reasonable diligence, this lease shall thereupon terminate, and the mineral estate hereby granted shall revert to Lessors.
“If oil or gas should be found and produced in paying quantities from said first or any subsequent well drilled on said land in accordance with the provisions hereof, then this lease shall remain in fqrce and effect so long as oil, gas, or other minerals are produced from said land in paying quantities, or so long as Lessee is engaged in good faith and with reasonable diligence in drilling operations on said land, or in endeavoring to bring back wells to production.
“Having discovered oil or gas in paying quantities, the Lessee shall thereafter be obligated to proceed with due diligence to the reasonable development of said leased premises ; and if at any time during the life of this lease there should 'be brought in On adjoining land a well producing fifty barrels of oil or more for thirty consecutive days, or a well producing gas in paying quantities, Lessee shall thereupon with reasonable diligence begin and prosecute the drilling of an offset well on the leased land in a faithful effort to reach the strata from which the well on said adjoining tract is producing, and to obtain a producing well on the land hereby leased, offsetting said well on adjoining tract.”

Brothers did not perform any of the covenants therein contained, but wholly breached the same. Appellants instituted this suit against him for damages for breach of the covenant to drill a well on the land covered by the lease.; A plea of intervention was filed' by James A. Baker, Edwin B. Parker, H. M. Garwood, Jesse Andress, C. R. Wharton, C. L. Carter, W. H. Walne, and J. H. Tallichet, the then members of the law firm of Baker, Botts, Parker & Garwood, of Houston, alleging that they were the real and true beneficial owners of an undivided two-thirds interest in the tract of land covered by the lease; that Mrs. Ella M. Corbett and her husband, W. C. Cor-bett, were the owners of the other undivided one-third interest; and that the legal title to the interest of the interveners stood in the name of Guardian Trust Company for convenience. In their plea they ratified and confirmed the lease contract, adopted the suit as their own action, and prayed that it proceed in the name of Guardian Trust Company the same as if it had been originally instituted in the name of the interveners.

It is not necessary to give a detailed statement of appellants’ pleadings for they have clearly and fairly interpreted them in their brief in this terse language: “The rdal question for decision, so far as plaintiffs’ right to recover under their pleadings is concerned, is as follows: Was the reasonable cost of drilling the well the correct measure of damages for breach of the contract? If it was not, the plaintiffs, under their pleadings, were not entitled to recover. If it was, then judgment should have been in their favor for the sum of $S,000.00, the agreed cost of drilling the well contemplated by the contract.”

The case went to trial before the court without a jury and in its development appellants offered the following evidence: (1) The lease; (2) a written agreement signed by attorneys that the actual cash value or cost of drilling the well in question as contemplated by the'contract sued upon, at the time that same was to be drilled on the land in question, would have been $8,000; and (3) an agreement in open court that Brothers never commenced the drilling of a well within sixty days after the date of the contract and has never drilled a well on the land in question, : and that the lease involved in the suit was ,prepared by the firm of Baker, Botts, Parker ⅛ Garwood, interveners. No other evidence was offered by appellants.

Appellee offered evidence designed to show that the lease had no market value at the date the contract was made, and that drilling would not have resulted in the discovery of oil or gas in paying quantities. We do not find it necessary to evaluate appellee’s evidence, as it is not to control in the disposition of the case.

After appellee rested, appellants introduced in rebuttal certain correspondence passing between the parties, and the case was submitted to the court. Upon this evidence judgment was rendered that the plaintiffs take nothing, and this appeal followed.

As stated by appellants in their brief, if the cost of drilling an oil well at the time appellee breached his contract is not the correct measure of their damages, then the judgment was properly rendered against them, for they neither pleaded nor proved any other damages. In determining this question it is necessary to keep in mind the universally recognized rule that, for breach of contract the injured party is entitled to have the value to him of its performance, and, in awarding compensatory damages, he should be put as near as possible .in the same position as that in which he would have been put by performance. The rule is stated in 17 C. J. § 168, pages 848, 849, in this language: “But a plaintiff is not to be put in a better position by a recovery of damages for the breach of a contract than he would have been in if there had been perf ormance.”

Our Supreme Court, speaking through Justice Greenwood, in Texas Pacific Coal & Oil Company v. Barker, 117 Tex. 418, 6 S.W.(2d) 1031, 1037, 60 A. L. R. 936, states the same thought in this language: “The purpose of the law to give compensation for breach of contract is subserved by allowing the injured party to have the value to him of the contract’s performance.”

If this well-established and fundamentally sound rule is to be applied to a contract for the drilling of an oil well, then the question arises, would $8,000 have been the value to appellants of performance, or, stated differently, would the payment to appellants of $S,000 put them in the same position that they would have been put had the well been drilled? The answer to that question is not difficult. The true and ultimate purpose of all parties to the lease was “the mutually profitable production of oil, gas, or other valuable mineral.” Texas Co. v. Davis, 113 Tex. 321, 264 S. W. 304, 308, 255 S. W. 601. No other value to appellants than the value of the royalty was contemplated. The land was situated in an oil field and three wells had been drilled on this very tract a few years before this lease was executed. The royalty was one-eighth of the oil and a like proportion of the proceeds of the sale of gas. Its value might have been substantially more than $8,000 and it might have been substantially less. The only way to put appellants in the position they would have been put by performance would be to award them damages measured by the value of their royalty. The burden was upon them to establish that value, but they offered no evidence thereof. There is no more reason to fix that value at $8,000 than there is to fix it at $10,000 or $2,-000. To do so would be to hold that the measure of damages for the breach of a contract is not the value of performance to the obligee, but -is the cost of performance to the obligor.

Suppose these appellants had been the owners of a vacant lot in the town of Desdemona, near which the land covered by this lease is situated, and had entered into a contract with appellee, under the terms of which appellee agreed to erect a building thereon according to certain specifications and to pay appellants one-eighth of the gross revenues to be derived from renting the building, and that the contract had provided that appellee should have the right to remove the building at the expiration of the lease, placing the land in as good condition as it was before the lease was given. Then suppose that appellee had failed-to erect the building. Would it be seriously contended that appellant’s measure of damages for the breach of that contract would be what it would have cost to erect the building? We think not. The loss or injury actually sustained by the obligee, rather than the cost of performance by the obligor, is the proper measure of damages for the breach of a contract. When that well-established rule is departed from, compensatory damages become either punitive' damages, because too much, or inadequate damages, because too little, and the fundamental purpose of compensatory damages is lost sight of.

We can see no just reason for departing from the well-established rule of law for measuring damages simply because the contract relates to the sinking of an oil well. The fact that the nature of the contract is such as to render it impossible to ascertain with mathematical accuracy the exact amount of the damages suffered by the lessor should not operate to change the rule. The parties knew that difficulty inhered in the subject about which they were contracting, but chose not to stipulate for liquidated damages. This question is fully discussed in Texas Pacific Coal & Oil Co. v. Barker, supra. See, also, 13 Tex. Jur., pages 78, 79.

In Restatement of the Law of Contracts by the American Law Institute, vol. 1, p. 576, § 346, the following illustration is given of the application of the general rule for measuring damages: “A contracts with B to sink an oil well on A’s own land adjacent to the land of B, for development and exploration purposes. Other exploration wells prove that there is no oil in that region; and A breaks his promise to sink the well. B can get judgment for only nominal damages, not the cost of sinking the well.”

We are unable to distinguish the instant case from' the case of Texas Pacific Coal & Oil Co. v. Barker, supra. In the latter ease ’the lessee covenanted: (a) To begin the actual drilling of a well within thirty days; (b) to prosecute the drilling with reasonable diligence; (c) to give due protection against offset wells; (d) to dedicate at least one string of tools to the development of the tract; and (e) to keep said string of tools operating until the tract was developed or until it had been determined the tract was unworthy of further tests. In the instant ease the appellee covenanted: (a) To commence the drilling of a well within sixty days; (b> to prosecute operations with due diligence; (c) having discovered oil and gas in paying quantities, to proceed with due diligence to the reasonable development of the premises; and (d) to protect the property from drainage by drilling offset wells.

The tract of land covered by the lease in the instant case was within the Desdemona oil ñeld. Several years prior to the making of this contract three wells had actually been drilled upon this tract, two of them resulting in dry holes and one in a small producer. There were wells drilled on adjacent tracts, some of them being dry and others producers. With the aid of the information obtained from drilling in this field and the history of the wells, experts could doubtless have given very valuable testimony as to the probable production from this tract. /There is no reason to believe that expert testimony would have bee’n any more reliable and accurate in estimating the lessors’ damages in the Barker Oase than in the instant case. In the opinion in the former case, after quoting from many decisions holding that the best evidence of which the subject will admit is reasonaable, and that expert witnesses acquainted with the field -could testify with reasonable ’ accuracy as to the loss in oil and gas production suffered by the lessor by the lessee’s failure to perform his contract, the rule for measuring the damages is announced in -this plain language: “The amount and value of oil or gas production, obtained or obtainable through reasonable diligence, must be definitely alleged, and must be proven with reasonable certainty before damages may be allowed for breach of an express or implied covenant to continue the production of oil or gas, whether such damages result from failure to produce oil or gas -or from loss of same by drainage.” ,

We are aware that there are cases which hold that the measure of damages contended for by appellants is the correct rule. Some of these cases involved contracts where the obligee would own the entire completed well and others involved facts similar to those in the instant case. This court announced that as the proper rule in the cases of Mitchell, Jones & May v. Dabney (Tex. Civ. App.) 294 S. W. 243, 245, and Texas Pacific Coal & Oil Co. v. Stuard (Tex. Civ. App.) 7 S.W.(2d) 878, 881. It made the same announcement in the original opinion in Curry v. Texas Company (Tex. Civ. App.) 18 S.W.(2d) 256, but modified it to some extent in the opinion on rehearing. Writ of error was granted in that ease but the litigants agreed on a compromise and had the appeal dismissed. Since the writer of this opinion also wrote the opinion of this court in the Stuard Case, he feels that he can take some liberties therewith. That opinion did not apply or follow the rule there announced, but, on the contrary, applied and followed the rule stated therein in this language: “The sole purpose of actual damages is compensation. Appellees are not entitled to damages 'by virtue of appellant’s breach of the contract greater in amount than the money they would have received had it not been ■breached.”

But, without discussing the different cases in which this question was involved, we think we can assert with confidence that the Supreme Court of this state has never indicated its adoption of the rule relied upon by appellants.

. The attorneys disagree as to the principle ;of the holding in the case of Gwynn v. Wisdom, 119 Tex. 320, 30 S.W.(2d) 298. Without undertaking to analyze the principle underlying the final decision in that case, we think it can be said that it lends no sanction to the rule that the cost of performance by the ob-ligor is the measure of the damages suffered by the obligee.

It is our conclusion that appellants neither pleaded nor proved any damages suffered by them on account of appellee’s Breach of his ■covenant, and since no complaint is made of the failure of the trial court to award them nominal damages, the judgment of that court is affirmed.

FUNDERBURK, Justice

(dissenting).

This court, in three cases, has approved the measure of damages contended for by appellants. Mitchell, Jones & May v. Dabney (Tex. Civ. App.) 294 S. W. 243, 245; Texas Pacific Coal & Oil Co. v. Stuard (Tex. Civ. App.) 7 S.W.(2d) 878; Curry v. Texas Company (Tex. Civ. App.) 18 S.W.(2d) 256. In the latter case there was on rehearing some modification of the previously expressed views. We have, however, in the instant case, approached the consideration of the question as one still open, if not subsequently concluded by the opinion of the Supreme Court in Gwynn v. Wisdom, 119 Tex. 320, 30 S.W.(2d) 298, 300. The conclusion of the court in the last-named case was stated thus: “The damages suffered by Mrs. Wisdom, under the facts of this case, were such special damages, if any, as she may have suffered by reason of, or on account of, Gwynn’s delay [italics ours] in beginning to drill as he had contracted.” The obligation of Gwynn as provided in the lease to begin within thirty days the drilling of a well, while an unconditional covenant, was, at the same time, perforce of the contract a condition subsequent upon which the determinable fee estate conveyed by the lease was granted. Upon breach of the covenant (same being also a condition subsequent) the lease did not ipso facto terminate. Forfeiture could be waived, and unless asserted would be waived. Mrs. Wisdom promptly asserted the forfeiture. She, in legal parlance} made a re-entry upon the land (the oil and gas therein). The effect of the decision of the Supreme Court, as we construe it, was simply to hold that she could not assert the forfeiture, and also, for breach of the covenant, claim damages measured in any way so as to give her compensation for failure to drill the well. The court, in stating that under the facts of the case the damages recoverable were such special damages, if any, as she may have suffered on account of the delay, evidently meant that such would be the case had she not elected to claim a forfeiture of the lease. Gwynn was within his contract rights in delaying commencement of the well until just before the expiration of thirty days. In other words, there was no delay until the expiration of the thirty days’ time. On the 31st day Mrs. Wisdom had the fully accrued right to declare a forfeiture of the lease and the consequent further right to forbid Gwynn thereafter to commence or prosecute the drilling of the well. On that day her cause of action accrued for damages, if any she had, fpr breach of the covenant to drill the well. We do not believe that the opinion of the Supreme Court should be understood as holding that, under such circumstances, Mrs. Wisdom had any right to damages for delay. Manifestly there could have been no delay •prior to the accrual of the only cause of action she could have had for damages. Therefore, it seems the court must have had reference to what would have been Mrs. Wisdom’s right had she waived forfeiture of the lease, thereby allowing the. lease to continue in effect and have elected to assert only her cause of action for damages for the breach of the covenant. In such case Gwynn, having the right to do so, -could have drilled the well and thereby have limited his liability for damages to such only as may have been occasioned by the delay. We have therefore concluded that the question for decision is still open, so far as the decision of the Supreme Court in Gwynn v. Wisdom is concerned. That case, we think, would not be authority for the proposition that, even if the lessee repudiated his obligation and abandoned the lease, he could not be held, upon the plaintiff’s election to do so, to respond in damages other than for mere delay.

“The measure of damages in the ease of a breach of contract is the amount which will compensate the injured person for the loss which a fulfillment of the contract would have prevented or the breach of it has entailed. In other words, the person injured is, so far as it is possible to do so by a monetary award, to be placed in the position he would have -been in had the contract been performed.” 17 C. J. p. 847, § 168. Unquestionably this is a correct statement of the law applicable to the case. In agreement therewith is the statement by our own Supreme. Court of the ruling principle, as- follows: “The purpose of the law to give compensation for breach of contract is subserved by allowing the injured party to have the value to him of the contract’s performance.” Texas Pacific Coal & Oil Co. v. Barker, 117 Tex. 418, 6 S.W.(2d) 1081, 1037, 60 A. L. R. 936. The specific question presented for decision may then in other words he stated as follows: Would the allowance to plaintiffs of the sum of $8,000, the agreed reasonable cost of drilling the well, be “the value to” plaintiffs “of the contract’s performance?” By value of the contract’s performance we understand is meant the monetary equivalent of the contract’s performance. So understood it is easier to see that the value of the contract’s performance may not include the profits from the possible production of valuable minerals. In an unproven field a contract for a test well which obligates one party absolutely to drill the well to a specified depth contemplates no more than a chwnce to profit by the possible discovery of minerals. It contemplates that, when the contract is fully performed, there may be no valuable minerals discovered, and hence no profit from the production thereof. It is therefore apparent that the value of the contract’s performance in the very nature of such a case would not include something which the contract did not contemplate as being embraced within its performance. This, it seems to us, is a consideration of vital importance in our inquiry.

In order to show the proper application of the law as above stated, to the facts of the particular case, we believe this can best be done by supposing a case or two different from the instant ease, but in which such application can more readily be seen, and then showing, if we can, that there is no material difference between the supposed cases and this case.

First case: A owns a lot and makes a contract with B, a building contractor, to construct a building thereon according to plans and specifications. Eor some special reason, we shall say, A pays the consideration in advance. B wholly breaches his obligation. A elects to sue for damages for breach of the contract rather than to rescind and recover the consideration paid. What is the correct measure of damages? What would be the value or monetary equivalent to A of the contract’s'performance? It seems to us there could be no valid argument that the reasonable cost of constructing the building to comply with the contract would be the proper measure of his damages. It will perhaps be conceded that, if A, being able to do so, should himself construct the building, he would be entitled to recover as his damages the reasonable cost of constructing same. Since the measure of his damages would be the reasonable cost of constructing the building and not the actual cost, no good reason can be perceived why, if he did not construct the building, he should not nevertheless be entitled to recover as damages the reasonable cost of constructing the building. Both propositions we regard as supported by both reason and authority. As said in 9 C. J., p. 812, § 149, upon the subject of building contracts: “In case of failure to perform, the measure of damages is the difference between the contract price and the fair' cash market price or value of the doing of the work contracted for. * * ⅜ where the contractor has been paid in advance the measure of damages is the value of the building when completed in accordance with the contract.” Simons v. Witmann, 113 Mo. App. 357, 88 S. W. 791; In re Carrier (D. C.) 21 F.(2d) 589; Hamilton v. Stephens, 240 Mich. 228, 215 N. W. 321. The authorities cited show that by “value of the building” is not meant the value of the land, including the building. It means, as first stated in the quotation, “value of the doing of the work contracted for.” The case of Simons v. Witmann, supra, will be found most interesting and instructive upon the problem presented in this case.

Second case: A pays B in cash a sum of money to drill a well to a specified depth on land owned wholly by A, it being contemplated as indicated by recitations in the contract that a test is thus to be made of the possible existence of valuable minerals. B breaches the contract. A, being able to do so, drills the well in just such way that, had it been drilled by B, would have constituted full performance. The reasonable cost of drilling the well was $8,000. If our observations upon the first supposed case be granted to be correct, then we think there can be no difference of opinion, but that A would be entitled to recover as damages for the breach of the contract the sum of $8,000; the reasonable cost of drilling the well. The $8,000 would be the exact monetary equivalent of the contract’s performance. That would be equally true whether the well was dry or a producer of 10,000 barrels of oil per day. In such a ease there could be no valid argument, we think, either that the reasonable cost of drilling the well was not the value to A of the contract’s performance or that such value included any profit from the production of minerals. If the consideration for said contract was legal and sufficient to support it, then it would be wholly immaterial what was the nature, amount, or value of such consideration. It necessarily follows that, if instead of the payment of cash, A paid the consideration by conveying to B another tract of land, or by executing and delivering to him a lease on other land or by giving any other thing of value sufficient to constitute an executed consideration, it would make no difference. It is also just' as certainly an immaterial matter in either case what it would have actually cost B to perform his obligation, or that the consideration received by him originally sufficient to support the contract turned out to be of little or no value. Just as in the case first supposed, the reasonable cost of drilling the well and not the actual cost, being the measure of A’s damages, it would not be necessary for him to drill the well in order to recover damages. Suppose B’s obligation to drill the well was one enforceable in an action for specific performance. To specifically enforce the contract, what would the court order B to do? The court, of course, would order him to drill the well. In lieu of that, what more certain and just legal equivalent could be given than a sum of money representing the reasonable cost of drilling the well? Is it a sufficient objection to say that if the well is not drilled but a sum of money equal to the reasonable cost of such drilling is allowed in lieu thereof, the parties will not be thereby placed in the exact position they would have been had the contract been performed in that A would still not have had his chance to profit by the possible production of minerals? We think not. According to the rule as quoted from Corpus Juris above, it is only “so far as it is possible” (italics ours) that the person injured is “to be placed in the position he would have been in had the contract been performed.” Upon what principle of right or justice could the defendant be heard to object that, since the award of damages measured by the cost of drilling the well would not place the plaintiff in a position fully as good as if the contract had been performed, such measure of his damages must be rejected? That measure of damages will place him in as good position “as it is possible to do so” and that is the measure of A.’s right under the law. It certainly does not lie in the mouth of the defendant to object that it may fall a little short of full compensation.

Thus far, we think, we have not entered upon really controversial ground. We now come to that in our endeavor to show that the same rules and principles applicable to the two cases supposed are likewise applicable to this. All three cases are alike in that an executed consideration was paid in advance for the obligation to drill the well. In the instant ease such consideration was the execution and delivery of the oil and gas lease. The cases are alike in that the contract contemplated a test well in an unproven field. The evidence showed that in the “boom days” three wells had been drilled upon the land covered by the lease, of which two were dry and one a small producer. A few wells on other land in the vicinity were, some dry, and others small producers. The correspondence of the parties leading up to the making of the lease and the surrounding circumstances all seem clearly to show a mere chance to discover oil or gas in paying quantities was within the contemplation of the parties. The purpose of the contract was, by actually drilling a well, to determine the existence or not of profitable production. Aside from the defendant’s unconditional obligation to drill the well, most of the respective rights and duties of the parties were in the very nature of the situation contingent and conditional.

Wherein does this case differ from the two above supposed? We think we may safely assume that any differences which can he thought to be material consist of one' or both of the following facts, namely, (1) that the well was to be drilled upon the land covered by the lease given as a consideration for defendant’s obligation to drill it, and (2) that, in the event the drilling of the well resulted in the discovery and production of minerals, defendant would be the owner of seven-eighths and plaintiff one-eighth thereof. The only difference, we think, as respects the subject of inquiry, between, an obligation to drill a well upon land owned wholly by the plaintiffs, and an obligation to drill a well upon land owned wholly by defendant, would be material only in determining what was within the contemplation of the contracting parties. There could be no uncertainty in that respect, where the obligation was to drill a well for oil or gas on plaintiff’s land, but an obligation of the defendant to the plaintiff to drill a well on defendant’s own land in which the plaintiff had no interest might present a different question as to what was within the contemplation of the parties as an advantage or benefit to the plaintiff. But as between such two cases, the instant case is like the first and unlike the second. It just as certainly contemplates the chance of a profit to the plaintiffs from performance in one case as the other. The fact that defendant’s performance gives him also a chance to profit from production does not alter or detract from the fact that a chance for a profit to plaintiff will he the result of defendant’s performance within the contemplation of the parties. The latter fact is the material one in the present inquiry, and it certainly exists where the well is to be drilled on defendant’s lease but in which plaintiff has a royalty interest just the same as where plaintiff is sole owner of the minerals. The amount or degree or proportion in which plaintiff and defendant may profit is wholly immaterial. The material question is, Does the contract show that within the contemplation of the parties performance by the defendant would afford the plaintiff a chance to profit from the production of discovered minerals?

Enough has already been said to show that the fact is wholly without controlling significance that in ease of the discovery of valuable minerals the profit of the defendant may be as much as, or more than that of the plaintiff. As already stated, full performance of the contract may, within the contemplation of the parties, result in no profit to either plaintiff or defendant. Therefore, in determining what is the value or equivalent to plaintiff of the contract’s performance, it extends no further than a completed well and the chance to profit from the discovery of minerals.

In the' case first supposed A may have expected or hoped for a large profit from the land with the building thereon to accrue from the use of same, the rents to be derived, the enhancement of market value, etc., but he did not so contract with B as to bring such expectation or hope within the contemplation of the contract. Therefore, B could not, in answer to A’s claim for damages, be permitted to show that if he had performed, such expectation or hope would not have been realized, or that plaintiff's land with the building would have been of no greater value than the land without the building, and that therefore A had suffered no damages. If the building in fact proved to be a monument to A’s folly, he had the right to build such a monument. He had the right to contract with B to build it for him. If B breached the contract, A had the right to recover his damages measured by the usual rule; namely, the monetary equivalent or value of the contract’s performance,- — the reasonable cost of constructing tile building. Just so in this case the plaintiffs had the right to have a well drilled on their land to the Desdemona sand. They could have paid the defendant in cash to drill the same; they could have conveyed him other land or have given him a lease on other land, but they just as certainly had the right to pay him as they did by the execution and delivery to him of a lease on the very land upon which the well was to be drilled. In the cases supposed and in this case the consideration was an executed consideration. Of what possible significance is it that in the latter case plaintiffs’ profit from possible production would not have been as much as if the consideration had been something else, as for instance a lease on other land, with the result that all interest was retained in the particular land? That could be no concern of the defendant. His obligation, it must be kept in mind, was not to procure production but to drill a well; not to produce a profit, but at most only the chance of a profit. If he could fully perform his contract without there being any production, as manifestly was the ease, how can the question at issue be affected by the fact that, if there had been production, plaintiffs would not have profited to the same extent or in the same proportion as if, instead of giving him a lease on the particular land, they had paid him in some other way?

It has been argued that, if as damages, plaintiffs be allowed to recover the reasonable cost of drilling the well, then they will have all the oil and gas, if any, in the land, and their damages besides. It is suggested that this would violate the rule that “a plaintiff is not to be put in a better position by a recovery of damages for the breach of a contract than he would have been in if there had been performance.” 17 C. J. p. 848, § 168. It is, we think, an entirely erroneous notion that such is the effect of such holding. Gwynn v. Wisdom, supra, illustrates a case where the allowance of such damages would have that effect. The very nature of the claim for damages in itself shows an election not to forfeit the lease. If, however, the lease terminated by limitations therein, such in no proper sense constitutes a taking back by plaintiffs of the minerals conveyed. If the plaintiffs had themselves drilled the well when defendant breached his obligation to do so, and had discovered valuable minerals, defendant, unless in the meantime the lease had terminated by reason of some limitation therein, and not by any act of the plaintiffs, would have owned the lease, and according to its terms would have profited by such production. If the lease had terminated by a limitation inhering in the nature of the estate granted by the lease, the result would have been no different than if the consideration had been a lease on other land which had so terminated but which land subsequently proved to be productive. Plaintiffs’ subsequent right to the land, including the minerals, would no more in one case than in the other have been a taking back of the consideration given for the defendant’s obligation.

The validity of these conclusions can in no way be affected by the fact that the lease given as a consideration for the drilling obligation may have had only a nominal value. It is sufficient, as we have before pointed out, if it would support the defendant’s promise and make of same a contract obligation. If the lease had only a nominal value, that fact would show, or at least strongly suggest, that the defendant had valued his own chance of profitable production at a minimum equal to the cost of drilling the well. Erom this fact we concluded on rehearing in Gurry v. Texas Company, supra, that such valuation should constitute the presumptive value of plaintiff’s chance and place upon defendant the burden of proving to the contrary. But this investigation has led us to the conclusion that we were in error and that our determination of the question in the original opinion in that ease was correct. We now see that the rule suggested in the opinion on rehearing in the Gurry Case, if sound, could not toe applied in any case where the lease, regardless of the drilling obligation, had a substantial value. In any such case, since in any event the lessee would be getting the value of the lease, it could never be said that the reasonable cost of drilling the well represented his valuation of the chance of profitable production. Nor-should the plaintiff be bound by the defendant’s valuation of such chance, when, as we have endeavored to show, the law provides a different and better rule.

Now let us examine for a moment the theory that the proper measure of damages is the value of the royalty that would have been received by plaintiffs. If it bo conceded that there may exist situations where proof could be made that royalty would be received, and the value thereof, it’ certainly must be admitted that such instances would be comparatively few. It never could be done where no -wells had been drilled in the particular vicinity. The utmost claim of reputable geologists and petroleum engineers is that they can point out localities where the chances of obtaining production are more than ordinarily favorable or unfavorable. They do not pretend to say that they can tell that oil or gas will be found at any particular point. Then how is it to be shown that damages had resulted from the breach of an obligation to drill a well, and the amount thereof? We submit .that it cannot be done except by substituting a jury’s mere guess for the certainty which the contract’s performance provided. Suppose that, in a case where the undisputed evidence showed that the reasonable cost of drilling a test well in a section where no well had ever been drilled was $2,000, the jury guessed that the value of royalties that would have been received but for breach of the obligation to drill was $25,000. This would be no impossible case. Would any court give judgment for that sum? If not, any attempt to limit it would be tantamount to an admission that a wrong measure of damages was being employed since it must thus needs be corrected. If in such ease the full value of the royalty was allowed as damages and judgment rendered for $25,000 for the royalty on the minerals never produced but still remaining in the ground, and the lease terminated as It probably would before any minerals were discovered, how could the lessee ever get the minerals upon which he had by the judgment been forced to pay royalty? The defendant would have no lease. The plaintiff could undoubtedly make a new lease to a third party. The third party would certainly be entitled to the minerals. We cannot believe that we are to become finally committed to such an unnecessary, ineffective, and unjust rule when the established rule is, as we have endeavored to show, both applicable and effective.

We do not believe that we should regard the decision in Texas Pacific Coal & Oil Co. v. Barker, 117 Tex. 418, 6 S.W.(2d) 1031, 60 A. L. R. 936, as having determined the question to the contrary. In that case there was an obligation like the one here; namely, to drill a test well. But that obligation was performed and was therefore not involved in that 'Case. The obligations involved in that case were those that were contingent and conditional upon the result of the performance of the obligation to drill a test well. Manifestly there could have been no obligation to drill offset ’wells, or to reasonably develop until production had been obtained. Possibly these obligations may be governed by different rules, because manifestly something different from a mere chance to profit by the discovery of valuable minerals was ¡by the very terms of the contract within .the contemplation of the parties.

We shall not undertake to point out the nature of such differences, nor even to express an opinion that they are such as to call for application "of a different measure of damages than we hold to be correct herein. We merely mention the fact by way of explanation why we cannot accept the decision in the' Barker Case as foreclosing the question involved in this. It is our view that the parties themselves, by their contract, prescribed the test by which it was to be determined whether or not the drilling of a well would have resulted in profitable production and that therefore the trial court should not have heard testimony necessarily in the nature of speculations of the witnesses as to whether there would in fact have been any minerals produced.

In our opinion and for all of the reasons discussed, the judgment of the trial court was erroneous; that judgment should have been rendered for the plaintiffs for the sum of $8,-000, by reason whereof said judgment should be reversed and here rendered.


author: LEVY, Justice

text:
    GLADEWATER COUNTY LINE INDEPENDENT SCHOOL DIST. v. HUGHES et al.

    No. 4303.
    Court of Civil Appeals of Texas. Texarkana.
    March 23, 1933.
    Rehearing Denied March 30, 1933.

       Writ of error granted.

   LEVY, Justice

(after stating the case as above).

There is presented for decision the point in view, in effect, of whether or not the title to the acre of land in suit revested in the original grantor on the abandonment of its use for school purposes. It is the rule that in the absence of a statute or provision in the grant there is no right of reversion where land, acquired in fee simple for .public school purposes, is no longer used or is abandoned for such use. 56 O. J. § 461, p. 461. In this state there is no statutory provision for reversion of the title to the grantor where the property is not used or is abandoned for school purposes. The statutory provision reads: “The trustees of any school district, upon the order of the county trustees prescribing the terms thereof, when deemed advisable, may make sale of any property belonging to said school district, and apply the proceeds to the purchase of necessary grounds, or to the building or repairing of schoolhouses, or place the proceeds to the credit of the available school fund of the district.” Article 2753, R. S., also article 2756.

The question must then turn upon the proper construction of the deed from A. L. Hughes to the trustees of the school district. The rule is too well established to admit of debate that a deed must be construed most favorably to the .grantee so as to confer the largest estate which a fair interpretation of its terms will admit. Hancock v. Butler, 21 Tex. 804; Hunt v. Evans (Tex. Civ. App.) 233 S. W. 854; Cartwright v. Trueblood, 90 Tex. 535, 39 S. W. 930, 931; 14 Tex. Jur. § 14S, p. 926. By the habendum clause in the deed the land described was to be holden by the trustees of the Gladewater School District No. 3, and 'their assigns “forever.” Those words of themselves indicate the giving of complete dominion and an unrestricted and unlimited power of disposition of the land conveyed, which would be equivalent to a title in absolute fee simple. But in the granting clause appears language which must be considered in determining whether or not the language of the entire instrument points to a different conclusion than that of an estate created in full fee-simple title. The following is the language:

“ * * * Have granted, sold and conveyed, and by these presents do grant, sell and convey unto C. L. Bray, J. F. Phillips and E. W. Clements, Trustees of the Gladewater School District No. 3 for school purposes only for the colored children of the County of Gregg, State of Texas, all that certain tract or parcel of land described as follows: * ⅜ *
“It is understood that the land is deeded to the Trustees for school purposes only for the colored children of District No. 3 of Gregg County, Texas.”

The language of the deed is emphatic in the declaration of the purpose for which the granted premises shall be used, which is the accomplishment of the specific purpose “for school purposes only.” The intent of the grantor is too clearly and forcibly expressed to doubt that lie intended the land granted should be used for the purpose declared. The land itself was granted and not a mere easement. Stanbery v. Wallace (Tex. Com. App.) 45 S.W.(2d) 198. The deed, though, in granting the land itself and not its mere use, contains no intimation that it was made on a condition.. There are no words to indicate an intention that, if the grantee permitted the land to be used for different purpose or there be abandonment of the use for the specific purpose, the title should thereupon be determined or revert to the grantor or his heirs. There are no words of proviso or condition or apt words to create or raise a condition. 12 Tex. Jur. § 4, p. 8; Warvelle on Vendors (2d Ed.) § 445, p. 526.. There is no clause of forfeiture or grant. It is especially the rule applicable to the construction of grants that a deed will not be construed to create an estate on condition or limitation unless language is used which, according to the rules of law, from their own force, imports a condition or limitation or the intent of the grantor to make a conditional estate is otherwise clearly and unequivocally indicated. Article 1291, R. S.; 12 Tex. Jur. § 86, p. 131; 2 Dev-lin on Real Estate, § 970, p. 1805. Quoting the rule from Ryan v. Porter, 61 Tex. 106: “Implied conditions subsequent in grants, devises, etc., are not the favorites either of the courts of law or equity, but are discouraged by both, as that doctrine is usually invoked for the purpose of securing a forfeiture of the estate. If the instrument will bear any reasonable construction that will defeat the springing of an implied condition subsequent, at law as in equity, that construction will be adopted. Estates upon implied conditions subsequent cannot be created by deed, except where the terms of the grant will not admit of any other reasonable construction.”

See rule of construction: Adams v. First Baptist Church, 148 Mich. 140, 111 N. W. 757, 11 L. R. A. (N. S.) page 513, 12 Ann. Cas. 224.

The grant here was not voluntary, but for a consideration which was in all probability the full value of the land. And taking into consideration the whole instrument and the purpose of the grant and the absence of any. clause of forfeiture or of re-entry, the fair construction is that the grantor intended the words “for school purposes only” as designating the beneficiaries. 'Such words in effect are the same'as the words “for the benefit of the public schools,” which is the statutory language of the purpose of a conveyance of land to district school trustees. Article 275G, R. S., expressly declares that a conveyance of land to district school trustees vests the title in them “for the benefit of the public schools" or for school purposes. It is believed that it is definitely settled, and the conclusion fully warranted, that a deed of land to school trustees for “school purposes,” wherein the habendum clause was to have and to hold unto the school trustees and assignees forever, was a conveyance of a fee-simple title, and simply that. Taylor v. County School Trustees (Tex. Civ. App.) 229 S. W. 670; Wilson v. County School Trustees (Tex. Civ. App.) 229 S. W. 669; Olcott v. Gabert, 86 Tex. 121, 23 S. W. 985; Ryan v. Porter, 61 Tex. 106; Long v. Moore, 19 Tex. Civ. App. 363, 48 S. W. 43; T. W. Phillips Gas & Oil Co. v. Lingenfelter, 262 Pa. 500, 105 A. 888, 5 A. L. R. 1493; McElroy v. Pope, 153 Ky. 108, 154 S. W. 903, 44 L. R. A. (N. S.) 1220. Quoting from the case of Lingenfelter, supra, “The insertion in a deed of a parcel of land to a school district * * * of the words ‘for school purposes only’ does not restrict the title of the district. * * * ” The mere ex-" pression of a purpose will not debase a title.

There was a reverter clause in the cases: Pitts v. Camp County, 120 Tex. 558, 39 S.W.(2d) 608, 615; Id. (Tex. Civ. App.) 42 S.W.(2d) 853; Skipper v. Davis (Tex. Civ. App.) 59 S.W.(2d) 454. The grant was a determinable fee, by its terms to become null and void in the event named, in the cases: Texas Co. v. Davis, 113 Tex. 321, 254 S. W. 304, 255 S. W. 601; Robinson v. Jacobs, 113 Tex. 231, 254 S. W. 309. The ease of Martin v. Texas & P. Rwy. (Tex. Civ. App.) 53 S.W.(2d) 514, was a grant of the land itself and not mere use and there could arise at most, though doubted, a covenant only as to use.

Both parties claim title under A. L. Hughes as common source. It is urged, though, on appeal as error, of the finding that the plaintiff has proven title in it as successor to the rights of the Gladewater School District No. 3. There is no evidence showing or agreement admitting that there was inclusion of the territory of-the Gladewater School District No. 3 within the boundaries of the incorporated Gladewater County Line Independent School District. In the absence of such proof it may not be said that the County Line Independent School District absorbed the school district No. 3 with legal right of succession to the property of school district No. 3. As far as the record shows, school district No. 3 may be existent.

The judgment is reversed and the cause is remanded.


author: LATTIMORE, Justice.

text:
    HARRIS v. MUNICIPAL GAS CO.
    No. 12789.
    Court of Civil Appeals of Texas. Fort Worth.
    March 18, 1933.
    Rehearing Denied April 15, 1933.
    Harris & Martin, of Wichita Ralls, for appellant.
    Carrigan, Hoffman & Carrigan, of Wichita Falls, and Karl F. Griffith, Roy C. Coffee, and Marshall Newcomb, all of Dallas, for appel-lee.
   LATTIMORE, Justice.

On August 24, 1931, the city of Wichita Falls enacted an ordinance reducing the rates for gas which might be lawfully charged by public utilities within its corporate limits. The appellee, a public utility operating under a franchise in the sale of gas in said city, petitioned to the railroad commission of Texas for a revision under article 6058, R. S., of the action of Wichita Falls, and the railroad commission made this order:

“On this 28th day of September, 1931, this cause came on to be heard before the Railroad Commission of Texas upon the verified petition of Municipal Gas Company in the matter of an appeal from an ordinance of the City of Wichita Falls, Texas, reducing the rates and charges of Municipal Gas Company for natural gas supplied and natural gas service rendered to domestic consumers in said city.
“And it appearing to the Commission that the Municipal Gas Company has tendered its bond, with good and sufficient surety, in the amount of Sixty Thousand ($60,000.00) Dollars, conditioned for the refunding of any excess. of rates or charges collected by it over and above the rates and charges that shall be finally determined to be a fair and reasonable return upon the value of the property used and useful in supplying natural gas and natural gas service to the City of Wichita Falls, Texas.
“It is therefore ordered that the petition of Municipal Gas Company on appeal herein be allowed; that the bond tendered be approved • and accepted; and that pending a final hearing and determination of this cause, the said ordinance, and the rates and charges as fixed and prescribed in said ordinance, are hereby suspended and superseded.
“It is further ordered and provided that at any time the Commission may deem it necessary, the Municipal Gas Company shall be required to give such further bond or security as the Commission may prescribe, after giving reasonable notice to the Municipal Gas Company.”

The merits of that appeal have not been decided by the railroad commission. The appel-lee thereupon continued to collect on the rate in force before said ordinance. On March 14, 1932, appellant procured in a justice court a judgment against appellee for $4.55, being the excess in an amount of a collection by appel-lee from appellant for gas delivered under the rate before the ordinance was passed over the rate fixed in the ordinance. Appellee sought in the district court of Wichita county an injunction to restrain the execution of that justice court judgment, and on trial a permanent injunction was ordered, restraining the enforcement of such judgment, from which this appeal is taken.

Appellant concedes that if the railroad commission had the power to make such an order as was made, and in the manner it was made, then the judgment of the district court was proper and thus as a good officer of the court strips the case of trifling matters and goes to the real purpose of his proceedings.

Article 6058, R. S. [Acts 36th Leg. (3d called session) 1920, c. 14, § 6], provides: “When a city government has ordered any existing rate reduced, the gas utility affected by such order may appeal to the Commissioner by filing with the Commission, on such terms and conditions as the Commission may direct, a petition and bond to review the decision, regulation, restriction, ordinance, or order of the city, town or municipality. Upon such appeal being taken the Commission shall set a hearing and may make such order or decision in regard to the matter involved in the determination, decision, ordinance or order, of the City, town or municipality, as the Commission may deem just and reasonable. Whenever a: public utility so appeals from the decision, restriction, ordinance or order of the city, or town or municipality, to the Commission, the Commission shall hear such appeal de novo and shall treat the appeal or complaint as though it were an original complaint. Whenever any local distributing company or concern whose rates have been fixed or may hereafter be fixed by any municipal government desires a change of any of its rates, rentals or charges, it shall make its applidation to the municipal government of the city, town or municipality in which such utility is located and such municipal government shall determine said application, within sixty days afler said application is presented to it, unless the determination thereof may be longer deferred by agreement between the municipality and the gas utility affected. If the municipal government should reject such application or fail or refuse to act on it within sixty days, then the utility may appeal to the Commission as herein provided. But said Commission shall determine the matters involved in any such appeal within sixty days after the filing by such utility of such' appeal with said Commission or such further time as such utility shall in writing agree to, but the rates fixed by such municipal government shall remain in full force and effect until ordered changed by the Commission.”

This act as originally passed contained, just preceding the above, this: “Nothing in this Act shall restrict the rights of cities, towns and municipalities to control the use of their public streets and alleys; and nothing in this Act shall be construed as taking away from the cities, towns or municipalities of this State any of their existing powers to regulate the rates, service, rules, regulations, and practices of public utilities operating in such cities, towns or municipalities,” which was omitted by the codifiers in the 1925 revision.

If the order of the railroad commission was authorized, it must be by virtue of its general powers, or by virtue of article 6058, R. S. We proceed to examine the first. When an enterprise is affected by a public use, the power of the government of such public exists to regulate its rates. Munn v. Illinois, 94 U. S. 113, 24 L. Ed. 77. Rate making in such cases, as far as prospective effect is decreed, is a legislative function, City of Denison v. Municipal Gas Co., 117 Tex. 291, 3 S.W.(2d) 794, and in this state is inherent in the Legislature of Texas except such portion as is delegated to the United States by virtue of the United States Constitution, Texas Steel Co. v. Fort Worth & D. C. Ry. (Tex. Civ. App.) 45 S.W.(2d) 794, 795, opinion by our lamented Mr. Justice Buck.

The railroad commission is not created by the Constitution, but is created by the Legislature, although some of its powers, once the body is created, are prescribed by the Constitution. City of Denison v. Municipal Gas Co., supra. It thus follows as to this litigation that the railroad commission acts only as an agent of the Legislature and with no power except such as is given it by statute.

Some powers given the railroad commission are legislative, e. g., rate making, while others are of a judicial nature, Producers’ Refining Co. v. M., K. & T. Ry. (Tex. Com. App.) 13 S.W.(2d) 679, of which are the power to investigate penalties, hear complaints, article 6058, R. S., determine when wells shall be plugged, etc., as well as to determine the conditions of an appeal to the railroad commission on this case. The constitutionality of the delegation of these various duties to one body has been upheld. City of Denison v. Municipal Gas Co., supra. Let us «Kamine its statutory authority: Article 6058 of the statutes is a curious one. It will be observed that it consisted apparently of three divisions : First, the section above quoted, eliminated by the codifiers, which apparently was intended to deny any original jurisdiction by the railroad commission over municipal gas rates. Second, a case where a city by its city legislative body has reduced a gas rate in which event the gas utility may appeal by petition and “bond” in “terms and conditions as the Commission may direct,” in which event a hearing shall be had and the commission “may mate such order * * * in regard to the matter * * * as the Commission may deem just and reasonable.” Then follows the provision for a hearing de novo. Next, in a separate sentence, procedure is provided where a utility desires a change in existing rates.

The fact that many times 60 days have gone by without determination of the appeal cannot affect the question of the right to order a supersedeas bond at the beginning of the 60 days. The remedy to end abusive delay is ample, but is not to be confounded with nullification of valid orders made at the outset.

We believe the statute authorized the railroad commission to use its discretion as to the terms and conditions of the bond. This includes the power to allow a supersedeas. In the first place, the utility company would have a right to appeal to the court for injunc-tive relief if such bond were not provided for. Oklahoma Natural Gas Co. v. Russell, 261 U. S. 290, 43 S. Ct. 353, 67 L. Ed. 659. This probably was in the mind of the Legislature. In the second place, to hold otherwise is to nullify the provision of the statute fon a bond*, and finally, in view of the wide latitude of supersedeas in appeals in other matters in this state, it is probable that such was the intention of the Legislature when it said “on such terms and conditions as the Commission may direct.”

From the many differences made in the procedure by which reductions by municipalities are disposed of, from the procedure by which rate increases sought by utilities are' disposed of, we conclude that the final clause of the article, “but the' rates fixed by such municipal government shall remain in full force and effect until ordered changed by the Commission,” has reference only to cases where the utility has sought to increase preexisting rates. It is a part of a sentence referring to “such appeal.” The appeal referred to is an appeal provided for in the preceding sentence, from “such application” to increase pre-existing rates. Good reason for this distinction exists. In the reduction ease, -the change attempted is upon the rates under which the utility was willing to undertake the business, and such reduction, if unjust, might destroy, it. From such threat the Legislature, we believe, desired to give it an opportunity to save itself pending final order. In the hiking of the rates, however, the utility seeks to better the contract under which it had been willing to work. In such cases the presumptions were against it, and the Legislature, we believe, saw fit to require that it continue in statu quo until final disposition of its request.

We do not see anything in this holding which violates article 1, § 28, of the Constitution. No other agency is suspending the law than the Legislature itself. True, it has delegated to the very agent that performs at its command a legislative function to wit, rate making, to also act in the manner the Legislature directs in allowing a supersedeas. The rate making, already declared constitutional, is no more violative of such article of the Constitution than is the other.

We have examined all assignments of error.

The judgment is affirmed.


author: SELLERS, Justice.

text:
    SHAW, Banking Commissioner, v. NUNN.
    No. 4318.
    Court of Civil Appeals of Texas. Texarkana.
    March 30, 1933.
    McKinney & Berry, of Cooper, for appellant.
    Cunningham & Lipscomb, of Bonham, for appellee.
   SELLERS, Justice.

Henry L. Nunn brought this suit in the district court of Fannin county against W. E. Weldon and James Shaw in his capacity of hanking commissioner of Texas, alleging in the first count in his petition the statutory action in trespass to try title to certain lands located in Fannin county; and in the second count by way of an alternative plea, sought judgment for his debt of $8,814 as evidenced by a vendor’s lien note against the property; and further sought the foreclosure of the vendor’s'lien securing said indebtedness. He further alleged that James Shaw, hanking commissioner, was claiming some character of interest in the land and that such interest, if any, was inferior to his.

The defendant W. E. "Weldon made no answer, but the defendant James Shaw, banking commissioner, answered by general denial and plea of not guilty, and by special answer alleged that the deed and vendor’s lien under which the plaintiff claimed were each void and setting out the fact on which he relied as constituting such instruments void.

The trial was before the court without aid of a jury, and, at the conclusion of the evidence, the court rendered judgment for plaintiff for his debt against W. E. Weldon with foreclosure of his vendor’s lien,against both defendants, decreeing such lien superior to any claim of James Shaw, banking commissioner. From this judgment the defendant James Shaw, banking commissioner, has duly prosecuted this appeal.

The facts pertinent to the disposition to be made of this appeal may be stated as follows: The parties agreed upon the First National Bank of Ladonia as a common source of title. The appellee Nunn introduced in evidence a deed from the bank to W. E. Weldon for the land involved which deed recites a cash consideration of $10, and the further consideration of the vendor’s lien note for the sum of $8,814. This deed was dated January 31, 1930. The appellee also introduced the vendor’s lien note. He further introduced in evidence a deed dated January 31,1931, from the defendant W. E. Weldon conveying the land to the appellee in satisfaction of the vendor’s lien note and the release of the lien against the land.

The appellant James Shaw, banking commissioner, claims title to the land by virtue of a judgment in the district court of Delta county against defendant W. E. Weldon with foreclosure of an attachment lien against the land involved. The appellant introduced an order of sale issued on this judgment. He further introduced the sheriff’s deed conveying him the land by virtue of the sale under the order of sale. But the judgment on which the order of sale was issued and the sale of the land by the sheriff was had was not offered in evidence.

Since the opinion in the case in Wofford v. MeKinna, 23 Tex. 36, 76 Am. Dec. 53, the law seems to have been well settled in this state that a sheriff’s deed is inoperative without proof of his power to sell. In order to show title through sheriff’s deed it is necessary to introduce both the judgment and the writ issued thereon by which the sheriff makes the sale. In this case, as before stated, the appellant failed to introduce the judgment and has therefore failed to connect himself with the title to the land involved. Kruegel v. Cobb, 58 Tex. Civ. App. 449, 124 S. W. 723.

Appellant having failed to show any title to the land involved, his assignments affecting the merits of the case will not be discussed. Flenniken v. Foote (Tex. Civ. App.) 270 S. W. 903.

The record disclosing that the defendant W. E. Weldon has conveyed the land involved to appellee in satisfaction of the debt and released the vendor’s lien, and the further fact that appellant has failed to show any title to the land, we are of the opinion that the judgment of the trial court awarding appel-lee judgment for his debt with foreclosure of the lien and ordering the land sold, and further decreeing to appellant any balance over the amount of appellee’s debt, should be reversed and judgment here rendered in favor of appellee for title to the land involved as against appellant and the defendant Weldon as sought by the appellee in the first count in his petition, and it is accordingly so ordered.