Gulf, Colorado & Santa Fe Railway Co. v. McBride

Mr. Justice Smith

dissenting.

This cause being before us on motion for rehearing, I withdraw my former dissent and file the following as a substitute therefor.

I disagree with the majority in assuming jurisdiction of this case. Jurisdiction has been erroneously predicated upon the Texas Rules of Civil Procedure. Such action is prohibited by Article 5, Sec. 3 of the Texas Constitution. Section 3 reads:

“The Supreme Court shall have appellate jurisdiction only except as herein specified, which shall be co-extensive with the limits of this state. Its appellate jurisdiction shall extend to questions of law arising in cases of which the Courts of Civil Appeals have appellate jurisdiction, under such restrictions and regulations as the Legislature may prescribe.”

Section 2 of Article 1731a, Vernon’s Annotated Civil Statutes of Texas, expressly provides that the rules adopted by the Supreme Court of Texas shall not abridge, enlarge, or modify the substantive rights of any litigant. This Court in adopting the rules of procedure particularly provided in Rule 816 that “these rules shall not be construed to extend or limit the jurisdiction of the Courts of the State of Texas.”

The Court of Civil Appeals had jurisdiction of petitioner’s appeal to that court complaining of the granting of the motion for summary judgment against it by the trial court. Petitioner’s appeal claimed error in that the evidence raised a fact issue. The judgment of the Court of Civil Appeals, reversing the action of the trial court in granting McBride’s motion for summary judgment, was final.

Article 1821, Vernon’s Annotated Civil Statutes, provides:

*456 “The judgments of the Courts of Civil Appeals shall be conclusive on the law and facts, nor shall a writ of error be allowed thereto from Supreme Court in the following cases to wit :

“5. In all appeals from interlocutory orders appointing receivers of trustees, or such other interlocutory appeals as may be allowed by law.

“6. In all other cases as to law and facts, except where appellate jurisdiction is given to the Supreme Court, and not made final in said Courts of Civil Appeals. Acts 1st C.S. 1892, p. 25; Acts 1923, p. 110; Acts 1929, 41st Leg., p. 68, ch. 33, Sec. 1.”

Petitioner relies upon Subdivision 6 of Article 1728, Vernon’s Annotated Civil Statutes, in petitioning this Court to entertain jurisdiction. This Court has jurisdiction only in such cases wherein the Court of Civil Appeals has committed an error of substantive law. The majority opinion fails to point out the error of substantive law committed by the Court of Civil Appeals, perhaps for the obvious reason that no error of substantive law was committed by the intermediate court. That court had appellate jurisdiction of this case by virtue of that part of the severable judgment entered by the trial court granting respondents’ motion for summary judgment. The Court of Civil Appeals agreed with petitioner’s argument in connection with this part of the judgment and thereby sustained its first point of error. The only other point of error presented to the Court, therefore, was as follows:

“Appellant was entitled to judgment against appellee as a matter of law, and the trial court erred in overruling appellant’s motion for summary judgment.”

This point of error, standing alone, would not have entitled petitioner to an appellate review. It is very important to note, however, that the Court of Civil Appeals did not base its holding on this point on the proposition that it was interlocutory and therefore not subject to appellate review. The Court rather, considered the point and, in doing so, failed to agree with petitioner and, moreover, specifically held that a genuine issue of fact did exist in the case. I submit, therefore, that under the clear and unambiguous wording of the predicating sentence of Article 1821 and Subdivisions 5 and 6 thereunder, the judgment of the Court of Civil Appeals was final. Where, then, is there any error of substantive law? The Court of Civil Appeals mere *457 ly found on the facts that petitioner was not entitled to the relief which it sought on that part of the severable judgment which was interlocutory. I submit again, therefore, that its judgment upon this point was final.

This Court has recently held in the case of the State of Texas v. Wynn, 157 Texas 200 , 301 S.W. 2d 76 (April 10, 1957), that Subdivision 5 of Article 1821 was absolutely conclusive as to Subdivision 6 of Article 1728. See page 78 of the Court’s Per Curiam, opinion in the Wynn case, where the following statement is found:

“For Supreme Court jurisdiction to attach, in the absence of statutory provision, it is not only necessary that a cause of action come within the authorizing clauses of Article 1728 but also that it be not precluded by the prohibitions of Article 1821.”

Assuming that the majority is correct in holding that under Mitchell’s Inc. v. Friedman, 157 Texas 424 , 303 S.W. 2d 775 (1957), settlement made by petitioner to England was “reasonable” as a matter of law, the majority is required to consider the defensive issue pleaded by respondent McBride in connection with the question of whether or not petitioner retained any indemnity coverage as against McBride under the lease-indemnity contract. In denial of coverage, McBride pleaded “laches” and estoppel and the facts demonstrating the applicability of such defenses in detail.

This defensive issue of laches has never been submitted to a court or jury for determination. The defense was pleaded as follows:

“VIII.

“For further answer herein, defendant alleges that the accident upon which plaintiff’s claim of indemnity is based occurred at approximately 6:45 A.M. on the 10th day of April, 1954; that plaintiff knew, or in the exercise of ordinary diligence, should have known of such accident at that time on that day; that the contract of indemnity between the parties necessarily contemplated that the railway company should give reasonable notice to defendant in order that he could make investigation of any and all circumstances upon which he could have been legally bound for indemnity, thereby adequately protecting his rights; that Plaintiff, nevertheless, failed and neglected to *458 notify defendant from whom he now seeks to recover indemnity, of such accident until the 25th day of April, 1956, that being two years and fifteen days subsequent to said accident, thereby engendering an unsurmountable degree of prejudice to defendant in investigating the said accident and, in fact, making it impossible for defendant to know the nature of the accident or the extent of the alleged injury suffered by plaintiff’s employee; that by virtue of such gross and inexcusable delay, plaintiff is precluded by his laches and forever barred from asserting against defendant any claim whatsoever growing out of such facts and circumstances.

“IX.

“Defendant would further show that Plaintiff was in a position to foresee that failure on its part to give notice of the alleged accident to defendant would create a prejudicial situation against defendant and plaintiff railway company was in a position to prevent such from arising while this defendant, by his lack of knowledge of the circumstances, was not in a position to secure any character of protection; that plaintiff, by his acquiescence and neglectful conduct necessarily induced this defendant into a course of inaction, thereby preventing defendant from protecting his interests and placing him in a materially disadvantageous position; that the plaintiff knew or ought to have known that this prejudicial situation would result from his neglectful conduct; that plaintiff and plaintiff only had the knowledge which, if communicated to this defendant, would have in all probability, defeated or materially diminished any claim growing out of the aforementioned circumstances; that such gross neglect to give notice does, therefore, equitably estop this plaintiff from asserting any demands whatsoever against this defendant.”

At the hearing of the motions for summary judgment, it was stipulated that “* * * the contract and bond were duly executed and were in full force and effect on the date of the accident alleged herein, April 10, 195b. That on April 25, 1956, plaintiff, Gulf, Colorado and Santa Fe Railway Company, sent to defendant, G. C. McBride, the letter attached hereto and marked Exhibit “B.” This- stipulation together with the pleadings above clearly raises an issue of fact as to whether McBride had notice of the injuries sustained by England prior to April 25, 1956. The judgment sustaining McBride’s motion for summary judgment makes no reference to the “laches” defense. If if is true that respondent-indemnitor McBride was not notified *459 by petitioner of England’s injury for some two years and fifteen days, then upon a finding to that effect, McBride should prevail. A summary judgment is never proper if the evidence raises issues of fact to be determined by the court or jury. Gulbenkian v. Penn, 151 Texas 412 , 252 S.W. 2d 929, 931, 932 .

In addition to the pleadings and stipulations, I respectfully call attention to evidence given in the oral deposition of both C. F. England, Jr., the injured party, and E. A. McBride, the manager of G. C. McBride Company, which, in my opinion, has a direct bearing on the defense of laches.

Mr. England testified that he was an employee of the petitioner and that a part of his duties for the railroad was to spot cars; that in the performance of such duties he sustained a back injury on April 10, 1954. His testimony reveals that he sustained the injuries when he was in the act of passing signals to the engineer; that he either stumbled over or struck a piece of timber. He described the timber as being a bridge timber, larger than a railroad tie, which was on the ground and partially covered with dirt; that he didn’t know the exact length of the timber but that he thought some seven or eight feet were not covered with dirt.

E. A. McBride testified by oral deposition that he had no knowledge of such claim and especially the facts relative to the piece of timber being involved until long after the accident. From the testimony, the inference may be fairly drawn that he did not obtain such knowledge until the letter of April'25, 1956, referred to in the stipulation. There is no evidence that anyone connected with the McBride Company had knowledge of the accident or any of the details thereof.

The stipulation that notice was given by letter on April 25, 1956, more than two years after the date of injury, does not mean that as a matter of law the respondent was guilty of laches and thereby estopped to claim under the indemnity contract. Neither does the stipulation prove that the respondent did not give notice or that McBride did not have notice well within the two-year period. It seems to me to be a reasonable deduction from the pleadings, the stipulations, and the depositions that McBride expects to prove that the letter was the first notice received as to England’s injury. It is equally possible that the petitioner could offer evidence that notice was given long before April 25, 1956. In view of the state of the record on this question, *460 I contend that this Court is without authority, by its judgment, to preclude a trial of this issue in the trial court.

The majority approach to a solution of the question involved is exactly backward. We are not considering McBride’s motion for summary judgment. It is the motion for summary judgment of the petitioner with which we are concerned. That motion can hardly be called a motion for summary judgment. It amounts to no more than an unsworn conclusion of the pleader. No affidavits accompany the record. Petitioner merely avers that the pleadings, depositions, and stipulations show that it was entitled to judgment as a matter of law. The principles of law announced in this and other cases have been stressed by this Court and the Court of Civil Appeals in the following cases: Smith et al. v. Bolin, 271 S.W. 2d 93 ; Ward v. Stroud, Texas Civil Appeals in the following cases: Smith et al. v. Bolin, 271 S.W. 2d 93 ; Ward v. Stroud, Texas Civ. App. (1955), 274 S.W. 2d 136 , wr. ref. n.r.e.; Kenny v. Starnes, Texas Civ. App. (1955), 277 S.W. 2d 919 ; Roberson v. Allstate Ins. Co., Texas Civ. App. (1955), 278 S.W. 2d 179 , wr. ref. n.r.e.; Feldman v .Drumheller, Texas Civ. App. (1956), 284 S.W. 2d 237 , wr. ref. n.r.e.; Gunnels v. Atcheson, Texas Civ. App. (1956), 288 S.W. 2d 878 ; Trammell v. Trammell, Texas Civ. App. (1956), 290 S.W. 2d 324 , wr. ref. n.r.e.

Petitioner is seeking the summary judgment and not McBride. In passing upon this motion all doubts as the existence of a genuine issue of material fact must be resolved against the moving party, and the opposite party is entitled to the benefit of every reasonable inference which can be properly drawn in his favor. Womack v. Allstate Ins. Co., Texas Civ. App., 296 S.W. 2d 233 ; Gulbenkian v. Penn, supra. The burden of proving that there is no genuine issue of material fact is on the movant (petitioner) . It is the duty of the court hearing the motion for summary judgment to determine if there are any issues of fact to be tried, and not to weigh the evidence or determine its credibility, and thus try the case on the affidavits. In Gulbenkian v. Penn, supra, this Court quoted with approval from the case of Kaufman v. Blackman, Texas Civ. App., 239 S.W. 422 , 428, wr. ref. n.r.e., the following holding:

“The underlying purpose of Rule 166-A was elimination of patently unmeritorious claims or untenable defenses; not being intended to deprive litigants of their right to a full hearing on the'merits'of any1 real issue of fact. * * * ”

*461 When both parties, as in this case, move for a summary judgment, the burden is upon each to prove clearly his right thereto, and neither party can prevail because of the failure of the other to discharge his burden. Tigner v. First National Bank of Angleton, 153 Texas 69 , 264 S.W. 2d 85 ; Steinberg v. Adams, D.C. 90 Fed. Supp. 604; Walling v. Richmond Soren Anchor Co., 2 Cir. 154 Fed. 2d 780; Federal Practice and Procedure, Barron and Holtzoff, Sections 1235 and 1239; Morris’ Federal Practice, Vol. 6, Sec. 65.13. The petitioners have not discharged the burden which rested upon them. The majority opinion states a rule that has no application here. The petitioner’s motion for summary judgment is not supported by affidavits, etc. Therefore, it has failed to establish a clear right to the summary judgment. Of course, the burden of proof will be upon the respondents to establish the defense of laches by a preponderance of the evidence in a trial upon the merits. The majority apparently recognizes that “laches” is a defense in this case, but grants the summary judgment on the sole proposition that McBride has failed to come forward with a showing that a disputed fact issue existed, or that he has suffered injury because of the failure of the petitioner to give notice until two years and fifteen days after the accident. The question of burden of proof on the issue of laches is not before us. This Court has no jurisdiction to determine issues that cannot arise until after a trial of the case upon its merits.

The majority states that there seems to be some confusion among the courts as to just what is the correct rule of law, and then proceeds to disapprove a holding of the Court of Civil Appeals of San Antonio in the case of City of San Antonio v. Castillo, Texas Civ. App. 1956, 293 S.W. 2d 691, 693 . The Court of Civil Appeals in that case stated: “* * * The only basic question presented by this appeal is whether appellants were entitled to have the fact issue of laches submitted to a finder of facts.” Why did we refuse the application for writ of error, n.r.e. if we did not approve the only basic question decided by the Court of Civil Appeals? I think the defense of laches is available to respondents here just as it was in the City of San Antonio case, supra. The petitioners have failed to pierce the pleading of such defense and established by affidavits or otherwise that there is no genuine issue of fact as to laches to be determined by the trier of the facts.

We should not hold that the trial court would be warranted in a trial on the merits to instruct a verdict on the theory that the defense of laches was untenable. The petitioner has wholly *462 failed to show that McBride was not harmed by its failure to give notice of England’s claim for two years and fifteen days. The lapse of time between the accident and notice renders it entirely reasonable to conclude that McBride was deprived of the valuable right to make a prompt, full, and complete investigation. An investigation within a reasonable time might have produced witnesses to establish that the alleged piece of timber was not in a location to have been in the path of Mr. England. The petitioner makes the statement in its application for writ of error that, “* * * In view of the manner in which the accident occurred, the seriousness of the injury, and the present law, the settlement made by petitioner with Mr. England was not only reasonable and prudent but that the respondent should be thanking the petitioner for making such a good settlemen of the case.”

It is my contention that this argument is beside the point. It disregards the fact that the legal rights of McBride were involved when it made the settlement, and completely ignores the right of McBride to have “the manner in which the accident occurred” tried and determined by a finder of facts. (Emphasis added.) The difficulty of defendant litigants to win verdicts at the hands of a jury and to win favorable decisions in the United States Supreme Court in F.E.L.A. cases is no justification for depriving McBride of a trial of the defenses of laches. It is only in cases where it indisputably appears that under no state of the case could laches be established that the question becomes one of law. As was said in the case of Collins v. Griffith, Texas Civ. App., 105 S.W. 2d 895, 898 , no writ history:

“Laches and the statute of limitation are defenses to be urged by appellants on the trial of the case on its merits, and if established, would defeat a recovery * * *.

“The presumption of laches * * * arising from lapse of time may be rebutted and overcome by competent testimony, and under the allegations in appellee’s petition and her proof, the delay is explained. These are issues to be determined on a trial of the merits if appellants plead limitation or laches as a defense.”

“ ‘Limitations’ and ‘laches’ are not synonymous; but ‘limitations’ signifies the fixed statutory period within which an action may be brought for some act done to preserve a right, while ‘laches’ signifies delay independent of statute.

“ ‘Limitations’ signify that fixed statutory period, whether *463 expressly applicable to suits in chancery or followed by analogy, while ‘laches’ signifies unreasonable delay independent of statute or any fixed period of time. ‘Laches’ also involves prejudice, actual or implied, resulting from the delay. It does not arise from delay alone, but from delay which works disadvantage to another, as the defense of laches is neither a limitation nor an estoppel, but partakes of the characteristics of both.” 25 Words and Phrases, 301. In re Van Tassell’s Will, 196 N.Y.S. 491 , 494, 119 Misc. 478 ; Wilder’s Ex’r. v. Wilder, 82 Vt. 123 , 72 Atl. 203, 205 .

I submit that notwithstanding the fact that petitioner’s settlement with England may have been reasonable as a matter of law under the circumstances of the case and all defensive issues relative to the injury thus abrogated, then still it is an entirely different question as to whether or not petitioner retained indemnity coverage under the lease executed by the parties. The effect of the majority opinion is that an indemnitee who fails and neglects to give his indemnitor notice of an accident and injury and consequent potential liability until some two years and fifteen days after its occurrence is not, as a matter of law, guilty of laches; that the delay, as a matter of law, is excusable; and that the indemnitor, as a matter of law; could have suffered no prejudice. If this is the true effect of the Court’s holding on this question, the defense of laches, in my opinion, has been abolished in this state.

I again most respectfully urge this Court’s consideration of the argument that the question of laches has no connection whatsoever with the defenses urged in connection with England’s injury — that is, the defensive issues of sole proximate cause, comparative negligence, unavoidable accident and assumed risk. The question of laches relates to an entirely different question — the question of coverage under the lease-indemnity contract itself. The holding of the Court in this case could not, therefore, have the effect of abrogating such defense on the ground that petitioner’s settlement with England was reasonable as a matter of law.

The application for writ of error should have been dismissed for want of jurisdiction, or, in the alternative, the judgment of the Court of Civil Appeals should be affirmed, or, in the further alternative, the cause should be remanded to the trial court for the purpose ■ of disposing of the fact issues presented by the record.

*464 Opinion delivered March 25, 1959.

Second motion for rehearing overruled April 22, 1959.