holding that customer could not bring tort action against telephone company for failure to publish advertisement when telephone company’s duty to publish advertisement arose solely from contract and damages were only from economic loss created by failure of telephone company to perform
How later courts described this case
- holding that customer could not bring tort action against telephone company for failure to publish advertisement when telephone company’s duty to publish advertisement arose solely from contract and damages were only from economic loss created by failure of telephone company to perform
- finding that action was in contract and not in tort, because plaintiff’s claims against telephone company for failure to publish yellow pages advertisement arose solely from the contract, and the damages were only for economic loss
- applying economic-loss doctrine where defendant inadvertently omitted plaintiff’s advertisement from Yellow Pages and plaintiff sued for negligence, noting that economic loss rule applied because the “duty to publish [plaintiff’s] advertisement arose solely from the contract” and plaintiff's damages “were only for the economic loss caused by [defendant’s] failure to perform.”
- holding claimant could not recover in tort when only damage resulting from defendant = s breach of contract was to the subject of the contract
Written by the judges who cited it.
Later courts went against this
Declined to follow in part by American Nat. Ins. v. Intern. Bus. MacH., 933 S.W.2d 685 (1996)
To the extent that any of these cases hold that Jim Walter Homes or the second prong of DeLanney applies to cases involving fraudulent inducement to enter a contract where the fraudulent party had no intention of performing the contract, we decline to adopt those holdings for the reasons that we have stated.
Declined to follow in part by American National Insurance Co. v. International Business Machines Corp., 1996 Tex. App. LEXIS 4520 (1996)
To the extent that any of these cases hold that Jim Walter Homes or the second prong of DeLanney applies to cases involving fraudulent inducement to enter a contract where the fraudulent party had no intention of performing the contract, we decline to adopt those holdings for the reasons that we have stated.
The opinion
MAUZY, Justice,
dissenting.
I respectfully dissent. The contractual relationship creates duties not only under contract law, but under tort law as well. A contract may create the state of things which furnishes the occasion for the tort. Montgomery Ward & Co. v. Scharrenbeck, 146 Tex. 153, 157 , 204 S.W.2d 508, 510 (1947).
Every contract is accompanied by a duty to perform that contract with care, skill, reasonable expedience and faithfulness. The negligent failure to observe any of the conditions imposed by this duty constitutes a tort. Id. In determining whether the action is one in contract or tort or both, the court must look to the substance of the cause of the action, and not necessarily the manner in which it was pleaded. Jim Walter Homes, Inc. v. Reed, 711 S.W.2d 617, 617-18 (Tex.1986) (citing International Printing Pressman and Ass’t Union v. Smith, 145 Tex. 399 , 198 S.W.2d 729 (1946)). When the injury involves failure to perform a contract and the only loss is that economic loss that is the substance of the contract itself, the action sounds only in contract and not in tort. Jim Walter Homes, 711 S.W.2d at 618 .
This case involves more than the mere failure to perform or negligent performance of the Yellow Pages contract. The action of Bell that gave rise to DeLanney’s tort cause of action was the negligent performance of its contract to provide telephone service to DeLanney, not the negligent performance of its contract to provide the Yellow Pages advertisement. DeLan-ney had two contracts with Bell. For several years he had contracted with Bell for Yellow Pages advertisements, and he had already contracted with Bell for a 1980-81 Yellow Pages listing prior to the incident the subject of this lawsuit. In addition to the Yellow Pages advertisement contract, DeLanney had a separate contract with Bell for telephone service. Prior to the publication of the 1980-81 telephone directory, DeLanney contracted to alter his telephone service by canceling his single line and adding a third number to his two-number rotary line. When the alteration of the telephone service was requested, the separate contract for the Yellow Pages advertisement was not modified or even mentioned by either party. Cancellation of the single telephone line, pursuant to the telephone service contract, resulted in the cancellation of the Yellow Pages advertisement because the advertisement was billed to that number. The Yellow Pages advertisement itself was not even contemplated within the telephone service contract. It was the negligent performance of the telephone service contract that the jury found was the proximate cause of DeLanney’s damages. 1 Southwestern Bell breached its *501 duty to perform the telephone service contract with care, skill and faithfulness. The negligent performance of the telephone service contract caused damages to DeLan-ney that were unrelated to the subject of the telephone service contract. If Bell had not negligently performed the telephone service contract, DeLanney’s advertisement would have been published as it had been in the past.
To confine DeLanney to recovery in contract, when his damages clearly extend beyond the contract itself, is to step back into the days of the common-law forms of action. Originally, forms of action were rigidly prescribed, and a plaintiff had no cause of action unless he could fit his claim “into the form of some existing and recognized writ.” W. Keeton, D. Dobbs, R. Keeton & D. Owen, Prosser and Keeton on the Law of Torts § 6 at 28 (5th ed. 1984); see Nelson v. Krusen, 678 S.W.2d 918, 932 (Tex.1984) (Kilgarlin, J., concurring and dissenting). Texas, though, has never adopted the old forms of action; thus, “it makes no difference in what shape a plaintiff presents his cause of action, the courts will look to the substance of it, and not be controlled by the mere form in which it is set forth.” Rector v. Orange Rice Mill Co., 100 Tex. 591 , 102 S.W. 402, 403 (1907). The option to proceed in contract or tort is available not to diminish the plaintiffs rights, but rather to afford the plaintiff a suitable remedy. See Briggs v. Rodriguez, 236 S.W.2d 510, 514-15 (Tex.Civ.App.—San Antonio 1951, writ ref’d n.r.e.).
“In jurisdictions where the old forms of action have been totally abolished, there should be nothing left of the whole doctrine excepting a few historical echoes.” Corbin, Waiver of Tort and Suit in Assumpsit, 19 Yale L.J. 221 , 246 (1910). The echo heard from the majority today is out of tune with modern jurisprudence, and wrongly deprives DeLanney of an adequate remedy at law.
This case was correctly tried in the trial court. The jury’s verdict formed the basis of the trial court’s judgment, which the court of appeals rightly affirmed. I would affirm the judgment of the court of appeals.
. In its answers to the special issues, the jury specifically found Bell to be negligent.
Issue (l)(a) Whether Bell was negligent in failing to inform DeLanney that the installation of a rotary system would cancel the Yellow Pages listing.
Issue (l)(b) Whether Bell was negligent in failing to adequately train and inform its employees that an order to cancel one of the *501 telephone numbers would cancel the Yellow Pages advertisement; and
Issue (l)(c) Whether Bell was negligent in failing to recognize that the automatic cancellation of the Yellow Pages advertisement would occur when the billing procedure was changed.
The jury further found that each of these acts of negligence proximately caused DeLanney’s injuries.