Dallas County Water Control and Imp. Dist. No. 7 v. Ingram

Decision Date08 October 1965
Docket NumberNo. 7,No. 16597,7,16597
Citation395 S.W.2d 834
PartiesDALLAS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICTAppellant, v. Gayle F. INGRAM, Appellee.
CourtTexas Court of Appeals

Saner, Jack, Sallinger & Nichols, H. Louis Nichols and Tim Kirk, Dallas, for appellant.

Lyne, Blanchette, Smith & Shelton and George C. Dunlap, Dallas, for appellee.

CLAUDE, WILLIAMS, Justice.

Action for damages for breach of employment contract. Following a period of employment pursuant to verbal agreement Gayle F. Ingram entered into a written contract on April 5, 1962 with Dallas County Water Control and Improvement District No. 7 (hereinafter referred to as Water District) wherein it was agreed that Ingram was to be employed as general manager of the Water District for a definite period of five years. As compensation for his services Ingram was to receive $500 per month for the full time of said contract with the provision that his salary would be reviewed from time to time and could be increased. In fact, such salary was increased on two different occasions until it reached the sum of $600 per month which was the amount being paid Ingram at the time the contract was terminated.

With reference to termination of the agreement Paragraph 4 of the contract provided:

'4. The term of the agreement is five years from date executed. If the contract is cancelled by the District, claims shall be made and allowed to the Manager for services rendered to the full term of contract. If cancelled by Manager, no claims will be allowed beyond date of notification of intent to cancel.'

On January 30, 1964 the Water District elected to terminate Ingram's employment and he brought this action to recover the amount which he contended would be due him for the remainder of the five-year term of the contract. By way of answer to Ingram's suit the Water District asserted two principal defenses. First, it contended that the employment contract was void and unenforceable because (1) it was nudum pactum and lacking in mutuality; and (2) that it had just cause for discharging Ingram in that (a) there were irregularities and shortages in the Water District's funds, (b) that Ingram failed to properly account for or explain the alleged deficiencies in the accounts as shown by the auditor's report, (c) that Ingram had received free water service to his individual properties without paying the Water District for same, and (d) that Ingram failed to carry out the policies of the Water District.

Following a jury trial, and in response to special issues submitted to them, the jury found (1) that Ingram did not fail to properly account for the monies of such District; (2) that Ingram did not fail to carry out the policies of the Water District; (3) that Ingram did not fail to pay the Water District for water services furnished to him; and (5) that the sum of.$19,000 would reasonably and fairly conpensate Ingram for the damages incurred because of the cancellation of his contract of employment. Based upon such verdict judgment was rendered in favor of Ingram for.$19,000 from which judgment the Water District has appealed.

By its first and eleventh points of error appellant contends that the trial court erred in refusing to sustain its motion for judgment non obstante verdicto, and that we should reverse and render the judgment, because the contract of employment sued upon is void and unenforceable, being lacking in mutuality of obligations and lacking in consideration. The burden of appellant's argument is that under the contractual terms appellee had no duty to perform any work nor to continue working for appellant for any period of time, and such failure on his part to perform all or part of his work would not have imposed any legal liability upon him. It says that since appellee had the right to terminate the agreement at his option, without incurring liability, appellant had the corresponding right to terminate the agreement free from liability. Appellant relies upon such cases as East Line & R. R. R. Co. v. Scott, 72 Tex. 70, 10 S.W. 99; St. Louis Southwestern Ry. Co. of Texas v. Griffin, 106 Tex. 477, 171 S.W. 703; Mutual Film Corp. v. Morris & Daniel, Tex.Civ.App., 184 S.W. 1060; and May v. Lee, Tex.Civ.App., 28 S.W.2d 202. The rule of law announced in these cases is undoubtedly sound, but upon careful examination and comparison of the record in this case with the cases cited we find that the authorities relied upon by appellant are not controlling of the instant appeal.

The contract between appellant and appellee was clear and unambiguous. While not expertly nor artfully drawn it does clearly express the agreement of the parties. It appears to have been entered into freely and voluntarily. For a period of twenty-two months the parties complied with the express terms of the contract and recognized the same as a binding and enforceable agreement. No charge is leveled against the agreement as being in contravention of any law nor against public policy. No one claims it contravenes equity or good conscience. It was for a definite period of time and for a definite consideration consisting of mutual promises. Appellant agreed with appellee that if it terminated appellee's employment under the contract prior to the expiration of five years that it would be obligated to honor appellee's claim for services for the remaining period of the contract. This, of course, contemplated a discharge by appellant without just cause. The law did not deprive appellant of its right to terminate the contract, and discharging appellee for good cause, such rule being duly recognized by the parties as well as the trial court in the submission of the case to the jury.

Our Texas courts have held that a contract of employment is not void as unilateral because, although the employer is bound for a definite period, the employee may terminate it at pleasure. The real basis for the decisions is the agreement on the part of the employer, implied in law, that he will not unjustly or wrongfully discharge the employee during the period of the contract. Thus in St. Louis, B. & M. Ry. Co. v. Booker, Civ.App., 5 S.W.2d 856, the court was presented with the almost identical situation and appellant relied upon and cited the same cases cited by appellant in this case. The court, in denying the same argument made here said, inter alia:

'But in none of these cases (cited by appellant) was there an express agreement by the employer not to terminate the contract without just cause. * * * As said by Judge Brown (in St. Louis Southwestern Ry. Co. v. Griffin, 106 Tex. 477, 171 S.W. 703) in the opinion above quoted, the liberty to make a contract for a lawful purpose is a natural right, which is beyond the power of government to take from the citizen. An employer and his employees have the right to agree with each other that the employer will not unjustly discharge the employee and will compensate the employee for the time lost by an unjust discharge and such contract is not invalid because of the fact that the employee has not agreed to remain in the service for any definite length of time.'

In Gulf, C. & S. F. Ry. Co. v. Jackson, Tex.Civ.App., 69 S.W. 89, the court considered a similar agreement, and breach thereof by the employer, and answered the same contention as advanced here by saying:

'It was not necessary, in order to make this contract binding upon appellant, that the appellee should have agreed to work for that length of time. It was competent for the parties to make a contract binding upon one of them for a certain length of time, but which the other might terminate whenever he saw fit. Such being, in our opinion, the character of the contract shown by the evidence in this case, the appellant would be liable for all of the damages which were directly caused by its breach of the contract.'

Numerous other Texas authorities assign this principle of law. Moore County Carbon Co. v. Whitten, Civ.App., 140 S.W.2d 880; Harper, et al. v. Local Union No. 520, International Brotherhood of Electrical Workers, et al, Tex.Civ.App., 48 S.W.2d 1033; Mansell v. Texas & Pacific Ry. Co., et al, Com.App., 135 Tex. 31, 137 S.W.2d 997; Smith v. Hamilton, Civ.App., Tex.Civ.App., 237 S.W.2d 774; Dixie Glass Co. v. Pollak, Tex.Civ.App., 341 S.W.2d 530, 91 A.L.R.2d 662, affirmed, 162 Tex. 440, 347 S.W.2d 596; 56 C.J.S. Master and Servant § 6, p. 67.

The parties in this case could, and did, by their contract, agree that the same might terminate at the election of one or the other of them and the agreement may be enforced, if fairly made and the same is not contrary to equity or good conscience. Haley v. Nickels, Tex.Civ.App., 235 S.W.2d 683; Maddox Motor Co. v. Ford Motor Co., Tex.Com.App., 23 S.W.2d 333; 17A C.J.S. Contracts, § 399, p. 481, et seq. Appellant's first and eleventh points are overruled.

Appellant's second, eighth, twelth and thirteenth points of error are 'no evidence' points dealing with the answers of the jury to Special Issues Nos. 1, 2 and 3, as summarized above. Appellant contends that such answers have no support in the evidence. We have carefully considered these 'no evidence' points within the rule directed by the Supreme Court in In re King's Estate, 150 Tex. 662, 244 S.W.2d 660, and having done so we find some evidence of probative force to sustain the answer of the jury to each of said issues against which complaint is leveled. As a matter of fact, appellee's testimony, standing alone, would be sufficient to create an issue of fact on each of said issues. When carefully analyzed, the testimony of witnesses relied upon by appellant, creates issues of fact which would be sufficient to justify the answers of the jury to the issues. Accordingly, appellant's Points 2, 8, 12 and 13 are overruled.

By its fifth and ninth points of error appellant assails the answer of the jury to Special Issue No. 5, being the damage issue, in the sum...

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