Hatten v. City of Houston, 14255

• Decision Date: 17 October 1963
• Docket Number: No. 14255,14255
• Citation: 373 S.W.2d 525
• Parties: G. R. HATTEN et al., Appellants, v. The CITY OF HOUSTON, Appellee.
• Court: Texas Court of Appeals

Page 525

373 S.W.2d 525

G. R. HATTEN et al., Appellants, v. The CITY OF HOUSTON, Appellee.

No. 14255.

Court of Civil Appeals of Texas, Houston.

Oct. 17, 1963.

Rehearing Denied Dec. 19, 1963.

Lloyd M. Lunsford, South Houston, and Louis W. Graves, Jr., James T. Russell and Graves, Cottingham & Russell, Houston, for appellants G. R. Hatten, James K. Freeman, Russell Kiehn and W. Joe Norris.

David Crews, Conroe, and Sam Freas, Livingston, for appellants M. L. & Lamar Walker.

R. H. Burks, City Atty., and G. Gordon Whitman, Senior Asst., Vinson, Elkins, Weems & Searls, Victor W. Bouldin, Houston, for appellee.

COLEMAN, Justice.

This is a special statutory proceeding instituted by the City of Houston, Texas, under the provisions of Article 717m, Vernon's Ann.Tex.St., seeking a declaratory judgment establishing the validity of $14,000,000.00 in Water System Revenue Bonds and the proceedings had in connection with the issuance thereof. The proceeding is one in rem and citation is by publication.

By order of the trial court an earlier suit seeking to enjoin the issuance of the bonds and a water rate ordinance of the City was consolidated with this cause, the order reciting: '(c) that all issues in Cause No. 607,354-A which are litigable in Cause No. 610,652, shall be consolidated and jointly tried in said Cause No. 610,652, it being expressly provided that this order shall not be deemed to limit or affect the determination by the respective judges trying said Cause No. 610,652 or 607,354-A of the question of the proper issues which may be litigated in said causes.' Cause No. 607,354 was instituted by a group of citizens, who subsequently filed an answer in this cause and who will be referred to herein as the 'Hatten defendants.'

Subsequently M. L. and Lamar Walker filed an answer in this cause, in which they alleged that they are land owners in Polk County, Texas, and that their real estate 'would be affected by the securities described * * * and that said Defendants * * * would be affected in other ways by said securities, and by the issuance and sale of same. That said Defendants fall within the calss of persons to whom the order and notice of this suit was addressed.'

As an answer to a motion for summary judgment, the Walkers filed an affidavit in which they stated that they owned an interest in a business in the City of Houston and an interest in real estate in the City of Houston. In answer to requests for admissions of fact they refused to admit that they owned no real estate in the City of Houston and were not water customers of said City, and in a sworn answer to the motion for summary judgment stated affirmatively that they were owners of real estate in the City of Houston and owned an interest in a business which is a water customer of the City. All of these pleadings were filed by David Crews, an attorney for the Walkers.

Prior to the trial of this case the Walkers filed proper affidavits to support a motion for continuance on the ground that their attorney of record, David Crews, was a member of the Legislature of the State of Texas, and that said Legislature was in session. The motion was denied and the matter proceeded to trial in the absence of the said David Crews. In his findings and conclusions the trial court said: 'M. L. Walker and Lamar Walker alleged no litigable interest in the subject matter of this proceeding and are not proper parties to this proceeding.'

Section 3 of Article 717m, V.A.T.S., provides in part:

'The judge of the District Court wherein the petition is filed, shall, upon the filing and presentation thereof, make and issue an order in general terms in the form of a notice directed to 'all property owners, taxpayers, citizens and others having or claiming any right, title or interest in any property or funds to be affected by the issuance of the Securities or affected in any way thereby,' requiring in general terms and without naming them, all such persons and the Attorney General of Texas to appear at or before 10 o'clock A.M. on the first Monday after the expiration of forty-two (42) days from the date of issue of said order, and show cause way the prayers of the petition should not be granted and the proceedings and the Securities validated and confirmed as therein prayed. * * *'

Section 5 provides in part:

'By the publication of said order, all property owners, taxpayers, citizens or others having or claiming any right, title or interest in or against the petitioner or property subject to taxation thereby or otherwise affected by or interested in the issuance of the Securities described in the petition, shall be considered as and are made parties defendant to said proceedings, and the court shall have jurisdiction of them to the same extent as if individually named as defendants in said petition and personally served with process in the cause.'

Section 6 provides:

'Any property owner, taxpayer, citizen or person affected by or interested in the issuance of the Securities may become a named party to said proceedings by pleading to the petition on or before the time set for hearing as provided in Section 3, or thereafter by intervention upon leave of court. At or after the time, and at place designated in the order for hearing, the judge shall proceed to hear and determine all questions of law and fact in said proceedings and may make such orders as to the proceedings and such adjournments as will enable him properly to try and determine the same and to render a final decree therein with the least possible delay.'

From a literal interpretation of these sections it would appear that any person, who owns any property in the City of who claims to be affected in any manner by the issuance of the securities, is given a statutory right to make himself a named party to the proceeding. By the provisions of Sec. 8 of the statute a judgment rendered in this cause will constitute a permanent injunction against the institution of any sort of legal proceeding contesting the validity of the securities or of the provisions made for the payment of the same. It may well have been the intention of the Legislature that all who consider themselves affected by the issuance of securities would have the right to appear and answer in a proceeding under this statute, whether their claim of interest is well founded or not. However, we are not content to rest our decision on this basis.

Appellee forcefully urges that in passing on the Walker motion for continuance the trial court could properly determine whether one presenting such a motion is a member of the class used so as to have standing to urge it. The Walkers were referred to as 'defendants' in many pleadings filed in this proceeding. Their bill of exceptions as approved by the trial court states that no objections to the form or contents of the motion for continuance and the affidavits filed in connection therewith were made. While the trial court in his conclusions of law found that the Walkers alleged no litigable interest in the subject matter of the proceeding and were not proper parties, their appearance was noted in the judgment and their rights, if any, are adjudicated thereby. The denial of the motion cannot be supported on the basis of a finding of 'no litigable interest.'

Rule 45, Texas Rules of Civil Procedure, provides that the pleading of a legal conclusion shall not be a ground for objection when fair notice is given by the allegation as a whole. Rule 90, T.R.C.P. provides that every defect, omission, or fault in a pleading, either of form or of substance, which is not specifically pointed out by motion or exception in writing shall be deemed to have been waived by the party seeking reversal on such account.

The Walker defendants pled the conclusion that they would be affected in ways other than by reason of thier ownership of Polk County property by the issuance and sale of these securities. They also alleged generally that they were within the class of persons to whom the notice of suit was addressed. Since the City did not contest these allegations by special exceptions, motion to strike, or otherwise, the conclusions so alleged are sufficient if evidence would be admissible under such allegations to prove that the Walkers are proper named defendants under the terms of Article 717m. Broussard v. Tian, Tex.Civ.App., 290 S.W.2d 372, reversed on other grounds 156 Tex. 371, 295 S.W.2d 405; Mizell Const. Co. & Truck Line, Inc. v. Mack Trucks, Inc., Tex.Civ.App., 345 S.W.2d 835; Tolson v. Carroll, Tex.Civ.App., 313 S.W.2d 131. The pleadings were sufficient when tested by this rule.

The statement of facts shows that the trial court held as a matter of law that this proceeding is not a civil suit and that Article 2168a has no application to a special statutory proceeding. In this we think the court erred. In National Life Co. v. Rice, 140 Tex. 315, 167 S.W.2d 1021, the court defined a 'suit' as follows: 'A 'suit' is 'any proceeding in a court of justice by which an individual pursues that remedy in a court of justice which the law affords him.' Watson Co. v. Cobb Grain Co., Tex.Com.App., 292 S.W. 174, 176, quoting the language of Chief Justice Marshall in Weston v. City Council of Charleston, 2 Pet. 449, 7 L.Ed. 481. It is the prosecution of some demand in a court of justice. Ex Parte Towles et al., 48 Tex. 413, 433.' Here the City pursues in a court of justice a remedy afforded it by law, its object being to finally determine a pending suit attacking the validity of bonds it proposes to sell and to enjoin the institution of future suits of a similar nature. The fact that by statute a special method of procedure is available to the City seeking relief of this nature does not change the nature of the action. It remains a civil suit subject to the terms of Art. 2168a. Ramsey v. Gardner, 154 Tex. 457, 279 S.W.2d 584.

The trial court erred in failing to sustain the motion for continuance and in proceeding with...