REA Express v. Missouri Pacific Railroad Company

• Decision Date: 05 November 1969
• Docket Number: No. 265,265
• Citation: 447 S.W.2d 721
• Parties: REA EXPRESS, Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellee. . Houston (14th Dist.)
• Court: Texas Court of Appeals

Page 721

447 S.W.2d 721

REA EXPRESS, Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellee.

No. 265.

Court of Civil Appeals of Texas.

Houston (14th Dist.).

Nov. 5, 1969.

Rehearing Denied Dec. 10, 1969.

Harry Tindall, Fulbright, Crooker, Freeman, Bates & Jaworski, Houston, for appellant.

Thomas S. Terrell, Sewell, Junell & Riggs, Houston, for appellee.

BARRON, Justice.

This suit is based upon a contract wherein Missouri Pacific Railroad Company sued REA Express for indemnity. Prior to trial on the merits of the case, REA Express' motion to compel arbitration was overruled by the trial court. At the trial of the cause with aid of a jury, the trial court overruled the motion for directed verdict filed by the defendant REA Express and sustained the motion for directed verdict filed by the plaintiff Missouri Pacific Railroad Company. Judgment was entered in favor of Missouri Pacific Railroad Company for $6,943.00, representing full indemnity against the defendant pursuant to the contract of the parties, to-wit: the Standard Express Operations Agreement. From that judgment below this appeal has been perfected by defendant REA Express as appellant .

Appellant contends that the trial court erred in granting judgment for appellee (1) because the undisputed evidence shows that the accident in question was due to the sole negligence of appellee, (2) because the evidence failed to show that appellee complied with the contract of the parties, and failed to show that REA breached such agreement, (3) because REA was entitled to jury findings on the question of proper notice to Missouri Pacific, a claimed fact issue having been presented to the jury on such question, and (4) because the trial court erred in overruling appellant's plea in abatement and motion to compel arbitration under the terms of the above contract.

On November 24, 1964, Thomas J. Josey, as a joint employee of REA and Missouri Pacific, injured himself during the course and scope of his employment. That same day Josey had written for him a letter to REA detailing the nature of his injuries. As a joint employee, Josey was entitled to both Workmen's Compensation benefits from REA, and he was entitled to Federal Employers Liability benefits from Missouri Pacific. In addition, Josey was entitled to disability benefits from the Railroad Retirement Board. Within a few days after the letter to REA, Josey filed a claim for benefits with the Railroad Retirement Board. On December 18, 1964, the Railroad Retirement Board sent a 'Notice of Lien' to W. L. Baker, Assistant Claims Attorney for the Missouri Pacific. That letter stated that Thomas J. Josey had injured himself on Missouri Pacific Train No. 55 while performing train service. The purpose of the letter was to put Missouri Pacific on notice of the Railroad Retirement Board's interest in any F.E.L.A. benefits which might be paid to Josey by Missouri Pacific. Shortly thereafter, Missouri Pacific dispatched a claims investigator to determine the cause of the accident and the extent of Josey's injuries. A written report was made to Mr. Baker of this investigation on January 14, 1965 in which it was suggested that appellee permit the Aetna Casualty and Surety Company, REA's compensation carrier, to handle the matter.

On May 20, 1965, Frank Glash, Claims Representative of the Aetna Casualty and Surety Company, sent formal notice in writing to Missouri Pacific detailing the facts surrounding Josey's injuries.

On July 21, 1965, two months after Aetna had given notice to Missouri Pacific, Josey filed suit against REA Express and Missouri Pacific for damages as a result of the injuries received while he was acting as a joint employee of the two named defendants.

Almost a year later, on June 18, 1966, Missouri Pacific filed a cross-action against REA claiming that it had not received formal written notice as required by Article 13, Section 4(d), of the Standard Express Operations Agreement. On August 10, 1966, the cross-action of Missouri Pacific was severed from the main suit of T . J. Josey against the parties here.

On December 6, 1966, Missouri Pacific, after notice to REA, settled the claim of T. J. Josey for approximately $6,000, and on December 8, 1966, judgment was entered in favor of Missouri Pacific in accordance with the terms of the settlement agreement. The settlement was a favorable one, and the suit by Josey against REA was voluntarily dismissed.

On May 20, 1968, nearly two years after Missouri Pacific's above cross-action was filed against REA Express, REA filed its plea in abatement and motion to compel arbitration. After the cross-action was filed, however, REA answered Missouri Pacific's first set of request for admissions, the parties took the deposition of C. K. Bell upon the issues of notice and liability, and both parties hereto made a motion to sever the cross-action from the main suit, which motion was presented to the trial court on August 10, 1966. In such motion for severance the parties requested that the cross-action be continued on the docket of the court. Requests for admissions were made by both parties. Also on June 28, 1968, Missouri Pacific filed interrogatories to REA inquiring whether REA had ever made written demand for arbitration, as required by the contract. Such interrogatories were not answered finally until November 1, 1968, at which time REA answered that written notice had been given on September 16, 1968. Prior thereto, on July 8, 1968, REA had answered the interrogatories by stating that it had no obligation to appoint an arbitrator until arbitration proceedings were initiated by Missouri Pacific. The trial court overruled REA's plea in abatement and motion to compel arbitration by order dated December 20, 1968, and in such order the court recited that it had heard the presentation of evidence and argument of counsel. The evidentiary record of the hearing on such plea in abatement and motion have not been brought forward to this Court, and we are not apprised of what occurred at the hearing.

On February 3, 1969, the cross-action of Missouri Pacific same on for trial. After both sides had rested, the trial court withdrew the case from the jury and rendered judgment in favor of Missouri Pacific. It is from this judgment, including the court's action on the plea in abatement and motion, that this appeal has been perfected.

Appellant's first contention is that the trial court erred in granting judgment for Missouri Pacific, because the undisputed evidence shows the accident was due to the sole negligence of Missouri Pacific. There is no contention on the part of appellee that the negligence of Missouri Pacific was not the sole cause of the injuries to T. J. Josey. Rather, the suit is on the contract. Article 13, Sec. 4(d) of the Operations Agreement states as follows:

'In case any claim is asserted or suit is brought against a party hereto based upon allegations making the other party liable, either solely or jointly, the party against which claim is asserted or suit is brought shall give Prompt notice thereof in writing to such other party * * * A party failing to give the notice required shall bear the entire loss * * *.' (Emphasis added).

Josey was injured on November 24, 1964. On the same day his fellow messenger, C. K. Bell, wrote a letter to the manager of REA, Mr. Hardebeck, which letter was received in the offices of REA and stamped with an REA stamp which noted that it was received by REA on November 25, 1964. After receiving the above letter and a telephone call from Josey, REA failed to give any written notice to Missouri Pacific. The letter from the Railroad Retirement Board dated December 18, 1964 to Missouri Pacific in which a claim for reimbursement from any sum of money payable by Missouri Pacific on account of liability based on Josey's injuries cannot supply the written notice required of REA by the agreement above, nor can the letter written to Missouri Pacific by Frank Glash, adjuster for Aetna, on May 18, 1965, claiming that the railroad was liable, serve to supply the written notice necessary under the terms of the contract. The latter letter was sent approximately six months after the Josey accident. Such indirect notices were not given by REA, and they are not sufficient to comply with the clear Standard Express Operations Agreement.

The contract requires that a party against whom a claim is asserted give written notice of such claim to the liable party, and we hold that Missouri Pacific was not in default of its contract. In fact, REA concedes that Missouri Pacific would ordinarily be correct in its contention that REA must bear the entire loss under the above circumstances, but REA contends as a defense that Missouri Pacific was itself in default of the contract by reason of its failure to give written notice to REA after receiving the notices of the Josey accident in the form of the letters above. We do not pass upon what legal effect a subsequent default of the contract by Missouri Pacific would have in this case, because we have held that the railroad was not in default of its agreement.

REA further contends that the trial court erred in rendering judgment as a matter of law and that the above facts create issues for the jury to determine. It is true that the facts are to be construed most favorably to the appellant, and if there is any fact issue for the jury the trial court erred in withdrawing the case from the jury and rendering judgment. See Triangle Motors of Dallas v. Richmond, 152 Tex. 354, 258 S.W.2d 60. Ordinarily, notice is a question of fact which is foreclosed by the decision of the trier of the facts, and it becomes a question of law only when there is no room for ordinary minds to differ as to the proper conclusion to be drawn from the evidence. O'Ferral v. Coolidge, 149 Tex. 61, 228 S.W.2d 146, 148, (Tex.Sup.). The trial court held as a matter of law that the notices were not sufficient and prompt. The...