Southern Canal Co. v. State Bd. of Water Engineers

• Decision Date: 03 December 1958
• Docket Number: A-6860,Nos. A-6859,s. A-6859
• Citation: 159 Tex. 227,318 S.W.2d 619
• Parties: SOUTHERN CANAL CO., Petitioner, v. STATE BOARD OF WATER ENGINEERS et al., Respondents.
• Court: Texas Supreme Court

Page 619

318 S.W.2d 619

159 Tex. 227

SOUTHERN CANAL CO., Petitioner, v. STATE BOARD OF WATER ENGINEERS et al., Respondents.

Nos. A-6859, A-6860.

Supreme Court of Texas.

Dec. 3, 1958.

McKay & Avery, Austin, Fulbright, Crooker, Freeman, Bates & Jaworski, John H. Crooker, J. Wiley Caldwell and Charles D. Boston, Houston, for petitioner.

Will Wilson, Atty. Gen., James W. Wilson and James. N. Ludlum, Asst. Attys. Gen., for respondents.

CALVERT, Justice.

Southern Canal Company instituted two suits against the State Board of Water Engineers and its individual members in a District Court of Travis County. A plea to the jurisdiction was sustained and the suits were dismissed. The Court of Civil Appeals reversed the judgment of dismissal and remanded the causes for trial. 311 S.W.2d 938.

The purpose of the suits, as disclosed by the Canal Company's petition, is to review and set aside an order of the Board denying its application for a permit to appropriate water from the Trinity River. The suits were filed under authority of Sections 12 and 13 of Article 7477, Vernon's Annotated Texas Statutes.

By the enactment of the Articles contained in Chapter 1 of Title 128 of our statutes the Legislature has sought, in a comprehensive way, to regulate the use of waters from our rivers, streams and lakes to the end that they will be conserved and used for the greatest public good and in the public interest. To make certain that such waters are so conserved and used the Legislature has created the State Board of Water Engineers and has entrusted to it broad discretion, within certain statutory limits, in determining whether an application for a permit to appropriate and divert such waters to a particular use shall be granted or denied. The Legislature has specifically provided that it shall be the duty of the Board, in determining applications, 'to reject all applications and refuse to issue the permit asked for if there is no unappropriated water in the source of supply; or if the proposed use will impair existing water rights, or is detrimental to the public welfare.' Art. 7506, V.A.T.S. It has directed the Board to issue a permit if the proposed appropriation contemplates use of the water for approved purposes, does not impair existing water rights or vested riparian rights, and is not detrimental to the public welfare. Art. 7507, V.A.T.S.

Right to review of the Board's order is provided in Section 12 of art. 7477, V.A.T.S., which reads in part as follows:

'Any person affected by any ruling, order, decision, or other act of the Board, may, within one hundred and twenty (120) days after the date on which such act is performed, or, in case of a ruling, order, or decision, within one hundred and twenty (120) days after the effective date thereof, file a petition in an action to review, set aside, modify, or suspend such ruling, order, decision, or other act. * * *.' Section 13 of art. 7477, V.A.T.S., reads as follows:

'(13) In all suits brought to review, modify, suspend or set aside rules and regulations, orders, decisions, or other acts of the Board, the trial shall be de novo, as that term is used and understood in an appeal from a Justice of the Peace Court to the county court. In such de novo trials, no presumption of validity or reasonableness or presumption of any character shall be indulged in favor of any such order, rule or regulation, but evidence as to the validity or reasonableness thereof shall be heard and the determination in respect thereto will be made upon facts found therein, as in other civil cases, and the procedure for such trials and the determination of the orders and judgments to be entered therein shall be governed solely by the rules of law, evidence and procedure prescribed for the courts of this State by its Constitution, Statutes and rules of procedure applicable to the trial of civil actions. It is the intent of the Legislature that such trial shall be strictly de novo and that the decision in each such case shall be made independently of any action taken by the Board, upon a preponderance of the evidence adduced at such trial and entirely free of the so-called 'substantial evidence' rule enunciated by the courts in respect to orders of other administrative or quasi-judicial agencies.'

The basis of the trial court's action in sustaining the plea to its jurisdiction is not fully reflected in the transcript, but it is agreed by the parties that dismissal was ordered by the trial judge because of his conclusion that Section 13, regulating the trial of the suits, is unconstitutional, and that the invalidity of that Section renders Section 12, authorizing the suit, ineffective. The Court of Civil Appeals agreed with the trial judge's conclusion that Section 13 is unconstitutional but held that the invalidity of that Section does not render Section 12 ineffective.

Section 13 was declared unconstitutional by the courts below on the ground that it confers purely administrative duties upon the judicial branch of the government in violation of Section 1 of Article 2 of the Constitution of Texas, Vernon's Ann.St. ¹ It is on that question that the parties primarily join issue.

The constitutionality of Section 13 is in issue only if, properly interpreted, it provides for a de novo trial of the issues heard and decided by the Board.

In Lone Star Gas Co. v. State, 137 Tex. 279, 153 S.W.2d 681, 692, we said: 'Power to try a case de novo vests a court with full power to determine the issues and rights of all parties involved, and to try the case as if the suit had been filed originally in that court.' The sine qua non of a de novo trial as that term is used to describe a retrial of a matter or controversy theretofore tried by another tribunal is the nullification of the judgment or order of the first tribunal and a retrial of the issues on which the judgment or order was founded. When jurisdiction of the second tribunal attaches, the judgment or order of the first tribunal is not merely suspended, but is nullified. Examples of that type of trial are found in our statutes applicable to appeals from Justice Court judgments and from awards made by the Industrial Accident Board.

Section 16 of Article 5 of our state constitution provides: 'In all appeals from Justices Courts there shall be a trial de novo in the County Court * * *.' In interpreting and applying that provision it is held that the perfection of an appeal from a judgment of a Justice Court to a County Court annuls the Justice Court judgment. Bender Bros. v. Lockett, 64 Tex. 566; Moore v. Jordan, 65 Tex. 395, 396; Harter v. Curry, 101 Tex. 187, 105 S.W. 988. The County Court does not merely review the judgment of the Justice Court but tries the issues anew. Patterson Produce Co. v. Tombs, Tex.Civ.App., 14 S.W.2d 959, 960. Article 8307, Sec. 5 of the Workmen's Compensation Act provides that either party to a proceeding before the Industial Accident Board, being unwilling to abide by the decision of the Board, may bring suit in the proper District Court to set aside the ruling or decision and that the Court shall 'determine the issues in such cause, instead of the Board, * * * and the burden or (sic) proof shall be upon the party claiming compensation.' It is held that when suit is filed to set aside an award and the District Court acquires jurisdiction 'The award of the Industrial Accident Board is vacated and is no longer in force.' Zurich General Accident & Liability Ins. Co. v. Rodgers, 128 Tex. 313, 97 S.W.2d 674, 676; Texas Reciprocal Ins. Ass'n v. Leger, 128 Tex. 319, 97 S.W.2d 677; Liberty Mutual Ins. Co. v. Wright, Tex.Civ.App., 196 S.W.2d 349, writ refused.

The type of trial referred to differs in important particulars from the trial of a suit to review the reasonableness of an order or a decision, rule, or regulation of an administrative agency, although the latter type of suit is also held to be a type of de novo trial in that the evidence is heard anew and the reasonableness of the agency's action is independently adjudged by the court on the basis of evidence admitted in the judicial proceeding. Fire Dept. of City of Ft. Worth v. City of Ft. Worth, 147 Tex. 505, 217 S.W.2d 664, 666; Jones v. Marsh, 148 Tex. 362, 224 S.W.2d 198; Board of Water Engineers v. Colorado River Municipal Water Dist., 152 Tex. 77, 254 S.W.2d 369, 372. This latter type of trial has come to be known as a trial under the substantial evidence rule. The major side effects of a trial under the substantial evidence rule are that the only issue to be decided is one of law and trial of the fact issues by a judge or jury is avoided.

When Section 13 of Article 7477 is analyzed it is obvious that some of its provisions are utterly inconsistent; that the Legislature has incorporated in it some of the attributes of both types of trial. As indicating that the type of de novo trial first discussed is intended, the section provides that trial shall be strictly de novo as that term is used and understood in an appeal from a Justice of the Peace Court to the County Court; that the decision of the court is to be made upon facts found on the trial as in other civil cases, the procedure and decision to be governed by the rules of law, evidence and rules of procedure applicable to the trial of a civil action; that no presumption of the validity or reasonableness of the Board's order shall be indulged, and decision shall be made from a preponderance of the evidence and shall be made entirely free of the substantial evidence rule. As indicating that the latter type of trial is intended, it is provided that the court is to hear evidence as to the validity or reasonableness of the Board's order and that the decision shall be with respect to that issue. The latter provisions contemplate a review of the reasonableness of the Board's order and directly negative any idea that the Board's order is vacated or nullified by the filing of the suit or that the court is to try anew...