Court Opinion

ID: 4897944
Source: CourtListenerOpinion
Date Created: 2021-09-03 00:10:33.873508+00
Date Added: 2024-06-11T08:12:49.695836
License: Public Domain

ON REHEARING.
Mr. Chief Justice Alexander
delivered the opinion of the Court.
In the original opinion we stated that the bond indenture was *632executed at the same time the other instruments were executed. In the motion for rehearing it is pointed out that, while the bond indenture was delivered at the same time the other instruments were executed, it was actually signed and acknowledged several days prior thereto. However, in our opinion, this is not material. As a general rule, delivery is an essential element of the execution of a written instrument. 17 C. J. S. 414; 10 Tex. Jur. 267; 15 Words and Phrases 546; Black’s Law Dictionary (De Luxe Ed.), p. 716; Thomason v. Berry( Com. App.), 276 S. W. 185; Planters’ Oil Co. v. Hill Printing & Stationery Co. (Tex. Civ. App.), 208 S. W. 192. Prior to the time the other instruments were executed and delivered and the transaction closed, the City had not acquired the property to be covered by the indenture, and had not received the consideration to be paid therefor. Consequently, although the indenture was actually signed at a priqr date, it was not intended that it should be delivered nor that it should become effective until the other instruments were executed and delivered. Therefore, for all practical purposes, we may consider that the indenture was executed at the same time the other instruments were executed and delivered.
It is strenuously insisted that, since the lease contract and the indenture were between different parties — the lease being between the City and GBRA and the indenture being between the City and the bond buyers and the trustees named therein— they should not be construed together as one instrument. It is undisputed, however, that all of the instruments were prepared and entered into in the accomplishment of a single purpose. Representatives of all of the parties — the City, GBRA, the bond buyers, and the trustees named in the indenture — met in the same room, at the same time, for the purpose of closing the over-all transaction. At that time they recognized that the City could noj; acquire the property to be covered by the indenture, and therefor could not issue and sell the bonds unless it would consent to execute the lease to GBRA. Consequently, it was agreed that thé City should make the lease to GBRA in order to put the City in position to issue its bonds1'and acquire the property to be covered by the indenture. The indenture, the lease, and the other instruments were all executed and delivered with the full knowledge of all of the parties, in carrying out the agreement entered into by them. The lease expressly refers to the indenture. Under these circumstances they must be construed together, in order to ascertain the true intent of the parties. Veal v. Thomason, 138 Texas 341, 159 S. W. (2d) 472; Peterson v. Miller Rubber Co., 24 Fed. (2d) 59; 12 Amer. Jur. 783.
*633The trustees named in the indenture insist that, since Article II, Section 2, of the lease (quoted in the main opinion) provided that the provisions of the lease were subject to the terms of the indenture, and in the event of a conflict the terms of the indenture should control, the provisions of the indenture placing “the complete management and control of the system” in the hands of the City’s Board of Trustees should control over the provisions of the lease which gave the lessee the right to operate the leased property, and that the provisions of the indenture requiring the proceeds of the system to be paid into the “Revenue Fund” should control over the provision of the lease which allows the lessee to retain the profits derived from the operation of the leased property. Of course, the complete management and control of the leased property could not be in the lessee and in the City’s Board of Trustees at the same time. Neither could the profits from the leased property be retained by the lessee and at the same time be paid into the “Revenue Fund.” But a lease such as this, stripped of the right to manage the leased property and to retain the profits over and above the stipulated rental, would be no lease at all. It would be worthless. Its terms would be rendered ineffective. We must assume that the parties honestly intended that the terms of the lease contract should be effective to accomplish the purpose therein indicated. We cannot assume that the City, the bond buyers, and the trustees named in the indenture agreed to the éxecution and delivery of the lease in order to accomplish their purpose, but at the same time secretly intended that the lease should be wholly ineffective. We must attribute to them honest motives. Consequently, we must try to reconcile the different provisions of the instruments and give effect to all of them, if possible. This can be done by holding that in the acquisition of the property all parties intended that the leased property should be burdened with the lease and that it was only the interest acquired by the City, over and above this burden, that was to be under the management and control of the City’s Board of Trustees. The same construction would give the trustees named in the indenture the right to have the stipulated lease rental paid into the “Revenue Fund’’ as revenue received by the City through the operation of the system, but not the profits earned by the lessee over and above the stipulated rental. Such a construction gives effect to the terms of the various instruments and it accords honesty of purpose to all the parties.
The motion for rehearing is overruled.
Opinion delivered April 2, 1947.
Second motion for rehearing overruled May 1, 1947.