The availability of the theory of estoppel to Union is dependent on whether the act of extending the depository contract was governmental or proprietary in nature. City of Hutchins v. Prasifka, 450 S.W.2d 829, 835 (Tex. 1970); City of Corpus Christi v. Gregg, 155 Tex. 537, 289 S.W.2d 746, 750 (1956); City of San Angelo v. Deutsch, 126 Tex. 532, 91 S.W.2d 308, 308-09 (1936). If the City was acting in its governmental capacity, then the contract would not be enforceable by Union.

See, e.g, Roberts v. Haltom City, 543 S.W.2d 75, 77 (Tex. 1976) (applying affirmative defense of estoppel where the city was acting in a proprietary capacity); City of Corpus Christi v. Gregg, 289 S.W.2d 746, 751 (Tex. 1956) (same).

" 17 Tex.Jur. 908, Evidence § 409. See also Perren v. Baker Hotel of Dallas, Inc., Tex.Civ.App., 228 S.W.2d 311; City of Corpus Christi v. Gregg, Tex.Civ.App., 275 S.W.2d 547, reversed on other grounds, 1956, 155 Tex. 537, 289 S.W.2d 746; Big Three Welding Equip. Co. v. Reeh, Tex.Civ.App., 301 S.W.2d 504; Lynch v. Ricketts, Tex. 1958, 314 S.W.2d 273, 277. It is shown that it was necessary to open the gate valves in the pipes leading from the casing to bleed off the gas from the casing before pulling the tubing.

City of Beaumont v. Moore, supra; Zachry v. City of San Antonio, supra; City of Dalhart v. Childers, D.C. Tex., 1937, 18 F. Supp. 903. Danciger cites City of Cuero v. Tupper-Texas, Inc., 5 Cir., 1955, 226 F.2d 121, and City of Corpus Christi v. Gregg, Tex.S.Ct., 1956, 155 Tex. 537, 289 S.W.2d 746, in support of his argument that estoppel is applicable to this kind of case. Each of those cases is distinguishable from this one.

In City of Corpus Christi v. Gregg , for example, we held that the city's suit to cancel oil-and-gas-leases was subject to estoppel because the city acted in its proprietary capacity when "making the leases upon which suit was brought." 155 Tex. 537, 289 S.W.2d 746, 750 (1956). In Gates , we held that a city that breached an insurance contract by failing to pay benefits was subject to statutory attorney's fees because it acted in its proprietary capacity when it "entered into the insurance contract."

The same does not hold true, however, when a city is performing its proprietary functions. See Gates v. City of Dallas, 704 S.W.2d 737, 739 (Tex. 1986) (defining proprietary functions as "those functions performed by a city, in its discretion, primarily for the benefit of those within the corporate limits of the municipality" and holding that proprietary functions subject cities to the same duties and liabilities as those incurred by private parties); City of Corpus Christi v. Gregg, 155 Tex. 537, 289 S.W.2d 746, 750 (1956) (city acted within its proprietary capacity when it entered into an oil and gas lease and could therefore be estopped from later challenging the validity of the lease). Decisions from the U.S. Supreme Court elaborate on these themes, and we find it useful to mention a few here.

Strand v. State, 16 Wn.2d 107, 132 P.2d 1011 (1943).State Ex rel. Shell Oil Co. Inc. v. Registrar of State Land Office, 193 La. 883, 192 So. 519 (1939); City of Corpus Christi v. Gregg, 155 Tex. 537, 289 S.W.2d 746 (1956). Defendant relies on the statute of frauds, Section 25-5-1 and 25-5-4(1), U.C.A. 1953, as well as Section 65-1-18 and 65-1-23, which impliedly require all leases of the Board to be in writing.

TEX. R. CIV. P. 324, 325; City of Corpus Christi v. Gregg, 155 Tex. 537, 289 S.W.2d 746 (1956); City of Fort Worth v. Hill, 306 S.W.2d 817 (Tex. Civ. App. -- Fort Worth 1957, writ ref'd n.r.e.); Harmon v. City of Dallas, 229 S.W.2d 825 (Tex. Civ. App. -- Dallas 1950, writ ref'd n.r.e.). Respondent Riata Cadillac has an additional point before this court asserting the trial court properly disregarded the jury's finding that Riata did not have good cause to discharge Miller.

On appeal, Appellees contend that the City's act in subdividing and leasing the lakefront residential lots is a proprietary function, citing pre-TTCA cases holding that, under the common law, a city leasing its property acts in its proprietary capacity. See, e.g.,City of Corpus Christi v. Gregg , 155 Tex. 537, 289 S.W.2d 746, 750 (1956) ; City of Port Arthur v. Young , 37 S.W.2d 385, 388–89 (Tex. Civ. App.–Beaumont 1931, writ ref'd). It is true that the Texas Supreme Court stated that the courts retain their function to determine whether governmental immunity applies under the common law.

Id. at 436. Trinity cites City of Corpus Christi v. Gregg, 289 S.W.2d 746 (Tex. 1956), to support its argument that the City engaged in a proprietary capacity when it leased the minerals to Trinity. The City argues that Gregg does not apply here because the case was decided before the legislature delineated what constitutes governmental versus proprietary functions in the Tort Claims Act.