author: WERLEIN, Justice. COLEMAN, Justice.

text:
    J. W. ROYALTY et al., Appellants, v. Dr. W. D. NICHOLSON, Appellee.
    No. 15034.
    Court of Civil Appeals of Texas. Houston.
    Jan. 19, 1967.
    Rehearing Denied Feb. 9, 1967.

      C. Wayne Holder, Freeport, for appellants.
    Vinson, Elkins, Weems & Searls, Donald L. Howell, Howard W. Mays, Robert R. Randolph, Houston, Evans & Gillies, Angleton, for appellee.
   Majority Opinion

WERLEIN, Justice.

This suit was brought by appellants to contest a schoolhouse bond election held in Brazosport Independent School District of Brazoria County, Texas, on June 4, 1966. The School District has only one high school which is located in Freeport. Sometime before the election a citizens committee was appointed by the president of the Board of Trustees to consider the alternatives for meeting an acute shortage of classrooms in the District, especially on the high school level. The alternatives were: (1) to replace the present high school in Freeport with a new central high school in the Lake Jackson-Clute area. The present Freeport high sthool would be converted to a junior high school for three or four years and then reactivated as a high school; (2) to expand the size of and continue the present single central high school in Freeport; (3) to repair, enlarge and continue the present high school at Freeport and also construct a second high school in the Lake Jackson area. The first alternative of the citizens committee was submitted to the electorate in a school bond election on April 2, 1966, and was defeated.

The School Board decided to submit the other two alternatives at an election on June 4, 1966, pursuant to a petition submitted to the Board on May 24, 1966, requesting a bond election. The petition requested the Board to submit two propositions. Proposition No. 1 was to authorize the Board to issue $3,860,000.00 District bonds “for the purpose of purchase, construction, repair and equipment of public free schools within the limits of said District, and the purchase of the necessary sites therefor [including (1) additions to present Brazosport high school to increase the permanent facilities to 2,600 student capacity; (2) a new elementary school, and (3) additions to elementary and junior high schools]” and the levy of the tax in payment thereof. Proposition No. 2 was to authorize the Board to issue $5,998,000.00 District bonds “for the purpose of the purchase, construction, repair and equipment of public free school buildings within the limits of said School District, and the purchase of the necessary sites therefor [including (1) a new 2,000 student capacity high school in the Clute-Lake Jackson area; (2) additions to present Brazosport high school to increase permanent facilities to 1,400 student capacity; (3) a new elementary school, and (4) additions and improvements to elementary and junior high schools],” and the levy of the tax in payment thereof.

The petitioners requested that if in said election each of said propositions “shall receive a greater number of votes ‘For’ than ‘Against’ such proposition, the proposition, receiving the greater number of votes ‘For’ such proposition shall be declared adopted, and bonds shall not be issued nor shall taxes be levied pursuant to the other proposition. The School Board granted the petition as requested by the petitioners and set June 4, 1966 as election day. Notice of the election was given by posting exact copies of the order calling the election, which were posted on the morning of May 25, 1966 between the hours of 8:30 to 9 o’clock at three public places in the School District. The election was held on June 4, 1966, and the returns were duly made to the Board of Trustees, who met in regular session on June 7 with all members present, and declared that Proposition No. 1 received 2616 votes “For” and 2321 votes “Against”, ¡ and Proposition No. 2 received 2656 votes “For” and ¿367 votes “Against”; and that since Proposition No. 2 received more favorable votes than Proposition No. 1, the election resulted favorably to Proposition No. 2, and for the issuance of bonds and the levy and collection of taxes in payment thereof. The Board further declared “that said election has resulted unfavorably to the issuance of the schoolhouse bonds described in Proposition No. One and said bonds shall not be issued.”

Thereafter appellants filed this suit, alleging among other things that the notice of the election was improperly given; that certain voters were not qualified to vote because their names were not on the tax rolls; that the tax assessor-collector failed to furnish election judges a certified list of taxpayers; and that the Board was not empowered to submit two propositions and provide in its order calling the election that only the proposition receiving the greater number of “For” votes would carry.

The trial court entered judgment on October 12, 1966 declaring that the June 4, 1966 special bond election resulted favorably to the issuance of the bonds described in Proposition No. 2 and that the Board was authorized to issue the bonds described in Proposition No. 2 and levy taxes in payment thereof. No findings of fact or conclusions of law were requested or filed.

Appellants contend that the court erred in finding and holding that notice of the election was properly posted, since less than ten full day’s notice of such election was given, and secondly, that the court erred in concluding that only ten days’ notice was required by law. They have no point complaining that there was any failure to timely begin absentee voting. They do complain of the failure to timely post notices. Article 2785, Vernon’s Annotated Texas Statutes, is the only statutory provision that purports to specify the notice required in a school bond election. It expressly provides for ten days’ notice. It is appellants’ contention, however, that the Texas Election Code, by providing for twenty days’ absentee voting, repealed by implication the special notice provision of Article 2785. Article 4.05 of the Texas Election Code, V.A.T.S. provides, however, that in any “special election specially provided for by the laws of this State, the notices of the election shall be given in compliance with the laws governing said elections respectively.” There is no provision in the Election Code concerning notice other than Article 4.05. Our Supreme Court, in Wallis v. Williams, 101 Tex. 395, 108 S.W. 153 (1908), has clearly distinguished between general elections and special elections which are provided for by the Special Laws of this State. It cannot be questioned that the election in question was a special election specially provided for by the laws of Texas.

The school bond election was held pursuant to Article 2784e-l, V.A.T.S., which provides that no bond shall be issued thereunder until authorized by an election and that the General Laws applicable to school districts shall govern the method and manner of calling and holding of tax and bond election. In Wiederkehr v. Luna, 297 S.W.2d 243, Tex.Civ.App., Waco 1956, n. w. h., the court held that Article 2785, V.A.T.S., was the general law referred to in Article 2784e-l. Such article may be considered as the general law with reference to school district elections, and yet be considered a special law in that it is limited in its scope to school district elections and does not embrace elections generally. There is no statute other than Article 2785, which specifies the notice required to be given in schoolhouse bond elections. See Wilkerson v. Otto, 289 S.W.2d 411, Tex.Civ.App., Beaumont 1956, n. w. h. Article 2785 provides that: “said elections shall be held and conducted as provided by law for general elections, except as provided herein.” It expressly provides as to the notice required to be given.

In Baker v. Scranton Independent School Dist., 287 S.W.2d 210, Tex.Civ.App., Eastland 1956, n. w. h., which was decided after the enactment of the Texas Election Code, it was held that ten days is the notice required in school district elections for the issuance of bonds. The contestants asserted that notice was not posted as required by law. The court said:

“We cannot agree with this contention. Article 2785, Vernon’s Annotated Civil Statutes, provides that elections within school districts for the issuance of bonds must be publicized by posting ‘notices thereof in three (3) places in the district for ten (10) days prior thereto * * *.’ These notices were posted within the district for the length of time provided by the statute.”

Furthermore, the Texas Legislature has at several times reaffirmed its intention to preserve the provisions of Article 2785. The absentee voting provisions were passed in 1951 as Article 5.05 of the Texas Election Code. Thereafter in 1953, the Legislature re-enacted all of Article 2785, as it exists today, without changing the notice provisions. In 1957 the Legislature enacted Article 2802Í-30, and in Section 3 thereof, by reference affirmed Article 2785 stating: “The election for the additional maintenance tax may be called without the necessity of a petition, but shall in all other respects be held in the manner provided by Article 2785, Revised Civil Statutes of Texas, 1925, as amended, or as hereafter amended.”

In 1959 the Legislature in connection with the enactment of Article 2802Í-31 again recognized Article 2785 in providing that the election shall in all respects, other than the necessity of a petition, be held in the manner provided in Article 2785. Thus the courts and the Legislature have affirmed at several different times the provisions of Article 2785 governing school district elections after the amendment of the absentee voting provisions of the Election Code.

We do not agree with appellants that Article 2785 providing for ten days’ notice by posting prior to the school bond election has been repealed by implication. The matter of giving notice of an election and the provisions referring to absentee voting are different subjects. In Cole v. State, 106 Tex. 472, 170 S.W. 1036 (1914), our Supreme Court said: “It may well be doubted whether any question of an implied repeal * * * really arises * * *. It is not sufficient that there be a discrepancy between different parts of a system of legislation upon the same general subject; there must be a conflict between different statutes upon the same specific subject.”

In Jefferson County v. Board of County and District Road Indebtedness, 143 Tex. 99, 182 S.W.2d 908 (1944), the court said:

“Ordinarily, a general repealing clause of inconsistent Acts does not, when contained in a general Act, operate to repeal a local or special Act, even though the provisions of the two Acts are in some respects inconsistent. 59 C.J. 904. The intention to repeal special Acts embodying conflicting provisions must be clearly evidenced.” [citing authorities]

The law is well settled that a general law will not ordinarily be held to repeal by implication a particular or special one upon the same subject. Flowers v. Pecos River R. Co., 138 Tex. 18, 156 S.W.2d 260 (1941); Ellis v. Batts, 26 Tex. 703 (1863); Richardson v. Cameron County, 275 S.W.2d 709, Tex.Civ.App., San Antonio 1955, n. w. h.

It is our view that the trial court did not err in holding that the notice of the election was duly and properly posted since there was an actual or substantial compliance with Article 2785, and appellants have not shown that the results of the election were in any way affected by the notices being posted between the hours of 8:30 and 9 o’clock a. m. on May 25, 1966, instead of an earlier hour on said date. There is, of course, no contention that the Trustees of the School District by not sooner posting such notices were undertaking to defraud or deceive the voters in the District. Nor do appellants contend that any voter was deprived of a vote by the posting of the notices between 8:30 and 9 a. m. on May 25, 1966, instead of at midnight on May 24, or instead of posting them by 7:45 a. m. on May 25, 1966, at which time the clerk’s office was to open each day for absentee voting under the order of the School Board.

Generally in computing the time of elections, the day of posting is included and the date of the election is excluded. Therefore, June 4, 1966, would be excluded. Counting back from such date it will be seen that the notices were posted on the tenth day prior to the date of the election. In Pollard v. Snodgrass, 203 S.W.2d 641, Tex.Civ.App., Amarillo 1947, error dism., involving a local option election contest, the applicable article required notice to be posted “for at least six days before the day of the election.” Notice was posted during the day of December 1, 1946 for an election on December 7, 1946. The court said:

“It has been held * * * that a substantial compliance with the procedural requirements concerning an election is sufficient unless it is shown that failure strictly to comply with the letter of the law materially interfered with the election and the right of the electors freely to participate therein. The election notices were posted some time during the day of December 1, 1946. If they had been posted prior to midnight November 30, the posting would have complied literally with the provision of the statute. Since, in that event no resident of the precinct would probably have seen them before sunup the next morning, the difference, in practical effect, between the time of actual posting and that provided by the statute could not have been more than a few hours. We think, in view of the fact that no voter was deprived of his privilege of suffrage by virtue of the short delay in posting the notices, the act of the clerk in posting them on December 1, 1946, was a substantial compliance with the statute, * *

It is our view that there was substantial compliance with Article 2785, and that the election was not invalid, especially since appellants have not shown that any qualified voters whose votes would change the result of the election would have voted if a few hours longer notice had been given. See Baker v. Scranton Independent School Dist., supra. Appellants assert only that three absentee voters were deprived of notice. We have read the testimony of these witnesses and cannot say that the court erred in not finding that they would have voted if the notices had been posted for a longer period. Furthermore, since appellants did not request findings of fact or conclusions of law, the trial court’s judgment implies all necessary fact findings in support of the judgment, and this Court will presume that all conflicting issues of fact were found in favor of ap-pellee. Petersen v. Robinson Oil & Gas Co., 356 S.W.2d 217, Tex.Civ.App., Houston 1962, n. w. h.; Globe Chemical Co. v. Walla, 328 S.W.2d 341, Tex.Civ.App., Houston 1959, n. w. h.; LaForce v. Bracken, Tex.Civ.App., 163 S.W.2d 239, aff’d 141 Tex. 18, 169 S.W.2d 465.

Appellants assert that the order calling the election was not in conformity with the law since the order of the Board of Trustees submitted dual issues or propositions with more than one subject submitted in each proposition. It is our view that the submission of two or more schoolhouse projects in one proposition at a bond election is permitted by Article 2784e-l, V.A. T.S., especially since Section 1, par. (2) of such Article allows an independent school district to issue bonds and levy ad valorem taxes for “the purchase, construction, repair or equipment of public free school buildings within the limits of such districts and the purchase of the necessary sites therefor.” Each of the two propositions submitted in connection with the schoolhouse bond election shows that the purpose of the election was the purchase, construction, repair and equipment of public free school buildings within the limits of the school district and the purchase of the necessary sites therefor. Thus, the purpose expressed in each of said propositions substantially conforms with the purpose set out in Article 2784e-l for which a school district may issue bonds. Article 2786, V.A.T.S., provides in part that whenever the proposition to issue bonds is to be voted on in any independent school district, the petition, election order and notice of election must distinctly specify among other things the purpose for which the bonds are to be used. This was done in the instant case. It is true that the law is that a separate proposition must be placed on the ballot for each distinct and independent object or purpose for which the indebtedness is contemplated. It is equally true, however, that it is permissible to include several structures or units in one proposition if they serve identical purposes in differing areas, such as two school houses, and have a natural relationship to each other. See Kellams v. Compton, Mo.S.Ct., 206 S.W.2d 498, 4 A.L.R.2d 612, and annotation thereunder at page 622; 79 C.J.S. Sec. 366(2), p. 96.

In Adams v. Mullen, 244 S.W. 1083, Tex.Civ.App., San Antonio 1922, error ref., the court held that bonds voted for the purpose of construction, operating, and maintaining graveled, paved or macadamized roads and turnpikes, or in aid thereof, were not objectionable in submitting two or more separate and distinct purposes in a single proposition. There is a similar holding in Garcia v. Duval County, 354 S.W.2d 237, Tex.Civ.App., San Antonio 1962, error ref., n. r. e. In Wilkerson v. Otto, supra, the court upheld the election results in connection with a proposition submitted “for the purpose of the purchase, construction, repair and equipment of public free school buildings within the limits of such district, and the purchase of the necessary sites therefor.”

Appellants assert that the Board of Trustees did not have the power to provide in their order pursuant to the petition submitted that only the proposition receiving the greater number of “For” votes would be the one adopted. The court found that Proposition No. 2 received more favorable votes than Proposition No. 1, and authorized the issuance and levy and collection of taxes as provided in Proposition No. 2. Both propositions carried. We are not concerned, however, primarily with Proposition No. 1. This suit was not brought by appellants to require the School Board to issue and sell bonds under Proposition No. 1. We are not called upon to consider what legal principles may apply had they done so or whether it may now be necessary for the Board to submit a proposition to the electorate cancelling and annulling the result and affirmance of Proposition No. 1 because the issuance of bonds pursuant to Proposition No. 2 would eliminate the need and necessity for the issuance of bonds pursuant to Proposition No. 1.

Even if we assume that the Board’s position with respect to not issuing bonds in connection with Proposition No. 1 is untenable, there seems to be no good reason why such fact should result in invalidating the will of the electorate with respect to Proposition No. 2 which passed with a larger number of favorable votes. It is our view that the power of the Board of Trustees to contract with the voters not to issue the bonds described in Proposition No. 1 is immaterial and irrelevant to the power of the Board to issue bonds described in Proposition No. 2 which carried by a majority vote, and that the wording of the pre-election order with respect to issuing bonds for carrying out Proposition No. 2 does not vitiate the authority of the Board to issue bonds therefor. There is nothing in the record to show that the manner of submission of the propositions affected the results of the election.

In Moore v. Coffman, 109 Tex. 93, 200 S.W. 374 (1918), it was held that where the commissioners court in submitting bonds for the purpose of building two bridges across the Brazos River at designated places, and the election carried, the court was required to keep faith with those whose will the election expressed, and therefore could not construct the bridges at places other than the designated places. The court said:

“In such cases it is only fair to the voters in the election called to determine the matter to inform them in advance of the intended location, so that the actual merits of the given proposal, into which the question of location may largely enter, shall decide the contest. When this is done, the location is a part of the vote and is entitled to an equivalent protection.”

There was a similar holding in Black v. Strength, 112 Tex. 188, 246 S.W. 79 (1922). In Board of School Trustees of Lubbock County v. Woodrow Independent School District, 90 S.W.2d 333, Tex.Civ.App., Amarillo 1935, n. w. h., the commissioners court provided in a pre-election order that if a majority of voters in any one or more of the common school or independent school districts voted against the creation of the rural high school district in the election, the rural high school district would not he created even though a majority of all persons voted in favor of the proposed grouping. Such order was made despite the fact that Article 2922c required only a favorable vote of all voters in the proposed rural high school district and did not require a favorable vote by the voters in each separate district. The court said:

“Accordingly, we hold that the initial discretion of the board to create the proposed district being absolute, it might exercise same upon a named condition, and that it appearing here that same was so exercised, as conclusively appears from the corrected minutes of said board, the trial court erred in attempting to control such discretion, by granting the writ of mandamus prayed for by appel-lees.”

See also Gibson v. Couch, 153 S.W.2d 288, Tex.Civ.App., Eastland 1941, n. w. h.

The Attorney General of the State of Texas, Gerald C. Mann, issued Opinion No. 0-2088, in response to a request for an opinion as to the effect that an order adopted by the Board of Trustees of Gonzales Independent School District on the same date the Board adopted an order calling a bond election, would have on the election results. The pre-election order adopted by the Board covenanted and agreed that the bonds of the district, if voted, would not be issued unless the district was able to secure a grant from the Public Works Administration. The election carried; however, the Public Works Administration denied the district’s request for a grant. The Attorney General’s opinion was to the effect that since the Board contracted not to issue the bonds unless the district received a P. W. A. grant, they could not legally issue the bonds unless the grant was secured. The Attorney General in his opinion stated, “Any other rule would tend to undermine public confidence in the acts of the public officers.” We recognize that the Attorney General’s opinions are not in any manner controlling, but they are entitled to great weight unless clearly wrong. San Antonio Union Junior College District v. Daniel, 146 Tex. 241, 206 S.W.2d 995 (1947).

In another opinion of the Attorney General of Texas, Gerald C. Mann, No. 0-2667, it was stated:

“In view of the foregoing quotation we think it would not be unlawful to annex the further condition that the bonds should not issue except upon the happening of some named event. The result thus obtained would have the effect and force of a contract. See Black v. Strength [112 Tex. 188], 246 S.W. [79] 75; 19 RCL, pages 1163 and 1164; Roane County Court vs. O’Brien [95 W.Va. 32], 122 S.E. 352 and 355; also Fletcher vs. Ely, 53 S.W. (2d) 817 (Writ Refused). We, therefore, conclude that if the bonds are voted for the straight statutory purpose, that is, ‘for construction, maintenance and operation of macadamized, graveled or paved roads and turnpikes, or in aid thereof,’ that the proceeds be used for the construction of State designated highways, and that the issuance thereof is conditioned upon House Bill 688 being amended in a manner so as to permit the participation of such bonds to the extent of 100% in the State gasoline tax fund allocated to the Board of County and District Road Indebtedness, that such bonds would not be rendered ipso facto void because of the inclusion of such named condition in the proceedings. We conclude further that without the happening of the last stated contingency the bonds could not be lawfully issued.”

It is our view that it is not necessary for this Court to determine whether the condition imposed in the pre-election order of the Board of Trustees may prevent the issuance of bonds for carrying out Proposition No. 1. We are here concerned with the carrying out of Proposition No. 2 and the issuance of bonds therefor, and hold that such provision in the pre-election order does not invalidate Proposition No. 2 and the issuance and sale of bonds pursuant thereto.

We are of the opinion that the court did not err in holding that the failure of the tax assessor-collector of the Brazosport Independent School District to comply with the provisions of Article 5.04 of the Texas Election Code by providing a certified list of duly rendered property owners, was not a ground for declaring the election void; since such provision is directory and such failure did not affect the results of the election. In Franklin v. Wilson, 242 S.W.2d 820, Tex.Civ.App., Eastland 1951, mandamus overruled, where it was contended that the votes cast by the voters in the election in question were illegal because the names of such voters did not appear upon the assessment rolls of the Town of Lake June, Texas, the court held that the tax assessment roll provided for in said statute is merely directory and provided for the purpose of aiding the county judge and election judges in determining who owns property within the area and are thereby eligible to vote in the election. It is not a mandatory provision that would disqualify citizens in the area. The court said: “We hold that if a voter is otherwise qualified under the law, that the failure of his name to appear upon the tax assessment roll would not destroy his right to vote in the election to abolish the city.”

In Border v. Abell, 111 S.W.2d 1186, Tex.Civ.App., Galveston 1937, n. w. h., the court said:

“ ‘In the absence of any allegations or proof of fraud or misconduct, or that the failure to comply with the provision of the statute stating that the tax collector shall furnish to the election judges, in an election of this character, a certified list of the owners of real estate in the county, who have rendered the same for taxes, affected the fair result of such election, the failure to so comply with such provision of the law is immaterial and does not affect the validity of the election.’ ”

The court in Baker v. Scranton Independent School District, supra, stated that the fact that the election officials did not have a certified list of the property owners as required by Article 5.04 did not invalidate the election unless there was fraud or serious misconduct and the irregularities changed or contributed to changing the result of the election. There is no evidence of fraud or misconduct or anything to indicate that the failure of the tax assessor and collector to furnish the certified list of taxpayers changed the results of the election in the instant case.

Appellants assert that there were some 42 voters who were not qualified voters as owners of taxable property within the district which had been duly rendered. They also contend that the court erred in finding that there were only 9 resident electors who voted in the election that did not own taxable property within the district. In their first category of voters which they contend were not qualified, they have listed 9 persons. In such category they listed Mr. Milton W. Walker, although there is no Mr. Walker whose vote was challenged. In the second category they list 26 voters, two of whom are not listed in their seventh point of error, thus reducing such number to 24. In their third category they list 7 voters, but they list Mr. and Mrs. George B. Stevens twice and hence such number should be reduced to 5. F. P. Davis, who is listed as a challenged voter in appellants’ seventh point of error, is not listed in any of appellants’ three categories. The fourth category whom the trial court held were not qualified includes those persons who were purchasing their property on a contract of sale, and whose contracts had never been recorded.

Appellee admits and the evidence shows that 29 of the 40 challenged voters listed in appellants’ Point 7 voted for Proposition No. 2 and that they either did not vote on Proposition No. 1 or voted against Proposition No. 1. The other 11 voters (omitting names duplicated), including Mr. Davis, did not disclose how they voted. Of four other voters, whose qualifications are the same as the 40 challenged voters, two voted for Proposition No. 1 and did not vote on Proposition No. 2, and two voted for Proposition No. .1 and against Proposition No. 2. Thus, as appellee contends, if all the votes challenged in the trial court are held to be disqualified, the results of the election would not be changed.

Appellee asserts, however, that the challenged voters were qualified, since the ledger cards which constituted the tax rolls of the School District showed property owned by each of the challenged voters, so that the property of each challenged voter was on the tax rolls of the School District. The evidence shows that most of the challenged voters pay their taxes to the School District through a mortgage company under the usual provisions of a deed of trust whereby the mortgage company withholds monthly one-twelfth of the taxes next due in a trust fund which is paid to the school district at the end of each year. The ledger cards did not reflect ownership of property on June 4, 1966, in the case of 5 voters, but the evidence shows that the tax assessor-collector had already received evidence of the changed ownership and had prepared an addressograph plate reflecting such change prior to June 4, 1966, the date of the election. Appellants urge that the fact that a voter’s name did not appear on the tax rolls or cards would indicate that they were not qualified to vote. This is not the law. Article VI, Section 3a of the Constitution of Texas, Vernon’s Ann.St. does not require that a person’s name actually appear on the tax rolls before he is qualified to vote in a bond election. Article 7171, V.A.T.S., provides: “All real property subject to taxation shall be assessed to the owners thereof in the manner herein provided; but no assessment of real property shall be considered illegal by reason of the same not being listed or assessed in the name of the owner or owners thereof.”

In Markowsky v. Newman, 134 Tex. 440, 136 S.W.2d 808 (1940), the Supreme Court said:

“Under Article 6, Section 3 of the Constitution of Texas, it was held that a person otherwise qualified to vote who owned property was a taxpayer and qualified to vote in elections to determine expenditure of money or assumption of debt (in an election like this) even though his property did not appear on the tax rolls.”

In Richter v. Martin, 342 S.W.2d 342, Tex.Civ.App., San Antonio 1961, n. w. h., the court said:

“It has been held that if the property of a citizen is on the tax rolls and he is liable for the taxes assessed, he has ‘duly rendered’ same, without regard to the particular manner or form through which the rendition was made. DuBose v. Ainsworth, Tex.Civ.App., 139 S.W.2d 307; Campbell v. Wright, Tex.Civ.App., 95 S.W.2d 149. There are a number of cases in which it may be shown that a voter has- duly rendered his property for taxation though it may not appear on the rolls in his name.” [citing cases]

See also Lucchese v. Mauermann, 195 S.W.2d 422, Tex.Civ.App., San Antonio 1946, n. w. h., in which the court stated that the failure of a person’s name to appear as an owner of property on the tax rolls will not disqualify that person from voting in a bond election, if he owns property which is on the tax rolls. .See also Texas Public Utilities Corp. v. Holland, 123 S.W.2d 1028, Tex.Civ.App., Ft. Worth 1938, error dism.

The law is well settled that property is “duly rendered” for taxation if the property is rendered for taxation by the owner or by his agent, or if such property is placed on the tax rolls by the tax assessor-collector. Campbell v. Wright, 95 S.W.2d 149, Tex.Civ.App., San Antonio 1936, n. w. h.; Texas Public Utilities Corp. v. Holland, supra; Markowky v. Newman, supra; Lucchese v. Mauermann, supra; Hanson v. Jordan, 145 Tex. 320, 198 S.W.2d 262 (1946). It is our view that appellants have failed to sustain the burden upon them to negative every theory upon which the challenged votes, with the exception of the 9 found by the trial court, could have been legal. Solis v. Martinez, 264 S.W.2d 956, Tex.Civ.App., San Antonio 1954, error dism.

We overrule appellants’ contentions that the trial court erred in overruling their motion to have the court deem their request for admissions admitted. We have considered appellants’ points, and have concluded that there was no error on the part of the court in such connection, and that the court properly exercised its discretion in the rulings made by it, and furthermore that appellants have failed to show any reversible error in such connection.

Judgment of the trial court affirmed, Associate Justice Coleman dissenting.

Dissenting Opinion

COLEMAN, Justice.

At the election in question two propositions were submitted to the voters. Proposition No. 1 authorized a $3,860,000.00 bond issue for the purpose of increasing the permanent facilities of the Brazosport High School to a 2,600 student capacity, a new elementary school, additions and improvements to elementary and junior high schools. Proposition No. 2 authorized a $5,998,000.00 bond issue for the purpose of building a new 2,000 student capacity high school in the Clute-Lake Jackson area, increasing the size of the Brazosport High School to 1400 student capacity, a new elementary school, additions and improvements to elementary and junior high schools.

As required by Article 2785, V.A.T.S., a petition requesting the School Board to call the bond election was presented to it. The petition requested that the two propositions be submitted. The petition was qualified by the following conditions:

“(a) If at said election both of the said propositions shall be rejected, bonds shall not be issued nor shall taxes be levied pursuant to either proposition; or
“(b) If at said election one of the said propositions shall be favored by a greater number of votes ‘For’ than ‘Against’ such proposition, and the other proposition shall be rejected, the favored proposition shall be declared adopted, and bonds shall not be issued nor shall taxes be levied pursuant to the rejected proposition; or
“(c) If at said election each of the said propositions shall receive a greater number of votes ‘For’ than ‘Against’ such proposition, the proposition receiving the greater number of votes ‘For’ such proposition shall be declared adopted, and bonds shall not be issued nor shall taxes be levied pursuant to the other proposition; or
“(d) If at said election each of the said propositions shall receive a greater number of votes ‘For’ than ‘Against’ such proposition, and each proposition shall receive the same number of approving votes, the Board of Trustees shall, in its discretion, declare one of the said propositions adopted, and bonds shall not be issued nor shall taxes be levied pursuant to the other proposition.”

The Board of Trustees adopted an order, reciting that the petition should be granted, and the election as prayed for should be ordered, calling the election. The order, which was set out in its entirety in the notices of election, contained a statement that the Board represented, covenanted and agreed to the conditions concerning the manner of ascertaining the results of the election contained in the petition, which were quoted above.

The order canvassing the returns and declaring the results of the election found that Proposition No. 1 received 2,616 “for” votes and 2,321 “against” votes; and that Proposition No. 2 received 2,656 “for” votes and 2,367 “against” votes. It further found that there was a majority for the issuance of the bonds provided in Proposition No. 1 of 295 votes, and a majority for the issuance of the bonds provided in Proposition No. 2 of 289 votes. The order then declared that the election resulted favorably to the issuance of the schoolhouse bonds described in Proposition No. 2 and the levying of the tax in payment thereof; that the Board of Trustees was authorized to issue said bonds and to levy and collect taxes in payment thereof; that the election resulted unfavorably to the issuance of the schoolhouse bonds described in Proposition No. 1 and said bonds shall not be issued.

This election, as planned and conducted, is void for the reason that such an election has not been authorized by the Legislature of this State. The record reflects that the District had an acute shortage of classrooms, especially for high school students. The president of the School Board appointed a citizens’ Committee to consider the problem. The Committee recommended that the existing high school be replaced by a new high school in another area and that the existing school be used as a junior high school for three or four years. In the alternative, the Committee suggested the existing high school be expanded and continue as the only high school, or, in the alternative, that the existing high school be repaired and enlarged and that a new high school be constructed in the Lake Jackson area.

The first proposition was submitted alone and was defeated. Then the Trustees determined that “it seemed only fair to let the people of the district vote what they wanted * * * so the two remaining propositions left were submitted.” It is obvious that one of the principal questions this election was designed to determine was the question of whether a new high school should be constructed in the Lake Jackson area, and the Trustees thereby delegated the powers entrusted to them by Article 2749, V.A.T.S., to determine “how many schools shall be maintained in their school district, and at what points they shall be located” to those of the voters qualified to vote in bond elections. On this important question those residents of the District qualified to vote for trustees, but who owned no property subject to taxation, or whose property had not been duly rendered, were, in effect, disenfranchised.

It is clear that an election held for the purpose of determining whether a high school should be established and constructed in a particular area would be without binding effect for the reason that such an election is not authorized.

Article 2784e-l, Sec. 1, par. 2, provides that the Board of Trustees may issue bonds for: (1) purchase, (2) construction, (3) repair, (4) equipment of public free school buildings, and (5) the purchase of necessary sites therefor. There is no statutory authority to submit the same matters at the same election in two different issues, and no necessity therefor except for the desirability of a straw vote on the establishment and location of the new high school. It amounted to calling two elections on the same issues to be held at the same time using the same ballots. The statute does not authorize calling two elections in one order for the same purpose. Except for the difference in the amount of money authorized there is no difference in the propositions.

In Countz et al. v. Mitchell, 120 Tex. 324, 38 S.W.2d 770, Tex.Com.App., the Court said: “ * * * [t]here can be no valid election without some lawful authority behind it. The right to hold an election cannot exist or be lawfully exercised without express grant of power by the Constitution or Legislature.”

In Coffee v. Lieb, 107 S.W.2d 406, Tex.Civ.App., the court said:

“Therefore, ‘In all popular forms of government the power of a majority to bind the minority by a popular vote depends upon the fact that the elections are held by virtue of some legal authority, and an election held without affirmative constitutional or statutory authority is universally recognized as being a nullity.’ ”

Prior to the election the Board of Trustees had not determined whether a new high school should be built or where it should be built. By ordering the election on the basis of the petition presented to it, the Board determined that it was advisable either to build a new high school or to enlarge the present one. It agreed to be bound by the decision of those voters eligible to vote in bond elections. This is a vital distinction between the facts in this case and those in such cases as Moore v. Coffman, 109 Tex. 93, 200 S.W. 374 (1918); Black v. Strength, 122 Tex. 188, 246 S.W. 79 (1922), and other cases cited by appellee. In these cases the taxing authority calling the election designated the particular improvements to be constructed and their proposed location. In each case the taxing authority exercised their discretion. No alternative was submitted to the voters. They voted for or against a specific proposal. It is significant that in Moore v. Coffman, supra, the Supreme Court said: “ * * * We can perceive nothing in such a course that either trenches upon or exceeds the authority possessed in these matters by Commissioners’ Courts or municipal bodies, or that amounts, as is contended, to a surrender of their duty into other hands.” See also Hudson v. San Antonio Ind. School Dist., 95 S.W.2d 673, Tex.Sup.1936.

Because of the identity of the propositions the ballots used in the election contained language which was not authorized by the law prescribing the form of the ballot to be used in such elections. The Supreme Court of Texas has stated that where a statute which authorizes a special election for the imposition of a tax prescribes the form in which the question shall be submitted to the popular vote, the statute should be strictly complied with. Reynolds Land & Cattle Co. v. McCabe, 72 Tex. 57, 12 S.W. 165 (1888). The additional language was necessary only because of the. straw vote feature of this election.

There is yet another vice in this election. Sec. 4 of Article 2784e, V.A.T.S., provides that no tax shall be levied or bonds issued until such action has been authorized by a majority of the votes cast at an election held in the district for such purposes. Here the election included an additional purpose and required, in addition to a majority vote, that a proposition to be adopted must receive more votes than the other proposition submitted. Such a requirement has no statutory basis. . The Trustees, in agreeing not to issue bonds voted on in the proposition receiving the fewer “For” votes exceeded their authority if such proposition passed by a majority vote at an election held and conducted according to the requirements of the applicable law. It has been held in such a case that even where the school board is presented with a petition signed by three-fourths of the taxpaying voters of the district asking that their former action of voting for the issuance of bonds be rescinded and the bond issue annulled, the Board lacked the power to do so. Orr v. Marrs, 47 S.W.2d 440, Tex. Civ.App., Texarkana 1932, writ dism., 122 Tex. 53, 52 S.W.2d 53.

Article 2786a, V.A.T.S., enacted in 1933, authorizes an election for the purpose of revoking and cancelling bonds voted or authorized by an independent school district. The Supreme Court of Texas had construed this statute to mean that an election could be held to revoke bonds duly voted, authorized and issued only when a later change in conditions showed that it would be unnecessary to spend their proceeds. Huntsville Independent School District v. McAdams, 221 S.W.2d 546, Tex.Sup.1949.

From these decisions and this statute I conclude that an election called for the purpose of authorizing the issuance of bonds and the levy of a tax in payment thereof is illegal and void where the School Board, by the expedient of a contract with the voters, attempts also to determine that one or the other of the propositions voted on would be declared adopted and the other not adopted where both propositions received more votes for than against. The effect of such action would be the authorization of the issuance of bonds and the revocation of the same bonds simultaneously and without the showing of a later change in conditions.

The representations made to the voters as to the method of ascertaining the result of the election, together with the delegation of the discretion and authority of the Board of Trustees to the voters, was calculated to affect the voting on both propositions and the result of the election. The election was not authorized by, but was contrary to, the pertinent statutes and is illegal and void. Stephens v. Dodds, 243 S.W. 710, Tex.Civ.App., Amarillo 1922; City of Houston v. McCraw, 131 Tex. 127, 113 S.W.2d 1215, 1938; Mesquite Ind. School Dist. v. Gross, 123 Tex. 49, 67 S.W.2d 242 (1934); Thompson v. Elmo Ind. School Dist., 269 S.W. 868, Tex.Civ.App., Waco 1925.

I would reverse the judgment of the trial court and render judgment voiding the election. According, I respectfully voice this dissent.


source: Caselaw Access Project

author: BELL, Chief Justice.

license: Public Domain

text:
    INTER-CONTINENTAL CORPORATION et al., Appellants, v. Robert L. MOODY, Appellee.
    No. 14611.
    Court of Civil Appeals of Texas. Houston.
    Dec. 15, 1966.
    Rehearing Denied Jan. 26, 1967.
    Second Rehearing Denied Feb. 16, 1967.

      Thompson, Coe, Cousins & Irons, Vernon Coe and Emory L. White, Jr., Dallas, for appellant Inter-Continental Corp.
    F. Warren Hicks, Houston, for appellant-intervenor Martin J. Richardson.
    Phipps, Smith & Alexander, Chas. B. Smith and Irwin M. Herz, Jr., Galveston, for appellee.
   On Motion for Rehearing

BELL, Chief Justice.

Our original opinion handed down December 15, 1966 is withdrawn and the following is substituted as the opinion of the Court.

This is an appeal from a summary judgment in favor of appellee against appellant, Inter-Continental Corporation, granting recovery on a promissory note dated July 1, 1963 in the principal amount of $80,000.00. The note was executed in the name of InterContinental Corporation by its president, J. S. Shively, and attested by its secretary. The total amount of the judgment, including accrued interest and an attorney’s fee, was $98,721.33. The other appellant is Martín J. Richardson, a stockholder in Inter-Continental, herein called Intervenor, who sought to intervene in the suit to enjoin the payment of the note on the ground that the note was an ultra vires transaction because it was given in satisfaction of a personal obligation of J. S. Shively, the president of Inter-Continental. The right to intervene was asserted by virtue of Article 2.04, subd. B(l) of the Business Corporation Act, V.A.T.S. The court, on motion of appellee, struck the intervention.

Appellee’s petition was in form the usual one to recover on a promissory note. He filed no pleading in response to Inter-Continental’s first amended original answer.

It appears that Mr. J. S. Shively, who had been in the insurance business for many years, organized the Insurance Company of The Americas, herein called I. C. A., in 1959 or 1960. It was a Panamanian corporation with broad authority to write all forms of insurance and to invest in securities. He was the owner of all the stock except for what he refers to as qualifying shares. It never wrote any insurance policies. It did, however, shortly after its formation, begin to invest in stock of other insurance companies. The first investment was in 30% of the stock of Texas Reserve Life Insurance Company, herein called Texas Reserve, and in 51% of the stock of appellant, Inter-Continental Corporation. Appellant’s single asset was 20% of the stock in Texas Reserve. While we have used round figures, these two purchases actually gave I.C.A. control over Texas Reserve because the Texas Reserve stock thus obtained amounted to slightly more than 50%. Title to the stock of Texas Reserve and of appellant was taken in the name of I.C.A.

To finance the purchase of this stock $700,000.00 came from I.C.A. and Shively personally borrowed $1,000,000.00 from the First National Bank of Dallas, herein called 1st National, and then loaned it to I.C.A. His loan to I.C.A. was secured by pledge of stock in Texas Reserve and appellant and Shively then pledged this stock and that of I.C.A. to 1st National. This transaction occurred in July, 1960, and the note to 1st National was due in one year.

Sometime in May, 1961, appellant, or Shively who was president of appellant, became interested in purchasing the stock of National Life Insurance Company of America, herein called N.L.A., a South Dakota corporation. It appears that several insurance organizations considered such purchase, including appellee, but decided against it. Shively talked to appellee Moody about the purchase, knowing that Moody through his investigation was familiar with the structure of N.L.A. Whether Moody brought the proposal to Shively or Shively first went to Moody to obtain the information is not made clear by the record, but Moody testifies he gave Shively the benefit of his knowledge concerning N.L.A. Just when this occurred is not clear from the record. In any event, in order to finance the purchase, insofar as a down-payment was concerned, Moody agreed to make a loan of $650,000.00 for 60 days at 5% interest. The other $150,-000.00 for the initial payment was borrowed from International Construction Associates, herein called International Associates. Too, Moody wanted, in addition, $50,000.00. Shively agreed to this. There seems some question as to whether Shively acted personally in borrowing the money and then lending it to appellant because at one point Shively testifed he did and at another point he testified he was at all times acting for appellant.

On May 31 or June 1, 1961, the Board of appellant passed a resolution. The resolution authorized Shively, as the act and deed of the corporation, to purchase from Gibraltar Life its interest in an option to purchase stock of N.L.A. that it held with some other persons. It gave Shively broad authority to work out the terms of the purchase including authority to make the down-payment and to execute any promissory notes, collateral pledges, assignments or other instruments necessary. One paragraph specifically authorized Shively as president acting for the corporation to borrow from himself as an individual the money necessary to make the down-payment. He was empowered to fix the interest rate and other terms of his note. Too, he was authorized to effect a purchase for appellant from Gibraltar Life of 4700 shares of stock in N.L.A. that it owned.

On June 3, 1961, appellant’s Board authorized Shively as the act of the appellant corporation, I.C.A., and Shively, individually, to enter into a joint and several obligation for the purpose of borrowing $650,-000.00 from appellee Moody and to execute a 60-day non-negotiable note with 5% interest. Too, Shively was authorized to pledge the interest of appellant in the option to purchase stock in N.L.A. and the stock of N.L.A. purchased by appellant from Gibraltar. Shively was authorized to pledge the general credit of appellant to secure all indebtedness created by the above contracts and to sign all necessary instruments.

On June 5, 1961, Shively as president of appellant and individually, executed the $650,000.00 non-negotiable note to Moody and pledged as security the shares of stock of Texas Reserve and appellant held in the name of I.C.A. The note recited that the stock was held by 1st National as collateral securing an obligation of Shively for $1,-050,000.00 that was payable on or before July 19, 1961. In Shively’s testimony it appears that on June 5, 1961, appellant executed its note to him for $805,000.00, though the note does not appear in the record.

In addition to the $800,000.00 cash payment made, a deferred payment on the purchase price for N.L.A. stock, amounted to $2,500,000.00. It was due with interest in two equal annual installments. We use these round figures because slightly varying amounts are used in different parts of the record.

The result of the above recital of fact is, first, that Shively individually owed 1st National $1,050,000.00 which he incurred in the purchase of stock in Texas Reserve and appellant and all of such stock and that of I.C.A. were with 1st National as security, as were the rights of appellant in the stock of N.L.A. that was being purchased. Secondly, Moody had the note of June 5, 1961, and a second lien on the stock of appellant and Texas Reserve. Too, there was the obligation of $2,500,000.00 owed by appellant for the purchase of the stock in N.L.A. Third, Shively, either for himself or appellant, had agreed to pay Moody $50,000.00 for making the $650,-000.00 loan because of indefinitely stated services rendered by Moody when Shively became interested in the acquisition of N. L.A. There is nothing at this stage in writing showing conclusively this $50,000.00 obligation or whether it was Shively’s or appellant’s obligation. Nor is there anything in the corporate minutes about this $50,000.00, or authority to create it unless found in the broad language of the resolutions we have noticed. The agreement rests in the testimony of Moody and Shively and there is a conflict in the testimony as to whether such agreement was made by Shively individually or as the act of appellant.

It appears that N.L.A. had a handsome cash reserve and Shively planned to sell the Texas Reserve stock owned by I.C.A. to N.L.A. and thus be able to pay Moody and others. This he was unable to do because of adverse action by officials of South Dakota in releasing certain securities of N.L.A. The purchase of the stock in N. L.A. was actually consummated, subject to the deferred payment above stated. When the personal obligation of Shively to 1st National was due, and Moody’s note was due, Shively was unable to pay. He then, according to testimony in the record from Shively and Moody, though none of the appellants’ records up to this time reflect it, went to Moody to see about further financing. Moody was not interested. Shively testified he could, he thought, have refinanced the loan at 1st National but was unable to do this and pay the $650,000.00 to Moody also. Shively suggested transferring his indebtedness at 1st National and refinancing it at the Bank of the Southwest in Houston. It was finally agreed between Shively and Moody that Shively would borrow $1,300,000.00 at the Bank of the Southwest and Moody would give said bank a “take out” letter. The effect of the letter was to obligate Moody to take over the loan if it was not paid and it also gave him the right to take it over. Moody wanted $100,000.00 for this letter. When Shively mentioned the previous $50,000.00, Moody said they would just make it one deal. None of this original $50,000.00 had been paid. This all occurred in August, 1962. At the time Shively personally owed 1st National $1,055,000.00. This amount went to that bank and the securities held by 1st National were sent to the Bank of the Southwest. Moody knew of this. Moody testified Shively explained the situation to him.

When we examine the record, it becomes very confusing as to the exact disposition of the $245,000.00 remaining of the loan. In one place it is stated $245,000.00 went to appellant. In another place it is stated that $210,000.00 went to appellant. In another place it was stated Moody was paid $650,000.00. Also it is stated that $150,-000.00 went to International Associates. There just was not enough borrowed to pay all of this. Of course it is possible that the $245,000.00 passed through the hands of appellant and additional financing was obtained to pay the other obligations.

Nowhere in the record do we find a note from Shively or appellant to Moody of $100,000.00, though there is testimony that such a note was given but we are unable to determine whether it was signed by Shively, appellant or both. The first thing we find concerning action taken by appellant with specific reference to any indebtedness of it to Moody, other than the loan of $650,000.00, is the resolution passed by the Board of appellant on December 15, 1962. This was at a time when, the record shows, Shively was in danger of losing his interest in appellant and his other companies through foreclosure. He did lose his interest in March, 1963, though he later reacquired it through other refinancing. After reacquiring his interest, Shively later lost his interest through foreclosure, though at the time of his deposition he testified he owned some stock of appellant. .Shively, when all of the resolutions were passed, was a director and president of appellant and was present and voted. Too, his wholly owned company, I.C.A., owned just over 50% of appellant’s stock and the balance was owned by 700 or 800 other stockholders. The December resolution recited that Shively discussed several unpaid obligations of appellant incurred when it purchased the stock of N.L. A. in 1961. It was then resolved that the Board recognized certain debts including $100,000.00 to appellee, and it was stated that the debts were incurred in financing the purchase of N.L,A. stock. The officers were authorized to execute notes to evidence the debts and the directors ratified any notes previously issued to the named creditors.

The depositions reflect that appellant’s note to Moody for $100,000.00 was executed though the note is not in evidence. They also reflect that later Shively, out of his personal funds, paid $20,000.00 and the note here sued on for $80,000.00 was given by the company in renewal of the original note just mentioned.

We wish to note that from time to time Shively advanced a great amount of his personal funds to his related corporations, including appellant, though we are unable to determine the amounts that went to each. The resolution of December, 1962 recites a debt of appellant to him of $42,-873.38 for expenditures and advances made by him in the operation of the appellant in addition to a note of $2,805,000.00 previously given to Shively. What this note represented we are not told, but $805,000.00 of it could be that previously alluded to where Shively testified that on June 5, 1961, appellant gave him its note for this amount, conceivably, under the record, for money he first borrowed from Moody and International Associates and in turn he loaned to appellant.

The pleading of appellant involved on the hearing of the appellee’s motion for summary judgment was its first amended original answer, in which it pled its defenses. It, in addition to a general denial, set up the following defenses:

1. That the note sued upon was given by Shively to Moody in order to get Moody to give the take out letter to the Bank of the Southwest to enable Shively to borrow $1,300,000.00 to pay the personal debt of Shively in the amount of $1,055,000.00 at the 1st National. In this connection it was alleged that the debt to 1st National was paid out of the $1,300,000.00 and the remaining $243,000.00 was used for the personal benefit of Shively or one of his wholly owned corporations and appellant received no direct benefit. It also alleged the above recited evidence about the original $50,-000.00 Shively agreed to pay Moody when the $630,000.00 was borrowed from Moody.

2. That the then officers and directors of appellant were without authority to cause the note to be issued for the payment of a benefit which did not go to appellant, but was for the sole benefit of either an officer of appellant or a corporation other than appellant, and that appellee had full knowledge of the circumstances. This in effect is a plea of ultra vires.

3. That the note was without a valid consideration being in contravention of Article 1348, Vernon’s Ann.Tex.Civ.St., of which appellee was cognizant and the note was wholly void. Appellee, it is alleged, was at all material times cognizant of facts by reason of which he is deemed to have known the officers and directors were without authority to execute the note.

4. While the term “illegal” is not used, it is alleged by reason of the recited facts that the note was given for services rendered solely or in part for an officer of appellant or the benefit of another corporation of which Shively was the sole stockholder, of which appellee had notice, the note is unenforceable. It, therefore, in effect pleads illegality, it being urged it was malum in se to use corporate funds to pay the personal debt of an officer.

In reply to this answer, except in his motion for summary judgment, appellee filed no further pleading. In his motion for summary judgment appellee, among other matters not necessary to notice at this point, pled that appellants’ assertion of ultra vires was as a matter of law not tenable. He then pled Article 2.04, Subd. A of the Texas Business Corporation Act. In his brief here, appellee relies on both Subdivisions A and B of said Article 2.04.

Appellant contends that Article 2.04, Subd. A, merely abolished the “limited capacity” theory relating to the power of a corporation under which theory the courts of some states hold that a corporation has no power or capacity to do an act not authorized by its charter or some statute and any act beyond the charter authority is void. Its position is that the defense of ultra vires is not completely abolished but the act only does away with the theory that everyone dealing with a corporation has constructive notice of the limits of authority contained in the charter. However, it says the usual principles of agency are applicable and the corporation may successfully assert want of authority to enter into a transaction if the other party has actual notice that the act is beyond the charter authority, or is in possession of facts that place him on inquiry as to the authority. Appellee’s contention is that said Article 2.04 abolishes the defense by corporation of ultra vires.

We are of the view that it might be reasonably inferred from facts testified to that the original loan of $650,000.00 was made to Shively individually, who in turn loaned it to appellant and that Shively individually agreed to pay Moody the original $50,000.00. A contrary inference might also be made. Too, we think it may be reasonably inferred, in fact we think the inference is compelled, that when Moody-agreed to and give the “take-out” letter he knew that $1,055,000.00 was to be used to pay the personal obligation of Shively at the 1st National. He must have known that except for the $245,000.00 money must be obtained elsewhere to pay him and International Associates its $150,000.00. While there is evidence that Moody was not specifically told the money was to be used for other than appellant’s benefit, the other evidence is such that he must have so known except for the possible sum of $95,000.00. We note here, however, that we are unable to tell from the record that any of the $1,300,000.00 went directly to appellant. It does appear that the refinancing effected at the Bank of the Southwest probably prevented foreclosure by 1st National. Foreclosure by 1st National would have had the effect not only of taking all of Shively’s interest in all his companies we ■ have mentioned, but also appellant’s stock owned by I.C.A. and thus there would have gone to the purchaser appellant’s interest in the stock of N.L.A. Appellee urges that the latter fact shows a direct benefit to appellant. Appellee did not plead estoppel. We think an inference can be drawn that appellant received no direct benefit, certainly at least from the note sued on.

The moving party in a motion for summary judgment has the burden of showing there is no genuine dispute as to any material issue of fact and all doubts as to the existence of such are resolved against the movant. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929.

Having reached the conclusions above stated that there are conflicting inferences that may be drawn as to the existence of the specified ultimate facts, we must determine whether they are material as to appellant corporation in the light of the issues of law raised by appellant.

We first discuss the contention of appellant that the defense of ultra vires has not been abolished so far as the corporation is concerned.

We overrule this contention and hold that such defense is not available to the corporation.

Article 2.04, subd. A of Texas Business Corporation Act makes clear that the “lack of capacity” of the corporation shall not be the basis of any claim or defense in any suit at law or in equity. The “want of capacity” theory followed in some states led to the conclusion that any act beyond the charter powers was void. While actually the law in Texas, when the Texas Business Corporation Act was passed, was that such acts were voidable and not void, there were expressions in some Texas cases that such acts were void. Texas followed the general capacity theory. Hildebrand, Texas Corporations, Section 132; Brimble, Ultra Vires under The Texas Business Corporation Act, 40 Texas Law Review 677, 680. We are of the view that Subdivision A was intended to remove any vestige of the “want of capacity” theory. See Trotti, Should An Existing Corporation Adopt the Act — Panel Discussion, Proceedings, T.B.C.A. Institute, Vol. 3A, Vernon’s Annotated Texas Statutes, 456, and the following case notes: Donsky, 43 Texas Law Review 792, and Patton, 43 Texas Law Review 796.

The only Texas cases we find involving a discussion of ultra vires since the adoption of the Texas Business Corporation Act are Empire Steel Corp. of Texas v. Omni Steel Corp., 378 S.W.2d 905 (CCA), ref., n. r. e., and Republic National Bank of Dallas v. Whitten, 383 S.W.2d 207 (CCA), aff’d by S.Ct. 397 S.W.2d 415. In the first cited case, which is the subject of the note in 43 Texas Law Review 792, the Court of Civil Appeals in effect held that Article 2.04, subds. A and B together effectively eliminate a plea of ultra vires by the corporation itself when it was sued. The guaranty sued on was that of a corporation made for its affiliate, the guaranty being made before the passage of Article 1302-2.06(B), Texas Miscellaneous Corporation Law Act, which seems to now authorize such. The Court of Civil Appeals, in Whitten, which case is the subject of the note in 43 Texas Law Review 796, held, among other things, Article 2.04, subds. A and B effectively eliminated the defense of ultra vires by the corporation. This was a suit by a trustee in bankruptcy of the corporation to recover money used by the corporation to pay a debt of its president of which fact the bank had knowledge. The Supreme Court, though granting a writ of error on this and other assignments of error, affirmed on grounds of estoppel, it being shown there was a completely executed transaction from which the corporation received a direct benefit. The court expressly refrained from passing on the ultra vires problem posed by the Texas Business Corporation Act. We are in accord with the holding of the Court of Civil Appeals that the defense of ultra vires is abolished except as provided in Article 2.04, subd. B.

Subdivision B of Article 2.04 deals with the want of authority in the corporation to perform an act. It reads as follows:

“B. No act of a corporation and no conveyance or transfer of real or personal property to or by a corporation shall be invalid by reason of the fact that such act, conveyance or transfer was beyond the scope of the purpose or purposes of the corporation as expressed in its articles of incorporation or by reason of limitations on authority of its officers and directors to exercise any statutory power of the corporation, as such limitations are expressed in the articles of incorporation, but that such act, conveyance or transfer was, or is, beyond the scope of the purpose or purposes of the corporation as expressed in its articles of incorporation or inconsistent with any such expressed limitations of authority, may be asserted:
“(1) In a proceeding by a shareholder against the corporation to enjoin the doing of any act or acts or the transfer of real or personal property by or to the corporation. If the unauthorized act or transfer sought to be enjoined is being, or is to be, performed or made pursuant to any contract to which the corporation is a party, the court may, if all of the parties to the contract are parties to the proceeding and if it deems the same to be equitable, set aside and enjoin the performance of such contract, and in so doing may allow to the corporation or to the other parties to the contract, as the case may be, compensation for the loss or damage sustained by either of them which may result from the action of the court in setting aside and enjoining the performance of such contract, but anticipated profits to be derived from the performance of the contract shall not be awarded by the court as a part of loss or damage sustained.
“(2) * * *
“(3) * * *

Paragraphs (2) and (3) are not quoted but paragraph (2) allows a suit by the corporation, or its proper representatives acting for it, against the officers or directors for exceeding their authority. Paragraph (3) allows a suit by the Attorney General to dissolve the corporation, enjoin transaction of unauthorized business or to require divestment of real property if held or acquired contrary to law.

This section deals with what may be done when an act of the corporation is beyond its charter authority or limitations on its officers and directors. The Act authorized use of want of authority to defeat performance of the act only in a suit by a shareholder and then only under the restrictions stated. It also attaches certain other consequences to acts beyond corporate authority. It allows a suit by the corporation, or authorized representative of it, or a shareholder, against the offending officers and directors. Then it authorizes a suit by the Attorney General against the corporation.

An analysis of 2.04 will demonstrate that it affords protection to all classes really entitled to protection. Any shareholder has his remedy, if equitably entitled to relief, through a suit to enjoin performance of the particular act. The corporation or its representatives or a shareholder have their remedy by suing the officers and directors. The third party dealing with the corporation is protected to the extent that he is entitled to compensation for any loss or damage, except profits, where a shareholder is entitled to an injunction. The public is protected by the authority vested in the Attorney General, which we have noticed. The result is a broad statutory scheme dealing with acts of the corporation that are beyond its authority.

By giving a remedy to specified persons and not including the corporation itself, except as against the offending officer or directors, we find the legislative intent to preclude a corporation from pleading ultra vires as a defense. This construction gives relative stability to commercial transactions and at the same time protects those really entitled to protection. The act nowhere contains any intimation that only the doctrine of constructive notice is abolished. We are of the view that the defense of ultra vires by the corporation in a suit by the other party to the transaction is unavailable even though the other party had actual notice of the want of authority. See Brimble, Ultra Vires under The Texas Business Corporation Act, 677, 688-690.

The payment of an officer’s debt is ultra vires but in Texas it is not illegal. Whitten, Trustee v. Republic National Bank of Dallas, 397 S.W.2d 415 (Tex.Sup.).

Other points urged by appellant corporation though not specifically discussed are overruled.

We now proceed to discuss the action of the trial court in striking the intervention of Martin J. Richardson, the shareholder who we will refer to as intervenor.

Intervenor filed his petition in intervention against appellant corporation seeking to enjoin the payment of the note. He asserted this right to enjoin performance of the act under said Article 2.04, subd. B(l). The petition was in substance the same as the first amended original answer of appellant in that it was alleged the corporation lacked authority to execute the note which was given in payment of the personal obligation of Shively or one of his other corporations and that no direct benefit was received by appellant. He alleged knowledge of such facts by appellee. He alleged injury to himself and that Moody, if the injunction issued, would suffer no loss except anticipated profits.

Appellee moved to strike the petition in intervention and adopted by reference as grounds therefor the allegations appellee had previously made in his “Plea in Opposition to Motion for Leave to Intervene” filed by another stockholder, C. C. Carson. Carson, for reasons of health, decided not to pursue his attempt to intervene. We do not find in the record this plea of appellee. However, we take it from recitals in the court’s order striking the intervention of Richardson and in statements of appellee’s counsel found in the statement of facts on the hearing of the motion to strike the intervention that appellee was asserting that Richardson was really not acting for himself but for the corporation and there were no equities in his favor. By supplemental transcript appellee shows he filed a motion for summary judgment against intervenor. It was not acted on by the court, but if it had been granted, it would have been error under the record.

The court held a hearing on the motion to strike, at which testimony was given. It was shown that intervenor was the owner of 19.38 shares of stock.

Mr. Coe, the attorney representing InterContinental, testified on the hearing on the motion to strike the intervention. He testified that he represented Big D Development Corporation from time to time. Big D was the owner of slightly more than 50 percent of the stock of Inter-Continental. After . this suit was filed by appellee, Mr. Coe was employed to represent Inter-Continental. In briefing the law Mr. Coe came to the conclusion that the individual stockholders might have some rights that were different from the corporation, though this had not been passed on by the courts. He told Mr. D. A. Childre, one of the principal stockholders and one of the officers of Big D, of this uncertainty in the law and suggested this might make it wise for Big D, a stockholder in Inter-Continental, to intervene. Mr. Childre, without stating his reasons, told Mr. Coe he had rather Big D not be an intervenor. We now quote Mr. Coe’s testimony as to what Mr. Childre said to him. Mr. Childre said: “Could I not get someone to find a stockholder who would be sufficiently interested to become an inter-venor ?” Mr. Coe then said: “Certainly, if that is what you want to do, that is all right.”

We interpret this to mean that Mr. Childre, an officer in Big D which was the majority stockholder in Inter-Continental, was going to try to get some other stockholder to intervene.

Mr. Coe then testified that Mr. Ed Bar-field, who worked for the Great Southwest Life Insurance Company, or someone for him, went over a list of the stockholders. Big D also owned voting control of such insurance company. Mr. Barfield was a vice president of the insurance company but Mr. Coe was not certain as to whether he was a stockholder in Big D. Mr. Bar-field knew Mr. Carson who was found to be a stockholder in Inter-Continental. Mr. Barfield went to see Mr. Carson and Mr. Carson agreed to intervene. Mr. Bar-field called Mr. Coe and told him that Mr. Carson had agreed to intervene and that Mr. Barfield had agreed that Big D Development Corporation would hold Carson harmless from any expenses of the suit. Carson then called Mr. Coe and told him that he would intervene. Mr. Coe prepared the petition to intervene and sent it to Mr. Carson.

It appears that after Mr. Carson had signed the petition and it had been sent to Mr. Hicks, the attorney for the intervenor Richardson, Mr. Carson and his doctor decided he should not, because of his health, pursue the matter further. Mr. Barfield then, without talking to Mr. Coe, obtained an agreement from Mr. Richardson to intervene. Mr. Barfield, told Mr. Coe he would copy the petition in intervention that had been drawn for Mr. Carson, have Mr. Richardson sign it, and Mr. Barfield would mail it to the attorney. Mr. Barfield got Mr. Hicks’ name and address from Mr. Coe.

Mr. Hicks, the attorney for Mr. Richardson, also testified in the hearing on the motion to strike. He testified he did not know and had never talked to Mr. Carson or Mr. Richardson. The petition in intervention of Mr. Carson was mailed to Mr. Hicks from Mr. Coe’s office. Previous to this Mr. Coe had called Mr. Hicks by telephone and asked him if he had any engagement that would prevent his attending a hearing that had been set on either the 10th or 16th of November. This was about a week before Mr. Hicks filed the petition in intervention for Carson. At a later time Mr. Barfield personally came to Mr. Hicks’ office and brought the “Plea in Intervention of Mr. Richardson, signed and sworn to * * The petition shows it was sworn to by Mr. Richardson before a notary public in Jefferson County. Mr. Hicks had never met Mr. Barfield before. He understood Mr. Barfield was connected with Big D.

Mr. Shively, in this hearing, testified concerning facts surrounding the execution of the note. It was in substance what we have previously stated.

The court in its order dismissing the plea found that Richardson did not take action to intervene in behalf of himself but was sought out as a minority stockholder to make the plea by Inter-Continental and the latter made arrangements to employ Richardson’s attorney. Appellee does not challenge the authority of the attorney to represent Richardson. The court also found intervenor had shown no equitable facts entitling him to intervene.

We are of the view that the court was in error in striking and dismissing the intervention. „

Article 2.04, subd. B (1) authorizes a stockholder to enjoin or set aside an act of the corporation that is ultra vires if all parties to the transaction are parties to the suit and the court deems the proceeding equitable. The statute does not expressly deal with the right to intervene. However, Rule 60, Texas Rules of Civil Procedure governs generally the right of a party to intervene. Under the rule and the doctrine of intervention existing before the passage of the rule, a party has the right to intervene if the intervenor’s interest is such that if the original action had never been commenced, and he had first brought it as sole plaintiff, he would have been entitled to recover to the extent of at least a part of the relief sought; or, if the action had been brought against him he would be able to defeat recovery at least in part. His interest may be either legal or equitable. King v. Olds, 71 Tex. 729, 12 S.W. 65; Pool v. Sanford, 52 Tex. 621, 633; Mussina v. Goldthwaite, 34 Tex. 125, 126; McDonald, Texas Civil Practice, Sec. 3.47; 44 Tex.Jur.2d, Sec. 40. See also Pratt-Hewit Oil Corp. v. Hewit et al., 122 Tex. 38, 52 S.W.2d 64 (Com.App.), opinion adopted.

We are not unaware that there is a broad discretion vested in the trial court in determining whether an intervention should be stricken. It is not, however, an unbridled one and its exercise is subject to review for abuse. If the intervenor meets the test above stated and intervention will not greatly complicate the case by the excessive multiplication of the issues, and to effectively protect the intervenor’s interest intervention is almost essential, it is an abuse of discretion to strike the intervention.

Intervenor by statute was given the right to maintain a suit against the corporation to enjoin the performance of an ultra vires act. He could, in the instant situation, have initiated the suit. While said Subdivision B(l) states the shareholder may enjoin the doing of an act in a proceeding against the corporation, it goes on to provide that the court may, if all parties to the contract are parties to the proceeding, enjoin performance if he deems it equitable and may allow damages or loss, apart from profits, to the corporation pr other parties. It would seem to us that the effect of this, where the shareholder initiates the suit, is to make the other parties indispensable parties, because no effective judgment could be entered for the shareholder without the presence of all such parties. Where, as here, a shareholder states a cause of action given him by law and asserts it by way of intervention in a suit pending between the parties who must be joined if the shareholder initiates the suit, we feel his intervention should not be stricken. Rather there should be a hearing on the merits, under appropriate pleadings, which could, of course, encompass a decision of the intervenor’s rights by way of a motion for summary judgment. The soundness of the above is demonstrated if we note what the result would be if the corporation is sued and judgment is rendered against it and there is a shareholder who wishes to pursue his statutory remedy. There would be a solemn judgment against the corporation and yet it and the plaintiffs in judgment would have to be sued to enjoin use of the judgment if it had not been satisfied. To say the least, there would be an awkward situation. Also, there would be the necessity of another suit. One reason interventions are favored is to avoid a multiplicity of suits. That a shareholder should be permitted to intervene in such a case as this is maintained by two Texas writers on the subject. See Brimble, Ultra Vires under The Texas Business Corporation Act, 40 Texas Law Review, 677, 693; and Trotti, Should An Existing Corporation Adopt The Act — Panel Discussion, Proceedings, Texas Business Corporation Act Institute, 3A, Vernon’s Ann.Tex.Stat., pp. 455-456. ■

Under the testimony of Mr. Hicks and Mr. Coe, which is all of the testimony concerning the circumstances leading to the intervention by Mr. Richardson, the reasonable conclusion to be reached is that Mr. Coe, the attorney for Inter-Continental, who in some other matters represented Big D Development Corporation and its stockholders, D. A. and Thad Childre, called Mr. D. A. Childre and gave him information about the suit against Inter-Continental and suggested that in the light of the statutes it might be wise for Big D, a stockholder, to intervene. Though Big D, for reasons unstated, preferred not to intervene, it then began efforts through Mr. Barfield to obtain another stockholder to intervene. First he obtained Mr. Carson, who was to be held free from expense of litigation by stockholder Big D. Mr. Coe was told of this and prepared the petition in intervention. The inference could be drawn that any fee to be charged would be paid by Big D, though the record shows nothing expressly in this regard. Too, it could be inferred that Mr. Coe in contacting Mr. Hicks was acting for Big D. Such conclusions are not compelled but are certainly reasonably to be inferred. Then Mr. Barfield prevailed on Mr. Richardson to intervene, had him sign the petition, and took it to Mr. Hicks. No question is raised that Mr. Hicks, counsel for intervenor, was not authorized to file the intervention for Mr. Richardson. See Rule 12, T.R.C.P.

Upon the above evidence it may well be concluded that the intervening stockholder was acting in his own interest at the urging of another stockholder, that is, Big D Development Corporation. The mere fact that a corporation representative may have given notice of the suit and suggested it might be wise for the stockholder to intervene does not make such stockholder an agent of the corporation. As a practical matter today when corporate stock is so widely held by different persons in varying and small amounts, the average stockholder can hardly be expected to keep himself informed of corporate operations except for information afforded him by corporate representatives or those associated with them. There might in some particular case be facts establishing such an agency so that in a trial on the merits he would not be entitled to the relief sought. However, whether the stockholder is in fact but the agent of the corporation is to be determined at a trial on the merits. We note that under all facts shown here no such agency is established, but they really show action by Richardson at the instigation of Big D through its representatives. We do not know what a fuller development of the facts will show. In this connection we think it material to show who is paying Mr. Hicks’ attorney’s fee. He may be required to disclose this though it may not be required that he show the amount.

If on trial the trier of the facts, on evidence of probative force, finds that Richardson is but the agent of Inter-Continental, then he would not be entitled to the relief sought. If intervenor is found not to be the mere agent of Inter-Continental, then he will be entitled to the relief stated below.

The court in its order striking the intervention stated there were no equitable facts or reasons entitling Richardson to intervene.

It would seem that the petition in intervention, having stated a cause of action, the question as to whether he had in fact such equities as to enable him to the relief sought is a matter to be determined in a hearing on the merits, either through a determination by a trier of the facts where material facts are in dispute, or, on motion for summary judgment where there is no genuine issue of material fact.

The question arises as to what the statute means when it states the court may enjoin the performance of the act if he deems the proceeding equitable.

We are of the view in this case if it is determined as a fact that initially the $650,000.00 was loaned to Shively individually and Shively agreed to pay Moody $50,000.00 and then Shively loaned the money to Inter-Continental, then the court should enjoin the collection of this $50,-000.00 or the unpaid portion represented in said note. If, however, as a fact the loan was directly to the appellant, the inter-venor is not entitled to the relief because the obligation to pay the $50,000.00 would not be beyond the charter powers of appellant.

As to the other $50,000.00, which together with the initial $50,000.00 was included in said note, it was incurred primarily if not wholly to refinance the personal obligation of Shively at 1st National. If a portion of the money that was obtained at the Bank of The Southwest went directly to pay an obligation of appellant, intervenor would be entitled to relief only as to a portion of the $50,000.00. That portion would be determined on a basis of the proportion that the amount used to pay an obligation of appellant bears to the total loan of $1,300,000.00. If none of the money was so used, then intervenor will be entitled to the relief sought as to the second $50,000.00.

If relief is granted in conformity with what we have stated above, there will be no damage or loss suffered by ap-pellee except interest. Interest would be but profits which are not allowable by Article 2.04, subd. B(l), Texas Business Corporation Act.

The whole case will be reversed and remanded, to be tried in accordance with our holding.

Appellee’s motion for rehearing is overruled.

On Second Motion for Rehearing

We reversed the judgment of the trial court against Inter-Continental in favor of appellee even though we held Inter-Continental could not successfully defend on the ground that the transaction sued on might be ultra vires. Had the rights of the corporation alone been involved appellee would have been entitled to judgment. However, we have a case where the rights of an intervening stockholder are involved. If in a trial on the merits it is determined that on the facts the stockholder is entitled to some relief, in accordance with the principles we set out in our opinion on the original motion for rehearing, appellee will be entitled to a judgment against the corporation, not for the full amount of the note, but only to the extent that the stockholder is held not to be entitled to relief. This is not because of a right in the corporation, but because of the rights of the stockholder.

Motion overruled.