author: TUNKS, Chief Justice.

text:
    Joseph LEBOW, Appellant, v. Stanford A. WEINER, Appellee.
    No. 34.
    Court of Civil Appeals of Texas. Houston (14th Dist.).
    Nov. 1, 1967.
    Rehearing Denied Nov. 22, 1967.

      Dow, Dow, Cogburn & Dow, and Perry J. Radoff, and Edmund L. Cogburn, Houston, for appellant.
    McLeod, Alexander, Powel & Apffel, Benjamin R. Powel, Galveston, for appellee.
   TUNKS, Chief Justice.

This is a plea of privilege case. The plaintiff in the court below, appellee here, filed suit in the District Court of Galveston County, Texas, for specific performance of a contract to sell land, in which contract he was the vendee of the land in question. Defendant in the court below, appellant here, filed a plea of privilage to be sued in Harris County, the County of his residence.

Plaintiff duly filed his controverting affidavit alleging a right to maintain the action in Galveston County under the provisions of Subdivision 5, Article 1995, Vernon’s Ann.Tex.Civ.St.

A trial before the court resulted in a judgment overruling the plea of privilege. From the judgment defendant has perfected his appeal.

The appellant makes three basic attacks on the judgment of the court below. First, he says that there is no evidence or alternatively insufficient evidence to support the presumed finding by the trial court to the effect that the defendant either in person or by any duly authorized agent ever executed the contract which is the subject matter of the litigation. Secondly, he argues that the purported contract is unenforceable due to the inadequacy of the description of the property involved. Thirdly, he contends that the contract does not on its face provide for performance within Galveston County as required by Subdivision 5 of Article 1995 if appellee is to be entitled to maintain the suit in Galveston County over appellant’s plea of privilege.

The trial was to the court without a jury.

The evidence showed that the appellant was the owner of a tract of land situated in Galveston County which he desired to sell. He had authorized one Hyman Levin to seek a purchaser for the tract of property. The appellee, on the other hand, was seeking a tract of property onto which to move his business. He, the appellee, had employed an agent, Mrs. Evans, to seek a tract of land which he could buy. Levin maintained a sign on his tract of land advertising it for sale. Mrs. Evans, seeing the sign, reached Levin by telephone and made inquiry concerning the purchase of a part of the property. The two agents then arranged for a meeting with the owner, Joseph Lebow, for the purpose of discussing the transaction. On October 8, 1966, such meeting was conducted at a restaurant during which time the parties orally agreed as to a sale of the property herein involved. On the occasion of such meeting, Mrs. Evans, acting as agent for the buyer, offered to purchase a one-acre portion of the tract of property having a frontage of 150 feet for the sum of $20,000.00 per acre. That offer was orally accepted by Lebow.

After the luncheon, Mrs. Evans went to her office for the purpose of typing out the earnest money contract by which the sale was to be effected. She then went to the place of business of Lebow, where Levin was present, to present the earnest money contract for signature. On that occasion it was discovered that there was an ambiguity in the description of the property and the parties retired to an adjoining place of business where a typewriter was to be had and typed an instrument designated an addendum to the contract, which instrument was for the purpose of correcting the description.

The addition of the addendum required changes in the previously typed earnest money contract, which changes were made and each of which was initialed by all three of the parties present, that is, by Mrs. Evans, by Levin and by Joseph Lebow. All three of the parties signed the document referred to as an addendum. Levin and Evans signed the earnest money contract but Lebow did not actually place a formal signature on it. Levin’s signature appears over the words “agent for seller.” Lebow was present when Levin so placed his signature on the earnest money contract and did not raise any objections to his doing so.

The record is not entirely clear as to the chronology of the various signatures and initials placed upon the documents in question, but it is probable that the so-called addendum was signed before the earnest money contract itself was signed or initialed.

As mentioned above, the addition of the addendum necessitated some changes to be made on the face of the earnest money contract. For instance, “see attached agreement” was typed on by Mrs. Evans and each of the three parties present initialed such an amendment. During the course of the making of the changes and the placing of the initials on the earnest money contract, Mrs. Evans noticed that Lebow was making some additional changes on other copies of the contract. She objected to this, stating that the agreement in its final form had been reached and that Lebow had no authority to make any additional changes on the face of the earnest money contract. When Lebow indicated that he intended to make some further changes, Mrs. Evans protested, stating that the terms of the agreement had been reached, gathered up all copies of the contract and started to walk out. Then, according to the testimony of Mrs. Evans, as she reached the reception desk, Mr. Le-bow called her back saying, “Mrs. Evans, there is no use in getting excited, we have-made a deal.”

Mrs. Evans then continued stapling the addendum to the remaining copies. When she had completed, she delivered copies to Mr. Lebow and his agent, Mr. Levin. She and Mr. Lebow then shook hands and the parties separated.

Mr. Levin testified that he did not know which of the two papers was signed first but that the two were treated together. He also testified after Mrs. Evans’ had staged her walkout and had been called back into the room by Mr. Lebow, some of the copies of the contract were signed or initialed by Lebow. Further, he testified that after the signing and initialing, Mr. Lebow said that he was satisfied with the deal and the copies of the documents were distributed.

The earnest money contract was on a printed form. It had a printed signature line for signature by seller with Joseph Lebow’s name typed underneath that line. Joseph Lebow’s signature was never placed on that line in any of the copies of the earnest money contract.

It does not make any real difference whether the so-called addendum to the contract on which the full signature of the appellant appears is considered as being the first or second page of the contract. Nor does it make any difference whether that part of the contract was signed before or after the changes were made on the printed earnest money contract, which changes were initialed by all of the parties involved. It is not essential to the validity of the contract that the signature of the parties should be at the end thereof. Missouri K & T R Co. v. Clark, 35 Tex.Civ.App. 189, 79 S.W. 827.

The real inquiry which a court must make in determining whether a party has signed a contract, is to determine whether he, or someone else at his direction, placed a marking thereon with the intention to give vitality to the instrument. In Newton v. Emerson, 66 Tex. 142, 18 S.W. 348, at p. 349, the court said: “A deed or other instrument may be said to be signed whenever the name of its maker is so written upon it as to evidence his intention to give authenticity to it. At common law the seal was the sign, and a sealing was regarded as a signing, — as the act evidencing the intention of the maker to give vitality to the instrument; so, under the laws of those states in which sealing has been dispensed with and subscription is not required, it has been very generally held that the writing of the name of the maker in the body of the instrument, in such connection as to evidence his intention to give effect, vitality, or authenticity to the entire writing as one completed instrument, is to be deemed a signing, within the meaning of the law.”

In view of the fact that the trial below was a trial to the court and there are no findings of fact or conclusions of law, we must view the evidence in the light most favorable to the appellee and presume that the trial court made such findings, consistent with the evidence, as are required to support the judgment. Quinn v. Dupree, 157 Tex. 441, 303 S.W.2d 769; Hill v. McDaniel, Tex.Civ.App., 129 S.W.2d 321. We are of the opinion that the evidence outlined above is sufficient to sustain a presumed finding by the trial court to the effect that the appellee placed his signature on the document in question with the intent that both pages of it be a contract signed by him. We are of the further opinion that such a presumed finding is not against the overwhelming weight and preponderance of the evidence.

Appellant’s fourth point of error is based upon his contention that the contract sued on was insufficient in law to constitute a contract in writing for the sale of land under Subdivision 5, Article 1995, due to the inadequacy of the property description.

It has been held, however, that an allegation of invalidity of the contract of the character here asserted by appellant is a defense to the merits of the claim under the contract and is not available to the defendant to use as a basis for sustaining his plea of privilege. Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300; Scott v. Beaver, Tex.Civ.App., 405 S.W.2d 644.

The fact that parol testimony is required to explain an ambiguity does not keep an instrument from being a contract in writing within the meaning of Subdivision 5. Farmers Seed & Gin Co. v. Brooks, 125 Tex. 234, 81 S.W.2d 675.

The Statute of Frauds is an affirmative defense not available on a plea of privilege hearing. Grayson Enterprises, Inc. v. Texas Key Broadcasters, Inc., 390 S.W.2d 346, writ dism’d.

Appellant’s fifth point of error is as follows: “The trial court erred in overruling the plea of privilege filed by defendant herein, inasmuch as the purported earnest money contract does not specify that it is performable in Galveston County, Texas, and therefore it is insufficient to sustain venue under Subdivision 5 of Article 1995.

Subdivision 5 of Article 1995 is in the following language:

“Contract in writing—If a person has contracted in writing to perform an obligation in a particular county, expressly naming such county, or a definite place therein, by such writing, suit upon or by reason of such obligation may be brought against him, either in such county or where the defendant has his domicile.”

The contract which is the subject matter of this law suit contains the following language:

“WARRANTY DEED: SELLER agrees, when any title defects have been cured, to deliver a warranty deed at listing realtor’s office, properly executed.-”

The undisputed evidence showed that Hyman Levin was the listing realtor and that he had one office, and one office only, which was located in Galveston, Galveston County, Texas.

Thus, while the contract in question did not expressly name a particular county, it did identify a definite place in Galveston County as the place for performance.

Obviously, the contract itself does not have to name the county in which performance is to be had, otherwise the words in the statute, “or a definite place therein” would be meaningless.

Where a contract names or identifies a definite place for performance, extraneous proof is proper to establish the county in which that definite place is located. Burtis v. Butler Bros., 148 Tex. 543, 226 S.W.2d 825; Harrison v. Nueces Royalty Co., Tex.Civ.App., 163 S.W.2d 244, err. dism.; Butler, Williams & Jones v. Goodrich, 288 S.W.2d 887, err. dism.

Harrison v. Nueces Royalty Co. (supra) involved a suit filed in Nueces County on a promissory note which recited on its face that it was payable “at the office of the Nueces Royalty Company.” There was no other language in the note indicating the place at which it was to be performed. The extraneous proof showed that the office of the Nueces Royalty Company was located in Nueces County. The defendant filed a plea of privilege and the plaintiff, in his controverting affidavit, relied upon Subdivision 5 of Article 1995. The judgment in the trial court in overruling the plea of privilege was affirmed. The court said 163 S.W.2d at p. 245, “We hold that the exception now requires that a definite place be stated in the written instrument, but that the identification of such definite place as being located within a particular county may be established by extraneous proof.”

In Butler, Williams & Jones v. Goodrich, supra, the place of performance stated in the written contract was “at your residence below Navasota, Texas.” The court held that to be an identification of a definite place within a particular county as contemplated by the provisions of Subdivision 5.

The judgment of the trial court is affirmed.


source: Caselaw Access Project

author: HUGHES, Justice.

license: Public Domain

text:
    ARGONAUT SOUTHWEST INSURANCE COMPANY, Appellant, v. John E. MORRIS, Jr., Appellee.
    No. 11545.
    Court of Civil Appeals of Texas. Austin.
    Nov. 8, 1967.
    Rehearing Denied Nov. 29, 1967.

      L. W. Anderson, Dallas, C. C. Small, Jr., Austin, for appellant.
    J. Hubert Lee, Austin, for appellee.
   HUGHES, Justice.

This is a workmen’s compensation case in which the insurer, Argonaut Southwest Insurance Company is appellant and the employe, John E. Morris, Jr., is appellee.

Previously overruled by us is a motion filed by appellee to dismiss this appeal for want of jurisdiction. We will now state the reasons for denying this motion.

The final judgment was signed and entered January 31, 1967. Appellant filed a motion for new trial February 6, 1967. February 28, 1967, appellant filed an amended motion for new trial.

On March 21, 1967, appellant filed a motion asking that its amended motion for new trial be considered as timely filed for the reason that since the last day for filing, February 26, fell on Sunday that Monday February 27th would be the last day for filing and that it, on February 25, 1967, prepared and mailed to the clerk of the trial court by depositing the same in the United States mail its amended motion for a new trial, but that for some reason this amended motion was not received by the clerk until February 28, 1967.

This motion, of March 21, 1967, was granted by the trial judge.

The amended motion for a new trial was overruled by order signed March 22, 1967.

Notice of appeal was given in this order and a separate notice of appeal was filed March 27, 1967. Appeal bond was filed March 31, 1967. The record was filed in this Court on May 4, 1967.

Rule 329b requires an amended motion for new trial to be filed within 20 days after the original motion for new trial is filed. We agree with appellee that appellant’s motion that the amended motion for new trial be considered as having been timely filed is insufficient to sustain the order of the trial judge granting such motion. It is agreed that the factual allegations of the motion constitute the only evidence offered to support the motion. It was also agreed that such factual allegations should be considered as evidence.

These allegations do not comply with the requirements of Rule 5, Texas Rules of Civil Procedure, namely, that the motion be sent by first class mail in an envelope or wrapper properly addressed and stamped, and the envelope or wrapper containing same bears a postmark showing a timely deposit.

Disregarding the amended motion for a new trial and considering only the original motion for a new trial, Rule 329b provides that such motion shall, if nothing else transpires, be overruled by operation of law 45 days after the same is filed. Here, nothing within the rule transpired after the original motion was filed and it was overruled 45 days after it was filed, to wit, March 23, 1967.

As shown above, the necessary appellate steps were timely taken after March 23, 1967.

Appellee also says that since appellant gave notice of appeal from the judgment and from the order overruling its amended motion for a new trial that it has restricted its appeal in some manner. An appeal is from the judgment or some portion of it and not from the order overruling a motion for new trial. Rule 353(b) T.R.C.P.

The trial was to the court without a jury. Judgment was rendered for appellee for total and permanent disability.

Appellant’s first point is that the trial court erred in permitting appellee to testify to statements made to him by Doctors B. F. Simms and Robert Farris regarding his physical condition, appellant objecting that such statements were hearsay. Upon such objections being overruled, appellee testified at length to statements attributed to these doctors concerning his physical condition.

It is quite true that unsworn, out of court statements made by doctors with reference to the physical conditions of their patients is hearsay and inadmissible. Traders and General Insurance Company v. Wheeler, 271 S.W.2d 679, Tex.Civ.App. El Paso, writ ref. n. r. e. It is equally true that such statements in the nature of admissions against interest are admissible against a principal when made by an agent within the scope of his duties. Texas Law of Evidence, 2nd ed., McCormick and Ray, Vol. 2, Sec. 1164. 31A C.J.S. Evidence § 343, p. 834.

Appellant has admitted that it requested Dr. Simms to examine appellee and that it received reports from Dr. Farris regarding the condition of appellee. There is evidence that the doctors to whom appel-lee’s employer sent him were Doctors Simms and Paulsen and that they sent him to Dr. Farris.

The admissions and testimony are sufficient to support an implied finding that the doctors named were agents of appellant. It is our opinion that the statements made by these doctors regarding the physical condition of appellee were admissible. See Vineyard v. Texas Employers’ Ins. Association, 263 S.W.2d 675, Tex.Civ.App. Dallas, writ ref. n. r. e.; Bituminous Casualty Corporation v. Jordan, 351 S.W.2d 559, Tex.Civ.App. Waco, n. w. h.

Point one is overruled.

The second point of appellant is that the trial court erred in receiving in evidence the payroll records of appellant relating to Halden Lloyd Holstien in order to prove the wage rate of appellee under subdivision (2) of Sec. 1 of Art. 8309, V.T.C.S., for the reason that there was no evidence that Mr. Holstien had worked in Austin or in a neighboring place for 210 days during the year immediately preceding the date of appellee’s accident.

Appellee was employed by the Cecil Ruby Construction Company in Austin, Texas, when he was injured in the scope of his employment on September 14, 1965. He had not worked in the employment in which he was working at the time of his injury for the same or a different employer for 210 days during the year immediately preceding his injury. Sub. (2), supra, provides that in such case an employee’s average weekly wage should be calculated from the average weekly wage or salary of an employee of the same class working 210 days in the year immediately preceding in the same or similar employment “in the same or a neighboring place.”

In attempting to make the requisite proof under this subdivision, appellee called the payroll clerk of the Cecil Ruby Company, Mrs. Sarah Darby Holland, who lived in Austin. We quote from her testimony:

“Q I will ask you if you brought with you the record of any employee of the Cecil Ruby Company that does a similar work to the work done by John Morris, namely a truck driver, driving those large highway construction trucks? Did you bring the record of another employee?
A I brought the records of another one as close as I could to this man.
Q What does that man do ?
A He is a truck driver.
Q The same type of trucks?
A Yes.
Q Has he worked for the company for a year or more before September 14, 1965?
A Yes, sir.
Q Do you have that record with you?
A Yes, sir.
Q Does that employee work in the same area as John Morris did?
A He has worked in the same area and other areas also.
Q And at the time between — the year just before September of 1965, his job was about the same as John Morris ?
A Yes, sir.
Q And he was paid out of the same office as John Morris was?
A Yes, sir.
Q And he was driving whatever truck that he had driven in the same way that John Morris would have to do ?
A Yes, sir.
Q And that is in Travis County and other surrounding territory, is that right, both of them?
A Yes, sir, wherever they were working.
Q Wherever they were sent?
A Yes.
Q Where is the company based — the main office of this company, the Cecil Ruby Construction Company?
A In the Brown Building, 907 Brown Building.
Q 907 Brown Building, Austin, Texas?
A Yes.”

On cross examination by appellant, Mrs. Holland testified:

“Q Mrs. Holland, Cecil Ruby and Company, Inc., is your employer, is that correct ?
A Yes.
Q They have jobs pending in numerous parts of the state, do they not?
A Yes, sir.
Q I believe actually most of your operations now are in Dallas. Isn’t that true?
A Yes, but in other places, also.
Q Yes, I understand. In fact, during this time Mr. Holstien worked for you, you had operations in Big Spring and San Marcos and Dallas and all over the state; isn’t that right ?
A Yes.
Q I believe that’s all.”

On redirect examination, she testified:

“Q Mrs. Holland, I will ask you if the wages that are paid are the same whether the man traveled to Dallas or stayed in Travis County?
A The wages are based on the Federal wage requirements and the men are paid according to the wage scale on each project that is awarded to our company, and then some of the men who have been with us and are good employees make more than that wage scale.
Q But what I was trying to arrive at is whether the wages in Dallas or Big Spring or whatever are different than in Austin?
A No, that has no bearing on what the man makes.
Q So far as the location of the job, they are paid the same wages?
A Yes.”

The payroll record of Mr. Holstien was admitted in evidence. It shows that his address was given as Edna, Texas. There is a line on the record under which these printed words appear “Dept, or Place of Work.” This line is blank.

The trial court made this finding:

“That Plaintiff had not worked for at least 210 days during the year immediately preceding the date of his injury but that there was an employee of the same class as Plaintiff employed in the same or similar employment as Plaintiff, in the same or neighboring place who did work at least 210 days of the year immediately preceding the date of Plaintiff’s accidental injury on September 14, 1965, and that such employee was Haldon Lloyd Hol-stien, and that his average weekly wages were not less than $70.00 per week.”

Mrs. Holland in explaining these records testified that they reflected the regular weekly pay of Mr. Holstien, his overtime ánd his gross weekly pay, and that a week was from Sunday through Saturday.

The record reflects that Mr. Holstien earned $1.50 an hour regular pay and that his overtime pay was $2.25 an hour. The regular pay earned during a full week was shown to be $60.00. The amount of overtime pay varied.

If we assume that the $60.00 weekly regular pay was for a five day, eight hour a day week (8 x $1.50 x 5 = $60.00) then the records show that Mr. Holstien worked 209 days in the year immediately preceding the injury of appellee.

While much overtime is shown, there are two weeks where overtime earnings were large, too large, in reason, to have been earned except by working on Saturday or Sunday. In the week ending October 24, 1964, Mr. Holstien earned $60.-00 regular pay and $52.87 overtime pay. In the week ending March 6, 1965, he earned $60.00 regular pay and $58.50 overtime pay. To have earned $58.50 overtime in five days Mr. Holstien would have had to work on the average of more than 5 hours overtime each day. This is an unreasonable assumption. We believe that the fact finder, the trial judge, had the right to infer from the evidence that Mr. Holstien worked at least 210 days in the year immediately preceding the date of appellee’s injury in the same or similar employment as appellee worked.

It remains to be determined whether Mr. Holstien worked in a “neighboring place.”

We believe that the principle of Commercial Standard Ins. Co. v. Brock, 167 S.W.2d 281, Tex.Civ.App. Amarillo, writ ref. w. o. m., requires an affirmative answer to this question.

In that case the employe was injured in Lipscomb County, Texas. He lived in Seminole, Oklahoma. His employer was engaged in oil field contract labor in Oklahoma. When injured, the employe was engaged in moving oil field machinery in special trucks from Garden City, Kansas to Odessa, Texas, a distance of 485 miles. In proving his weekly wage rate the employe used the employment of a worker from Seminole, Oklahoma, who, while working for a different employer, was engaged in the same kind of work as the employe performed. Seminole, Oklahoma is something over 200 miles from Lipscomb County, Texas. We quote from the opinion of the Court which recites other facts in connection with its holding that the proof was sufficient:

“The appellant contends, first, that the wages or salary of Poling was not a correct measure because his work was not performed in the same or a neighboring place as that of appellee, and asserts that the phrase ‘in the same or neighboring place’ refers to the place of the accident, in this case, Lipscomb County, and not to some other place where the appellee or Poling may have worked. Under the facts presented, we think such a restricted meaning of this phrase is not applicable. The expression ‘neighboring place’ is obviously a relative term and the purpose and import of its use are to be known from the context. What would not constitute a neighboring place in one instance might do so in another. * * * Therefore, the circumstances under which the term is applied must be considered in each case. In this case we have extraordinary circumstances. The work of the appellee and of Poling and his associates was of an unusual type and character and extended over considerable territory, including several States. It was not of a local character, and, with the exception of appellee’s passing through the place of the accident, so far as the record reveals, such work was not performed in Lipscomb County or in that immediate vicinity. Under such conditions, we are of the opinion that the meaning of the term must be given a larger and a more appropriate interpretation.”

This case was followed by the Eastland Court of Civil Appeals in Texas Employers’ Insurance Association v. Goforth, 307 S.W.2d 610, writ ref. n. r. e., where the Court held that the employe, an oil field roughneck and driller, injured while working in Stonewall County could establish his wage rate under subdivision 2, supra, by showing that a workman of the same class worked in Stephens, Callahan and Stonewall Counties and in “East Texas” for the requisite number of days. Only the work in “East Texas” was challenged as not being a “neighboring place” to Stonewall County in West Texas. After citing the Brock case, the Court stated:

“The record in this case indicates that the oil field workers involved were engaged in work which, like the oil field machinery removing work in the above cited case, was transitory and extended over a large territory. The evidence shows that Goforth was being paid at approximately the same rate per hour for the work he performed as a roughneck that Lewis was being paid for the same type of work and that the wages paid in each of the counties involved were the same. We are unable to see how appellant could be injured by an application of the same liberal rule used in the Brock case in identifying and determining the extent or breadth of ‘a neighboring place’.”

Similarly here, the work of the Ruby Construction Company was carried on at various places over the State, presumably at places where construction jobs were obtained. The work, the trucks and the wages were the same regardless of where the employe was situated. The locale of the job was of no relevance. Under these circumstances, we conclude that a neighboring place, under the facts of this case, includes places where the same employer conducts the same type of business under the same conditions and the conditions of employment are the same.

In reaching this conclusion we are also aided by the rule that a liberal construction of the Workmen’s Compensation Act requires but slight proof of the applicable wage rate where, as here, there is no real controversy over it. American General Insurance Company v. Hightower, 279 S.W.2d 397, Tex.Civ.App. Eastland, writ ref. n. r. e.

We overrule the second point.

Appellant’s points three and four, jointly briefed, are to the effect that the trial court erred in considering evidence to sustain a finding of $70.00 per week as a just and fair wage under subdivision 3 of Sec. 1 of Art. 8309, supra, since the applicability of subdivision 2 of such article had not been negated.

We have held that the evidence supports the findings of the trial court with reference to the application of subdivision 2 of Art. 8309, Sec. 1, which holding makes moot these points. They are not decided.

The fifth point of appellant is that the finding of the trial court that appellee was totally and permanently disabled is not supported by any evidence and, alternatively, is against the great weight and preponderance of the evidence as to be clearly wrong and unjust.

We overrule this point.

We copy, in full, appellant’s statement under this point:

“The Plaintiff admitted at the suggestion and the leading question of his attorney that he was able to do light work. Dr. Jerry D. Julian had testified that in his opinion he was able to do work of driving a truck, as the result of his examination of the Plaintiff. Dr. Maurice Jacobs the physician to whom the Plaintiff had gone immediately following the alleged accident, and who had treated the Plaintiff on three (3) occasions prior to this for his previous back injuries, testified, in his opinion that when he saw him on September 18, 1965, which was three (3) days after the alleged accident, the Plaintiff would be able to return to work as a truck driver and the most he should be off as the result of the alleged accident was two (2) or three (3) weeks. Even Dr. War-ran A. Ross, the physician to whom his attorney sent him, testified that in his opinion the Plaintiff might have some pain but he could do the work of a truck driver.”

The reference to the testimony of Dr. Ross with regard to the ability of appellee to drive a truck is quoted below:

“Q Will you state now, in view of the reports that I have, that you have seen and that you have made, on review of them whether you have any opinion as to whether or not John Morris is able at this time to do any heavy lifting?
A I would strongly not recommend it.
Q And would he be able to do any material twisting, such, for example, as taking a wheelbarrow load of dirt and turning it over into a dump ?
A I wouldn’t advise him to do this continuously throughout the day, no, sir.
Q And in your opinion — do you have an opinion about whether or not John Morris can do any heavy lifting at this time?
A I would recommend that he do nothing that would require prolonged use of his back for lifting, bending, twisting, stooping or straining.
Q Now, Dr. Ross, assuming that the driving of these trucks, highway trucks, such as John Morris was driving previously, requires a substantial and continuous amount of heavy twisting of the wheels and heavy pulling of the levers and controlling of the trucks, and heavy pressing of the feet on the brakes,, do you have any opinion as to whether that sort of continuous activity would — whether he could do it without pain?
A He could, but for how long, I don’t know. In other words, if he persisted in it, he would have pain, and he would have pain of such a severe degree that he would have to quit.
Q So that actually he could not do the work regularly?
A If it’s the type of truck that I would be familiar with, not being a truck-driver any more, I couldn’t say much more about that. Again I limit my qualifications to the medical aspects that the man should not do any prolonged lifting, bending, squatting, stooping, straining or twisting of his back.
Q And, now, do you consider that to be a permanent condition?
A Yes, sir.
Q Maybe I should ask you m another way, Doctor: Do you have an opinion as to whether it would be — that condition would be permanent?
A His injury that he has there?
Q Yes, and disability to do the twisting and bending and stooping and lifting that you have described?
A Yes, sir; it is permanent.”

The so-called admission of appellee that he could do light work was derived from the following testimony of appellee:

“Q Can you bend backwards or forwards reasonably well when you have the brace on?
A I have not tried to bend backwards, but I have tried to bend forwards.
Q You can bend forwards?
A Yes, sir, reasonably.
Q Do you have any difficulty in picking up anything heavy and twisting from your waist?
A I try not to pick up anything heavy, not over ten to fifteen pounds.
Q Have you had any pain of any kind in connection with trying to do any strenuous exercise or lifting?
A Yes, sir.
Q Tell us how. Do you remember any particular instance?
A When I bend down on my exercise, I get pain in my back, and when I cut the yard, I get pain in my back and my legs, and so I quit and rest a while, and then work a while, and then keep on doing that until I finish the yard.
Q Are you willing to do some kind of light work that you could do if you could find it?
A Yes, sir.
Have you looked for it? a
Yes, sir. C
Have you found it? a
A No, sir.”

Appellee was a truck driver. The truck he drove was a tandem type. Its cab had four wheels. The tandem trailer had twelve wheels, six double wheels. The truck had a flat and while it was being repaired it was noticed that a brake drum was cracked and a new one had to be installed. While helping another employe carry this brake drum, which weighed about 100 lbs., the employe, so appellee testified, dropped his end of the drum and in picking it up and carrying it to the truck, ap-pellee strained and injured his back. Two employes who were present when this incident occurred testified that appellee dropped the drum.

Appellee described driving the truck as follows:

“Q Will you state to' the Court whether managing these large trucks and driving them requires you to exercise any strength from your waist and your legs and your arms?
A Yes, it does.
Q Describe how and to what extent and why.
A You have to use your right leg for the gas and for the brakes, and your left leg is for the clutch, and you use your arms for the twisting and turning of the steering wheel. If you are going up a steep hill and you have to change gears awfully fast and the road is bumpy, you bounce up so, and you have to keep wrestling with the steering wheel and have to change gears fast enough to keep from rolling back down the hill.
Q Does the weight of the load have anything to do with that, the fact that it is a heavy truck or heavy load?
A Not exactly. The weight of the ■ load sometimes makes it go smoother, and other times, if the road is pretty bumpy, it is rough anyway.
Q In turning corners, are you required to make any more or less exertion than driving straight?
A Yes, you do.
Q Do you have to exert any strength from your waist?
A Yes, you have to wrestle with that steering wheel.
Q How many shifts does a truck like that have?
A This one has five forward and one reverse.”

Dr. Jerry. D. Julian, an orthopedic surgeon, was a witness for appellant. He testified that he examined appellee one time, June 1, 1966, for appellant. He stated that appellee had a slight pelvic obliquity with the right side elevated and the left compensatory lower thoracic upper lumbar scoliosis. That the range of motion of the lumbar spine was limited; that there was subjective tenderness in the lower thoracic and upper sacral area but no demonstrable paravertebral muscle spasm; that the left leg was two (2) centimeters shorter than the right and that the thigh circumference was 48 centimeters on the right and 47 on the left; that there was a hamstring muscle tightness to 40 degrees bilaterally which is usually associated with discomfort on the part of the patient; that his x-rays showed a grade one spondylolis-thesis with approximately one centimeter of anterior displacement of the body of L-5 on S-l. That there appeared to be an increased sclerosis about the lumbo sacral facets. That the spondylolisthesis grade one, means a forward displacement of the last lumbar vertebra on the first sacral vertebra. That this was a congenital defect.

Dr. Julian also testified that a person with a spondylolisthesis may in all honesty suffer several separate injuries to his back because he has got this spondylolisthesis situation, and that it is probably true that a person with a good back does not get injured as often as a person with a spondy-lolisthesis, and that with respect to muscle spasms there are periods of remission when the muscle spasms are not evident and that the fact that the doctor did not detect muscle spasms on the occasion of his examination did not mean that appellee had not had muscle spasms within recent times.

Dr. Julian further testified that you could have the sprain being chronic without the necessity of a displacement of any of the vertebrae of the back, if it is a low back sprain; that a person with a low back spondylolisthesis does render his back more susceptible to low back sprains and chronic sprains.

Dr. Julian also testified:

“Q Now, do you ever find any situation in which a sprain may become chronic and so affect the individual that he really would not be able to return to the type of work that he was doing before, if his work involved lifting heavy weights, twisting heavy wheels on heavy trucks, and that sort of thing?
A It is possible.
Q I will ask you if you could deny and rule out that John Morris’ back is in that condition?
A I could not deny it with complete certainty.”

Dr. Maurice Jacobs, an orthopedic surgeon, testified for appellant. He examined appellee on the day following his injury. We quote from his testimony:

“Q On that occasion, was he again complaining of a backache or back pain in the same area for which you had treated him before on these two previous occasions ?
A Yes.
Q Did you or not take any x-rays of him at that time?
A No, I did not take any x-rays.
Q Did you give him any treatment?
A Yes.
Q What type of treatment did you give him?
A I prescribed some muscle relaxant pills and some pain medicine, too-.
Q Did you prescribe a back brace at that time or not?
A I have no note here of having prescribed a back brace.
Q Did you consider that he had a serious injury and would have any permanent injury as a result of the condition which you treated him for as a result of this accident in September of 1965?
A No.
Q Doctor, when was the last time you saw him after you treated him in September, 1965?
A September 18, 1965.
Q And the last time you saw him, did you or not think that his physical condition would improve so that he could return to work as a truck driver ?
A Yes.
Q. What is your opinion as to how long you think he should have remained off work as a result of the injury or alleged injury in September of 1965 ?
A About two or three weeks.”

On cross examination, he testified:

“Q If he suffered any disability by reason of having been injured in September, 1965, the last time he went to see you, would you attribute that disability to the injury that he suffered in September of 1965? In other words^-when -he ■ came to see you in September of 1965, if ⅜ had any disability after that accident of September, 1965, would you attribute that disability to that accident or the injury suffered at that accident?
A In other words, was this a fresh injury in September?
Q Yes, sir.
A Well, I would assume that, yes, if he worked for several months without complaining of pain, and then had a new complaint of pain and recalled an injury to it, I would say this was a fresh injury.”

Dr. Warran A. Ross, a medical doctor, specializing in orthopedics, testified for ap-pellee. Dr. Ross saw appellee about February 4, 1966, the first time, and treated him thereafter to the time of trial. Dr-Ross examined him on February 4, 1966, neurologically and also took x-rays of ap-pellee’s spine and lower back. Dr. Ross found a forward displacement of the vertebral body of L-5 on the sacrum and an increased lumbosacral angle of 55 degrees. He also found structural deformities of the low lumbar level at L-4, 5 and the sacrum, and the pelvic crest was level with the spine of L-3. The right and left oblique projections demonstrate extreme narrowing of the pars-interarticularis at L-5 and more apparent loss of continuity on the right than on the left.

Dr. Ross’ diagnosis was acute and chronic lumbar strain; structural instability, lumbar spine; that the acute and chronic lumbar strain was referable to the ligaments of the lower back; that the x-ray evidence was his primary basis for diagnosing the structural instability of the lumbar spine. Dr. Ross stated that he found muscle spasms on appellee when he examined him in February of 1966.

Dr. Ross also stated that the structural instability was not caused by a sudden traumatic incident and that the previous injuries that he may-have'sustained would not be the cause of his structural instability.

He also testified that these prior accidents did not contribute to the present disability, that the structural disability of the lumbar spine was a permanent condition, which has likely been that way for many years and was not caused by an acute traumatic condition. Dr. Ross further stated that the relaxation of these torn ligaments is permanent.

We have previously recited the testimony of Dr. Ross to the effect that the disability of appellee to perform the usual duties of a truck driver was permanent.

After appellee was injured he, at the suggestion of Dr. Simms, returned to his job and resumed driving a truck. After a very short ■ time, the same day, he had to quit because of pain.

Appellee testified that he applied for work at several places but was unsuccessful in obtaining it.

There is much more evidence in the record regarding the injury of appellee, its extent and permanency and we have, as duty requires and as appellant suggests, examined all the evidence very closely in order to determine this point. We are of the opinion that the evidence is legally and factually sufficient, and that this point should be and is overruled.

Appellant cites no cases considered factually in point in its favor. Appellee cites several cases as factually supporting its position. Since the facts of these cases differ from those found here, a review of them would not be fruitful.

The sixth point of appellant is that the trial court erred in finding that prior compensable injuries sustained by appellee did not contribute to his present disability because such finding was not supported by any evidence and was against the great weight and preponderance of the evidence so as to be clearly wrong and unjust.

Appellee testified that he had sustained a back injury in 1958, that he received medical treatment for it but was not compensated under the Workmen’s Compensation Law for it. He next sustained an injury to his back in 1959. He received medical treatment for this injury. His claim before the Industrial Accident Board was settled after he had not worked for four or five months. He next was injured in 1961, received medical treatment, did not work for three or four months and settled his claim for workmen’s compensation benefits. He then worked for six months prior to another injury to his back in March, 1964. He received medical treatment for this injury, did not work for one year and settled his claim for workmen’s compensation benefits. He commenced working for the Cecil Ruby Company in May, 1965 and sustained the injury involved in this suit on September 14, 1965, while in the same employments

Appellee testified that he had worn back braces after his previous injuries but not the chair type brace he was now wearing.

Dr. Maurice Jacobs testified that appel-lee had complained of the same low back area when he treated him following injuries prior to the September, 1965 injury..

We quote the following testimony of Dr. Ross:

“Q Now, I believe you said awhile-ago that whenever you have am injury to a muscle or a joint that that creates an arthritic condition that remains the rest of their life?
A Yes, sir.
Q Now, this man had these series of injuries in this very same area that he had had this bad back, he has been treated for it, and he has collected money for it; now, each one of those occasions, if they occurred, created an arthritic condition that continued from then on, didn’t it?
A Only if it involved the joints.
Q Right. Well, if there were similar claims based on these same symptoms, it would be working on the same parts of the body, and would have created these same arthritic conditions in the very same places involved in this action?
A If it involved the joint, yes, sir.
Q And if it was a complaint caused by lifting something, hurting his back, it would have created a condition each time that projected itself permanently into the future?
A Yes, sir.
Q You say that that doesn’t contribute at all to his present condition?
A I said it contributes to his potential; in other words, the fact that he has an unstable back does—
Q I am talking about this arthritic condition that has set up, this inflammatory reaction of the joints.
A Well, I have no way of knowing whether he had an injury of the joints preceding this present injury. In fact, it would be most difficult to say that he has an injury of the joint at this time categorically, although it is presumed with the severity of his symptoms and the prolonged history that he gives that the injury is most likely involved. And, therefore, if the injury does extend into the joint, then he does have an arthritic condition of that joint which will be permanent.
And that could very well have been the case in the prior injuries? a
Have no way of knowing. I didn’t see him then. >
Y.ou just don’t know ? iO
That’s right. * * * >
Now, assuming this man had substantially the same symptoms on all these other occasions, if he had torn ligaments on these other three occasions, that would have created a permanent condition— O
Yes, sir. >
—that might have contributed to his problem at this time? o
It would contribute to his weakness, but not his present incapacity.
But would contribute to the permanency of his present condition ? a
Well, yes, I think you could say that, but not to his — I don’t think you could even say that. >
Well now,— o
Because I have no way of knowing how severe his previous injuries were. Apparently they weren’t too severe because he recovered. * * >
He has been out over a year this time. >
Right. a
So this would indicate some increased severity of this injury over the preceding injury. <
Well, isn’t that severity a result probably of the previous permanent damage that might have occurred to him? a
A It is possible.
Q It is possible. So you can’t say then categorically that this particular injury or transaction is the sole cause of his present permanent condition, can you?
A Yes, I can.
Q Well, you just said it was possible—
A No.
Q —that these others contributed to the permanency of his present condition.
A No; no. We are talking about two different things. You are talking about the structural condition, and I am talking about the newly acquired ligamentous condition.
Q Well, now, those ligaments could have been torn and strained in these other accidents, couldn’t they?
A Sure; he could have broken his toe in these other accidents, too, but that has nothing to do with his present injury.
Q But that contributes to the permanency of it, doesn’t it?
A No, sir.
Q No?
A No, sir. It contributes to the condi-of his back prior to his present injury, but not to the permanency of it. In other words, the permanency of his condition at this time is related to the permanency of the injury at this time. The permanency of the injury before has contributed to the permanency of his condition before he sustained his injury. He did recover before.
Q You are saying that his previous injuries or claimed injuries wouldn’t contribute at all to the continuation of the muscle spasm and the pain that he claims now exists?
A That is correct. * * *
Q If I follow you correctly then, this prior history of injury in this very same locality of his back was of no concern or interest to you whatever in making your diagnosis ?
A That is correct.
Q And you didn’t even consider that in making your diagnosis of the man?
A That is correct.
Q And you don’t consider that any of those could have had any contributing cause to the present condition man suffers from?
A It contributed to his instability, but not to his present incapacity; that is correct. * * *
Q Well, let’s go into this matter of structural instability. I believe you weren’t willing to say whether that was congenital or what it was; is that correct — did I hear you right?
A. Yes, I said that it could be argued that it is a congenital condition or that it is an acquired condition, but to be acquired it would not be considered as developing from one acute episode of injury.
Q What is your best judgment on it — is it congenital or acquired?
A Well, I don’t think it is really material about whether the fellow was born with this or whether he developed it because of doing heavy work over his thirty-three years of existence. I do know the x-rays show it is present, and this is the only thing that concerns me; the fact that the x-rays indicate this, the symptoms indicate that he has an injured condition in his back on the 4th of February when I first saw him, and the history he relates is the fact that his symptoms started the 14th of September, 1965.
Q All right. Then, I take it that this structural instability was present at the time of the injury and didn’t in your opinion contribute to any degree to the injury or the possibility of the injury?
A It contributed to the weakened condition of the spine, but it did not— it was not the cause of his present incapacity, no, sir.
Q It doesn’t have any effect on his present incapacity?
A I don’t understand what you mean by the—
Q The structural instability, does that have anything to do with the man’s sore back at the present time and his complaint that his back hurts ■ him?
A His injury is the reason that his back is hurting.
Q The injury was not caused in any respect and not influenced by the structural instability ?
A I think you can say that it was influenced, but not caused by it.”

In discussing point five, we set out the testimony of Dr. Julian to the effect that he could not rule out with certainty that the effect of a chronic sprain would disable a person so that he could not do the type of work which appellee was doing when injured last.

Appellant cites us to no medical testimony to the effect that the prior injuries appellee sustained contributed to his present disability. The most that the medical testimony of doctors testifying for appellant shows is that appellee had an unstable back which made him more susceptible to back injury. In fact, Dr. Jacobs testified, supra, that any disability which ap-pellee has after September 14, 1965, would be attributed to any injury then sustained.

Appellant asserts that the findings of the trial court in this respect constitute a travesty on justice in that appellee has been paid for two or more compensable claims resulting from injuries to his back. Whatever merit there may be in this assertion is of an equitable rather than a legal nature. The Workmen’s Compensation Law is -purely'1 Statutory."''No doubt, at times, its operation is deemed inequitable both by the employer and the employee. With these complaints, we are not judicially concerned. Our duty is to enforce the Act as written.

The evidence to support the findings, attacked here, in our opinion, preponderates in support of the findings of the trial court, and we, therefore, have no authority to disturb them. Point six is overruled.

Appellant’s point seven is that the trial court erred in finding that appellee’s prior physical condition was not the sole cause of his disability, because there was no evidence to support such finding and it was against the great weight and preponderance of the evidence as to be clearly wrong and unjust.

Drs. Julian and Jacobs testified and the trial court found that appellee had an unstable back and that this was a congenital condition.

Appellant contends that appellee should have pleaded and proved and the trial court should have found that this congenital condition of appellee was aggravated by the injury complained of before he was entitled to recover in this case.

The trial court found that the prior physical condition of appellee was not the sole cause of his present disability.

The trial court made no finding with respect to aggravation of appellee’s infirmity, nor would this have been appropriate since there was neither pleading nor proof of aggravation. •

We quote from Texas Jurisprudence 2d Vol. 62 Sec. 109, Workmen’s Compensation, the law, as we understand it to be, which fully answers the contention of appellant:

“If a protected employee sustains an accidental injury of the character defined in the law and from which disability or death results, the injury is compensable even though the employee was at the time suffering from some disease or infirmity that rendered him more susceptible to such an injury or that aggravated or enhanced its effect. In other words, if there is a real injury, the background of the employee’s peculiarities will not defeat compensation for it. The employer accepts the employee subject to the latter’s condition when he enters the employment, and it is no defense to a claim for compensation that the injury would not have been as great, or that death would not have occurred, if the employee had been in a healthy condition. * * *
A claimant is precluded from recovery if the disability or death for which compensation is sought was not the direct result of the injury but was solely caused by a pre-existing disease or idiopathic condition.”

Many cases are cited to sustain the text including Sowell v. Travelers Insurance Co., 374 S.W.2d 412, Tex.Sup.Ct.

See also Texas Employers’ Ins. Co. Association v. Beard, 390 S.W.2d 59, Tex.Civ.App. Fort Worth, writ ref. n.r.e. where it is stated:

“In order for a prior or existing disease, impairment or condition to constitute a defense to a claim for compensation it must be established that such prior or existing disease, impairment or condition or some combination thereof standing alone is the sole cause of the the incapacity. Otherwise stated, it must be shown that such prior or existing disease, impairment or condition or combination thereof is disassociated or disconnected with and not aggravated by the injury or incapacity upon which the claim for compensation is based.
The appellant Insurance Company must plead such matter as a sole cause defense and secure favorable findings thereon. The burden of proving the negative of the sole cause issue is upon the claimant.”

Appellant cites the case of Whitten v. Liberty Mutual Insurance Co., 257 F.2d 699 (5th Circuit) as holding that compensation benefits under the Texas law cannot be recovered where there is no evidence that the injury aggravated a prior condition, and as being directly in point here. As we understand this case, it merely holds that causation between the death of the employee and his employment was not shown since there was no evidence that his over exertion metastasized cancer of the prostate and was a producing cause of death as claimed.

We overrule point seven.

Point eight is that the trial court erred in admitting into evidence the typewritten reports of Dr. Ross made by him regarding the physical condition of appellee. The objection was that the reports were hearsay.

In arguing this point, appellant states, “Since apparently this was the only medical testimony upon which the court could rely in making any finding of fact of total and permanent disability, the finding was obviously in error since it was based upon incompetent evidence.”

The reports of Dr. Ross were made by him shortly after each examination made by him of appellee. Some of the reports are quite lengthy. Dr. Ross testified that the reports were true and correct. Appellant had the opportunity to cross examine Dr. Ross about these reports. It did cross examine Dr. Ross.

The objection to the reports was a general objection that they were hearsay. If any portion of the reports was admissible as an exception to the hearsay rule, then a general objection to the reports in their entirety was properly overruled.

We are of the opinion that these reports of Dr. Ross fall within the purview of Art. 3737e, V.T.C.S., and were generally admissible. Goshorn v. Hattman, 387 S.W.2d 422, Tex.Civ.App. Beaumont, writ ref. n.r.e. If, as appellant contends, some portion of these records was inadmissible under the decision of the Supreme Court in Loper v. Andrews, 404 S.W.2d 300, then it was incumbent upon appellant to isolate such portion and specifically object to it.

Furthermore, the evidence recited in this opinion refutes the statement of appellant that dehors these reports there was no evidence that appellee was totally and permanently disabled. The point is overruled.

Point nine is that the trial court erred in refusing to admit in evidence two exhibits offered for impeachment purposes.

One exhibit is a letter signed by John E. Morris and by E. B. Fuller, attorney. It is a letter dated November 27, 1959, reciting that while he, appellee, was in the employ of Bob King’s Humble Station and that about October 8, 1959, in the course of his employment he was helping to move a small car which was on the grease rack and about to fall. In assisting, he injured his back. It also states that the Bob King’s Humble Insurance Company contends that there is a question as to whether or not he sustained an injury of any kind and that if he did, it was minor and would not result in permanent disability and that there was a possibility that the injury and disability of which he complained was congenital.

While testifying in this case, appellee was asked whether on October 8, 1959, if he didn’t claim that he injured his back while working for King’s Humble Service Station while holding a small car on a grease rack. He answered that he did hold a small car on the grease rack and that he thought that he filed a claim and he knows that he injured his back at that time. He stated that the signature on exhibit “1” looked like his signature. That it was the claim that he had filed with the Industrial Accident Board. It was received in evidence as Defendant’s exhibit “1.”

Appellee also testified that he went to Dr. Jacobs at that time but he did not remember if Dr. Jacobs told him that he had a congenital back condition. He acknowledged that he employed Mr. E. B. Fuller to represent him.

Appellant’s counsel stated that he was offering this exhibit for impeachment, saying: “I asked him about what Dr. Jacobs told him about his back and so forth, and that is in here, and I will read it to you or let you read it first.” Portions of it were read in evidence, but upon the instrument being offered in evidence, the court sustained the objection. There was no statement in the instrument made by Dr. Maurice Jacobs.

Appellant states that this letter was offered to impeach appellee regarding “what the doctors had told him about his prior back condition, and that it was congenital.”

There is nothing in this exhibit to impeach appellee on this subject. No error was committed in excluding this proffered evidence.

The other proffered and excluded exhibit was a copy of an instrument providing for settlement for $500.00 of a previous compensation claim made by appellee for an injury while working for “Big Bear.” The record shows that appellee had made such a claim and that it had been settled. When asked whether he received $500.00 as settlement, appellee answered, “I don’t think I did, I don’t know it was that much.”

Evidence of the amount received in settlement of a prior workmen’s compensation claim is not admissible in a workmen’s compensation case. St. Paul Fire and Marine Insurance Co. v. Murphree, 163 Tex. 534, 357 S.W.2d 744. It is not permissible to impeach a witness on immaterial or inadmissible matters. Point nine is overruled.

The judgment of the trial court is affirmed.

Affirmed.


author: PHILLIPS, Chief Justice.

text:
    Don HARRISON et al., Appellants, v. Arthur L. BUNNELL et al., Appellees.
    No. 11543.
    Court of Civil Appeals of Texas. Austin.
    Nov. 8, 1967.

      Maynard F. Robinson, San Antonio, Morgan, Gambill & Owen, Cecil A. Morgan, Fort Worth, for appellants.
    Crawford C. Martin, Atty. Gen., George M. Cowden, First Asst. Atty. Gen., A. J. Carubbi, Jr., Staff Legal Asst. Atty. Gen., J. C. Davis and Pat Bailey, Asst. Attys. Gen., Austin, Saner, Jack, Sallinger & Nichols, H. Louis Nichols, Dallas, Eugene Russell, Burnet, for appellees.
   PHILLIPS, Chief Justice.

This is a suit for declaratory judgment under the provisions of Tex.Rev.Civ.Stat. Ann. art. 2524-1. The plaintiffs below, and the appellants here are Don Harrison, Wallace Robinson and Claude Blackburn, residents of Burnet County, Texas, and Lewis A. Foley, a resident of Harris County, Texas.

The defendants are Arthur L. Bunnell, Mayor of the Town of Granite Shoals, O. T. Caldwell and Guy C. Holder, Commissioners of the Town of Granite Shoals, Tom O’Donnell, County Judge of Burnet County, Texas and Crawford Martin, Attorney General of the State of Texas.

The appellants sought a determination that the action of'the abovenamed County Judge in calling an election on May 9, 1966, for the incorporation of the Town of Granite Shoals, was arbitrary, capricious and void. That the abovenamed Mayor and Commissioners of the Town of Granite Shoals are not its officials, and that the incorporation of the Town of Granite Shoals as a municipality, pursuant to the election held on May 9, 1966, is void.

The trial court sustained special exceptions directed toward appellants’ pleadings, namely, the jurisdiction of the court, that the Uniform Declaratory Judgment Act, Tex.Rev.Civ.Stat.Ann. art. 2524-1 was not the proper proceeding with which to bring this lawsuit, and that the suit against the Attorney General was a suit against the State of Texas without the necessary permission having first been obtained. Since appellants declined to amend, the court dismissed the suit.

We affirm the judgment of the trial court.

Appellants are before this Court with three points of error, briefed together, namely, the error of the court in sustaining pleas to its jurisdiction, in sustaining the pleas in abatement that the Uniform Declaratory Judgment Act was an improper action in suit, that the lawsuit was a suit against the State of Texas of a nature that consent of the State was a necessary condition precedent to legal action sought.

We overrule these points.

This is not a quo warranto proceeding, since the suit was not brought in the name of the State of Texas by either the Attorney General or other officials authorized to bring such suit. This is a collateral attack against the action of the abovenamed officials in ordering the election in question. Phillips v. City of Odessa, 287 S.W.2d 518 (Tex.Civ.App., El Paso 1956, writ ref’d n. r. e.), City of Gladewater v. Pelphrey, 309 S.W.2d 472 (Tex.Civ.App., Texarkana 1957, writ ref’d n. r. e.).

Consequently, this case is controlled by the opinion of the Supreme Court in School Board of City of Marshall v. State of Texas, 162 Tex. 9, 343 S.W.2d 247, (1961), wherein the Court stated:

“It is settled that where the Legislature expressly or impliedly authorizes some officer or board to determine a question of fact prior to the ordering of an election for the creation of a political entity or for changing the boundaries of one already in existence without providing for a review of such preliminary finding, the administrative determination of that question is intended to be final. The finding when made is not subject to collateral attack and can be set aside in a direct proceeding only on the ground of fraud or bad faith.” (Citing cases)

Thus, the suit at bar was not properly brought even though the action of certain defendants was alleged to be arbitrary, capricious and unreasonable in ascertaining that the Town of Granite Shoals had 200 or more inhabitants as is required by Tex.Rev.Civ.Stat.Ann. art. 1133.

The rationale for this holding is that the exercise of governmental authority over the system established for the administration of public affairs throughout the State is a legislative matter.

The suit against the Attorney General was brought against him in his official capacity as Attorney General, apparently to seek a declaration by the trial court that his conduct in failing to commence a quo war-ranto proceeding was arbitrary, capricious and unreasonable. We hold that this action against the Attorney General is a suit against the State of Texas inasmuch as it was, apparently, an attempt to control his actions while he was acting within the scope of authority lawfully conferred upon him. Short v. W. T. Carter & Brothers, 133 Tex. 202, 126 S.W.2d 953 (1938); W. D. Haden Company v. Dodgen, 158 Tex. 74, 308 S.W.2d 838 (1958).

The judgment of the trial court is affirmed.

Affirmed.

      . “Art. 1133. [1033] [579] [506] May be incorporated
      When a town or village contains more than two hundred (200) and less than ten thousand (10,000) inhabitants, it may be incorporated as a town or village in the manner prescribed in Chapter 11, Title 28, of the Revised Civil Statutes of Texas, 1925, and all amendments thereto. Acts 1881, p. 63; G.L. vol. 9, p. 155; Acts 1897, p. 193; G.L. vol. 10, p. 1247; Acts 1915, p. 130; Acts 1941, 47th Leg., p. 68, eh. 55.”


author: COLEMAN, Justice.

text:
    BELL OIL & GAS COMPANY, Appellant, v. ALLIED CHEMICAL CORPORATION, Appellee.
    No. 15115.
    Court of Civil Appeals of Texas. Houston (1st Dist.).
    Nov. 2, 1967.
    Rehearing Denied Nov. 30, 1967.

      Bass C. Wallace, Houston, Andrews, Kurth, Campbell & Jones, Houston, of counsel, for appellant.
    B. Jeff Crane, Jr., Theodore Crowell, Houston, Vinson, Elkins, Weems & Searls, Houston, of counsel, for appellee.
   COLEMAN, Justice.

This is a suit for debt. The principal question involved is the liability of appellant for debts incurred by an affiliated corporation and a subsidiary corporation.

Allied Chemical Corporation sued Mid-Tex Development Company, Apollo Oil Company, Lubell & Company, a partnership, and Bell Oil & Gas Company, to recover damages measured by the total of certain unpaid invoices on open account sales of gasoline and other petroleum products to Mid-Tex and Apollo. Prior to trial Lubell & Company was voluntarily dismissed.

Upon trial to the court without a jury, judgment was rendered and entered for Allied Chemical against Mid-Tex in the sum of $62,877.13, plus interest, and against Apollo in the sum of $33,251.38, plus interest. Judgment was also rendered and entered, jointly and severally, against Bell Oil in the sum of those amounts. Only Bell Oil has appealed.

By appropriate points of error appellant contends that neither the pleadings nor the proof support the judgment entered; that there is no evidence that appellant acted as the alter ego of Mid-Tex or Apollo; and that such findings are contrary to the great weight and preponderance of the evidence.

The trial court filed findings of fact and conclusions of law, in addition to certain findings of fact and conclusions of law set out in the judgment. The findings contained in the judgment read:

“At the time material hereto Bell Oil & Gas Company was interested in the continued operation of Mid-Tex Development Company and Apollo Oil Company because of the interlocking ownership, because of the debt owed to Bell Oil & Gas Company by Mid-Tex Development, Inc., and because of its lease with Oriole Oil Company and its subleases to Mid-Tex Development Company; that Bell Oil & Gas Company was interested for .those reasons in having gasoline and oil supplied to Mid-Tex Development Company and Apollo Oil Company and the extension of credit to Mid-Tex Development Company and Apollo Oil Company by Allied Chemical Company and its Union of Texas Petroleum Division; that Bell Oil & Gas Company paid 70% of the salary of Mr. Harry Jenkins who was an employee of Bell Oil & Gas Company at the time he was also an officer of Mid-Tex Development Company; that Mr. Herbert Rothstein did represent to Mr. J. W. Love in the May, 1962 long distance telephone conversation, Mr. Love then being Credit Manager for Texas Gas Corporation, that Bell Oil & Gas Company would protect Texas Gas Corporation in return for its extending credit to Mid-Tex Development Company and thereby induced Texas Gas Corporation to extend continued credit to Mid-Tex Development Company; that Lubell and Company and Bell Oil & Gas Company so used their respective stock ownership of Mid-Tex Development Company and Apollo Oil Company as to make those companies a mere agent, representative, adjunct, device, stooge or dummy through which Bell Oil & Gas Company in fact engaged in the retail distribution of oil and gasoline in Texas; that such representation by Mr. Rothstein to Mr. Love as above stated to induce Texas Gas Corporation to extend credit to Mid-Tex Development Company was made to Texas Gas Corporation and that such corporation alone was entitled to rely on such representation in extending credit to Mid-Tex Development Company and that Allied Chemical Corporation, as such, had no knowledge of such representation and was not entitled to rely thereon; that no conspiracy or joint venture was existent as between or among any of the defendants; that there has been no fraud practiced by any of defendants against the plaintiff; that Mid-Tex Development Company and Bell Oil & Gas Company are indebted to Allied Chemical Company in the amount of Sixty-Two Thousand Eight Hundred Seventy-Seven and .13/100 Dollars ($62,877.13), and that Apollo Oil Company and Bell Oil & Gas Company are indebted to Allied Chemical Company in the amount of Thirty-Three Thousand Two Hundred Fifty-One and .38/100 Dollars ($33,-251.38); * * *”

On request, additional findings were filed:

“1. That Bell Oil & Gas Company made no written agreement to pay Allied Chemical Corporation, directly or indirectly, for petroleum products furnished or to be furnished by Allied Chemical to Mid-Tex Development, Inc. or Apollo Oil Company.
“2. That the only written agreements covering the sales of petroleum products by Allied Chemical Corp. to Mid-Tex Development, Inc. or Apollo Oil Co. are contained in Defendant’s Exhibits Nos. 5 and 6, introduced at trial.
“3. That there was no agreement made orally modifying the terms of the written agreements as contained in said Defendant’s Exhibits Nos. 5 and 6.
“4. That any statement or representation made by Mr. Rothstein to Mr. Love regarding the payment of the Mid-Tex account to Texas Gas Corporation was made to Texas Gas Corporation only and it alone was entitled to rely on any such representation.
“5. That at the time Allied Chemical Corporation acquired the principal assets of Texas Gas Corporation the account of Mid-Tex Development, Inc. with Texas Gas Corporation was current.
“6. That Lubell & Company was a limited partnership which owned a majority of the stock of Mid-Tex Development, Inc. during the time material to the suit in question.
“7. That Bell Oil & Gas Co. never owned any stock in Mid-Tex Development, Inc.
“8. That prior to making any sales of petroleum products to Apollo Oil Company by Allied Chemical Corporation the latter was advised through Mr. Love, its Credit Manager, by Bell Oil & Gas Company that it was not responsible for and would not pay or guarantee the payment of the account of Mid-Tex Development, Inc.
“9. That no sales of petroleum products were made to Apollo Oil Company by Allied Chemical Corporation until after the time that Bell Oil & Gas Company had refused to pay or guarantee the payment of the account of Mid-Tex Development, Inc.
‘TO. That Bell Oil & Gas Company was a substantial creditor of Mid-Tex Development, Inc. during the years material to the suit in question.
“11. That during the twelve month period from June 1, 1963 to May 31, 1964 on sales of petroleum products by Allied Chemical Corporation to Mid-Tex Development, Inc. the latter paid a total of approximately $475,000.00 to Allied Chemical on such sales.
“12. That no demands or requests for payment of the Mid-Tex account were made by Allied Chemical Corporation to Bell Oil & Gas Company until the long distance telephone calls of Mr. Love of Allied Chemical to Mr. Lubell and Mr. Rothstein in April, 1964.
“13. That the majority of the unpaid portion of the Mid-Tex account and all of the Apollo account were incurred after the telephone conversation between Mr. Love and Mr. Lubell in April, 1964.
“14. That Allied Chemical Corporation never sent any bills or statements or made any written demands on Bell Oil & Gas Company to pay the accounts of Mid-Tex Development, Inc. or Apollo Oil Company other than a letter from Mr. Love to Mr. Rothstein introduced at trial as Plaintiff’s Exhibit No. 1.
“15. That during the period of time that Allied Chemical Corporation sold petroleum products to Mid-Tex Development, Inc. and subsequently to Apollo Oil Company, the Defendant, Bell Oil & Gas Company, received no payments or credits from Mid-Tex Development, Inc. on its indebtedness owed to Bell Oil & Gas Company.
“16. That Bell Oil & Gas Company did not misrepresent to Allied Chemical Corporation its corporate structure or its relationship with Mid-Tex Development, Inc. or Apollo Oil Company.
“17. That Allied Chemical Corporation did not learn the corporate relationship between Bell Oil & Gas Company and Apollo Oil Company until after Allied Chemical had made all the sales of petroleum products to Apollo Oil Company which are the basis of this suit as to Apollo.
“18. That Bell Oil & Gas Company did not conspire with Mid-Tex Development, Inc. or Apollo Oil Company to induce sales by Allied Chemical Corporation to Mid-Tex or Apollo.
“19. That Bell Oil & Gas Company did not exercise joint operation and control with Mid-Tex Development, Inc. or Apollo Oil Company in their respective business operations.
“20. That the day to day business and business records of Bell Oil & Gas Company were kept separate from that of Mid-Tex Development, Inc. and Apollo Oil Company.
“21. That the Board of Directors’ meetings and Stockholders’ meetings of Bell Oil & Gas Company were not held jointly or at the same time or place with Mid-Tex Development, Inc. or Apollo Oil Company.
“22. That neither Mid-Tex Development, Inc. nor Apollo Oil Company represented to Allied Chemical Corporation that it was a subsidiary or division of Bell Oil & Gas Company.”

Defendant’s Exhibits 5 and 6 referred to in the court’s findings of fact were contracts dated April 8, 1963, and June 6, 1963, between Allied Chemical and Mid-Tex, whereby Mid-Tex agreed to buy all of the gasoline for certain service stations at specified prices from Allied Chemical. Allied Chemical agreed to furnish paint and equipment needed to brand the stations with the Allied Chemical’s Tex-Gas color scheme and to furnish equipment to initiate a credit card system.

The only finding directly attacked by a point of error is that portion of the judgment reading:

“ * * * that Lubell and Company and Bell Oil & Gas Company so used their respective stock ownership of Mid-Tex Development Company and Apollo Oil Company as to make those companies a mere agent, representative, adjunct, device, stooge or dummy through which Bell Oil & Gas Company in fact engaged in the retail distribution of oil and gasoline in Texas; * *

Mid-Tex Development Company was organized in Texas in 1956 with a capitalization of $1,000.00, the stock being owned one-half by Lubell & Company, a limited partnership of Tulsa, Oklahoma, and one-half by Harry K. Webb, Jr., of Dallas, Texas. The directors were Herbert Roth* stein and Benedict Lubell (partners in Lubell & Company), Harry K. Webb, Jr. and Ralph Pulley. Webb was already engaged in the gasoline marketing business. Mid-Tex did not become active until 1958 or 1959, when its capitalization was raised to $5,000.00 and the ownership changed to 51% to Lubell & Company, 48% to Webb, and 1% to Pulley. The original officers were Harry K. Webb, Jr., as president, Harry C. Jenkins as vice president, Ralph Pulley as secretary-treasurer, Benedict Lubell as assistant treasurer, and Herbert Rothstein as assistant secretary. Mid-Tex had its office in Dallas and engaged in the retail marketing of gasoline through service station outlets in Nebraska, Missouri, Oklahoma, Arkansas, and Texas.

Bell Oil was incorporated in Oklahoma and is in the business of refining and marketing gasoline and petroleum products. It does no business in Texas under its own name, but operates a chain of retail gasoline stations through its wholly owned subsidiary, Bell Stations, Inc. During the period material to this suit, two of the principal officers of Bell Oil were Benedict Lubell and Herbert Rothstein. A majority of the common stock of Bell Oil was owned by the partners in Lubell & Company.

Herbert Rothstein was a director and the assistant secretary of Mid-Tex, a partner in Lubell & Company, and vice president of Bell Oil. Benedict Lubell was a partner in Lubell & Company, the executive vice president of Bell Oil, and a director and assistant treasurer of Mid-Tex.

After Mid-Tex became operative, most of its petroleum products were purchased from Bell Oil. Prior to 1961 the volume of its business had increased to the point that its monthly purchases were in the vicinity of $400,000.00. In 1961 Harry Webb, the operating manager of the business, disappeared, leaving his indorsed stock certificates on his desk indorsed in blank. Nothing was done about the certificates except to put them in a safe place. Mr. Pulley’s certificate was also acquired. The offices vacated by Mr. Webb and Mr. Pulley were not filled. In 1963 Mr. Jenkins was elected president of Mid-Tex, but no new directors were elected.

After Webb disappeared, an audit of the books of Mid-Tex revealed a very large shortage in its accounts. At this time Mid-Tex owed Bell Oil $1,000,000.00 on open account for gasoline sales. While it is apparent that the corporation was insolvent, Bell took no action against Mid-Tex. Harry K. Jenkins undertook to operate Mid-Tex, receiving his instructions from Mr. Rothstein. Mr. Rothstein became the only one authorized to sign checks for Mid-Tex. Mr. Jenkins had been a sales representative of Bell Oil in Oklahoma. When he moved to Texas to become active in Mid-Tex, Bell Oil continued to pay $700.00 on his salary. Mid-Tex paid him $300.00. Mr. Jenkins was originally sent to Texas to look after Bell Oil’s interest in Mid-Tex because of the large debt outstanding.

There was testimony that the purpose of continuing to operate Mid-Tex was to pay the debt to Bell Oil. In 1961 Mid-Tex sold its service station equipment to Oriole Oil Company for $1,000,000.00, and at least $496,029.00 of this money was paid to Bell Oil on its account. Oriole Oil Company is an Oklahoma corporation. The officers, directors, and stockholders of this corporation were the partners, associates, and their wives of the Oklahoma law firm who for many years had represented Lubell & Company, Bell Oil, and its subsidiaries. Oriole borrowed substantially all of the money required to make this investment. Oriole leased the stations to Bell Oil on a long-term lease. Bell, in turn, subleased back to Mid-Tex. The lease payments were about $12,000.00 per month. There was an option to Lubell & Company or Bell Oil to purchase the stations at the end of the ten year term.

Thereafter the debt owed by Mid-Tex to Bell Oil increased because of failure to make rental payments. Under instructions from Mr. Rothstein, Mid-Tex assigned its stations in north Texas to Bell Stations, Inc. and moved its headquarters to San Antonio.

In May, 1962, Mid-Tex sought to buy petroleum products from Texas Gas Corporation. The credit manager, J. W. Love, refused to approve their application. After talking to the Texas Gas sales manager, Mr. Love called Bell Oil in Tulsa and asked to speak to Mr. Lubell, but was referred to Mr. Rothstein. Mr. Love testified that Mr. Rothstein told him that Bell Oil and Gas would see to it that if they sold to Mid-Tex on credit, their invoices would be paid. Texas Gas sold petroleum products to Mid-Tex on open account thereafter. The invoices were promptly paid by checks signed by Mr. Rothstein. Texas Gas sold its assets to Allied Chemical as of December 31, 1962. At that time the Mid-Tex account was up to date.

By May, 1962, the leases on all the stations except those in Texas had been transferred to Bell Stations, Inc., on the instructions of Mr. Rothstein because Mid-Tex had not paid the rentals.

In 1964 Apollo Oil was incorporated with Bell Oil owning all the capital stock. It was organized to operate service stations. The former employees, or officers, of Mid-Tex, Harry Jenkins, John E. Kirkpatrick, and Clyde E. Crawford, became the officers and directors of Apollo. All of the stations operated by Apollo were transferred to it by Mid-Tex. The capitalization of Apollo was $1,000.00. The only consideration paid to Mid-Tex was the invoice price of the petroleum products on hand. Later when Apollo was unable to operate the stations profitably, they were transferred to Bell Stations, Inc.

After the disappearance of Mr. Webb, apparently there were no meetings of the Board of Directors of Mid-Tex. There were only two members of the Board other than Webb and Pulley. The affairs of the corporation were handled by Rothstein. The only reason for its continued existence was to pay its obligation to Bell Oil.

Both Mid-Tex and Apollo used the insignia of Bell Stations, Inc. when it was convenient to do so although there was no written or oral agreement permitting this arrangement.

All of the billing or invoicing by Allied Chemical for its sales to Mid-Tex, and later to Apollo, went to these companies, and not to Bell Oil. In 1963 Mid-Tex began to get behind in its payments to Allied Chemical. Mr. Love, the credit manager, had left the employment of Texas Gas, but returned to Allied Chemical in June, 1963. At that time Mid-Tex owed Allied Chemical $80,-000.00 to $90,000.00. Allied Chemical continued to supply Mid-Tex until June, 1964, when the balance was $62,877.13. In April, 1964, Mr. Love called Lubell and Rothstein in Tulsa about the accounts. Bell Oil refused to pay the accounts and denied any responsibility for the account.

All of the money generated by Mid-Tex, and subsequently by Apollo, was used to pay salaries, utility bills, ad valorem taxes, ground rents of the stations, and the suppliers of gasoline. It must be noted, however, that Bell Oil was primarily liable for the ground rents. While Apollo paid Mid-Tex $20,000.00 for the petroleum products on hand when the stations were transferred to it, and Mid-Tex paid the $20,000.00 to Allied Chemical on the open account debt, this money was generated through the sale of the products purchased. Apollo also purchased gasoline from Allied Chemical in the total sum of $33,251.38, and made no payments on this account. Mr. Lubell testified that Apollo paid Bell $26,215.00 in May, 1965, for equipment rental.

In the petition on which the case went to trial, Allied Chemical alleged liability on the part of Bell Oil alternatively under theories of joint venture, conspiracy and sham (alter ego). The trial court found that there was no conspiracy or joint venture. The judgment necessarily rests on the finding that “Lubell & Company and Bell Oil & Gas Company so used their respective stock ownership of Mid-Tex Development Company and Apollo Oil Company as to make these companies a mere agent, representative, adjunct, device, stooge or dummy, through which Bell Oil & Gas Company in fact engaged in retail distribution of oil and gasoline in Texas.” The trial court found that none of the defendants had practiced any fraud against Allied Chemical and that neither Mid-Tex nor Apollo was used to justify a wrong as to Allied Chemical.

In Continental Supply Co. v. Forrest E. Gilmore Co. of Texas, 55 S.W.2d 622 (Tex.Civ.App., Amarillo 1932, writ dism.), the court said:

“The legal fiction of the separate entities of two corporations, the stock of which is owned by the same parties, should be disregarded when necessary for the prevention of fraud or to protect the legal rights of third parties. Upon ascertainment of all the facts, it is the prerogative of the court and not the jury to look through the forms to the substance of the relations existing between the corporations. Williams v. Freeport Sulphur Company (Tex.Civ.App.) 40 S.W.(2d) 817; Oriental Investment Co. v. Barclay, 25 Tex.Civ.App. 543, 64 S.W. 80; Buie v. Chicago, etc., Ry., 95 Tex. 51, 65 S.W. 27, 55 L.R.A. 861; Fowler v. Small (Tex.Civ.App.) 244 S.W. 1096, 1097; O’Neal v. Jones (Tex.Civ.App.) 34 S.W.(2d) 689; 14 C.J. 61, § 22; Id. 62, § 25; 10 Tex.Jur. 648, § 49.
“Upon ascertainment of the facts, the courts will disregard the fiction of corporate entity where the fiction (1) is used as a means of perpetrating fraud; (2) where a corporation is organized and operated as a mere tool or business conduit of another corporation; (3) where the corporate fiction is resorted to as a means of evading an existing legal obligation; (4) where the corporate fiction is employed to achieve or perpetrate monopoly; (5) where the corporate fiction is used to circumvent a statute; and (6) where the corporate fiction is relied upon as a protection of crime or to justify wrong.”

These paragraphs of the opinion were quoted with approval in Pacific American Gasoline Co. of Texas v. Miller, 76 S.W.2d 833 (Tex.Civ.App., Amarillo 1934, writ ref.).

In Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340 (1955), the Court said:

“Courts will not disregard the corporation fiction and hold individual officers, directors or stockholders liable on the obligations of a corporation except where it appears that the individuals are using the corporate entity as a sham to perpetrate a fraud, to avoid personal liability, avoid the effect of a statute, or in a few other exceptional situations. Hildebrand on Corporations, Vol. 1, sec. 5, pp. 31-44; 18 C.J.S., Corporations, §§ 6 and 7, pp. 376-385; 13 Am.Jur. pp. 160-163, Corporations, sec. 7 and 8.”

Dean Ira P. Hildebrand, in the work cited above (Hildebrand on Corporations, Vol. 1, Sec. 5, pp. 32-35), says:

“But whatever name may be given to this legal concept, as a practical matter a corporation is in reality an association of persons, and no judicial dictum or legislative enactment can alter this fact. The conception of corporate entity was given to this group of persons for a purpose, as a formula for working out the rights of real parties in interest, and for convenience in making contracts, in the acquisition of property, and to preserve limited liability of stockholders. Since a corporation is looked upon as a legal entity for a purpose, when that purpose is abused, a court is under no duty to continue to regard the corporate entity, and may consider the corporation as an aggregate of persons.
“As Professor Ballantine suggests, the problem of responsibility of acts of a corporation or stockholders is to be solved not by disregarding the corporate entity, but by a study of the just limitations on the exercise of the legal privileges of separate capacity.
“Where a corporation is organized and used for legitimate business purposes, it will be looked to as a separate legal entity, but courts will not sanction its use in such instances where the rights of innocent parties will be defeated.
“Professor Wormser gives the nearest approach to a generalization that is available as to when the concept of corporate entity should be ignored: ‘When the conception of corporate entity is employed to defraud creditors, to evade an existing obligation, to circumvent a statute, to achieve or perpetuate monopoly, or to protect knavery or crime, the courts will draw aside the web of entity, will regard the corporate company as an association of live, up-and-doing, men and women shareholders, and will do justice between real persons.’ This statement of the law has been frequently followed by the courts.
“The modern tendency of courts is to disregard the corporate entity when same is invoked as a means of protection against fraud, where the corporate organization is illegally conducted, where the corporation is used as a mere sham and devise to protect individuals against liability, where the corporation did not exist except practically as a shadow of the individual, where the corporate entity is used to evade existing legal obligations, where the corporate and individual transactions have not been distinct, * * * ”

The question of disregarding the corporate fiction was discussed at length in State v. Swift & Co., 187 S.W.2d 127 (Tex.Civ.App., Austin 1945, writ ref.). There the court said:

“Just when a corporation will be regarded as the adjunct, creature, instrumentality, device, stooge, or dummy of another corporation is usually held to be a question of fact in each case. As above stated the general rule is that the separate corporate entity of corporations will be observed by the courts, even though one may dominate or control another, or may treat it as a mere department, instrumentality, agency, etc.; and courts will disregard the separate legal identities of the corporations only when one is used to defeat public convenience, justify wrongs, protect fraud or crime of the other. (Citing cases) These cases discuss at length proper methods or standards of handling relations between a parent and a subsidiary corporation so as to prevent their separate corporate identities from being disregarded by the courts. After reviewing particularly the Berkey case, Mr. Justice Douglas, before going on the bench, wrote an article for 39 Yale L.J. 193, in which such methods or standards are summarized as follows:
“ ‘The observance of the following four standards will keep the business -units from being treated as assimilated: (1) A separate financial unit should be set up and maintained. That unit should be sufficiently financed so as to carry the normal strains upon it. * * * (2) The day to day business of the two units should be kept separate. * * * And in addition the financial and business records of the two units should be separately kept. (3) The formal barriers between the two management structures should be maintained. The ritual of separate meetings should be religiously observed. The activities of the individuals serving on the two boards can be tagged so that the individuals qua directors of the subsidiary can always be distinguished from the same individuals qua directors of the parent. Such tagging is not pure fiction. It draws the line that keeps the dual capacities separate and distinct. It conforms to the habit of thought which accepts the fact of dual capacity but which demands a separation of conduct so that each act may be clearly categorized. Separate meetings of the boards are sufficient. The same problem arises in connection with the officers. And the same solution suggests itself. A man may not be indiscriminately one officer or another. The observance of the niceties of business efficiency are normally sufficient. Such demands are not exacting. They merely suffice to keep the record of the business affairs of the two units from becoming hopelessly intermingled. (4) The two units should not be represented as being one unit. Those with whom they come in contact should be kept sufficiently informed of their separate identities.’ ”

The controlling stock of Bell Oil and Mid-Tex was owned by the same people. All of the stock of Apollo was owned by Bell Oil. A reasonable inference from the evidence is that the only reason for the continued existence of Mid-Tex after Webb left was to aid Bell Oil by paying the debt owed it and paying the equipment rental for which Bell Oil otherwise would be liable to Oriole.

It appears that two of the standards, suggested by Mr. Justice Douglas in the article quoted, for preventing business units from being assimilated, were not met in the case. Neither Mid-Tex nor Apollo was sufficiently financed. The formal barriers between the two management structures were not maintained. In the case of Mid-Tex it appears that no meetings of the Board of Directors were held after Webb resigned. It is a fair inference that the activities of Rothstein as an officer in the various interrelated business organizations were not kept distinct. The fact that Jenkins was an employee of Bell Oil and received his principal salary from that company while serving as the chief executive officer of Mid-Tex and Apollo is suspect in view of the assignment of the subleased stations and equipment leases to Bell Stations, Inc., and Apollo, without any monetary consideration, and by reason of the fact that Apollo paid the sublease rentals to Bell Oil in preference to the purchase price of the petroleum products bought from Allied Chemical.

The trial court after considering that (1) the operation with Mid-Tex was unprofitable, and (2) the capitalization of Apollo was inadequate, might well have concluded that Apollo was organized solely for the purpose of avoiding liability on the part of Bell Stations, Inc. or Bell Oil, in the operation of the stations since it was necessary that the stations be operated to minimize the loss on the station and equipment leases from Oriole.

These circumstances support the finding of the trial court that Mid-Tex and Apollo constituted representatives, devices, or dummies through which Bell Oil engaged in the retail distribution of oil and gasoline in Texas.

The judgment of the Trial Court is affirmed.