author: CHADICK, Chief Justice.

text:
    SUNDOWNER MANUFACTURING COMPANY, Appellant, v. Paul KINMAN, Appellee.
    No. 8335.
    Court of Civil Appeals of Texas, Texarkana.
    April 27, 1976.
    Robert M. Parker, Nichols & Parker, Longview, for appellant.
    Terry Bailey, Carthage, for appellee.
   CHADICK, Chief Justice.

This appeal is from an order overruling a plea of privilege. The judgment of the trial court is reversed and the case remanded.

Suit was instituted in Panola County, Texas, by Paul Kinman, a resident of Pano-la County, Texas, against Sundowner Manufacturing Company, a resident of Gregg County, Texas, and Lewis and Woods Rolling Estates, Inc., a resident of Panola County, Texas. Mr. Kinman grounded his action on several acts and omissions of common law negligence, breach of an implied warranty of merchantability, breach of an implied warranty of fitness for a particular purpose, breach of an implied warranty of habitability, and breach of an express warranty by promise. Sundowner Manufacturing Company interposed its plea of privilege to be sued in Gregg, the County of its residence.

Appellee Kinman and his wife accompanied Leon Lewis of Lewis and Woods Rolling Estates, Inc. to Sundowner Manufacturing Company’s display lot in Longview, Gregg County, Texas, and there Sundown-er’s representative showed them the mobile home, hereafter called house, that Kinman eventually purchased. Sundowner’s representatives pointed out the good qualities of the house and Kinman had opportunity to and did make an inspection. The house was not connected to a gas line at that time. The house had a gas line system built in to supply gas demands of a hot water heater, furnace, stove, and oven. The gas lines were not visible except where an end projected from underneath the house for connection with an outside gas source. At one point in his testimony, Kinman said gas lines were in the walls but on cross-examination admitted that he did not know where the lines were located, except for the outside projection. He described the house in this manner:

“Well, it was 14 by 80, Sunvilla, a three bedroom, two on one end and full bath on that end. Then living room, kitchen, a master bedroom and another full bath.”

After inspection of the house at Long-view Mr. Lewis and his party returned to Panola County. The following day, October 28, 1974, Mr. Kinman purchased a house from Lewis and Woods Rolling Estates, Inc. in a cash transaction paying $13,300.00 for it. The seller agreed to deliver the house to a site in Panola County designated by Mr. Kinman. Delivery was not immediate as Mr. Kinman made substantial site preparation, including a concrete foundation and installation of an 800 ft. gas line connecting the site with a commercial gas company’s nearby trunk line. This segment of line was tested by the company and found safe.

The date the house was delivered to the site is not shown. On December 13, 1974, slightly more than six weeks after purchase, Mr. Kinman connected the house’s gas system to the commercial source of supply. After making the connection he went inside the house and lit the pilot lights and burners on the several gas appliances, then turned the burners off. He did not smell gas during the ten to twenty minutes he was in the house although the gas was treated with chemical to make it detectable by smell. He was outside the house five to ten minutes performing other work when an explosion occurred that destroyed the house. He testified that the house was in the same condition immediately before the explosion as when he first saw and inspected it at Sundowner’s display lot in Long-view. He acknowledged that he was not an expert on construction of mobile homes and was not able to say in what respect the gas system was defective.

Appellee’s brief states that its “focus” and “primary emphasis” is on the law of products liability and to sustain venue in Panola County appellee invokes here as in the court below, Tex.Rev.Civ.Stat.Ann. art. 1995, subdivisions 4, 23, 29, 30 and 31 as well as provisions of Tex.Bus. & Comm. Code Ann. Sec.’s 2.313, 2.314, 2.315, 17.50, 17.51 and 17.56. Negligence aside, from the standpoint of products liability law Mr. Kinman was obligated by the nature of his pleadings to prove, by preponderance of the evidence, that a defect existed in the house that caused the damage claimed at the time it left the control of the manufacturer. McKisson v. Sales Affiliates, Inc., 416 S.W.2d 787 (Tex.1967); Technical Chemical Company v. Jacobs, 480 S.W.2d 602 (Tex.1972); Jack Roach—Bissonnet, Inc. v. Puskar, 417 S.W.2d 262 (Tex.1967).

The preceding factual recitals make it apparent that a defect was not directly proven. However, defects may be proven by circumstantial evidence. Darryl v. Ford Motor Company, 440 S.W.2d 630 (Tex.1969); Pittsburg Coca-Cola Bottling Works of Pittsburg v. Ponder, 443 S.W.2d 546 (Tex.1969); Melody Home Manufacturing Company v. Morrison, 468 S.W.2d 505 (Tex.Civ.App., Houston, 1st Dist. 1971, no writ). Prom the evidence in the record the trial judge might reasonably infer that the house exploded and burned as a result of leakage of gas trapped inside. It would also be reasonable to conclude that a properly operating natural gas system would not have leaked gas. It may be assumed in this instance that the house and its gas system is of a nature that would require the application of rules applied in exploding bottle cases. Pittsburg Coca-Cola Bottling Works of Pittsburg v. Ponder, supra, Darryl v. Ford Motor Company, supra. The applicable rule would require Kinman to negative the probability of an intermediate actor or agency causing the injury. Mr. Kinman testified that the house, which includes its gas system, was in the same condition when the explosion occurred as when he inspected it at the manufacturer’s plant before purchase. Such testimony tended to satisfy the rule and to show a defect existed at the time the house left the hands of the manufacturer. However, Mr. Kinman’s acknowledged unfamiliarity with the house’s gas system weakens and virtually deprives this generalization on the condition of the house of any real probative value.

The record shows the house was sold more than six weeks before the explosion occurred. It is silent as to where the house was stored in the interim. There is no evidence concerning access to it and care that was taken with it. Under the circumstances, the testimony of a man who acknowledged that he was unfamiliar with the gas system, is factually insufficient to support a conclusion that there was a defect in the gas system at the time it was sold or left the manufacturer’s control. Though the focus and emphasis is upon the law of products liability examination of the record reveals that the evidence is insufficient to establish any negligent act or omission relevant to this appeal. Appellant’s point of error No. 10 is sustained and the case is reversed to allow fuller development of the facts.


source: Caselaw Access Project

author: BISSETT, Justice.

license: Public Domain

text:
    W. K. MORGAN et ux., Appellants, v. Hewitt B. FOX, Appellee.
    No. 1065.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 29, 1976.
    Rehearing Denied May 20, 1976.

      J. G. Adami, Jr., Perkins, Davis, Oden & Warburton, Alice, for appellants.
    Wm. G. Burnett, Burnett & Burnett, Sin-ton, for appellee.
   OPINION

BISSETT, Justice.

This is an appeal from a summary judgment in favor of Hewitt B. Fox in his suit to quiet title to an oil, gas, and mineral lease and to the oilfield equipment and personal property used in connection with the production of oil and gas from the land subject to the lease.

Suit was instituted by Hewitt B. Fox against W. K. Morgan and wife, Alma Morgan, on September 20, 1974. Plaintiff alleged: 1) that he was the owner of a certain oil, gas, and mineral leasehold estate, created by a lease executed by Jesse Cross, et al, as lessors, to William D. Johnson, as lessee, dated June 15, 1970, covering a certain 160 acre tract of land in San Patricio County, together with all oilfield equipment, personal property and fixtures located on said land; 2) that Jesse Cross, et ux, as grantors, executed and delivered to the defendants, as grantees, a certain deed dated March 8,1974, covering the land in question, which deed contained a recitation that the property covered thereby is subject to the aforesaid oil, gas, and mineral lease; 3) that the recitation constituted notice to defendants that the land was subject to the lease, constituted a ratification of the lease, and constituted a binding, absolute and conclusive estoppel against defendants which prevented them from asserting that the land so conveyed to them was not subject to the lease; 4) that the defendants were asserting unfound claims of title to the lease and leasehold estate and all personal property on the land incidental to the lease which were adverse to plaintiff’s title thereto. He prayed that he have judgment quieting his title thereto and that the cloud cast on his title by defendants’ claims be removed.

Defendants, in addition to general and special denials, pled that the lease to William D. Johnson had terminated “due to non-production”, and that they were the owners of the oilfield equipment located on the land. They also filed a cross-action against plaintiff, which was severed from the case by the trial court. The cross-action is not before us in this appeal.

Plaintiff filed a motion for summary judgment on March 11, 1975, which was contested by defendants. The motion after hearing thereon, was granted, and judgment was rendered on August 5,1975 which quieted plaintiff’s title to the oil, gas and mineral leasehold estate and to the oilfield equipment, personal property and fixtures on the land. Defendants have appealed.

Plaintiff, in his motion for summary judgment, stated several specific grounds therefor. They were: 1) the pleadings, answers to interrogatories, and admissions on file, together with the affidavits, establish conclusively and as a matter of law that plaintiff is the owner of the oil, gas, and mineral lease involved, and that it is a valid lease; 2) that he is the owner of the oilfield equipment located on the land covered by the lease and was in possession of such property at the time defendants asserted a claim thereto; 3) defendants ratified the lease and are estopped to deny that the lease had terminated; and 4) defendants repudiated the lease.

Defendants, in their reply to plaintiff’s motion, asserted that there were material questions of fact concerning: 1) whether or not the mineral lessee under a prior oil and gas lease abandoned the lease and all oilfield equipment thereon about December, 1969; 2) whether or not title to the oilfield equipment passed to Jesse Cross because of the failure of the prior mineral lessee to remove said oilfield equipment within a reasonable time after the expiration of the prior lease; and 3) whether or not there was any production of oil and gas in paying quantities at the time of suit.

Defendants, in their points of error, contend that the trial court erred: 1) in holding, as a matter of law, that plaintiff “was the owner of certain oilfield personal property located on the lease in question”; 2) in holding, as a matter of law, that the lease “is being perpetuated by production”; and 3) in quieting title to the “lease and the oilfield equipment and fixtures located thereon without a conventional trial on the merits”.

Plaintiff, in his counterpoints, states that the judgment should be affirmed because: 1) the judgment may have been based upon a ground not saved for appellate review; 2) the summary judgment evidence established conclusively that defendants ratified and subsequently repudiated the lease; 3) the summary judgment evidence established conclusively that the lease was producing in paying quantities, and that plaintiff had title to the oilfield equipment located thereon.

Plaintiff supported his motion for summary judgment by the answers to interrogatories and admissions on file, and by affidavits from himself, William D. Johnson, and Yvonne Orrick, together with the several exhibits attached to and made part of the affidavits of himself and of Johnson. Defendants supported their reply to the motion with affidavits from Jesse Cross, W. L. Roots, Jr., and from the defendant W. K. Morgan, together with certain exhibits attached to the Cross and Morgan affidavits.

It is admitted by defendants in their brief that Jesse Cross is the common source of title to the mineral leasehold estate here involved, and that the question for determination as to the validity of the lease is whether or not there was production of minerals in paying quantities that perpetuated the lease. Insofar as the oilfield equipment is concerned, defendants’ claim that the question to be resolved is whether a prior mineral lessee abandoned the equipment after the termination of his lease, or alternatively, whether such prior lessee failed to remove the equipment within a reasonable time after the expiration of the prior lease.

The facts related in this and in the next succeeding four paragraphs were conclusively established by summary judgment evidence. On March 30, 1934, an oil, gas, and mineral lease was executed by Roy L. Talbert, as lessor, to R. R. James, as lessee, covering the land here involved. This lease is hereinafter called “the prior lease”. Production was established and certain items of oilfield equipment were installed and placed on the premises, some of which remained thereon at all times pertinent to this suit. The lease terminated in December, 1969. Orion Oil Company and Huisache Operating Company, hereinafter referred to as the “1969 mineral lessee”, prior to December, 1969, acquired the mineral leasehold estate and all oilfield equipment then located on the land and used to produce oil or gas therefrom.

On June 15, 1970, Jesse Cross, et al, the then owner of the 160 acre tract of land, as lessor, executed an oil, gas, and mineral lease to William D. Johnson, as lessee, covering the land, which, among other provisions, provided for: a primary term of 3 years “and as long thereafter as oil, gas, or other mineral is produced from said land hereunder”; delay rentals of $800.00 per year; reworking or additional drilling operations within 60 days following a cessation of production; and the right to assign the lease. This lease is hereinafter called the “Johnson lease”.

On March 1,1971, the 1969 mineral lessee, by a bill of sale that warranted the title, sold and delivered all of the oilfield equipment and personal property located on the land to the said William D. Johnson. Delay rentals were paid by Johnson for the years commencing June 15, 1971 and June 15, 1972. Johnson, by an instrument executed on May 14, 1973 and denominated “Assignment of Oil and Gas Lease and Bill of Sale”, assigned “all of the leasehold estate and working interest and rights of the original lessee in and to that certain Oil and Gas Lease dated June 15, 1970, by and between Jesse Cross, et al, as Lessor, and William D. Johnson, as “Lessee”, to plaintiff; and did “bargain, sell and deliver all of his right, title and interest in and to all personal property used, now located on said premises or obtained in connection therewith to the said assignee, his heirs, successors and assigns”. The assignment and bill of sale contained a covenant of general warranty.

Jesse Cross, et ux, conveyed the land to defendants by general warranty deed, dated March 8, 1974. The deed recited that it was “Subject to Oil, Gas and Mineral Lease dated 15 June 1970 from Jesse Cross, et ux, to William D. Johnson . . . ” On March 27, 1974, Jesse Cross, et ux, by a bill of sale which contained a covenant of general warranty, sold to defendants all their “right, title and interest in and to any personal properties located in, on, over, or under” the land here involved. On June 24, 1974, the 1969 mineral lessee quitclaimed to defendants all its right, title and interest in the personal property on the land “in connection with an Oil, Gas and Mineral Lease . from Roy L. Talbert, et al, to R. R. James, as Lessee, and dated March 30, 1934”. Jesse Cross, in his affidavit, stated that he was paid royalties by Johnson in the amount of $324.66 on June 14, 1973, and was paid $154.38 as royalties, by plaintiff on July 5, 1974.

W. L. Roots, Jr. executed an affidavit on January 27, 1971, wherein he said: “there has been no production of oil, gas or other minerals from said land since December 31, 1969. There has been no drilling, mining, reworking or other operations conducted on the land in search of production of oil, gas or other minerals since December 31, 1969”.

In addition to the facts stated in the five paragraphs immediately preceding this paragraph, despite defendants’ contention to the contrary, there is other summary judgment evidence that is also undisputed. First, Yvonne Orrick, plaintiff’s secretary since prior to March, 1974, said in her affidavit that in March or early April, 1974, the defendant W. K. Morgan came to plaintiff’s office; that plaintiff was not in at that time; that Morgan told her that the lease had expired because of non-production, and that he wanted a release of the “lease held by Mr. Fox”; that she told him that the lease was still in effect because “we had been producing oil from the lease each month, and had made periodic sales of the oil to the Permian Corporation”; that she showed him office copies of “the reports filed with the Railroad Commission”, 2) plaintiff’s gauger’s reports which showed the days the well produced, 3) the daily production figures, 4) the days the well was shut in, 5) and the statements of “crude oil runs furnished us by the Permian Corporation dated February, 1974, showing 86.42 barrels of oil sold”. Second, plaintiff, in his affidavit, said that “shortly after W. K. Morgan’s visit to my office, and conversation with my secretary, Mrs. Orrick, as is described in her affidavit, he called me at my home early one morning and repeated his demand for a release of the lease”, and that in “May or June, 1974, the defendant came by my office and advised me not only that my lease had terminated but, in addition, that he claimed ownership of the oilfield personal property located on the lease”. Plaintiff attached to his affidavit copies of the production reports which he timely filed with the Railroad Commission for the months May, 1973 through November, 1974. Those reports showed a cumulative production of 455 barrels of oil and production of oil for each month except for the months of May and September, 1973. Plaintiff also attached to his affidavit copies of his office records which showed in detail the expenses incurred by him in his leasehold operations. He further stated the dates that the oil which was produced from the lease was sold.

None of the Railroad Commission Reports, the statements concerning the sales of oil produced from the lease, the leasehold expenses as reflected by plaintiff’s books, or the statements made by the defendant W. K. Morgan to plaintiff and to Yvonne Or-rick, at the times stated by them, concerning the termination of the lease were disputed or challenged in any of the affidavits attached to their reply to plaintiff’s motion for summary judgment. Morgan, in his affidavit, admitted that he and plaintiff “made each other aware of our respective claims on such lease”; he did not, however, mention the date when the exchange of claims occurred.

The judgment does not specify any particular reason or ground for the granting of plaintiff’s motion. It may have been based upon any or all of the specific grounds stated by plaintiff in his motion. Among such grounds is the ratification of the Johnson lease because of the acceptance by defendants of the deed which contained the recitation that the conveyance was “subject to oil, gas and mineral lease dated June 15, 1970 from Jesse Cross et ux to William D. Johnson”. Defendants, by the acceptance of the deed with the above-quoted recitation therein, ratified the Johnson lease and are estopped to challenge the validity of the lease as of March 8,1974 and all times prior thereto. Greene v. White, 137 Tex. 361, 153 S.W.2d 575 (1941); Hastings v. Pichinson, 370 S.W.2d 1 (Tex.Civ.App.—San Antonio 1963, no writ). Since the judgment may have been based upon ratification, it must stand as it was not specifically challenged by the defendants on that ground; furthermore, there is no general assignment that the trial court erred in granting summary judgment. Malooly Brothers, Inc. v. Napier, 461 S.W.2d 119 (Tex.Sup.1970).

No one disputes the fact that the Johnson lease was a valid lease on the date of its execution and remained in full force and effect until June 15, 1973 by the payment of delay rentals. It is undisputed that this lease was duly assigned by Johnson to plaintiff on May 14,1973. Since defendants ratified the lease on March 8, 1974, the question of whether there was any production of oil and gas from the land covered by the lease from June 15, 1973 to March 8, 1974 is immaterial. Hastings v. Pinchinson, supra. Unquestionably, defendants repudiated the lease in March or early April, 1974. The statements to that effect made by Yvonne Orrick in her affidavit, which were not disputed by defendants, are sufficient to establish such a repudiation as a matter of law.

The consequences of the ratification of the Johnson lease, and the subsequent repudiation thereof, is that the ratification gave the lease new life, if it was in fact lifeless, and the later repudiation thereof relieved plaintiff from any obligation to conduct any operations, drilling, re-working, or otherwise, on said land in order to maintain the lease in force pending the judicial determination of the controversy between plaintiff and defendants over the validity of the lease. Kothmann v. Boley, 158 Tex. 56, 308 S.W.2d 1 (1957).

The lease contained a provision which provided, in part:

“. . .if after the discovery of oil or gas the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional drilling or re-working operations within sixty (60) days thereafter . . .”

Therefore, since it is shown as a matter of law that the lease was a valid lease as of March 8, 1974, the effect of the 60-day re-working provision, above quoted, extended the lease until May 8,1974, even if there had been no production during that period of time. The summary judgment proof shows that the defendants repudiated the lease prior to May 8, 1974. Be that as it may, the record further conclusively shows that the lease was maintained by actual production of oil in paying quantities at all times pertinent to this suit.

The term “paying quantities” means that the oil or gas produced from the lease must be sufficient to pay the lessee a profit, even small, over operating and marketing expenses, excluding the cost of drilling or re-working a well, but including all payments of all royalty and overriding royalty interests which are excluded from the total income attributable to the working interest owner. Garcia v. King, 139 Tex. 578, 164 S.W.2d 509 (1942). Absent any other provisions in the lease which will keep the lease alive, in order that there be production in paying quantities, there must be an available market. Gulf Oil Corp. v. Reid, 161 Tex. 51, 337 S.W.2d 267 (1960). The question of whether an oil or gas well is producing in paying quantities is ordinarily one of fact, but where it is shown that a small profit has been realized from the operation of the well, it may be found as a matter of law that the well is producing in paying quantities. Skelly Oil Co. v. Archer, 163 Tex. 336, 356 S.W.2d 774, 783 (1962); Union Oil Co. of California v. Ogden, 278 S.W.2d 246 (Tex.Civ.App.—El Paso 1955, writ ref’d n. r. e.).

The fact that there was an available market at all times for the oil produced from the Johnson lease is undisputed.

Plaintiff further stated in his affidavit that he did not sell the oil each month as it was produced, but did so when he had “accumulated enough for a load to be hauled off”; he sold “four loads” of oil from August, 1973 through November, 1974 for a net of $2,772.88. According to plaintiff’s office records, copies of which were attached to his affidavit, the expenses incurred in operating the lease from July 31, 1973 through September 11,1974 amounted to $1,377.37. The working interest owned by plaintiff, after excluding all outstanding royalties and overriding royalties is 78.125% of the total production. The sum of $2,166.31 accrued to the working interest. Plaintiff’s net profit from May, 1973 through November, 1974 was $788.94.

As already stated, plaintiff acquired the Johnson lease on May 14, 1973; at that time, the payment of the $800.00 delay rental on June 15, 1972, constituted the lease a valid lease, irrespective of production, until June 15, 1973; the lease was repudiated in March or early April, 1974 and again in May or June, 1974; suit was filed on September 20, 1974. The lease produced 436 barrels of oil from May, 1973 through September, 1974, which, after deducting severance taxes, brought a net of $2,582.88 to the %ths production. Plaintiff’s share thereof (78.125% WI) was $2,017.87. The expenses of operation amounted to $1,377.37. The profit realized by plaintiff for that period of time was $640.50.

From March, 1974, the month that defendants bought the land covered by the lease, through September, 1974, the lease produced a total of 170 barrels of oil. Sales of the oil produced during that period of time were made in April and in November, 1974. After deducting all severance taxes, the oil produced from the lease, some of which was not sold until after suit was filed, had a market value of approximately $1,633.00, and eventually sold for at least that sum of money. Plaintiff’s working interest entitled him to about $1,283.00 thereof; his operating expenses from March through September, 1974, totalled $274.31; his profit for the period March-September, 1974, was about $1,008.69.

The lease produced oil each month following the date that defendants purchased the land from Jesse Cross, et al. The lease produced a profit, though small. It is established by the summary judgment proof that the lease, as a matter of law, produced oil in paying quantities at all times from May 14, 1973, when it was assigned to plaintiff by Johnson, to the date suit was filed. Defendants’ contention that there was a fact question of whether there was production in paying quantities at the time material to this suit cannot be sustained.

With respect to the oilfield equipment on the lease, plaintiff’s title thereto is deraigned by and through the bills of sale from “the 1969 mineral lessee”, dated March 1,1971 to William D. Johnson, and from Johnson to plaintiff, dated May 14, 1973. Defendants claim of title under the quitclaim from “the 1969 mineral lessee”, dated June 24, 1974, which was after the date that defendants repudiated the lease and notified plaintiff that they were claiming title to such equipment, lacks merit. “The 1969 mineral lessee”, having previously sold the equipment to Johnson, plaintiff’s predecessor in title, on March 1, 1971, had no title to or interest in the equipment on June 24, 1974, the date of the quitclaim by such lessee to defendants. With respect to a sale of personal property, it is a settled rule that a buyer acquires no better title than that owned by the seller. 1 Tex. Jur.2d, Sales, § 149. Since “the 1969 mineral lessee” had no title to the equipment from and after March 1, 1971, it follows that defendants did not acquire any title to or interest in the equipment under the bill of sale executed on June 24, 1974.

However, defendants further contend that there are fact issues as to whether the prior owners lost title to the equipment by abandoning it, or by failing to remove it within a reasonable time after the expiration of the prior lease. Those claims are affirmative matters upon which the defendants would have the burden of proof, since the effect thereof is to admit that the prior owners owned the equipment but that it is sought to avoid the effect of such an admission by pleading and proving that their title was lost to them by abandoning the equipment, or failing to remove it within a reasonable time after the lease terminated. See 1 Tex.Jur.2d, Abandonment, § 10; Rule 94, T.R.C.P.

•In Gulf, Colorado & Santa Fe Railway Co. v. McBride, 159 Tex. 442, 322 S.W.2d 492, 500 (1958), it was held:

“Where the plaintiff moves for summary judgment in an action in which the defendant has pleaded an affirmative defense, he is entitled to have his summary judgment if he demonstrates by evidence that there is no material factual issue upon the elements of his claim, unless his opponent comes forward with a showing that there is such a disputed fact issue upon the affirmative defense.
Lemond & Kreager, The Scope of Pleading as Proof in Summary Judgment Procedure, 30 Tex.Law Rev., pp. 613-622.”

Here, plaintiff has demonstrated by his summary judgment proof that there are no material factual issues as to the elements of his claim of title to both the lease and the oilfield equipment located thereon.

Defendants in their summary judgment proof, failed to raise an issue of fact as to abandonment, and, specifically, they produced no evidence that either plaintiff or any of his predecessors in title ever intended to abandon the oilfield equipment on the lease. Title to such equipment in “the 1969 mineral lessee”, as of December, 1969, when the prior oil and gas lease terminated, was not disputed by defendants.

It is settled law that an essential element of abandonment is an intention to abandon, which must be established affirmatively by facts, and that non-use and the passage of time alone do not constitute an abandonment of vested rights. Adams v. Rowles, 149 Tex. 52, 228 S.W.2d 849 (1950); Dallas County v. Miller, 140 Tex. 242,166 S.W.2d 922 (1942, opinion adopted). This Court, in Strauch v. Coastal States Crude Gathering Co., 424 S.W.2d 677, 683 (Tex.Civ.App.—Corpus Christi 1968, writ dism’d), held that non-use of an easement for a period of 22 years did not raise a fact issue as to abandonment or an intention to abandon the easement. The case of City of Anson v. Arnett, 250 S.W.2d 450 (Tex.Civ.App.—Eastland 1952, writ ref’d n. r. e.), held that non-use for a period of 6 years, without more, did not raise a fact issue as to abandonment. It was held in Pearson v. Black, 120 S.W.2d 1075 (Tex.Civ.App.—Eastland 1938, no writ) that non-use of oilfield equipment for a period of 5½ years, as a matter of law, was not evidence of abandonment.

Furthermore, even if defendants’ summary judgment evidence had raised a fact issue for determination with respect to abandonment of the oilfield equipment, there is no pleading or proof that either defendants or their predecessors in title to the land ever reduced such equipment to possession after its abandonment, if any.

Plaintiff was in possession of the equipment, and was claiming under a bill of sale covering such equipment, on the date that defendants bought the land, which bill of sale was prior in time to defendants’ bill of sale, to the same equipment. Nor did defendants produce any summary judgment proof that raised any issue as to what would have been a reasonable time which passed after the prior lease terminated.

Title to abandoned personal property vests in the first person who reduces it to possession. Gregg v. Caldwell-Guadalupe Pick-up Stations, 286 S.W. 1083 (Tex.Comm’n App.1926); Pearson v. Black, supra. In order for defendants to acquire title to the oilfield equipment on the ground that such abandoned equipment became their property because the lessee did not remove it within a reasonable time after expiration of the lease, it was incumbent on them “to allege and prove what would be a reasonable time under the circumstances of the case.” Meers v. Frick-Reid Supply Corp., 127 S.W.2d 493 (Tex.Civ.App.—Amarillo 1939, writ dism’d, judg. cor.). Defendants did neither in this case.

It is conclusively shown by summary judgment proof: the prior lease terminated by cessation of production in December, 1969; a new lease was executed by Jesse Cross, et al, as lessor, to William D. Johnson, as lessee, on June 15, 1970, which was for a primary term of 8 years; Johnson purchased the equipment from the prior owners on March 1,1971, paid delay rentals for the years commencing on June 15, 1971 and June 15,1972, respectively, and produced enough oil to pay Cross $324.66 as royalties on June 14, 1973; plaintiff paid Cross $154.38 as royalties on July 5, 1974 (which was after the sale of the land to defendants); Johnson sold the equipment (and lease) to plaintiff on May 14, 1973. These facts were not questioned by defendants in the summary judgment evidence produced by them in their reply to plaintiff’s motion for summary judgment. The fact that there were no records in the office of the Railroad Commission which authorized plaintiff to store oil produced from the leased premises off of such premises is not, of itself, evidence that the subject lease did not produce oil during the interval in question. The non-production affidavit of W. L. Roots, Jr., and the conclusions and opinions expressed by Cross and W. K. Morgan in their affidavits, do not separately or collectively, constitute summary judgment proof which supports any of the contentions made by defendants. There is no evidence of any statement or overt act by the 1969 mineral lessee or by Johnson which would indicate an intention to abandon the oilfield equipment. The failure to remove such equipment after December, 1969 under the circumstances of this case does not raise an inference of an intention of any mineral lessee to abandon the oilfield equipment.

The judgment of the trial court is correct. It is established, as a matter of law, that the Johnson lease was a valid, subsisting oil, gas and mineral lease on the subject land, that plaintiff was the owner of that lease from May 14, 1973 up to and including the date judgment was rendered, and that the oilfield equipment, initially placed on the land by R. R. James (the prior lessee) and those claiming under him was owned by plaintiff on August 5,1975, when the judgment which quieted plaintiff’s title to the lease and the oilfield equipment thereon was rendered. We have carefully eon-sidered all of the defendants’ points of error, and they are all overruled.

The judgment of the trial court is AFFIRMED.

NYE, C. J., not participating.


text:
    CITY OF CORPUS CHRISTI, Texas, Appellant, v. R. J. HERSCHBACH, Appellee.
    No. 1097.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 29, 1976.
    Rehearing Denied May 20, 1976.

      Gerald Benadum, Asst. City Atty., Corpus Christi, for appellant.
    Curtis B. Dyer, Corpus Christi, for appel-lee.
   OPINION

BISSETT, Justice.

This is an appeal from a judgment by the trial court which awarded R. J. Herschbach, an employee of the City of Corpus Christi, full benefits under both the workmen’s compensation and civil service statutes. The trial was before the court, sitting without a jury, and on stipulated facts.

Richard J. Herschbach, hereinafter called “appellee”, a twenty-one (21) year veteran of the City of Corpus Christi’s Fire Department, was seriously injured in the line of duty on December 23, 1974. Subsequently thereafter (on December 24, 1974), appellee began a period of sick leave from the Fire Department until his return to duty on April 29, 1975.

Pursuant to Tex.Rev.Civ.Stat.Ann. art. 8309h § 2(a), appellee began to receive workmen’s compensation benefits from the City of Corpus Christi, hereinafter called “appellant”, in the amount of $70.00 per week. He received a total of $1,260.00 by way of such benefits for the period he was on leave of absence for the injury. In addition to the workmen’s compensation benefits, appellee, as a civil service employee, continued to receive his full salary for the same period of injury leave as required by Tex.Rev.Civ.Stat.Ann. article 1269m, § 26(a).

On February 2, 1975, appellant, acting under its Ordinance 8127, began withholding $70.00 from appellee’s bi-monthly payroll check to recover what, in its belief, was an overpayment to appellee. The provision in the Ordinance on which appellant relied, in part, reads as follows:

“. . . in no case will the combined total of workmen’s compensation and supplemental compensation exceed the employee’s regular salary . .

Appellee, on July 17,1975, then filed suit to recover the accumulated sums withheld by appellant and to prohibit further deductions from his payroll wages. On July 23, 1975, appellant filed a counterclaim seeking from counter-defendant $4,779.92 allegedly overpaid in error to appellee. The trial court, after waiver of a jury trial and stipulations of all material facts by both parties, then rendered judgment in favor of appellee, and ordered appellant to pay appellee the sum of $1,260.00, being the total amount of workmen’s compensation benefits paid and subsequently deducted from appellee’s wages, plus interest thereon at the rate of 6% per annum.

The trial judge, in his findings of fact, found: 1) appellee is an employee of the City of Corpus Christi’s Fire Department; 2) that appellee was injured in the course and scope of his employment on December 23, 1974, necessitating leave of absence until April 29, 1975; 3) that appellee received $1,260.00 in workmen’s compensation and appellant deducted the same amount from his wages.

The trial court, in its conclusions of law, concluded: 1) under art. 1269m, § 26, appel-lee was entitled to full pay during his leave of absence; 2) under art. 8309h, § 2(a), appellee was entitled to workmen’s compensation benefits; and 3) neither statute authorized appellant to deduct from appellee workmen’s compensation benefits.

In essence, it is appellant’s position in this appeal that under a statutory interpretation of either statute, appellee is not entitled to receive the full amount of his regular salary in addition to workmen’s compensation benefits. In order to better state the contentions of the parties, we now discuss the applicable sections of the statutes involved.

Article 1269m, entitled “Firemen’s and Policemen’s Civil Service in cities of 10,-000”, was enacted in 1947 for the purpose of creating a firemen’s and policemen’s civil service. Section 26 of the statute requires cities coming under the provisions of the Act to:

“. . . provide injury leaves of absence with full pay for periods of time commensurate with the nature of injuries received while in line of duty for at least one (1) year . . .”

The second statutory provision requiring payment of benefits by appellant to appel-lee for injury is art. 8309h. This statute, entitled “Workmen’s compensation insurance for employees of political subdivisions,” became effective July 1, 1974, and under Section 2(a) it is provided:

“All political subdivisions of this state shall become either self-insurers, provide insurance under workmen’s compensation insurance contracts or policies, or enter into interlocal agreements with other political subdivisions providing for self-insurance, extending workmen’s compensation benefits to their employees.”

Appellant, as a political subdivision, thereafter became self-insured and a participant in a joint fund as allowed under § 4 of the statute.

The Legislature, in enacting art. 8309h, enumerated in Section 5 the legislative “purpose” it sought to achieve, to-wit:

“It is the purpose of this article that the compensation herein provided for shall be paid from week to week and as it accrues and directly to the person entitled thereto, unless the liability is redeemed as in such cases provided elsewhere herein.

Subsequently, the Legislature, in 1975, amended Section 5 of art. 8309h to read as follows:

“. . . Provided further, however, that any and all sums for incapacity received in accordance with Chapter 325, Acts of the 50th Legislature, 1947, as amended (article 1269m, Vernon’s Texas Civil Statutes), and any other statutes now in force and effect that provide for payment for incapacity to work because of injury on the job that is also covered by this Act are hereby offset as against the benefits provided under this Act to the extent applicable.”

It is on this amendment that appellant primarily relies in support of its contention that it should be permitted to offset the sums received by appellee as payment for his inability to work on account of injuries suffered.

When in the course of any controversy a question as to the effect or operation of a statute is presented, it becomes the duty and it is in the province of this Court to construe the statutory language and to give it, if possible, the effect and scope intended by the Legislature. 53 Tex.Jur.2d, Statutes, § 119. In such instances, where the intent of the legislature is not clear, the courts must resort to rules of construction in order to give meaning to the legislative enactment. When intent is ascertained, the courts will construe the statute so as to give effect to the intent of the legislature. Gilmore v. Waples, 108 Tex. 167, 188 S.W. 1037 (1916); 53 Tex.Jur.2d, Statutes, § 125. When such intent is clear or is made clear, it will be given effect by the courts even to the extent of adding words to the language used by the Legislature. Sweeny Hospital District v. Carr, 378 S.W.2d 40 (Tex.Sup.1964).

In circumstances where there has been an amendment to an act, in order for us to arrive at the intention of the Legislature in enacting the amendment, it is our duty to look primarily to the act itself as an entirety. American Surety Co. of New York v. Axtell Co., 120 Tex. 166, 36 S.W.2d 715 (1931, opinion adopted). The court may properly consider the amendment to arrive at the legislative intent, without, however, being bound thereby. Calvert v. Audio Center, Inc., 346 S.W.2d 420 (Tex.Civ.App.—Austin 1961, writ ref’d n. r. e.).

With respect to statutory amendment, the guiding rule of statutory construction is that the original provisions appearing in the amended act are to be regarded as having been the law since they were first enacted and still speak from that time, while the new provisions are to be construed as enacted at the time the amendment took effect. Shipley v. Floydada Independent School District, 250 S.W. 159, (Tex.Comm’n App.1923). Additionally, it is a well established presumption that an amendment to a statute is presumed to operate prospectively, not retroactively, unless terms of the statute show a contrary intention. Deacon v. City of Euless, 405 S.W.2d 59 (Tex.Sup.1966).

It was stated in City of Austin v. Clendennen, 323 S.W.2d 158 (Tex.Civ.App.—Austin 1959, writ ref’d n. r. e.):

“To allow an offset for money earned by appellee subsequent to his injury would violate the well-established rule that a person is not precluded from recovering workmen’s compensation by reason of working and earning money after the date of injury . . . ”

In Opinion No. H-338, dated June 28, 1974, the Honorable John H. Hill, The Attorney General of Texas, said:

“Where the same illness or injury is concerned, we find nothing in either Article 1269m or Article 8309h providing that benefits under one should be set off against benefits under the other .

In a factual situation similar to the present case, the Louisiana Court of Appeals, in Walters v. General Accident & Fire Assur. Corp., Ltd, 119 So.2d 550 (1960), denied the contention made on appeal that compensation paid under two statutes similar to those in this case should be subject to offset. The court, on page 559, stated:

“We note with considerable interest that both benefits received by plaintiff were paid pursuant to statutory compulsion. There can be no serious contention the Legislature lacked authority to provide that the benefits conferred by LSA-R.S. 33:1995 (1269m herein) shall be in addition to payments due under our compensation law. We believe the legislature intended the benefits payable thereunder are to be viewed as benefits earned by virtue of past services rendered, for which the Employer (or the Employer’s insurer) shall not be entitled to credit against compensation payments due.”

In construing articles 1269m and 8309h as those statutes existed in December, 1974, we conclude the Legislature, in those instances where the same illness or injury is concerned, did not intend that compensation received under a general civil service statute should be offset ágainst benefits received from a workmen’s compensation statute. Travelers Insurance Company v. Walkovak, 390 S.W.2d 75 (Tex.Civ.App.—Houston 1965, writ ref’d n. r. e.); Texas Indemnity Ins. Co. v. Arant, 171 S.W.2d 915 (Tex.Civ.App.—Eastland 1943, writ ref’d n. r. e.). We further conclude that the Legislature intended the 1975 amendment to article 8309h, § 5, to operate prospectively, not retrospectively. We hold that the amendment to art. 83Q9h did not give appellant the right to offset the money received by appellee as workmen’s compensation benefits for the injury sustained in 1974 against the money received by him pursuant to his employment contract with appellant.

An additional reason which supports our holding that the amendment to Section 5 of 8309h is not applicable to the case at hand is found in art. 8306, § 3b, as incorporated into Article 8309h by Section 3(a)(1) of that Act. Under art. 8306, § 3b, the rights of appellee became vested and the liability of appellant became established under the facts and circumstances existing at the time of injury, since the amendment to the Workmen’s Compensation Act did not change or alter existing rights under the law as it existed on the date of injury. Southern Surety Co. v. Lucero, 218 S.W. 68 (Tex.Civ.App.—El Paso 1920, writ dis’d); Simpson v. Texas Employers Insurance Association, 519 S.W.2d 209 (Tex.Civ.App.—Fort Worth 1975, writ ref’d n. r. e.).

Appellant also contends that if ap-pellee should receive the additional benefits under art. 1269m, he would in effect be receiving “extra compensation”, in violation of Art. Ill, § 53, Texas Constitution. We do not believe that the benefits received under the statute should be treated as “extra compensation” within the meaning and prohibition of the above constitutional amendment. When the appellant initially hired appellee in 1954, a contract of employment was entered between itself and appel-lee. The employment relationship has been, at all times pertinent to this suit, subject to and governed by art. 1269m, the general Civil Service Act; therefore, the statutory provisions of the article became and formed a part of the contract of employment. Byrd v. City of Dallas, 118 Tex. 28, 6 S.W.2d 738 (1928, opinion adopted); City of Orange v. Chance, 325 S.W.2d 838 (Tex.Civ.App.—Beaumont, 1959, no writ). As such and at the time in question, appellee, when he received payments under the statute, did not receive “extra compensation”, fees or allowance in violation of Art. Ill, § 53, Texas Constitution, which forbids paying extra compensation for past performance or adding additional consideration to the already existing contract. Rhoads Drilling Co. v. Allred, 123 Tex. 229, 70 S.W.2d 576, 582 (1934); Foreman v. Gooch, 184 S.W.2d 481 (Tex.Civ.App.—Beaumont 1944, ref’d w. o. m.). Under the employment contract, at least until the effective date of the 1975 amendment to art. 8309h, § 5, any payments received by appellee became a part of his overall compensation. Such payments were not a gratuity or donation.

Finally, this Court has in the past rejected the argument that the receipt of benefits under two compensation statutes would result in a double recovery, contrary to the intention of the Texas Workmen’s Compensation Act. Texas Employer’s Ins. Ass’n v. Chappell, 486 S.W.2d 818 (Tex.Civ.App.—Corpus Christi 1972, rev. in part (on other grounds), aff. in part, 494 S.W.2d 159 (Tex.Sup.1973).

The judgment of the trial court is AFFIRMED.


author: YOUNG, Justice.

text:
    Charles H. GRIFFITH, Appellant, v. Virgil Warren CONARD et al., Appellees.
    No. 1023.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 29, 1976.
    Rehearing Denied May 20, 1976.
    James R. Harris, Harris, Cook, Browning & Barker, Corpus Christi, D. Dean Patton, Morrill & Patton, Beeville, for appellant.

      Robert D. Nogueira, Beeville, Arnold J. Dullnig, Corpus Christi, for appellees.
   OPINION

YOUNG, Justice.

This is an appeal from a summary judgment denying a petition for bill of review. The appellant, Charles H. Griffith, sought by bill of review filed February 3, 1975, to set aside a default judgment taken against him on November 26, 1974, by Virgil Warren Conard and Ben D. Marks. The original suit was brought by Conard and Marks to recover delinquent rental payments due under a written lease agreement. Although personally served with citation, Griffith failed to file an answer, a motion for new trial or writ of error. All parties moved for summary judgment upon the bill of review. The order of the trial court recited that the summary judgment evidence presented no fact issue; affirmatively showed that Griffith failed to use any diligence to defend the prior suit; that no extrinsic fraud was practiced.

The restaurant and club facilities of the Sea Palm Motel, Aransas Pass, Texas is the property which is the subject to the lease agreement. As title owner, the Federal Deposit Insurance Corporation (FDIC) leased the facilities to H. Norman Dorsey on September 28,1971. In accordance with the terms of the lease pertaining to assignment, Dorsey assigned his interest in the lease, with the permission of FDIC, to Harold C. Smith on October 1, 1971. In a like manner Smith assigned the lease to the appellant Griffith on October 5,1972. Both assignments provide that neither Dorsey nor Smith are released from their obligations under the lease. Subsequently, on June 15,1978, FDIC conveyed the Sea Palm Motel to Conard and on the same date Conard conveyed a one-half interest in the property to Marks. The Corpus Christi State National Bank accepted a deed of trust to the property from Conard and Marks to secure the financing. Ben D. Marks then on August 27,1973, assigned an undivided 25% net profits interest in the property to his son, Robert S. Marks.

Appellant argues, in his first point, that it was error to enter the summary judgment because his petition and the summary judgment evidence satisfy all of the requirements for a bill of review. He further contends that the original default judgment is void because the Bank, FDIC, and Robert S. Marks were not joined as parties and thus the summary judgment must be set aside.

Upon a motion for summary judgment the trial court must determine if there are any issues of fact to be tried and all doubts as to the existence of a genuine issue as to a material fact must be resolved against the party moving for summary judgment. It is not the duty of the court to weigh the evidence or determine its credibility and thus try the case on the summary judgment evidence. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929, 931 (1952); Lyons v. Paul, 321 S.W.2d 944, 951 (Tex.Civ.App.—Waco 1958, writ ref’d n. r. e.). In accordance with the general rule in summary judgment cases we shall disregard all conflicts in the evidence and accept as true that evidence which tends to support the position of appellant. Farley v. Prudential Insurance Company, 480 S.W.2d 176, 178 (Tex.Sup.1972). Together with the rules of summary judgment we must also consider the rules which pertain to a bill of review.

To invest judgments of the courts of this State with that degree of finality which is demanded by our system of jurisprudence, a bill of review must not be granted unless the petitioner clearly satisfies the requirements of pleading and proof. The petitioner must allege under oath and prove: (1) a meritorious defense, (2) which he was prevented from making by fraud, accident or wrongful act of the opposite party, (3) unmixed with any fault or negligence of his own. Petro-Cbemical Transport, Inc. v. Carroll, 514 S.W.2d 240 (Tex. Sup.1974); Texas Machinery and Equipment Company, Inc. v. Gordon Knox Oil and Exploration Company, 442 S.W.2d 315 (Tex.Sup.1969); Gracey v. West, 422 S.W.2d 913 (Tex.Sup.1968). The issue to be considered, therefore, is whether the summary judgment evidence establishes as a matter of law that the appellant is not entitled to a bill of review.

The summary judgment evidence as to the appellant’s meritorious defense is in the nature of a claim for damages resulting from a failure by the landlords to repair the premises and an oral agreement of accord and satisfaction. That defense, if fully proven, would satisfy the first requirement for a bill of review in that it indicates a different judgment, more favorable to appellant, would have been entered had the defense been asserted prior to the default judgment. Sedgwick v. Kirby Lumber Co., 130 Tex. 163, 107 S.W.2d 358 (1937).

The summary judgment evidence which tends to support the appellant’s position that he was prevented by the fraud and wrongful act of the opposite party from presenting his meritorious defense is found in the affidavit of Paul Lott. Paul Lott had been installed as manager of the restaurant and club by Griffith. Pursuant to an understanding that a new lease agreement would be worked out and certain repairs made to the leased premises, Lott stopped making the rent payments. In June of 1974 he received notice to vacate and he complied. Several weeks later, Lott was notified by Griffith of the original suit and Griffith requested that Lott get in touch with Ben Marks. When Lott called Marks, he told him that, “If you sue us, we’re going to sue you.” Marks replied that nobody wins in court and “lets not get any lawyers in this.” Marks further said that he would get Conard together with Griffith and settle this matter and, in Marks’ words, “Don’t worry about the lawsuit — it will be taken care of. We don’t want to go to court and we know you don’t want to go to court.” Lott then advised Griffith of what Marks said. Later, Griffith notified Lott that a judgment had been taken and directed him to get in touch with Marks about a conference. When Lott talked with Marks again, Marks told him that he would “call the dogs off” and not to worry about it and they would get together. Marks said that he did not know about the judgment and that he would see that things were worked out. Lott notified Griffith of this conversation and Griffith said that he wanted to go to see Marks himself.

Lott made an appointment with Marks. When Lott and Griffith arrived in Marks’ office, Marks’ secretary advised them that Marks could not keep their appointment because of an emergency. Lott called Marks to make another appointment and Marks told him not to worry about it; he would get Conard to get in touch with Griffith. Two weeks passed and no contact was made. Lott called Marks again at Griffith’s request and made an appointment. Lott and Griffith once again went to Marks’ office at the scheduled time and Marks’ secretary told them that he was out of the office. Lott explains that it is at this point that Griffith sought the services of an attorney.

The foregoing is the evidence in the record, disregarding all conflicts, most favorable to appellant’s position, all of which we must consider as true. Farley v. Prudential Insurance Company, supra. In summary, it reveals that promises of settlement were made prior and subsequent to the default judgment. The nature of the fraud relied upon by a petitioner for bill of review must be extrinsic. Kuper v. Kuper, 336 S.W.2d 819 (Tex.Civ.App.—Amarillo 1960, writ dismissed). When the petitioner is induced to refrain from pursuing his meritorious defense by false promises of compromise and settlement made by the opposite party, there exists extrinsic fraud which is contemplated by the rule. O’Meara v. O’Meara, 181 S.W.2d 891, 893 (Tex.Civ.App.—San Antonio 1944, writ ref’d).

The appellant’s petition and deposition contains allegations of the diligence in his conduct. Appellant alleges that he failed to answer and file a motion for new trial because he relied on the representations made by the appellees to “not worry about the lawsuit in that everything would be worked out through a settlement.” After he received notice of the judgment he was told by the appellees that they would “call the dogs off” and “don’t worry about the judgment, everybody would get together and settle this matter.” Appellant alleges that he diligently pursued the invitations to settle and that at no time was he negligent; that after he received notice of the default judgment, about November 27, 1974, he called Paul Lott; that he did not talk with Conard or Marks after he received the notice; that he made a couple of calls to Conard but never succeeded in reaching him; that he relied on what Lott told him about the conversations with Marks; that he did not consult an attorney about the suit after he was served with citation.

Although the evidence is not detailed as to time and we cannot determine exactly when Griffith finally determined that the promises of settlement were not made in good faith, we cannot say that the evidence shows as a matter of law, when tested by the rules of law applicable to this case, that he was not diligent in the pursuit of his defense. Thus, the evidence presents facts which are such that a jury could draw an inference either way. Lyons v. Paul, 321 S.W.2d 944 (Tex.Civ.App.—Waco 1958, writ ref’d n. r. e.). The present case is distinguishable from Lindsey v. Dougherty, 60 S.W.2d 300 (Tex.Civ.App.—Amarillo 1933, writ ref’d), in which there were no further representations alleged to have been made after the petitioner received notice of the judgment and she was thus charged with a lack of diligence in not filing a motion for new trial. Griffith has alleged representations were made both before and after the default judgment was entered. Appellant’s first point is sustained.

Appellant also argues, in his second point, that the original judgment is void because the Corpus Christi State National Bank, FDIC, and Robert S. Marks were not joined as parties. This raises an issue of whether it is proper to consider a bill of review when it is filed before the time has expired for bringing writ of error.

To be entitled to a bill of review, a litigant must show a good excuse for failure to exhaust adequate legal remedies. Falsetti v. Lowman, 405 S.W.2d 796, 799 (Tex. Civ.App.—Eastland 1966, writ ref’d n. r. e.); Moore v. Mathis, 369 S.W.2d 450, 454 (Tex.Civ.App.—Eastland 1963, writ ref’d n. r. e.), 376 U.S. 939, 84 S.Ct. 794, 11 L.Ed.2d 659. See 4 McDonald, Tex.Civ.Practice § 18.27.6. We must thus determine if writ of error would be an adequate remedy for the appellant.

Review by writ of error is not an adequate remedy to secure relief from a default judgment unless the invalidity of the judgment is apparent from the face of the record. Pace Sports, Inc. v. Davis Brothers Publishing Co., Inc., 514 S.W.2d 247 (Tex.Sup.1974); Texas Industries, Inc. v. Sanchez, 521 S.W.2d 133, 136 (Tex.Civ.App.—Dallas 1975, writ ref’d n. r. e.). In the present case the alleged invalidity does not appear on the face of the record and thus direct attack by bill of review is proper. Vogel v. Vogel, 405 S.W.2d 87, 90 (Tex.Civ.App.—San Antonio 1966, no writ); Champion v. Kinney, 460 S.W.2d 173, 176 (Tex.Civ.App.—Texarkana 1970, no writ).

In Cooper v. Texas Gulf Industries, Inc., 513 S.W.2d 200 (Tex.Sup.1974), the Texas Supreme Court has set out important new guidelines for the joinder of parties under Rule 39, T.R.C.P. It is pointed out that under the traditional view, the nonjoinder of an indispensable party produced an invalid judgment, but the amended Rule 39 has initiated an entirely new method of resolving the question. Considering that one of the aims of the revised rule is to avoid questions of jurisdiction, the Court says, at page 204, that it will be “rare indeed if there were a person whose presence was so indispensable in the sense that his absence deprives the court of jurisdiction to adjudicate between the parties already joined.”

When FDIC conveyed the property to Conard, Griffith was $244.79 in arrears. At the time of the conveyance FDIC also assigned all of its interest in the lease. FDIC was therefore without any interest at the time of the original suit such that Griffith might be subjected to liability for rents in a subsequent suit. Therefore we do not consider FDIC to be a party needed for just adjudication as contemplated by Rule 39.

Nor do we consider Robert S. Marks to be a person needed for just adjudication. His interest is in the profit which the property produces and by the terms of the assignment from his father, Ben D. Marks, he has no right of management or control of the property. We also note that Robert has submitted a disclaimer in which he denies being a necessary party to the suit. Although, before amendment, Rule 39 provided that persons having a joint interest shall be made parties, this is no longer a controlling consideration under the new Rule 39. Cooper v. Texas Gulf Industries, supra.

The Corpus Christi State National Bank, as trustee, is the holder of a deed of trust and purchase money lien upon the leased premises. The Bank has also filed a disclaimer as to any interest which might necessitate its joinder. We do not consider the Bank, therefore, to be a party necessary for just adjudication. Appellant’s second point is overruled.

Because we have sustained appellant’s first point about his raising fact issues concerning his bill of review, it is our duty to reverse this cause and remand it for trial.

The judgment of the trial court is reversed and the cause is remanded.


text:
    MERCEDES INDEPENDENT SCHOOL DISTRICT, Appellant, v. L. P. NOLEN, d/b/a Mercedes Flying Service, Appellee.
    No. 1021.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 29, 1976.

      J. D. Vollmer, Mercedes, for appellant.
    Bates & Hendrix, Cornelius B. Marsh, IV, Edinburg, for appellee.
   OPINION

YOUNG, Justice.

Suit was filed by the Mercedes Independent School District against L. P. Nolen, d/b/a Mercedes Flying Service to recover delinquent personal property ad valorem taxes. The trial court, sitting without a jury, found that the taxes had not been levied as required by law and entered a take nothing judgment against the school district who appeals.

The record reflects no requests for findings of fact or conclusions of law. Nor were any filed separate from the judgment. In the judgment there is, however, this combination finding and conclusion:

“The Court further finds that the Plaintiff, the Mercedes Independent School District is entitled to nothing and the judgment should be rendered against the Plaintiff on their asserted cause of action because of the failure of the Plaintiff taxing body to levy personal property taxes by ordinance rather than by resolution.”

The issues presented upon appeal require a determination of the requirements of a proper levy of taxes by a board of trustees of an independent school district.

The school district produced in the trial court the official tax records which reflected that the taxes, penalties and interest sued for were due, delinquent and unpaid for the years 1969 through 1974. Additionally, the testimony of Ismael Luna, tax assessor-collector and custodian of the tax records, was offered to establish that the taxes were due and unpaid. In defense, the taxpayer Nolen introduced into evidence interrogatories and answers to those interrogatories propounded to Luna in 1972 during the discovery stage of the litigation. It was developed upon the cross-examination of Luna at the trial that the board of trustees levy taxes by resolution rather than by ordinance. The question and response of Luna was as follows:

“Q Now, in the interrogatories I asked you whether the taxing body, the Mercedes Independent School District, taxes by resolution or by ordinance, and your answer was by resolution, is that correct?
A Yes, sir.”

Nolen also introduced the pertinent portions of the minutes of the meetings of the board of trustees for the years 1969 through 1972. The minutes reveal that in a 1969 meeting of the board a motion was made, seconded and carried to “adopt” the same tax as in the previous year: $1.22 local maintenance plus $0.63 for debt services. We presume that by this language the board intended to levy a tax of $1.85 on each $100.00 of property within the taxing district. In August 1970 and 1971 the board made, seconded and carried a motion to “set” the tax rate for a like amount for the respective years. In August 1972 a motion was made and seconded to “keep” the tax rate the same as in the previous year. The minutes do not reflect that this motion carried.

Appellant contends, in his first point of error, that there was no evidence to support the judgment that the school district take nothing as to its claim for the years 1973 and 1974. It is urged that a prima facie case was established for tax liability for 1969 through 1974 by introduction of the official tax records and testimony of the tax assessor-collector, and that no evidence was offered by the taxpayer to rebut liability for 1973 and 1974.

The delinquent tax records and the testimony of the assessor-collector established a prima facie case as to every material fact of liability for the years 1969 through 1974. East and Mount Houston Independent School District v. South Texas Lumber Company, 153 Tex. 795, 271 S.W.2d 795 (1954); Plyler v. City of Pearland, 489 S.W.2d 459 (Tex.Civ.App.—Houston (1st Dist.) 1972, writ ref’d n. r. e.). The burden was then upon the taxpayer to offer a valid defense. State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569, 572 (1954); Whaley v. Nocona Independent School District, 339 S.W.2d 265, 267 (Tex.Civ.App.—Fort Worth 1960, writ ref’d). It is provided by statute that in a suit for collection of delinquént taxes there shall be no defenses except: 1) that the defendant was not the owner of the land at the time the suit was filed; or 2) that the taxes sued for have been paid; or 3) that the taxes are in excess of the limit allowed by law. Tex.Rev.Civ.Stat.Ann. art. 7329 (1960). This statute does not preclude, however, the defense that the taxes were not levied as required by law. Town of Pleasanton v. Vance, 277 S.W. 89 (Tex.Com.App.1925, judgmt. adopted).

Nolen’s defense was that the taxes had not been levied as required by law. The only evidence bearing upon this issue for the taxable years 1973 and 1974 which supports the judgment of the trial court is the testimony of Luna by interrogatories in 1972 that the school district taxes by resolution. We must next determine whether this constitutes a valid defense.

The levy of an annual ad valorem tax by a board of trustees of an independent school district is required to be by ordinance rather than by motion or resolution. Flower Grove Independent School Dist. v. Koger, 77 S.W.2d 602 (Tex.Civ.App.—El Paso 1934, writ dismissed). The testimony of Luna about taxing by resolution is not contradicted and neither party sought too further qualify it. The question was not limited to any specific year. So the trial court must have assumed that the question and answer pertained to all taxing years in issue, 1969 through 1974. The appellant argues, however, that because the interrogatories were submitted to Luna in 1972 and he responded in 1972, the interrogatories cannot constitute evidence of a defense, based on no levy of taxes by ordinance, for the years 1973 and 1974. We agree. We hold, therefore, that there was no evidence upon which the trial court could properly base a finding, as to the taxable years 1973 and 1974, that levy had not been accomplished as required by law. The appellant’s first point of error is sustained.

Appellant next contends, in point of error two, that there was not sufficient evidence to support the judgment of the trial court as to the taxable years 1969 through 1972. He argues that the minutes of the board reflect the adoption of the school budget for the respective years and thus the adoption of a municipal debt to be paid in the future. Relying upon City of Odessa v. Elliott, 58 S.W.2d 34 (Tex.Com.App.1933, holding approved), appellant urges that when the board adopts a debt to be paid in the future, the levy of taxes to pay that debt need not be by ordinance. We do not agree.

In City of Odessa v. Elliott, supra, the court held that where the city had created a municipal debt by ordinance which provided that each year a tax sufficient to pay the debt be levied, the annual determination of the tax rate necessary to satisfy the requirements of the ordinance was a ministerial duty of the city council. Under these circumstances the fixing of the annual tax rate by simple motion did not violate the statute which required that levy be by ordinance. The record in the present case does not reveal such an ordinance. We have only a simple motion to approve or accept the school budget recorded in the minutes of the board. The statutory requirement that levy be by ordinance remains unsatisfied. We therefore hold that City of Odessa v. Elliott, supra, is not controlling of the case at bar. Appellant’s second point of error is overruled.

In its final point of error, appellant argues that the ad valorem taxes were properly levied by verbal motion, made, adopted, and entered in the minutes of the board, and the levy need not be reduced to writing before being acted upon by the board. In support of this argument appellant cites Yorktown Independent School District v. Afflerbach, 12 S.W.2d 130 (Tex.Com.App.—1929, holding approved), and Port Neches Independent School Dist. v. Reconstruction Finance Corp., 121 F.Supp. 561 (E.D.Tex.1954).

In Afflerbach the taxpayer sought to enjoin the collection of taxes by the trustees of the independent school board for 1921 and other years. The minutes of the board in 1921 did not show a levy for that year. In 1922, however, the board made and entered a written order which recited that in October 1921 a motion was made and carried levying a tax for 1921 and set out the amount of the tax and its purpose. The order further explained that although the 1921 minutes of the board did not reflect such board action, the board was at this time ratifying and confirming that levy and further ordered that the tax collector proceed to collect said taxes for 1921. The court held that a proper levy was shown for the 1921 taxable year.

It is arguable that the Commission of Appeals’ opinion could be read to mean that a verbal motion made and carried is sufficient to levy a tax. Indeed, this was the interpretation given to Afflerbach by the court in Port Neches Independent School Dist. v. Reconstruction Finance Corp., supra. We find it significant, however, that the Texas Supreme Court only approved the holdings of the Commission of Appeals in their review of Afflerbach. This signifies that the court did not necessarily approve its reasoning. Pate v. Security Union Ins. Co., 54 S.W.2d 355 (Tex.Civ.App.—Austin 1932, no writ). The opinions of the Commission of Appeal which are not expressly approved by the Supreme Court are not authoritative as precedent. Galbraith-Foxworth Lumber Co. v. Gerneth, 66 S.W.2d 471 (Tex.Civ.App.—Fort Worth 1933, writ dismissed).

We consider that the better reason for the holding in Afflerbach that there was a proper levy in 1921 is that the board of trustees satisfied the requirements of the statutes by entry of the formal written order. It must also be pointed out that the federal court in Port Neches did not base its decision solely upon the Afflerbach opinion. The court also found that art. 2815g-47, Tex.Rev.Civ.Stat.Ann. (1953), validated the attempted levy by the board. We find, therefore, that Afflerbach and Port Neches are not supportive of the appellant’s position.

An ordinance is something more than a mere verbal motion or resolution, adopted, subsequently reduced to writing, and entered in the minutes. American Const. Co. v. Seelig, 104 Tex. 16, 133 S.W. 429 (1911). It must be invested substantially with the formalities, solemnities and characteristics of an ordinance, as distinguished from a simple motion or resolution. Vance v. Town of Pleasanton, 261 S.W. 457 (Tex.Civ.App.—San Antonio 1924), aff’d, 277 S.W. 89 (Tex.Com.App.1925). The minutes of the board of trustees of the Mercedes Independent School District do not reflect that levy was by ordinance. These attempts to levy a tax are at best, simple motions which do not meet the requirements of the statutes.

The appellant also argues that the Texas Legislature has, by statute, validated the actions of the school board and although the taxes may not have been properly levied, they are now to be considered as valid and legal. We find two such statutes which we consider applicable to the facts of this case. The legislature passed in 1969 art. 2815g-60, Tex.Rev.Civ.Stat.Ann., which became effective April 3, 1969. Section 3 of this statute reads in part as follows:

“. . . all proceedings, resolutions, orders, ordinances, and other acts or attempted acts of . all such school districts, pertaining to, or attempting to . authorize, any such bonds, bond taxes, maintenance taxes, and bond assumptions, be and are hereby validated in all respects, ... as though they had been duly and legally issued, authorized, or accomplished in the first instance.”

In 1971 the legislature passed art. 2815g-61, Tex.Rev.Civ.Stat.Ann., effective May 11, 1971. This act is substantially identical to the one passed in 1969. Similar validating statutes have been held to be effective to rectify defects or irregularities in the levying of taxes by a school district. Frost v. Village of Hilshire Village, 403 S.W.2d 836 (Tex.Civ.App.— Houston 1966, writ ref’d n. r. e.); Cook v. City of Booker, 167 S.W.2d 232 (Tex.Civ.App.—Amarillo 1942, no writ); Morris v. City of Conroe, 47 S.W.2d 690 (Tex.Civ.App.—Beaumont 1932, writ ref’d).

The 1969 validating statute was effective prior to any attempted levy by the board. It is not prospective in its application and thus it does not validate any of the future board actions. Gifford-Hill and Co. v. Midlothian Independent School District, 459 S.W.2d 944 (Tex.Civ.App. —Waco 1970, writ ref’d n. r. e.). The 1971 validating statute, however, was effective to validate all actions of the board prior to its effective date of May 11, 1971. Any defects in levying a tax for 1969 and 1970 was cured. Doherty v. San Augustine Independent School Dist., 178 S.W.2d 866 (Tex.Civ.App.—Amarillo 1944, err. ref.). The board actions taken in 1971 through 1974 remain unaffected by either validating act.

Appellee suggests that these validating acts are unconstitutional because the subject of the act (validation of an attempted tax levy) is not contained within its title as required by art. Ill, § 35, Tex.Const. We do not agree.

If the caption states the main subject of the act, any subsidiary matter reasonably connected, germane, incidental, or relevant to the main subject will be covered. Lee v. State, 163 Tex. 89, 352 S.W.2d 724 (1962). The title or caption of the 1971 act is: “Art. 2815g-61. Validating of districts, boundary lines, resolutions, orders and ordinances for separation from municipal control; bonds; exceptions”. The title is thus sufficient because it announces that embraced within the act is the validation of “resolutions”. The appellant’s final point is sustained as to the years 1969 and 1970 and overruled for the years 1971 and 1972.

The judgment of the trial court is affirmed as to the years 1971 and 1972 and reversed and rendered that school district recover from Nolen for the years 1969, 1970, 1973 and 1974. All costs, both here and in the trial court, are to be taxed one-third (½) to appellant and two-thirds (⅜) to appellee.

Reversed and rendered in part, affirmed in part.


author: NYE, Chief Justice.

text:
    Vance P. DIENST, d/b/a The Lamplighter, Appellant, v. TEXAS ALCOHOLIC BEVERAGE COMMISSION, Appellee.
    No. 1064.
    Court of Civil Appeals of Texas, Corpus Christi.
    April 29, 1976.

      James A. Smith, Port Lavaca, Maddin, White & Brin, Corpus Christi, for appellant.
    Patrick Rogers, Asst. Atty. Gen., Austin, Joseph P. Kelly, Guittard & Henderson, Victoria, for appellee.
   OPINION

NYE, Chief Justice.

This is an appeal from a judgment denying an application for certain permits that would allow on-premises consumption of alcoholic beverages.

Vance P. Dienst, appellant, sought to have set aside the order of the appellee, Administrator of the Texas Alcoholic Beverage Commission, denying appellant’s application for the permits in a trial de novo proceeding in the District Court of Victoria County, Texas.

The appellant, on June 7,1975, applied to the Texas Alcoholic Beverage Commission for a Mixed Beverage Permit, a Mixed Beverage Late Hours Permit and a Beverage Cartage Permit for the premises located at 3304 Sam Houston Drive in the City of Victoria, County of Victoria, Texas. On July 9, 1975, Henry C. Knowles, the Assistant Administrator of the Alcoholic Beverage Commission, denied the permits sought by appellant on the ground “that the place or manner in which the applicant may conduct his business is of such a nature which, based on the general welfare, health, peace, morals, and safety of the people and on the public sense of decency, warrants a refusal of the permits,” pursuant to Article 666-11(6), Tex.Penal Code Ann. (1971).

The Texas Alcoholic Beverage Commission in making its ruling denying the permits had before it certain evidence. Included in the evidence were several letters of protest by individual property owners living in the area of the proposed lounge, together with letters of protest from the Mayor, Chief of Police, and the Sheriff, each of whom commented about the probable increased traffic hazard which would be caused by granting the permits at the proposed location. There was also a petition signed by numerous property owners in the three subdivisions surrounding the proposed location of the lounge protesting the establishment at this particular location.

On August 6,1975, Dienst brought suit to set aside and hold for naught the order of the Texas Alcoholic Beverage Commission denying his application for the three permits for the business to be located at 3304 Sam Houston Drive in Victoria, Texas. The petitioner alleged, among other things, that no factual basis had been established to show an unusual condition and, therefore, the denial of his application discriminates between him and his competitors.

Subsequently on August 12, 1975, a petition in intervention was filed by Robert L. Coffee and Paul Guthrie personally and as representatives of a large group of family residence owners near the location of the proposed lounge. The intervenors alleged that the place or manner in which the applicant would conduct his business is of such a nature which, based on the general welfare, health, peace, morals, and safety of the people, and on the public sense of decency, warrants refusal of the permits.

Trial was had before the court without the aid of a jury on August 15, 1975. The district court entered judgment on behalf of the Commission, specifically finding that the Texas Alcoholic Beverage Commission’s ruling denying the permits was supported by substantial evidence. The appellant, Dienst, has timely perfected his appeal from such judgment.

The appellant first asserts in his points of error No. 1 and 2 that the trial court erred in holding that the order of the Texas Alcoholic Beverage Commission was supported by substantial evidence and that appellant had not sustained his burden of proof.

The substantial evidence rule is that the finding of the administrative agency will be sustained by the trial court if the finding is reasonably supported by substantial evidence, meaning evidence that was introduced in the trial court. The decision of the trial court as well as the appellate court is to determine from all of the evidence presented in the trial court whether as a matter of law the decision of the agency is supported by substantial evidence.

In many of these cases, there seems to be some confusion concerning the rule and its application. First of all, the rule does not mean that the parties are limited to the evidence taken by and received by the commission. The parties may, as the parties did in this case, introduce relevant legal testimony concerning the appellant’s application. After all of the evidence is in, the issue then before the trial court is not whether the agency came to the proper fact conclusion on the basis of conflicting evidence, but whether or not it acted arbitrarily and without regard to the facts. The trial court is not to substitute its discretion for that of the commission, but it is required to sustain the commission if its action is reasonably supported by substantial evidence presented to the trial court. If the evidence as a whole is such that reasonable minds could not have reached the conclusion that the commission must have reached in order to justify its action, then the order must be set aside. After all, the trial court is required to render justice in the case. Jones v. Marsh, 148 Tex. 362, 224 S.W.2d 198 (1949); Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424 (1946). See also Gerst v. Nixon, 411 S.W.2d 350 (Tex.Sup.1966); Gerst v. Goldsbury, 434 S.W.2d 665 (Tex.Sup.1968); Morgan v. Texas Alcoholic Beverage Commission, 519 S.W.2d 250 (Tex.Civ.App.—Texarkana 1975, no writ); Texas Employment Commission v. Keller, 456 S.W.2d 225 (Tex.Civ.App.—Waco 1970, no writ); Texas Employment Commission v. Riddick, 485 S.W.2d 849 (Tex.Civ.App.—Texarkana 1972, no writ); Lewis v. Southmore Savings Association, 480 S.W.2d 180 (Tex.Sup.1972).

The “manner” in which the applicant may conduct his business is not at issue in this case nor are the applicant’s qualifications. In order to deny a permit to a fully qualified applicant who proposes to operate a lawful business in a wet area and in compliance with the zoning ordinances of the city, some unusual conditions or situations must be shown so as to justify a finding that the place or manner in which the applicant may conduct his business warrants a refusal of a permit under Article 666-11(6), Tex.Penal Code Ann. (1971). See Texas Alcoholic Beverage Commission v. Mikulenka, 510 S.W.2d 616 (Tex.Civ.App.—San Antonio 1974, no writ); Elliott v. Dawson, 473 S.W.2d 668 (Tex.Civ.App.—Houston [1st Dist.] 1971, no writ); Smith v. Cove Area Citizens Committee, 345 S.W.2d 850 (Tex.Civ.App.—Austin 1961, writ ref’d n. r. e.).

Many times in a contested case, the evidence will support a ruling either way. However, each substantial evidence case must be decided on its own facts in relation to the above rules of law. The evidence presented to the trial court shows that the appellant made an application with the Texas Alcoholic Beverage Commission for the three permits to conduct a business on the premises to be known as the Lamplighter, located at 3304 Sam Houston Drive in Victoria, Texas. The hours of operation were to be from 3:00 or 4:00 o’clock in the afternoon until 2:00 o’clock a. m. The type of lounge would be a mixed-drink club open to the public and catering preferably to middle aged couples. All activities would be conducted inside a closed building.

The proposed location of the lounge is on a corner lot on the northwest side of the intersection of Sam Houston Drive and Kingsway Street. The immediate area in which the proposed lounge is to be located is a commercial area wherein eight to ten small businesses are located, those being on the same side of the street as that on which the proposed lounge is to be located. Immediately next to the proposed lounge is a Dairy Queen. Other businesses located close by include: a dentist office; an animal clinic; a rental business; a convenience grocery store; a Fedmart; a gift and flower shop and a gas station. Located immediately behind the rental business is a swimming pool and behind the convenience store is a recreational hall for the area teenagers.

Approximately six (6) blocks from the proposed location of the lounge is a school. Immediately across the street from the proposed lounge is a residential area. It is also shown that immediately behind and adjacent to the proposed lounge are also located two other residential areas. There is no comparable type of business in this area that allows on-premises consumption of alcoholic beverages. There has never been an on-premises consumption permit granted to any business establishment in this particular area although the convenience store sells beer and wine and a Fedmart store sells liquor for off-premises 'consumption only. The only establishment with an on-premises consumption permit is located approximately twenty-one (21) blocks away.

The basic reason for the denial of the on-premises permits by the commission was that an unusual traffic condition would exist because of the location of the proposed lounge at the intersection of Sam Houston Drive and Kingsway Street. Three witnesses testified that Sam Houston Drive, the street on which the proposed lounge was to be located, was a major thoroughfare in the City and is a busy street. In this respect, Mr. Richard Jones, a police officer for the City of Victoria, testified as follows:

“Q Mr. Jones, in all reasonable — Based on your familiarity with the area, and your experience as an officer, in all reasonable probability, will the establishment of an on-premises consumption tavern in that particular location create an unusual problem with the traffic and safety of the people in that area, considering the traffic flow and the street pattern, considering the cures and all?
A Yes, I think it will create more hazard.”

Mr. Jones further testified that in all probability it (the lounge) will create an unusual condition with the traffic and the safety.

The Honorable Charles Carsner, Mayor of the City of Victoria, testified that the intersection of Sam Houston Drive and Kings-way is an already congested intersection and the establishment of a lounge at that location would bring about special circumstances insofar as traffic is concerned. The mayor testified in effect that in all reasonable probability, the establishment of an on-premises tavern at the particular location in question, maintaining hours between 3:00 p. m. and 2:00 a. m., would create unusual conditions with the traffic resulting in a safety problem to the citizens who live in the particular area. The mayor testified that he would recommend a denial of the permit. It had been his experience that when lounges were located in residential areas they result in an increase in police assistance calls to that particular area.

Considering the entire record and all the evidence, we cannot say that reasonable minds could not have reached the same conclusion that the assistant administrator reached in denying appellant, Dienst, his permits. Appellant’s points of error No. 1 and 2 are overruled.

Appellant Dienst, in his third point of error, contends that the denial of the permits is discriminatory as between this appellant and other permittees and businesses. More specifically, appellant asserts that he is being discriminated against because a situation exists where it would be permissible to operate a business which would cause an increase in traffic, (if no alcoholic beverages were sold on the premises) but not so if the business operated on such premises allowed alcohol to be sold and consumed thereon.

The provisions of the Texas Liquor Control Act are an exercise of the police powers of the State for the protection of the welfare, health, peace, temperance and safety of the people of this State. Article 666-2, Tex.Penal Code Ann. (1971). The permits and licenses issued under the Texas Liquor Control Act are purely personal privileges. Article 666-11(6) of the Texas Penal Code is a legislative enactment providing for the protection of the people of this State under the legitímate exercise of the State’s police power. It is not discriminatory on its face nor does its language make it mandatorily discriminatory when applied. Morgan v. Texas Alcoholic Beverage Commission, supra. There appears no evidence that the statute was applied discriminatorily. The evidence reflects that there are no comparable types of businesses allowing on-premises consumption in this particular area in which appellant’s lounge is proposed to be located. The evidence further shows, as stated above, that an unusual condition or situation would be present, that is, the locating of the lounge at this busy intersection in the middle of a residential area would cause an increased traffic hazard and would require an increase in police assistance. This justifies the finding of the commission and causes us to conclude that the agency’s decision is supported by substantial evidence. Appellant’s third point is overruled.

The judgment of the trial court is AFFIRMED.