author: CADENA, Justice.

text:
    Sarah E. BARTLEY et al., Appellants, v. Robert A. SONE, Appellee.
    No. 15296.
    Court of Civil Appeals of Texas, San Antonio.
    Oct. 30, 1974.
    Rehearing Denied Feb. 5, 1975.
    Second Rehearing Denied Oct. 1, 1975.

      Morriss, Boatwright, Lewis & Davis, San Antonio, C. H. Gilmer, Rocksprings, for appellants.
    Thurman Lee Mulhollan, Corpus Christi, Robert A. Sone, Leakey, for appellee.
   CADENA, Justice.

This case involves the right to use water emanating from a spring and flowing in a ditch which will be referred to in this opinion as the “Waddle Ditch.”

Plaintiff, Robert E. Sone, is the owner of the west ⅛ of Survey 22, Block 3, Cert. %s, T. W. G. N. Ry., in Real County. At the time the case went to trial, the east ¾ of Survey 22 was owned by defendants, Sarah E. Bartley, Marvin Conner, and Betty Perry and husband, Jim Perry. Another defendant, M. L. Hocker, was in possession, as tenant, of the east ¾ of the survey. After testimony had terminated, but before judgment was rendered, Howard E. Davis, Jr., and wife, Sarah Margaret Davis, purchased the interests of Bartley, Conner and the Perrys in the east ¾ of the survey and were permitted to intervene as defendants.

Defendants appeal from a judgment declaring that plaintiff had the unlimited and unrestricted right to use the water flowing in the Waddle Ditch “for any purpose he may desire” and limiting the defendants to the right to use only such water as may be available “at the end of the” Waddle Ditch after the “unrestricted and unlimited use” of such water by plaintiff. The judgment also awarded plaintiff injunctive relief, but a description of that portion of the judgment is unnecessary, since we agree with defendants’ points 21-25, unchallenged by plaintiff, that the evidence does not warrant injunctive relief.

The west ½ of Survey 22 will be referred to in this opinion as the “Sone property,” while the east ¾ of the survey, owned by defendants, will be designated as the “Bart-ley property.” At times, in the testimony, the exhibits and the briefs, Survey 22 is referred to as “Section 22,” but, whichever term is used, the reference is to the land involved in this litigation.

Several springs are located on the Sone property. Prior to May 11, 1894, the water from these springs flowed in a general southerly direction across the Sone property and into Bull Head Creek, a tributary of the Nueces River, at a point on the Sone property. At no time did any of the water from the springs flow onto or across any portion of the Bartley property. One of these springs is the source of the water which flows in the Waddle Ditch. (Findings of Fact 19, 20 and 21).

On September 1, 1894, Phil Waddle, one of plaintiff’s predecessors in title, executed an affidavit of appropriation of the water from the springs. (Findings of Fact 4 and 13). Although this affidavit was filed with the county clerk, the record does not disclose the date of such filing. (Finding of Fact No. 5).

It is undisputed that on May 11, 1894, Phil Waddle commenced construction of three irrigation ditches for the purpose of capturing the water emanating from the springs and transporting it for use on other portions of the Sone property. The September 1,1894, Waddle affidavit recited the completion of these three ditches and described their location. One of these ditches is the one referred to in this opinion as the Waddle Ditch. This ditch ran in a general easterly direction from its point of origin at the spring, across the Sone property, and terminated at the eastern boundary of such property, which is also the western boundary of the Bartley property. (Findings of Fact 16, 17, and 24).

On May 12, 1894, one day after commencement of construction of the Waddle Ditch, J. E. T. Burris, one of defendants’ predecessors in title (Finding of Fact No. 14), began construction of an irrigation ditch which will be designated in this opinion as the “Burris Ditch.” This ditch connected with the Waddle Ditch at the point where the latter ditch terminated on the eastern boundary of the Sone property and the western boundary of the Bartley property. (Finding of Fact No. 24). On November 30, 1894, Burris filed his affidavit of appropriation with the County Clerk. (Finding of Fact No. 11). This affidavit contained the following language: “Said ditch is supplied by water from the Waddle . Ditch . . . and this description is made to obtain the right to said waters next after Mr. P. Waddle.” (Finding of Fact No. 12).

The Waddle and Burris affidavits of 1894 were filed in compliance with the provisions of Tex.Gen.Laws 1889, ch. 88, p. 100, the statute then in force. Under this statute, a person who had constructed works for the appropriation of water subject to appropriation was directed to file an affidavit with the County Clerk containing details of the ditch or canal. Under the provisions of § 8 of this statute, upon the filing of the affidavit the rights of the appropriator “related back” to the date of commencement of construction of the ditch or canal. Under this provision, Waddle’s rights had their inception on May 11, 1894, the date he commenced construction of the Waddle Ditch, while the rights of Burris came into being on May 12,1894, the date of commencement of construction of the Burris Ditch.

In 1913 the legislature created the Board of Water Engineers and made significant changes in the statutory law concerning the appropriation of public waters. Tex.Gen. Laws 1913, ch. 171, p. 358. Among other things, the 1913 statute directed that, within one year after the effective date of the statute, appropriators of water file with the Board of Water Engineers certified copies of the sworn statements of appropriation previously filed with the county clerk under prior statutes. In 1915 the period for filing of such certified copies was extended until March 31, 1916. The filing of the certified copy of a prior affidavit of appropriation is generally referred to as a “certified filing,” or, simply “CF.”

Prior to March 16,1916, Waddle conveyed the Sone property to 1.1. Hutcherson, while Burris conveyed the Bartley property to T. R. Moore. Both Hutcherson and Moore filed with the Board of Water Engineers certified copies of the affidavits of appropriation filed with the county clerk in 1894 by Waddle, in the case of Hutcherson, and by Burris, in the case of Moore. The file marks on these instruments reflect that they were both filed at 2:00 P.M. on March 16, 1916. The Moore certified filing appears on page 302 of Book 5 of the water appropriation records of the Board of Water Engineers and bears the file number 884, while the Hutcherson certified filing appears on page 384 of Book 5 and bears the number 885.

CF 885 filed by plaintiff’s predecessor in title, Hutcherson, is accompanied by Hutch-erson’s affidavit which recites: (1) At the time Waddle filed his affidavit of appropriation in 1894, the Waddle Ditch had been completed and was in actual use. (2) From 1894 to the date of filing of CF 885, “all the water that has been needed has been used, which has take [sic] the total capacity of the ditch, except in very wet years when not quite all has been used.” (3) The water was used to irrigate “about (25) twenty-five acres of land out of the W. ½ N. E. ¾ of Section 22, said land being owned by me due course of transfer from Phil Waddell [sic].” (Emphasis added. The description of the land being irrigated as being located in the “N. E. V4” of the survey does not describe any land ever owned by plaintiff or his predecessors in title, including Waddle and Hutcherson. The N. E. of the survey has, at all times relevant to this controversy, been owned by defendants and their predecessors in title. However, as required by the 1913 statute, CF 885 in-eludes the 1894 Waddle affidavit of appropriation which correctly describes the Waddle Ditch as being located wholly on the Sone property, and the statement in CF 885 that the land being irrigated by Hutcherson was owned by Hutcherson “by due course of transfer” from Phil Waddle necessarily refers to the Sone property, which is the property transferred by Waddle to Hutch-erson prior to the filing of CF 885.)

CF 884 filed by Moore, defendants’ predecessor in title, after describing the Burris Ditch, declares: (1) The water from the Burris Ditch which was used for irrigation purposes, was the “surplas [sic] water that is not used by I. I. Hutcherson, who owns the upper end of said ditch.” (It is clear that the words “the upper end of said ditch” which CF 884 describes as being owned by Hutcherson, refers to the Waddle Ditch, and not to the “upper end” of the Burris Ditch.) (2) Since 1894 the water flowing in the Burris Ditch consisted of “all the water that has come down said ditch as surplas [sic], not used by I. I. Hutcherson.” (3) The water was used to irrigate “about 13½ acres” of the Bartley property.

Plaintiff’s predecessors in title filed with the Board of Water Engineers reports concerning the use of water from the Waddle Ditch on the Sone property in 1919, 1949, 1950, 1951, 1952, 1953 and 1954. The trial court’s finding of fact No. 8 states that one of plaintiff’s predecessors in title filed a report for the year 1929, but we agree with defendants’ contention, embodied in the point of error No. 9, that there is no evidence to support this finding. This error, however, is harmless. In any event, we attach no significance to these reports, since they are of no assistance in determining the amount of water used on the Sone property during the years covered by the reports.

Plaintiff acquired title to, and went into possession of, the Sone property in 1955, since which time, according to the ninth finding of fact, he has filed yearly water reports. Defendants contend that there is no evidence to support this finding, but since plaintiff testified that he had filed such reports every year, defendants’ tenth point of error is without merit. However, only the report filed by plaintiff for 1955, the year he went into possession, was introduced in evidence. This report recites: (1) Plaintiff had no means of measuring the water used, but he had not used all the water from the spring. (2) Since plaintiff had not taken possession until May, 1955, he had used hardly any water, but he was preparing the land for cultivation. (3) The water in the Waddle Ditch ran onto the property of “another” who “uses the excess by permission only.”

Defendants and their predecessors in title filed water reports for the years 1919, 1926, 1927, 1929 and 1953-1960. The 1919 report, filed by Moore, states that the water used by him was “wast [sic] water” from the Waddle Ditch, and added that the water available to him was insufficient since, because of drought, Hutcherson used “nearly all” the water. The 1926 report reflects the use of 141,200 cubic feet of water to irrigate 13 acres, while the 1927 report states that 12,800 cubic feet were used on 13 acres. It is impossible to determine from the 1929 report whether the amount of water used on the Bartley property was 175,040 cubic feet or 175,040 cubic feet.

The reports filed for the years 1953-1960 make no attempt to estimate the amount of water used during those years. The number of acres being irrigated, according to these reports, varied from eight acres in 1958 to 35 acres in 1959 and 1960. The 1958 report recites that there was “plenty of water” and that the Bartley property was irrigated “all the time except when there was sufficient rainfall.” The 1960 report declares that the Burris Ditch “runs all the time.”

In addition to the findings of fact identified by number in the preceding portions of this opinion, the trial court found that during the existence of the Waddle Ditch plaintiff and his predecessors in title had used the water in such ditch “as they saw fit” (finding No. 26); from time to time the persons owning or in possession of the Bart-ley property had gone upon the Sone property for the purpose of cleaning and repairing the Waddle Ditch, but, except during the period beginning on May 5, 1965, and June 10, 1965, the date on which plaintiff filed this suit, such entry and work “was done with the permission of the then owners of” the Sone property (finding No. 27); when, during the May 5,1965-June 10,1965 period, Bartley and his tenant attempted to exercise control of the Waddle Ditch, plaintiff, Sone, “informed them that they had no legal right to clean or repair” such ditch (finding No. 29. There is no finding numbered 28); the water in the Burris Ditch has been the only water available for irrigation and domestic purposes on the Bartley property (finding No. 30); and at times plaintiff and his predecessors in title “had used all the water in the Waddle Ditch, leaving no water for the Burris Ditch” (finding No. 31).

We agree that, as contended by defendants, there is no evidence to support the finding (No. 26) that, “during the entire existence of the Waddle Ditch,” plaintiff and his predecessors in title had used the water in that ditch “as they saw fit,” and that there is no evidence to support the finding (No. 31) that plaintiff and his predecessors in title had, at times, “used all the water in the Waddle Ditch, leaving no water for the Burris Ditch.”

Plaintiff’s claim of ownership of all the water flowing in the Waddle Ditch is based on (1) excavation and capture of percolating waters and bringing them to the surface; (2) the Waddle affidavit of appropriation filed in 1894 and the certified filing (CF 885) by Hutcherson in 1916; ownership of the water emanating from the springs by reason of the fact that the springs are located on plaintiff’s land.

Defendants rely on the Burris affidavit of appropriation filed in 1894 and the certified filing by Moore (CF 884) in 1916.

The record does not support plaintiff’s claim of ownership of the water on the theory that he acquired title to it as a result of excavation and capture of percolating waters by bringing them to the surface. In any event, the trial court made no findings of fact relating to this theory and plaintiff made no request for additional findings. Since no element of this ground of recovery was found by the trial court, we must consider this ground of recovery as waived. Tex.R.Civ.P. 299; 4 McDonald, Texas Civil Practice § 16.09, p. 25 (1971).

Nor can the trial court’s conclusion that plaintiff is entitled to use all of the water in the Waddle Ditch be supported on the basis of compliance with applicable statutes.

It has always been the law in Texas that as between appropriators of water, the first in time is the first in right. Hutchins, Texas Law of Water Rights 228 (1961). Because of the doctrine of relation back, the claim of Waddle, perfected by his filing of the 1894 affidavit, was first in time, and, therefore, the Waddle claim is superior to the rights acquired by Burris. However, under the express provisions of the 1889 statute, Waddle, by filing the affidavit, obtained only the prior right “to such quantity of the water only as is reasonably sufficient and necessary to irrigate the land susceptible of irrigation on either side of ditch or canal.” Tex.Gen.Laws 1889, ch. 88, p. 100, § 4. There is nothing in the record to indicate that the amount of water reasonably sufficient and necessary to irrigate the Sone property was equal to the entire output of the spring. Even if we should assume that at times the entire flow from the spring was reasonably necessary for the proper irrigation of the Sone property, the record does not indicate the volume of flow from the spring during those years. It may be true that during drought years the prior appropriator has the right to use all the water if the use of such amount is reasonably necessary, even if his exercise of such right completely deprives subsequent appropriators of water. But the fact that, during dry years, the need of the prior appropriator demands the use of all the water does not give such appropriator the right to use all of the water at all times. His right remains the right to use such amount of water as is reasonably necessary. This is the only right acquired by Waddle under the 1889 statute.

We find no basis for holding that the filing of CF 885 by Hutcherson in 1916 in any way enlarged or increased the right which was acquired by Waddle in 1894 and which passed to Hutcherson when he acquired the Sone property from Waddle. It is, we think, clear that the provisions in the 1913 statute relating to the filing of certified copies of prior appropriation affidavits were intended to establish a central filing agency, the Board of Water Engineers, where all records relating to appropriations of water could be kept. The filing of the certified copies of prior affidavits of appropriation was not intended to increase the rights acquired by the prior filings with county clerks. The legislature, in § 98 of the 1913 legislation, expressly disavowed any intention “to alter, affect, impair, increase, destroy, validate or invalidate any existing or vested right . . . .”

Therefore, assuming that the water flowing from the spring was water which was subject to appropriation by compliance with applicable appropriation statutes, neither Waddle nor his successors in title acquired the right to use all of the water flowing from the spring as they saw fit. The judgment of the trial court, then, cannot rest on the Waddle affidavit of 1894 and the 1916 filing of a certified copy of such affidavit by Hutcherson.

However, the judgment of the trial court can be upheld on the theory that plaintiff owns all of the water in the Waddle Ditch because such water comes from a spring or springs located wholly on plaintiff’s land.

The owner of land “owns also all ordinary springs and waters arising thereon.” Toyaho Creek Irrigation Co. v. Hutchins, 21 Tex.Civ.App. 274, 52 S.W. 101, 105 (Port Worth 1899, writ ref’d). This rule relating to ownership of water flowing from springs stems from the rule that the owner of land owns the water under the surface, generally referred to by hydrologists as “ground water.” Our statutory law recognizes this principle, although the legislature uses the term “underground water,” rather than “ground water.” Our statutes define “underground water” as “water percolating below the surface of the earth and that is suitable for agricultural gardening, domestic or stock raising purposes, but does not include defined subterranean streams or the underflow of rivers.” Tex.Water Code Ann. § 52.001(3) (1972). The Water Code expressly recognizes “the ownership and rights of the owner of the land . in underground water . . . .” Tex. Water Code Ann. § 52.002 (1972). These statutory provisions are but the embodiment of well settled rules relating to the ownership of percolating waters. Houston & T. C. Ry. v. East, 98 Tex. 146, 81 S.W. 279 (1904); Anno.: 55 A.L.R. 1385, 1390-95 (1928).

The rules referred to in the two preceding paragraphs are not applicable to water flowing in a subterranean stream or to the overflow of rivers. Nor are such rules applicable to springs which form the source of a flowing stream or which add perceptibly to the flow of water in a stream. However, in the absence of evidence that the flow of the spring in question had its source in a subterranean stream, or was of sufficient magnitude to be of any value to riparian proprietors, or was the source of, or added perceptibly to the flow of, a stream, it will be presumed that the spring was of such character that plaintiff “had the right . to . the use of their waters for any purpose, either on riparian or non-riparian land.” Texas Co. v. Burkett, 117 Tex. 16, 296 S.W. 273, 278 (1927). That is, it must be concluded that the springs “were the exclusive property of” plaintiff, “who had all the rights incident to them that one might have as to any other species of property.” Id.

Defendants argue that the trial court made no findings concerning the nature of the springs and the source of the water flowing from such springs, and that therefore plaintiff, who failed to request that the trial court make additional findings, waived his right to recover on this theory. We disagree.

Plaintiff specifically pleaded that the springs were located wholly on his land, and the trial court expressly so found. Under the doctrine applied in Burkett, in the absence of evidence to the contrary, it must be presumed that the springs were of such character that plaintiff had the right to use their waters for any purpose. If the exists ence of fact “A” gives rise to a presumption of fact “B”, then, when the existence of “A” is established, the law requires that the existence of “B” be assumed in the absence of evidence which would support a finding of the non-existence of “B.” Johnson’s Adm’r v. Timmons, 50 Tex. 521 (1878); Model Code of Evidence rule 104.1 (1942). It is clear that the doctrine applied in Burkett gives rise to a true presumption, which is a rule of law which compels the trier of fact to draw a certain conclusion from a given fact or group of facts in the absence of evidence rebutting such conclusion. 9 Wigmore, Evidence § 2491, at 289 (3d ed. 1940); Keeton, Statutory Presumptions— Their Constitutionality and Legal Effect, 10 Tex.L.Rev. 34 (1932); Chafee, the Progress of the Law, 1919-1921: Evidence, 35 Harv. L.Rev. 302 (1922).

If the existence of “A” requires and compels a finding of the existence of “B” in the absence of evidence to the contrary, it is clear that, in the absence of such rebutting evidence, the existence of “B” is established as a matter of law. Findings upon facts which are established as a matter of law are not required. Smith, v. Brown Express, 343 S.W.2d 550 (Tex.Civ.App.—San Antonio 1961, writ ref’d n. r. e.); Burmley v. Neeley, 207 S.W.2d 931 (Tex.Civ.App.—Amarillo 1947, writ ref’d n. r. e.).

Plaintiff’s claim to exclusive ownership of the water because the springs are located wholly on his land is established without resort to the doctrine of implied findings.

Defendants present several points based on alleged defects in CF 885, filed by Hutcherson in 1916. These contentions are without merit, in view of our conclusion that plaintiff was the exclusive owner of the water flowing from the springs and that his rights do not depend on compliance with the statutes concerning appropriation.

The judgment of the trial court is reformed by deleting from such judgment all portions granting plaintiff’s prayer for in-junctive relief. As so reformed, the judgment of the trial court is affirmed. Plaintiff (appellee) shall pay Vs of the costs of this appeal. The remaining of such costs are assessed against defendants (appellants).


source: Caselaw Access Project

license: Public Domain

text:
    Genevieve DeLeon URANGA, Appellant, v. C. V. URANGA, Appellee.
    No. 15327.
    Court of Civil Appeals of Texas, San Antonio.
    Feb. 12, 1975.
    Rehearing Denied Oct. 1, 1975.

      Pat Maloney, San Antonio, for appellant.
    V. F. Knickerbocker & Associates, Eagle Pass, for appellee.
   CADENA, Justice.

This is a divorce case in which appellant, Genevieve DeLeon Uranga, complains only of the property disposition portions of the judgment below. In this opinion appellant will be referred to as “wife,” while appellee, C. V. Uranga, will be designated “husband.”

The trial court held that the only community property accumulated by the parties was money on deposit in a bank in the amount of $5,260.59. $5,000.00 of this was awarded to wife and $260.59 to husband. The judgment further recited that all assets shown on a balance sheet reflecting husband’s financial position as of May 31,1973, nine months before the trial, were husband’s separate property.

The parties were married in April, 1972, and the evidence supports the conclusion that they lived together as husband and wife for only a few months. The trial of the divorce case began on October 8, 1973, and the divorce decree was signed on November 30, 1973.

Wife first contends that the trial court erred in permitting proof concerning the alleged separate nature of the property awarded to husband because there were no pleadings to support the introduction of such evidence.

We are familiar with cases containing statements to the effect that a spouse claiming that property on hand at the time of the dissolution of the marriage is his separate property should plead such fact fully, including the basis for such claim. See, e. g., Bobbitt v. Bobbitt, 223 S.W. 478, 485 (Tex.Civ.App.—Amarillo 1920, writ dism’d). In this case, husband’s petition for divorce alleged that there was no community estate “other than personal effects, which should be awarded to the person having possession.” In her answer, wife alleged that the parties owned separate and community property, but that because of the “extent and complexity and commingling of the properties of the parties . it is proper and just that an auditor be appointed” to determine the nature of the properties on hand.

Wife’s pleadings clearly disclose the existence of separate property. Without her determining whether statements such as that found in Bobbitt are correct expressions of the law, we hold that the reference in wife’s pleadings to the existence of separate property and her prayer that the property rights of the parties be determined were adequate to support the introduction of evidence as to the character and nature of the property so that the trial court might intelligently perform the duty imposed upon it by § 3.63, Tex.Family Code Ann., to partition the property in such manner as he may consider just and right under the circumstances. Schreiner v. Schreiner, 502 S.W.2d 840 (Tex.Civ.App.—San Antonio 1973, writ dism’d); Cox v. Cox, 439 S.W.2d 862 (Tex.Civ.App.—San Antonio 1969, no writ).

In any event, wife failed to object to the introduction of the evidence offered by husband in support of his claim of separate right in the property in question. We know of no reason why the doctrine of trial by implied consent of an issue not raised by the pleadings should not be applied here to bar wife’s complaint. Rules 45, 46 and 67, Tex.R.Civ.P. (1967); Zimmerman v. Zimmerman, 348 S.W.2d 239 (Tex.Civ.App.— San Antonio 1961, no writ).

Wife next contends that the trial court used an incorrect method in determining the extent of the community estate of the parties. She contends that the trial court based its determination solely on evidence to the effect that husband’s net worth as of May 31,1973, some four months prior to the trial, was less than his net worth as of December 31, 1971, about five months prior to the marriage. Wife correctly argues that this “before and after” method of determining the extent of the community estate is incorrect and that such showing by husband is insufficient to overcome the presumption established by § 5.02 of the Family Code that all property possessed by either spouse on dissolution of the marriage is community property. In re Marriage of Greer, 483 S.W.2d 490 (Tex.Civ.App.— Amarillo 1972, writ dism’d). However, in addition to the testimony concerning the net worth of husband as of December 31, 1971, and May 31, 1973, there is the testimony of W. E. Cook, a certified public accountant who had kept husband’s books and records for 15 years preceding the divorce action, who testified that all of the assets owned by husband as of May 31, 1973, could be traced back to the assets owned by him on December 31, 1971. We must, therefore, consider the sufficiency of all of the evidence to support the trial court’s finding since wife also contends that the evidence is insufficient to support the finding that all assets on hand at the time of the dissolution of the marriage, except the money in the bank, comprised the separate estate of the husband.

Our task of evaluating the evidence is not made easier by the fact that the exhibits which have been brought before us do not coincide with the exhibits which formed the basis for Cook’s testimony. At the trial, Cook identified two exhibits which were referred to as husband’s exhibits 1 and 2. He identified exhibit 1 as being a balance sheet reflecting husband’s financial condition as of May 31, 1973, four months before trial. This corresponds to exhibit 1 which is contained in the record brought forward to this court. Cook identified exhibit 2 as being a balance sheet showing the financial position of husband as of December 31, 1971, about five months before the marriage. However, the document which appears in the record before us as husband’s exhibit 2 is a balance sheet purporting to reflect husband’s financial condition as of December 31, 1972, ten months after the marriage, rather than December 31, 1971, five months before the marriage. Although it is obvious that much of Cook’s testimony relates to husband’s financial position as reflected by a balance sheet reflecting such position as of December 31, 1971, no such balance sheet is before us. None of Cook’s testimony relates to the balance sheet showing husband’s assets and liabilities as of December 31, 1972. It cannot be said that Cook in identifying exhibit 2 as the December 31, 1971, balance sheet, was guilty of only a slip of the tongue and meant to identify the exhibit as the December 31,1972, balance sheet, since the figures which form the basis of his testimony obviously are based on the assumption that exhibit 2 was the 1971 balance sheet, and the figures which he used do not coincide with the figures reflected in the exhibit 2 (balance sheet as of December 31, 1972) which is before us.

Cook’s testimony was to the effect that as of December 31, 1971, husband’s net worth, as reflected by what he labeled “exhibit 2,” was $596,373.80. The document marked “exhibit 2” which is before us shows that as of December 31, 1972, husband’s net worth was $414,137.73. Cook then testified that, as reflected by exhibit 1, the balance sheet of May 31, 1973, husband’s net worth was $577,896.86, a decrease in net worth in five months of $18,-476.94. Thus, the exhibits which we have before us show that during the year 1972 husband’s net worth decreased by $182,-236.07, and there is nothing in the record to indicate what portion of this decrease occurred in the four months of 1972 preceding the marriage, and what portion occurred in the eight months of 1972 during which the parties were married. By May 31, 1973, there had been an increase in net worth of $163,759.13 over the December 31,1972, figure. This increase, although it represents a net worth $18,476.94 less than that as of December 31, 1971, occurred while the parties were man and wife. Under these circumstances, it is impossible to say whether or not the husband’s net worth increased or decreased during the marriage.

The evidence discloses that during the marriage husband received income in the form of salary, dividends and rents which must be classified as community property. 1 Speer, Marital Rights in Texas §§ 416, 422, 427 (4th ed., Oakes, 1961). Husband’s 1972 income tax return shows receipt of $26,000.00 in salary, $16,104.60 in dividends, $34,798.24 in rentals and $665.22 as “miscellaneous income,” or a total income of $77,568.06. Against the rental income, husband offset, for tax purposes, “expenses” of $69,841.71, including interest in the sum of $29,743.56, ad valorem taxes in the sum of $14,848.70, labor in the amount of $6,691.04 and depreciation in the sum of $9,165.32, to show a net loss on his rental properties of $34,378.25. The record discloses no information concerning husband’s net income during the first nine months of 1973, except that there is evidence to the effect that he received a salary of $500.00 a week.

All of the testimony, including the balance sheet, relates to husband’s financial condition as an individual. The record discloses that a substantial portion of his business was transacted through a corporation, Eagle Oil Co., in which he owns 99x/2% of the stock and of which he is president. There is no evidence concerning the financial position of this corporation except for the accountant’s statement to the effect that Eagle Oil Co. operated at a loss during 1972, and husband’s statement to the effect that Eagle Oil Co. had never declared a dividend. However, the record discloses that as of May 31, 1973, husband owed Eagle Oil Co. $330,668.45, representing money which he had “borrowed” from the corporation. According to the December 31, 1972, balance sheet, husband owed the corporation $309,606.22. According to the accountant’s testimony, as of December 31, 1971, husband owed the corporation $267,-000.00. The increase is unexplained.

The evidence reveals that during the time the parties were married husband borrowed $145,000.00 for the purpose of constructing an apartment complex on his separate realty. The nature of this loan transaction is completely unexplained, and since money borrowed during marriage is presumed to be community property, it must be concluded that the $145,000.00 which husband invested in improving his separate realty was community property. 1 Speer, op. cit. § 440. It must also be concluded that at least a portion of the apartment complex is completed and occupied, since a woman who accompanied husband on a trip to the Bahama Islands and has accompanied him on various social occasions lives in one of the apartments. Husband testified that this woman pays no rent for the apartment which she occupies because she cooks his meals. There is no testimony relating to the rental received by husband from the apartments, nor is there any testimony relating to the value of the services received by husband from the tenant who cooks for him in lieu of paying rent.

In view of the fact that husband’s business affairs, to a substantial extent, are conducted through a corporation which must be presumed to be his alter ego, and in the absence. of testimony concerning the financial condition of the corporation, aside from the statement that it operated at a loss, despite the fact that husband had borrowed in excess of $330,000.00 from it, we cannot say that the record supports the conclusion that the husband’s interest in the corporation, although acquired by him before marriage, was his separate property. Dillingham v. Dillingham, 434 S.W.2d 459 (Tex.Civ.App.—Fort Worth 1968, writ dism’d); Mea v. Mea, 464 S.W.2d 201 (Tex.Civ.App.—Tyler 1971, no writ). This is particularly true in view of the fact that the record establishes that husband kept only one checking account and his admission that part of his salary was used for the purpose of defraying the corporation’s operating expenses.

It is also clear from the judgment that the trial court did not consider the fact that, under the state of the record, $145,-000.00 of community funds had been used by husband for the improvement of his separate realty.

While we conclude that the trial court erred in evaluating the extent of the community estate, we believe that the interests of justice would be better served if the case were remanded for further proceedings so that evidence developing the true nature of the various assets may be presented to the court.

Since neither party complains of the portion of the judgment dissolving the marriage, that portion of the judgment is affirmed. Insofar as the judgment determines the property rights of the parties, it is reversed and that portion of the cause is remanded to the trial court for further proceedings. ⅜

      . Cf. Zaruba v. Zaruba, 498 S.W.2d 6 dism.). 5 (Tex.Civ.App.—Corpus Christi 1973, err.


author: COULSON, Justice.

text:
    Gussie F. STOOT, Appellant, v. SOUTHERN PACIFIC COMPANY, Appellee.
    No. 1171.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    June 11, 1975.
    Rehearing Denied July 2, 1975.
    Writ of Error Granted Oct. 8, 1975.

      Robert G. Coltzer, Baker, Coltzer, All-mond & Coltzer, Galveston, for appellant.
    . Robert W. Alexander, McLeod, Alexander, Powel & Apffel, Galveston, for appel-lee.
   COULSON, Justice.

This is an appeal from a final judgment of the district court of Galveston County dismissing for want of prosecution appellant’s suit for personal injuries.

The appellant, Gussie F. Stoot, on August 11, 1971, filed suit in Galveston County against Southern Pacific Company, appel-lee, for personal injuries allegedly suffered on August 12, 1969. The appellant alleged that he sustained serious and permanent injuries as a result of a fall while descending from one of the passenger coaches owned and operated by the appellee. The suit was brought for the sum of $115,000.

On July 17, 1973, the parties were notified that the cause was being placed on the dismissal docket for want of prosecution. A hearing on the appellant’s motion to reinstate was had on October 2, 1973. At that time the case was set for trial on the non-jury docket for November 29, 1973. However, on October 5, 1973, the appellee demanded a jury trial. As a result of the appellee’s demand for jury trial, the case was removed from the non-jury docket. At the request of the appellee, the deposition of the appellant, Gussie F. Stoot, was taken on January 31, 1974. The deposition was filed by the reporter on August 14, 1974.

On October 17, 1974, the district clerk again notified the parties that the case had been placed on the dismissal docket for want of prosecution. The appellant, on November 15, 1974, filed a motion for reinstatement pürsuant to the local rules of Galveston County. That motion was heard on December 17,1974. After a full eviden-tiary hearing on the matter, the court denied the appellant’s motion for reinstatement and entered an order dismissing the case. The court’s final written order of dismissal was entered on January 2, 1975. The appellant filed a motion for rehearing on the motion for reinstatement on January 29, 1975. However, no order was ever entered on that motion. Appellant has perfected this appeal from the order of the trial court dismissing his cause of action.

As his only point of error the appellant asserts that “[t]he trial court erred in overruling Plaintiff’s Motion to Reinstate and in dismissing Plaintiff’s suit for want of prosecution.”

In his brief the appellant recognizes that the trial court’s decision to dismiss his suit for want of prosecution rests with the sound judicial discretion of the trial court. The appellant also recognizes that it was his duty to prosecute this suit to a conclusion with reasonable diligence. Where there has been an unreasonable delay in the prosecution of a suit, and such delay has not been sufficiently explained, there is a conclusive presumption of abandonment of appellant’s suit and dismissal is justified. Bevil v. Johnson, 157 Tex. 621, 307 S.W.2d 85 (1957); Callahan v. Staples, 139 Tex. 8, 161 S.W.2d 489 (1942); Missouri P. R. Co. v. Liberty County Water C. & I. Dist., 483 S.W.2d 50 (Tex.Civ.App.—Beaumont 1972, writ ref’d n. r. e.).

A suit may be dismissed for want of prosecution even though the appellant objects to the dismissal at the hearing thereon and manifests his intention to prosecute the suit to judgment. Rorie v. Avenue Shipping Co., 414 S.W.2d 948 (Tex.Civ.App.— Houston 1967, writ ref’d n. r. e). In this case the trial court reviewed the entire record. Such review revealed that no action was taken by the plaintiff from the date of the filing of this suit on August 11, 1971, until the date of the initial notice of dismissal given on July 17, 1973. That two year period of total inactivity bears on the question of the appellant’s diligence in the prosecution of this suit.

The evidence introduced at the hearing on December 17,1974, tends to demonstrate the following facts. From the time this suit was filed in 1971, until sometime in 1973, the appellant’s attorney was under unusual time limitations due to the fact that his partner ran for and was elected to the Texas State Legislature. The appellant’s attorney testified that, during this two year period, attorneys in the Galveston area practicing criminal law were under pressure to aid in overcoming a large back log of criminal cases. A new district court has been created in Galveston County, and that court had focused its attention on disposing of a back log of criminal cases which had evolved over the years. The record does not show why the trial court, at the initial hearing on dismissal for want of prosecution on October 2, 1973, decided not to dismiss the case, and set it for trial on the non-jury trial docket. However, we may infer that the trial court determined that the above outlined facts were sufficient cause to retain the case on the trial docket.

During the twelve month period from October 2, 1973, until October 17, 1974, the deposition of the appellant was taken at the request and on the insistence of the appel-lee. There was also evidence that some negotiations for settlement of the case took place during this period of time. The other testimony presented at the December 17, 1974, hearing focused on the presence or absence of certain witnesses who might be necessary at a trial of the case on the merits. It was the appellee’s position that at least one of the key witnesses was deceased, that the defendant Railroad no longer operated passenger services, and hence the Company no longer employed a number of employees who had been present at the time of the appellant’s injury. It was the appellee’s position that the appellant’s lack of diligence in prosecuting this case prejudiced the Railroad in defending itself against the claims asserted by Stoot.

Although in this case there was not that extraordinary level of activity which was present in the Rorie case, the evidence in this record does not sustain the finding by the trial court that this case should be dismissed for want of prosecution. In reviewing the cases involving dismissal of a suit for want of prosecution, we have found that in most of those suits the case had been on file for four to eight years. The number of years that a case has been on file is not an absolute rule for measuring due diligence. However, the presumption in favor of dismissal for want of prosecution tends to become stronger with age. In this case, plaintiff’s petition had been on file for only three years at the time of dismissal, had it been on file eight, seven, or even five years, dismissal would have been more justified. See Bevil v. Johnson, supra at 88.

Reversed and remanded.


author: McKAY, Justice.

text:
    CITY OF FARMERS BRANCH, Texas, et al., Appellants, v. MATSUSHITA ELECTRIC CORPORATION OF AMERICA, Appellee.
    No. 838.
    Court of Civil Appeals of Texas, Tyler.
    July 31, 1975.
    Rehearing Denied Aug. 28, 1975.

      Durant, Mankoff, Davis & Wolens, Ronald M. Mankoff, C. Robert Rainwater, Dallas, for appellants.
    Thompson, Knight, Simmons & Bullion, Jerry Buchmeyer, Dallas, for appellee.
   McKAY, Justice.

Plaintiff-appellee, Matsushita Electric Corporation of American (MEGA) brought suit against appellants, City of Farmers Branch, Texas, and T. E. Waldrip, the Tax Assessor-Collector of Farmers Branch, seeking a declaratory judgment that certain inventory on hand at MECA’s Farmers Branch warehouse on January 1, 1972, is exempt from taxation by virtue of the provisions of Article 1, Section 10, Clause 2 (the Import-Export Clause) of the United States Constitution. Further, MECA sought both temporary and permanent injunctions, enjoining Farmers Branch and Waldrip from attempting to impose, collect or enforce any taxes upon or with respect to the disputed inventory for the year of 1972. The trial court held that imported merchandise brought from Japan and stored in its original cartons in MECA’s Farmers Branch warehouse was exempt from taxation, but that any merchandise stored in MECA’s warehouse in Farmers Branch which was received from any other MECA warehouse in the United States was not exempt even if the merchandise remained in its original cartons. Also, the court held that any merchandise imported from Puerto Rico and stored in MECA’s warehouse in Farmers Branch was not exempt. The parties filed stipulated facts, and pursuant to appellants’ request, the trial court filed findings of fact and conclusions of law.

We have this day decided an appeal in City of Farmers Branch, et al v. American Honda Motor Co., Inc., No. 839, which appeal raised some of the same questions as are presented here.

This cause of action arose by virtue of appellants’ imposition of an ad valorem tax on personal.property located within Farmers Branch, under the power vested in it by Article 1165 of the Texas Revised Civil Statutes. MECA rendered to Farmers Branch for taxation certain personal property situated in its warehouse. MECA had additional personal property valued at $2,425,334.70 situated in its Farmers Branch warehouse which it did not render, claiming that the property was exempt under Article 1, Section 10, Clause 2, of the United States Constitution. Of that amount, the total value of Panasonic products imported from Puerto Rico was $140,714.71. It is undisputed that MEGA claimed this exemption and pursued all administrative remedies, but was denied the claimed exemption for the disputed inventory.

No manufacturing, repairing or servicing is carried on at the Farmers Branch warehouse, as it is only used to store the imported products prior to their sale and shipment to retailers, dealers, distributors and others in Texas, Louisiana, Mississippi, Arkansas, Oklahoma and three counties in Tennessee.

MECA did not claim any exemption from the ad valorem tax for (1) non-inventory property, (2) property not imported from outside the United States or (3) for imported products which had been removed from the corrugated cartons in which they were shipped from outside the United States. MECA did claim an exemption from taxation for the imported Panasonic products which remained in their original unbroken packages and were imported from either Japan or Puerto Rico.

The Panasonic products imported from Japan were manufactured in Japan and placed in corrugated cartons by the foreign manufacturer. Each carton was taped or stapled at the factory and was loaded into a large sea van, 40 feet long, 8 feet high and 8½ feet wide, weighing 6,260 pounds, and leased by an independent common carrier. After a sea van was loaded, it proceeded to dockside, was separated from its wheels and cab by crane and loaded onto a ship, where title to the products passed to MECA. The ship proceeded to the United States and at Seattle, Washington, the port of entry, federal custom duties were paid on the products. The entire van was removed from the ship by crane and affixed to a railroad flat car, by which it proceeded to Fort Worth, Texas. There, the van was once again affixed to wheels and a cab and proceeded directly to MECA’s warehouse in Farmers Branch. Upon the van’s arrival at the warehouse, each of the original corrugated cardboard cartons was unloaded and placed in the warehouse. Throughout the entire process described, the original corrugated cartons remained taped and/or stapled and were stored in that condition in the warehouse until an order was received from a dealer or distributor to purchase the particular products contained in the cartons. After unloading, the van was immediately returned to the carrier for use in transporting goods of other manufacturers and importers. At all times the van was owned or leased by the independent common carrier and MECA at no time had direct control over its progress. The Panasonic products imported from Puerto Rico were purchased by and shipped to MECA in the same manner as those imported from Japan except that the port of entry was New Orleans, Louisiana.

On a few occasions, when the MECA warehouse in Farmers Branch was in short supply of a particular Panasonic product, MECA made arrangements for a shipment of these products from another MECA warehouse in the United States. When these products arrived at the Farmers Branch facility they were in the original unbroken cartons in which they were imported from Japan or Puerto Rico.

In their first point, appellants maintain that the trial court erred in concluding that the goods in the Farmers Branch warehouse of MECA on January 1, 1972, had not been incorporated into the mass of goods in the United States, and, therefore, were still “imports” for the purposes of Article 1, Section 10, Clause 2 of the United States Constitution. Appellants argue that (1) the disputed inventory, through an elaborate marketing system, has lost its character as imports; (2) the disputed inventory has been fully committed to appellee’s operational needs and, therefore, should not be tax exempt; and (3) the act of importation may end, and in this ease has ended, before the goods are removed from the original package. We disagree.

Article 1, Section 10, Clause 2 of the United States Constitution provides:

“No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its Inspection Laws * ⅜

In Brown v. State of Maryland, 25 U.S. (12 Wheat.) 419, 6 L.Ed. 678 (1827), the Supreme Court interpreted the Import-Export Clause and adopted what has become known as the “original package” doctrine. The Court stated, speaking through Chief Justice Marshall:

« ⅜ * * w}jen the importer has so acted upon the thing imported, that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the State; but while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the constitution.” Brown v. State of Maryland, supra, p. 441-2.

The United States Supreme Court has continued to apply the original package doctrine in Low v. Austin, 80 U.S. (13 Wall.) 29, 20 L.Ed. 517 (1872); Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252 (1945); and Dept, of Revenue v. James Beam Distilling Co., 377 U.S. 341, 84 S.Ct. 1247, 12 L.Ed.2d 362 (1964). Some of the more recent state and federal court decisions which apply the “original package” doctrine to imported goods held for sale are: Wages v. Michelin Tire Corporation, 233 Ga. 712, 214 S.E.2d 349 (1975) cert, granted; Wilson v. County of Wake, 19 N.C.App. 536, 199 S.E.2d 665, 668 (1973); Price Paper Corporation v. Detroit, 42 Mich. App. 488, 202 N.W.2d 523, 525 (1972); Sterling Liquor Distributors Inc. v. County of Orange, 3 Cal.App.3d 510, 83 Cal.Rptr. 571 (1970) cert. denied, 400 U.S. 822, 91 S.Ct. 43, 27 L.Ed.2d 50 (1970); Tricon, Inc. v. King County, 60 Wash.2d 392, 374 P.2d 174 (1962) cert. denied, 372 U.S. 908, 83 S.Ct. 721, 9 L.Ed.2d 717 (1963); Standard-Triumph Motor Company v. City of Houston, Texas, 220 F.Supp. 732, 734 (S.D.Tex.1963) vacated on other grounds, 347 F.2d 194 (5th Cir. 1965) cert. denied 382 U.S. 974, 86 S.Ct. 539, 15 L.Ed.2d 466 (1966); State ex rel. H. A. Morton Company v. Board of Review, City of Milwaukee, 15 Wis.2d 330, 112 N.W.2d 914 (1962); Miehle Printing Press and Manufacturing Company v. Department of Revenue, 18 Ill.2d 445, 164 N.E.2d 1 (Ill.1960); Singer Co. v. County of Kings, 46 Cal. App.3d 852, 121 Cal.Rptr. 398 (1975).

In the case at bar, the disputed inventory remained as the property of MECA, in MECA’s Farmers Branch warehouse in the corrugated cartons in which it was imported. Therefore, applying the “original package” doctrine, we believe that a tax upon the disputed inventory could not escape the prohibition set forth in the Import-Export Clause of the Constitution.

In Youngstown Sheet and Tube Company v. Bowers, 358 U.S. 534, 541-2, 79 S.Ct. 383, 3 L.Ed.2d 490 (1959), the Supreme Court, relying upon Brown v. Maryland, reemphasized some of the acts or conduct of the importer that would deem the importer to have ‘so acted upon the thing imported’ as to cause it to be ‘mixed up with the mass of property in the country (and to lose) its distinctive character as an import.’ The Court stated that goods lost their character as imports when the importer (1) ‘sells them,’ (2) ‘(breaks) up his packages, and (travels) with them as an itinerant pedlar’ or (3) when goods are brought into this country by an importer ‘for his own use’ and are here ‘used’ by him. Also, see Brown v. Maryland, supra.

In the case at bar, at the time of the controversy MECA had not (1) sold the disputed inventory, (2) broken the disputed inventory out of the corrugated cartons in which it was imported, nor (3) brought the disputed inventory into the country for its own use and here used the inventory in such a manner that it has become incorporated and mixed up with the mass of property in the country.

Appellants attempt to rationalize by analogy the facts involved in the case at bar with the opinion of the court in Youngstown in which the court stated that the iron ore, lumber, and veneers had been irrevocably committed to use in manufacturing at the plants to which they were shipped and that the iron ore, lumber and veneers were necessarily required to be kept on hand to meet current operational needs and were actually being used to supply those needs. To show that imported goods which are held for sale should be treated similarly to imported goods held for use in manufacturing, appellants cite a quote from Hooven & Allison Co. v. Evatt, supra, which is discussed in the following quotation from Youngstown, supra, 542, 79 S.Ct. 388:

“In Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252, it was held that goods imported for ‘use’ share the same immunity as goods imported for ‘sale,’ and that goods imported ‘for manufacture [do not] lose their character as imports any sooner or more readily than imports for sale’ (id., 324 U.S. at page 667, 65 S.Ct. at page 878); but ‘when [the imported goods are] used for the purpose for which they are imported, they cease to be imports and their tax exemption is at an end.’ Id., 324 U.S. at page 665, 65 S.Ct. at page 877.”

The Youngstown case has been distinguished many times from cases similar to the case at bar, and we believe that the facts involved here are distinguishable from Youngstown. Later in the Youngstown opinion is found this language (79 S.Ct. 389):

“ * * * The constitutional design was then to immunize imports from taxation-by the importing States, and all others through or into which they may pass, so long as they retain their distinctive character as imports. Hence, that design is not impinged by the taxation of materials that were imported for use in manufacturing after all phases of the importation definitely have ended and the materials have been ‘put to the use for which they [were] imported.’ (Hooven & Allison Co. v. Evatt, supra, 324 U.S. [652] at page 657, 65 S.Ct. at page 873), for in such a case they have lost their distinctive character as imports and are subjection to taxation * *

We agree with a quote from Tricon, Inc. v. King County, supra, 374 P.2d p. 176:

“We do not think the Supreme Court has indicated by implication that goods imported for resale, and which remain in their original containers, lose their character as imports immune from state taxation when they become a part of the importer’s current inventory of goods held for sale.”

Appellants’ first point is overruled.

In their second point appellants maintain the trial court erred in concluding that the general property tax imposed on the disputed inventory is an “impost” or “duty” within the meaning of the import clause of the United States Constitution. Appellants argue that Youngstown established that a non-discriminatory property tax does not violate the Import-Export Clause, and that the language of the Import-Export Clause indicates that a general property tax was not within its intended prohibition. We disagree.

The Supreme Court of the United States has rejected appellants’ argument in Low v. Austin, supra, by holding that while goods retain their character. as imports, a tax upon them in any form is within the constitutional prohibition. The court stated: “The question is not as to the extent of the tax, or its equality with respect to taxes on other property, but as to the power of the State to levy any tax.” (Emphasis added.) If, in fact, any discrimination against domestic and in favor of foreign producers of goods does result because of the tax immunity of imports, such discrimination is implicit in the constitutional provision and in its purpose to protect imports from state taxation. Hooven & Allison Co. v. Evatt, supra. Moreover, the disputed inventory was subject to substantial custom duties while domestic goods are not.

The rationale of Low and Hooven that all taxes, even non-discriminatory ad valorem taxes, are unconstitutional if imposed upon merchandise which retains its status as imports has been reaffirmed in Richfield Oil Corp. v. State Board of Equalization, 329 U.S. 69, 76, 67 S.Ct. 156, 91 L.Ed. 80 (1946) and Department of Revenue v. James Beam Distilling Company, supra, 377 U.S. p. 343, 84 S.Ct. 1247.

Appellant also argues that the rationale employed in interstate commerce cases should be applied to the disputed inventory so that a non-discriminatory tax will not violate the import clause.

The Import-Export Clause and the Commerce Clause, while related, are not coterminous. There are two important differences between the two clauses. First the Import-Export Clause prohibits taxation by the states on the import or export, while the application of the Commerce Clause has no relationship to whether an article was, or ever had been, an import or export. Second, the Commerce Clause is not cast in terms of a prohibition against taxes but in terms of power of the Congress to regulate commerce. The Import-Export Clause does not prohibit every state from laying “any discriminatory” tax on imports or exports, but rather prohibits the state from laying “any” tax — “except what may be absolutely necessary for executing its inspection Laws.” Richfield Oil Corp. v. State Board of Equalization, supra, 67 S.Ct. 159-60. Consequently, we cannot write any qualifications into the Import-Export Clause. Appellants’ second point is overruled.

In their third point, appellants maintain the trial court erred in concluding that the goods stored in the Farmers Branch warehouse of MECA had not been removed from the containers in which they had been transported into this country and, therefore, were not subject to local taxation under the “original package” doctrine. Appellants argue that the sea van is the original package since it is the container in which the units are shipped from Japan or Puerto Rico. We do not agree.

The facts in the case at bar reveal that the sea van is furnished by the steamship lines for the purpose of carrying the corrugated cartons overseas and that when the sea vans are unloaded at Farmers Branch, they are returned to the steamship line for use in transporting goods of other manufacturers and importers. The mere use of new technology in shipping should not destroy the tax immunity of the property shipped. Here, the use of the sea van did not go to the essential nature of the transaction, but only to formalities of transportation. Therefore, we do not believe that the opening of the sea vans constitutes the breaking of the original packages. Wages v. Michelin Tire Corporation, supra; Montgomery Ward & Co., Inc. v. County of Alameda, 390 F.Supp. 177 (N.D.Cal.1975); Michigan State Tax Commission v. Garment Corporation, 32 Mich.App. 715, 189 N.W.2d 72, cert. denied, 404 U.S. 992, 92 S.Ct. 538, 30 L.Ed.2d 544 (1971).

In its first cross-point, appellee maintains the trial court erred in holding that merchandise which was imported by MECA and stored at MECA’s warehouse in Farmers Branch in its original, unbroken cartons, was not exempt from taxation under the Import-Export Clause if it was first stored in some other MECA warehouse in the United States. We sustain appellee’s contention.

We are unable to distinguish between the situation in which the disputed inventory is shipped directly from its port of entry to Farmers Branch and the situation in which the disputed inventory is stored in the corrugated cartons in which it was shipped in another MECA warehouse in the United States before it is shipped to Farmers Branch. The Import-Export Clause was intended to immunize imports from taxation by the importing states, and all other states through or into which they may pass so long as they retain their distinctive character as imports. Youngstown Sheet & Tube Co. v. Bowers, supra, 79 S.Ct. p. 389. It matters not that the imported merchandise is stored in the original package at the importer’s warehouse at the port of entry or in an interior state. This tax immunity attaches and “survives their arrival in this country and continues until they are sold, removed from the original package, or put to the use for which they are imported.” Hooven & Allison Co. v. Evatt, supra, 324 U.S. p. 657, 65 S.Ct. p. 873; Wilson v. County of Wake supra.

Therefore, we believe the trial court erred in holding that the disputed inventory which was stored in the “surplus” storage area of another warehouse before it was shipped to the Farmers Branch warehouse, is not exempt from taxation. This portion of the judgment is reversed and rendered for appellee.

In its second cross point, appellee maintains that the trial court erred in holding that merchandise imported by MECA into the United States from Puerto Rico was not an “import” within the meaning of the Import-Export Clause of the United States Constitution. We sustain appellee’s contention.

Merchandise which is brought into the United States from a place without the country, even though the merchandise does not come from a foreign country, may be considered as “imports.” The only material question which must be determined is whether it came from a place without the country. Hooven & Allison Co. v. Evatt, supra, 671, 65 S.Ct. 870.

The United States acquired Puerto Rico by cession without obligation to admit it to statehood or to incorporate it as a part of the United States. We do not believe Puerto Rico is a part of the United States in the sense that it is subject to and enjoys the benefits or protection of the Constitution as do the States which are united under the Constitution. Hooven & Allison Co. v. Evatt, supra, 678, 65 S.Ct. 870.

Puerto Rico is apparently now a commonwealth. An instrument of government or constitution was adopted by Puerto Rico pursuant to a congressional statute; and it seems to have more autonomy than a territory but is short of statehood. If not “a territory” it is not a part of the country proper. Merchandise brought into one of the United States from Puerto Rico would be “imports” under the Import-Export Clause of the U. S. Constitution and entitled to the immunity from taxation as goods from a foreign country. See Rice Growers’ Assn, of California v. County of Yolo, 17 Cal.App.3d 227, 94 Cal.Rptr. 847, 852, 853 (1971).

Therefore, we believe that the trial court erred in holding that merchandise imported by MECA into the United States from Puerto Rico was not an “import,” and that portion of the trial court’s judgment is reversed and judgment is rendered in favor of appellee.

The judgment of the trial court is affirmed in part and reversed in part, and judgment is here rendered for appellee to that portion of the judgment which is reversed.

Since we have affirmed the judgment in part and reversed in part, we tax the costs on appeal and in the court below equally against appellants and appellee. Coca Cola Bottling Company of Houston v. Hobart, 423 S.W.2d 118, 126 (Tex.Civ.App.—Houston 14 Dist., 1967, writ ref’d, n. r. e.); Combined American Insurance Company v. City of Hillsboro, 421 S.W.2d 488, 491 (Tex.Civ.App.—Waco, 1967, writ ref’d n. r. e.); Wichita National Bank v. United States Fidelity & Guaranty Co., 147 S.W.2d 295, 298 (Tex.Civ.App.—Fort Worth, 1941, n. w. h.); Rule 448, T. R. C. P.

ON MOTION FOR REHEARING

Appellee Matsushita Electric Corp. of America, moves for a rehearing only insofar as our original opinion and judgment taxes the cost one-half to appellants and one-half to appellee. In our original opinion the judgment of the trial court was affirmed in part and reversed and rendered in part. We taxed the cost one-half to appellants and one-half to appellee.

However, appellee reminds us that the portion of the trial court’s judgment we reversed was on the cross-points of appellee and therefore all relief was denied to the appellants and full relief granted to appel-lee.

We confess our error in this regard and accordingly that portion of our original decision in this cause is modified to the extent that all of the costs are taxed against the appellants.

Appellants also have filed a motion for rehearing which we have duly considered and same is overruled.


author: DUNAGAN, Chief Justice.

text:
    CITY OF FARMERS BRANCH, Texas, et al., Appellants, v. AMERICAN HONDA MOTOR COMPANY, INC., Appellee.
    No. 839.
    Court of Civil Appeal of Texas, Tyler.
    July 31, 1975.
    Rehearing Denied Aug. 28, 1975.

      Durant, Mankoff, Davis & Wolens, Ronald M. Mankoff, C. Robert Rainwater, Dallas, for appellants.
    Carrington, Coleman, Sloman, Johnson & Blumenthal, Marvin S. Sloman, Peter Tier-ney, Dallas, for appellee.
   DUNAGAN, Chief Justice.

Plaintiff-appellee, American Honda Motor Company, Inc. (American Honda) brought suit against appellants City of Farmers Branch, Texas, and T. E. Waldrip, the Tax Assessor-Collector of Farmers Branch, seeking a declaratory judgment that certain inventory on hand at American Honda’s Farmers Branch warehouse on January 1,1972, is exempt from taxation by virtue of the provisions of Article 1, Section 10, Clause 2 (the Import-Export Clause), of the United States Constitution. Further, American Honda sought a permanent injunction, enjoining Farmers Branch and Waldrip from attempting to impose, collect or enforce any taxes upon or with respect to the disputed inventory for the year of 1972. In a non-jury trial, the court held that imported merchandise in American Honda’s surplus storage brought to Farmers Branch directly from Japan was exempt from taxation under the Import-Export clause, but that otherwise exempt imports in “surplus storage” in American Honda’s Farmers Branch warehouse brought from “surplus storage” in other warehouses of American Honda in the continental United States were not exempt. The parties filed stipulated facts, and pursuant to appellants’ request, the trial court filed finding of fact and conclusions of law.

We have this day decided an appeal in City of Farmers Branch et al. v. Matsushita Electric Corporation of America, 527 S.W.2d 768, which appeal raised some of the same questions as are presented here.

This cause of action arose by virtue of appellants’ imposition of an ad valorem tax on personal property located within Farmers Branch, under the power vested in it by Article 1165 of the Texas Revised Civil Statutes. On January 1, 1972, American Honda rendered for taxation personal property valued at $160,310.85 which was situated in its warehouse in Farmers Branch. American Honda also had additional property valued at $293,050.15 in its warehouse which it did not render for taxation, claiming that the property was exempt under Article 1, Section 10, Clause 2, of the United States Constitution. It is undisputed that American Honda claimed this exemption and pursued all administrative remedies, but was denied the claimed exemption for the inventory in question.

The disputed inventory consisted of parts and accessories for motorcycles, automobiles or outboard motors which were manufactured by Honda, Ltd., in Japan and distributed domestically to American Honda’s warehouses situated throughout the United States. The location of American Honda’s warehouses is determined in substantial part by the geographical pattern of retail demand for appellee’s units and the parts needed for repair of consumer-owned units. All goods shipped by Honda, Ltd. to appel-lee, including all of the disputed inventory on January 1, 1972, were subject to United States’ custom duties which had been paid by custom brokers on behalf of American Honda.

In its Gardena, California, offices American Honda maintains a perpetual inventory count of all units and parts of stock in each of its warehouses in the United States by means of its data processing system. To determine the size of its inventories in each warehouse, American Honda considers various factors such as demand requirements, budgetary considerations, availability from source, anticipated monetary revaluations and other special considerations such as the possibility of future material shortages. The inventory turnover of parts at American Honda’s Farmers Branch warehouses is approximately once a year or slightly more than once a year.

When parts are ordered by American Honda, employees of Honda, Ltd. at its warehouse in Japan put these parts in corrugated cartons and seal them. These corrugated cartons are then placed in sea vans by Honda, Ltd.’s employees and the sea vans are transported to the steamship dock in Japan where they are loaded onto steamships for transport to the United States. Except for a few specialized instances, the cartons of parts contain a relatively large number of items per carton.

The steamship line whose vessel is to carry a specific shipment supplies a sea van at the Honda, Ltd. parts warehouse dock in Japan for use in transporting corrugated cartons of parts to the United States. A sea van is a large metal container which weighs 6,200 pounds and measures 40 feet long, eight feet high and eight and one-half feet wide. The van is at all times owned by the steamship line and is furnished by the steamship line for the purpose of carrying the cargo of sealed corrugated cartons overseas. When the sea vans have been unloaded at Farmers Branch, Gardena, and elsewhere, they are returned to the steamship line which owns them at a port of entry in the United States.

In 1971, the sea vans from Japan were brought to American Honda’s Gardena, California, warehouse where they were opened and the sealed corrugated cartons were unloaded and placed in enclosed semi-trailer trucks for shipment to American Honda’s Farmers Branch warehouse or they were stocked in “surplus inventory” at American Honda’s Gardena warehouse and, at a later time, forwarded to the Farmers Branch warehouse for “surplus storage” there.

There are two segregated areas for storing the inventory at American Honda’s Farmers Branch warehouse. The area for the storage of the sealed unopened corrugated cartons is designated “surplus storage” and is segregated from other parts of the warehouse. When the sealed unopened corrugated cartons arrive at American Honda’s Farmers Branch warehouse, employees unload these cartons at a receiving area and they are taken to the “surplus storage” area until they are needed in the “open stock” area.

The “open stock” area is the other area for storing inventory at Farmers Branch. It is segregated from the “surplus storage” area and consists of storage bins of parts which are no longer in cartons and are for current use in filling orders. When an open stock bin becomes low on parts, it is refilled by removing a carton from “surplus storage,” opening the carton and distributing its contents into the depleted open stock bin. Sometimes, sealed and unopened cartons which normally would be stored in the “surplus storage” area are kept on top of the racks containing bins of open stock in the “open stock” area although the cartons remain sealed and unopened. This area is referred to as “above-bin surplus storage.” These cartons, though sealed and unopened, are not included in the inventory-count of “surplus storage” and are not included in the count of disputed inventory.

Transfers of stock from the American Honda Farmers Branch warehouse to other American Honda warehouses in the United States are made from both “open stock” and from the stock of sealed and unopened corrugated cartons in “surplus storage” and “above-bin surplus storage” while transfers of stock from Gardena, California, to the Farmers Branch warehouse are out of stock of sealed corrugated cartons in “surplus storage” and not from “open stock.”

The main function of appellee’s warehouses, including its warehouse in Farmers Branch, is to store merchandise which is necessary to supply to retail dealers carrying “Honda” brand merchandise in the southwest region. No manufacturing, repair work, or servicing is carried on at the American Honda warehouse in Farmers Branch. All disputed inventory on hand at the American Honda warehouse in Farmers Branch on January 1,1972, was the property of American Honda, unsold, segregated in the “surplus storage area” of the warehouse, and in the original unopened corrugated cartons in which it was packed in Japan.

In their first point, appellants maintain the trial court erred in finding that the disputed inventory in the Farmers Branch warehouse of American Honda on January 1, 1972, had not been incorporated into the mass of goods in the United States and, therefore, was still “imports” for the purposes of Article 1, Section 10, Clause 2, of the United States Constitution. Appellants rely primarily on Youngstown Sheet and Tube Company v. Bowers, 358 U.S. 534, 541-42, 79 S.Ct. 383, 387, 3 L.Ed.2d 490 (1959), and argue that (1) the disputed inventory has lost its character as imports; (2) the disputed inventory has been fully committed to the appellee’s operational needs and, therefore, should not be tax exempt; and (3) the act of importation which is protected by Article 1, Section 10, Clause 2, may end, and in this particular case, has ended, before the goods are removed from the original package. We disagree.

In Brown v. State of Maryland, 25 U.S. (12 Wheat.) 419, 6 L.Ed. 678, 686 (1827), the Supreme Court interpreted the Import-Export clause and espoused what has become known as the “original package” doctrine. The court speaking through Chief Justice Marshall stated that “ * * * (w)hen the importer has so acted upon the thing imported that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the state, but while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported, a tax upon it is too plainly a duty on imports to escape the prohibition in the Constitution.”

The United States Supreme Court has continued to apply the original package doctrine in: Low v. Austin, 80 U.S. (13 Wall.) 29, 20 L.Ed. 517 (1872); Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252 (1945), and Dep’t. of Revenue v. James Beam Distilling Co., 377 U.S. 341, 84 S.Ct. 1247, 12 L.Ed.2d 362 (1964). Some of the more recent state and federal court decisions which apply the “original package” doctrine to imported goods held for sale are: Wages v. Michelin Tire Corporation, 233 Ga. 712, 214 S.E.2d 349 (1975, cert. granted); Wilson v. County of Wake, 19 N.C.App. 536, 199 S.E.2d 665, 668 (1973); Price Paper Corporation v. Detroit, 42 Mich.App. 488, 202 N.W.2d 523, 525 (1972); Sterling Liquor Distributors, Inc. v. County of Orange, 3 Cal.App.3d 510, 83 Cal.Rptr. 571, (1970), cert. denied, 400 U.S. 822, 91 S.Ct. 43, 27 L.Ed.2d 50 (1970); Tricon, Inc. v. King County, 60 Wash.2d 392, 374 P.2d 174 (1962), cert. denied, 372 U.S. 908, 83 S.Ct. 721, 9 L.Ed.2d 717 (1963); Standard-Triumph Motor Company v. City of Houston, Texas, 220 F.Supp. 732, 734 (S.D.Tex.1963), vacated on other grounds, 347 F.2d 194 (5th Cir. 1965), cert. denied 382 U.S. 974, 86 S.Ct. 539, 15 L.Ed.2d 466 (1966); State ex rel H. A. Morton Company v. Board of Review, City of Milwaukee, 15 Wis.2d 330, 112 N.W.2d 914 (1962); Miehle Printing Press and Manufacturing Company v. Department of Revenue, 18 Ill.2d 445,164 N.E.2d 1 (1960).

In the case at bar, the disputed inventory remained as the property of American Honda, the importer, in a segregated part of American Honda’s Farmers Branch warehouse, in the original corrugated cartons in which it was imported. Therefore, applying the “original package” doctrine, we believe that a tax upon the disputed inventory was subject to the prohibition set forth in the Import-Export clause of the Constitution.

In Youngstown Sheet and Tube Company v. Bowers, supra, the Supreme Court, relying upon Brown v. State of Maryland, supra, reemphasized some of the acts or conduct of the importer that would deem the importer to have “so acted upon the thing imported” as to cause it to be “mixed up with the mass of property in the country (and to lose), its distinctive character as an import.” The court stated that goods lose their character as imports when the importer (1) “sells them,” (2) “(breaks) up his packages, and (travels) with them as an itinerant pedlar,” or (3) when goods are brought into this country by an importer “for his own use” and are here “used” by him. Also, see Brown v. State of Maryland, supra.

In the case at bar, the disputed inventory owned by American Honda has not been (1) sold (2) it had not been broken out of the corrugated cartons in which it was imported, nor was it (3) brought into this country for Honda’s own use or consumption. It was simply stored in its original packages in a segregated place until it was needed to supply the demand of the American market.

Appellants attempt to rationalize by analogy the facts involved in the case at bar with the rationale of the court in Youngstown in which the court stated that the iron ore, lumber, and veneers had been irrevocably committed to use in manufacturing at the plants to which they were shipped and that the iron ore, lumber and veneers were necessarily required to be kept on hand to meet current operational needs and were actually being used to supply those needs. To show that imported goods which are held for sale should be treated similarly to imported goods held for use in manufacturing, appellants cite a quote from Hooven & Allison Co. v. Evatt, supra, which is discussed in the following quotation from Youngstown Sheet and Tube Company v. Bowers, supra, 358 U.S. p. 542, 79 S.Ct. p. 388: “In Hooven & Allison Co. v. Evatt, 324 U.S. 652, 65 S.Ct. 870, 89 L.Ed. 1252, it was held that goods imported for ‘use’ share the same immunity as goods imported for ‘sale,’ and that goods imported ‘for manufacture (do not) lose their character as imports any sooner or more readily than imports for sale’ * * *; but ‘when (the imported goods are) used for the purpose for which they are imported, they cease to be imports and their tax exemption is at an end.’ ”

Nevertheless, we believe that the facts involved in the case at bar are distinguishable from Youngstown for at least three reasons. First, notwithstanding the previously mentioned quote from Youngstown, we have not been cited nor have we been able to find any factually similar cases which hold that goods which were imported for sale and stored in their original containers (as opposed to goods imported for use in manufacturing) were irrevocably committed to the purpose for which they were imported and were necessarily required to be kept on hand to meet current operational needs and were actually being used to supply those needs. In this regard, we quote from Tricon, Inc. v. King Country, supra, 374 P.2d p. 176, where certiorari was denied: “We do not think the Supreme Court has indicated by implication that goods imported for resale, and which remain in their original containers, lose their character as imports immune from state taxation when they become a part of the importer’s current inventory of goods held for sale.”

Second, there is no finding as to what portion, if any, of the disputed inventory was necessarily required to meet current operational needs. Certainly, the most current operational needs were filled from inventory taken from the “open stock” bins.

Third, the disputed inventory is not necessarily at its final destination when it reaches American Honda’s warehouse in Farmers Branch. The stipulated facts, as well as the trial court’s findings of facts, reveal that sometimes transfers of stock from the American Honda Farmers Branch warehouse were made to other American Honda warehouses in the United States even though the transfers are made from both “open stock” and from the stock of sealed corrugated cartons in “surplus storage.” Appellants’ first point is overruled.

In their second point, appellants maintain the trial court erred in finding that the general property tax imposed on the disputed inventory is an “impost” or “duty” contrary to the import clause of the United States Constitution. Appellants argue that Youngstown established that a non-discriminatory property tax does not violate the Import-Export clause, and that the language of the Import-Export clause indicates that a general property tax was not within its intended prohibition. We disagree.

The Supreme Court of the United States has rejected appellants’ argument in Low v. Austin, supra, by holding that while goods retain their character as imports, a tax upon them in any shape, is within the constitutional prohibition. The court stated that: “The question is not as to the extent of the tax or its equality with respect to taxes on other property, but as to the power of the state to levy any tax.” If, in fact, any discrimination against domestic and in favor of foreign producers of goods does result because of the tax immunity of imports, such discrimination is implicit in the constitutional provision and in its purpose to protect imports from state taxation. Hooven & Allison Co. v. Evatt, supra. Moreover, the disputed inventory was subject to substantial custom duties while domestic goods are not.

The rationale of Low and Hooven that all taxes, even non-discriminatory ad valorem taxes, are unconstitutional if imposed upon merchandise which retains its status as imports has been reaffirmed in Richfield Oil Corp. v. State Board of Equalization, 329 U.S. 69, 76, 67 S.Ct. 156, 91 L.Ed. 80 (1946), and Department of Revenue v. James Beam Distilling Company, supra, 377 U.S. p. 343, 84 S.Ct. 1247.

Appellant also argues that the rationale employed in interstate commerce cases should be applied to the disputed inventory so that a non-discriminatory tax will not violate the Import-Export clause.

The Import-Export clause and the Commerce clause, while related, are not coterminous. There are two important differences between the two clauses. First, the Import-Export clause prohibits taxation by the states on the import or export, while the application of the Commerce clause has no relationship to whether an article was or ever has been, an import or export. Second, the Commerce clause is not cast in terms of a prohibition against taxes but in terms of power of the Congress to regulate commerce. The Import-Export clause does not prohibit every state from laying “any discriminatory” tax on imports or exports, but rather prohibits the state from laying “any tax” “except what may be absolutely necessary for executing its inspection Laws.” Richfield Oil Corp. v. State Board of Equalization, 67 S.Ct., pp. 159-160. Consequently, we certainly cannot write any qualifications into the Import-Export clause. Appellants’ second point is overruled.

In their third point, appellants maintain the trial court erred in finding that the goods stored in the Farmers Branch warehouse of American Honda had not been removed from the containers in which they had been transported into this country and, therefore, were not subject to local taxation under the “original package” doctrine.

The facts reveal that the sea van is furnished by the steamship line for the purpose of carrying the sealed corrugated cartons overseas and that when the sea vans are unloaded at Farmers Branch, Gardena, or elsewhere, they are returned to the steamship line. The mere use of new technology in shipping should not destroy the tax immunity of the property shipped. Michigan State Tax Commission v. Garment Corporation, 32 Mich.App. 715, 189 N.W.2d 72, 74, cert. denied 404 U.S. 992, 92 S.Ct. 538, 30 L.Ed.2d 544 (1971); Wages v. Michelin Tire Corporation, 233 Ga. 712, 214 S.E.2d 349, 355 (1975), cert, granted. Therefore, we do not believe that the opening of the sea vans constitutes the breaking of the original packages.

Appellants rely primarily on Volkswagen Pacific, Inc. v. City of Los Angeles, 7 Cal.3d 48, 101 Cal.Rptr. 869, 874, 496 P.2d 1237, 1242 (1972). However, in Volkswagen Pacific, Inc., the court recognized that “ * * it would not follow as a matter of law that merely because an importing agent removed the parts from the vans, they then lost the constitutional protection of imported articles.” Also, the court recognized that “ * * * the opening of such a container by an importer may not necessarily be effected ‘for the sale or delivery of the separate parcels contained in it’ * * * but may instead be accomplished so that the importer can by other means of transportation divert his imports to his outlets in different interior states.” The facts in the instant case fit squarely within the exception recognized by the court in Volkswagen Pacific, Inc. The sea vans containing the disputed inventory were brought to American Honda’s warehouse in Gardena where the seal on the sea van would be broken and the sealed corrugated cartons would be unloaded into enclosed semi-trailer trucks and shipped to Farmers Branch. There was no breaking of the original package. Appellants’ third point is overruled.

By way of a crosspoint of error, appellee attacks the judgment and maintains that the trial court erred in finding that a part of the disputed inventory received in sea vans from Japan in Gardena, California, stocked in “surplus inventory” at the Gardena warehouse of American Honda, and later shipped to American Honda’s “surplus inventory” in Farmers Branch is not exempt from taxation under the provisions of Article 1, Section 10, Clause 2, of the United States Constitution. We sustain this contention.

We are unable to distinguish between the situation in which the disputed inventory is shipped directly from the Gardena port of entry upon its arrival from Japan, and the situation in which the disputed inventory is temporarily stored in the “surplus storage” area of the Gardena warehouse before it is shipped to Farmers Branch. In both situations, the disputed inventory was segregated and stored in the “surplus storage” area in its original packages. The Import-Export clause was intended to immunize imports from taxation by the importing states, and all other states through or into which they may pass, so long as they retain their distinctive character as imports. Youngstown Sheet and Tube Company v. Bowers, supra, 358 U.S. p. 545, 79 S.Ct. 383. The immunity attaches “whether the imported merchandise is stored in the original package in the importer’s warehouse at the port of entry or in an interior state.” Hooven & Allison Co. v. Evatt, supra, 324 U.S. p. 664, 65 S.Ct. p. 877. Wilson v. County of Wake, supra.

We believe, therefore, that the trial court erred in holding that the disputed inventory, which was temporarily stored in the “surplus storage” area of the Gardena warehouse before it was shipped to the Farmers Branch warehouse was subject to taxation by Farmers Branch. This portion of the judgment is reversed and judgment rendered for appellee. In all other respects, the trial court’s judgment is affirmed.

Since we have affirmed the judgment in part and reversed in part, we tax the costs on appeal and in the court below equally against appellants and appellee. Coca Cola Bottling Company of Houston v. Hobart, 423 S.W.2d 118, 126 (Tex.Civ.App., Houston, 14th Dist., 1967, writ ref., n. r. e.); Combined American Insurance Company v. City of Hillsboro, 421 S.W.2d 488, 491 (Tex.Civ. App., Waco, 1967, writ ref., n. r. e.); Wichita National Bank v. United States Fidelity & Guaranty Co., 147 S.W.2d 295, 298 (Tex. Civ.App., Fort Worth, 1941, n. w. h.); Rule 448, T.R.C.P.

Affirmed in part and reversed and rendered in part.

ON MOTION FOR REHEARING

Appellee, American Honda Motor Company, Inc., moves for a rehearing only insofar as our original opinion and judgment taxes the cost one-half to appellants and one-half to appellee. In our original opinion the judgment of the trial court was affirmed in part and reversed and rendered in part. We taxed the cost one-half to appellants and one-half to appellee.

However, appellee reminds us that the portion of the trial court’s judgment we reversed was on the cross-points of appellee and therefore all relief was denied to the appellants and full relief granted to appel-lee.

We confess our error in this regard and accordingly that portion of our original decision in this cause is modified to the extent that all of the costs are taxed against the appellants.

Appellants also have filed a motion for rehearing which we have duly considered and same is overruled.

      . “No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing its Inspection Laws; * * *”

      . “Cities having more than five thousand inhabitants may, by a majority vote of the qualified voters of said city, at an election held for that purpose, adopt or amend their charters, subject to such limitations as may be prescribed by the Legislature. No charter or any ordinances passed under said charter shall contain any provision inconsistent with the Constitution or general laws of this State; said cities may levy, assess and collect such taxes as may be authorized by law, or by their charters; but no tax for any purpose shall ever be lawful for any one year which shall exceed two and one-half per cent of the taxable property of such city, and no debt shall ever be created by any city unless at the same time provision be made to assess and collect annually a sufficient sum to pay the interest thereon and create a sinking fund of at least two per cent thereon. No city charter shall be altered, amended or repealed oftener than every two years. The governing body of such city may, by two-thirds votes of its members, or upon petition of ten per cent of the qualified voters of said city, shall provide by ordinance for the submission of the question, ‘shall a commission be chosen to frame a new charter.’ ”