author: MOORE, Justice.

text:
    Bob R. HOLMES, Appellant, v. Del CLOW and Mobile Modulars, Inc., Appellees.
    No. 874.
    Court of Civil Appeals of Texas, Tyler.
    Jan. 22, 1976.

      Gregory L. Ceshker, Ashley & Welch, Dallas, for appellant.
    James A. Gandy, Dallas, for appellees.
   MOORE, Justice.

Appellant, Bob R. Holmes, instituted this suit against appellees, Mobile Modulars, Inc., and its president, Del Clow, to recover the sum of $2,062.50 for certain blueprinting and design work for a housing project consisting of forty-one houses to be constructed by Mobile Modulars, Inc. Appellant based his cause of action for personal liability against appellee, Del Clow, upon the premises that Clow organized and controlled Mobile Modulars, Inc., for his sole benefit and that said corporation was the alter ego of Clow created for the purpose of defrauding appellant and other creditors. Appellees answered with a general denial. After a trial before the court, without a jury, the trial court rendered judgment in favor of appellant against Mobile Modulars, Inc., for the sum of $2,062.50 plus attorneys fee, but rendered a take nothing judgment against appellant in his suit against Del Clow, individually. Mobile Modulars, Inc., did not perfect an appeal from the judgment. Appellant, Bob R. Holmes, duly perfected his appeal from that part of the judgment denying him a recovery against Del Clow, individually.

We affirm the judgment.

Appellant seeks a reversal for seventy-six points of error. His principal contention is that the trial court erred in refusing to pierce the corporate veil and hold appellee individually liable because he contends the judgment is not supported by the evidence and that the evidence shows as a matter of law that Mobile Modulars, Inc., was the alter ego of appellee, Del Clow. Alternatively, he contends the trial court’s findings and judgment are against the overwhelming weight and preponderance of the evidence.

Generally speaking, the legal fiction of corporate entity may be disregarded where the fiction is used as a means of perpetrating a fraud or is relied upon to justify a wrong. Pace Corporation v. Jackson, 155 Tex. 179, 284 S.W.2d 340, 341 (1955); First Nat. Bank in Canyon v. Gamble, 134 Tex. 112, 132 S.W.2d 100, 103 (Tex.Comm.App.1939). This rule, however, is an exception to the general rule which forbids disregarding corporate existence or entity and is not to be applied unless it is made to appear that there is such unity that the separateness of the corporation has ceased and the facts are such that adherence to the fiction would, under the particular circumstances, sanction a fraud or promote injustice. First Nat. Bank in Canyon v. Gamble, supra. 125 A.L.R. 265.

In order to warrant piercing the corporate veil, the courts generally require the presence of one or more of the following factual situations: (1) evidence that the corporate entity amounts to a fraud, promotes injustice or it is relied on to justify a wrong, (2) that it was inadequately capitalized, (3) that an individual controls and manages the entity in such a manner that it becomes his alter ego, and (4) that the corporate formalities were not adhered to by the corporation. Each case must rest on its special facts. 18 Am.Jur.2d Corporations, secs. 14 — 16, p. 559 et seq.

The trial judge filed findings of fact finding that prior to the incorporation of Mobile Modulars, Inc., Del Clow was a majority stockholder, officer and director of several corporations, all of which were headquartered at 6116 North Central Expressway in Dallas, Texas; that sometime prior to May 15, 1970, Wayne Patty contacted appellee advising him that he had received an F.H.A. commitment to construct 20 houses in Greenville, Texas, and the commitment would enable them to borrow the sum of $283,000.00 from a lending institution in order to construct and sell the houses. Ap-pellee and Patty agreed to form a corporation for the purpose of obtaining the loan and constructing the houses. As a result, Mobile Modulars, Inc., filed a certificate of incorporation with the Secretary of State on May 15,1970, with an authorized capitalization of $500,000.00. The capital in the amount of $1,000.00 was made by the sale of stock to appellee Clow, Wayne Patty, A. J. Dakour, T. H. Carter and Jerry Davis, each of whom paid the sum of $200.00 for 2,000 shares of stock. At the organizational meeting held on June 12, 1970, Del Clow, Jerry Davis, A. J. Dakour and appellee’s wife, Grovonda Clow, were elected directors. Del Clow was elected president; A. J. Dakour, vice president, Mrs. Clow, secretary and Jerry Davis, assistant secretary. Appellee, Del Clow, and his wife continued to act as president and secretary, respectively, at all times pertinent to this litigation. Shortly after Mobile Modulars was organized, Wayne Patty, acting on behalf of Mobile Modulars, Inc., called on appellant Bob R. Holmes and requested him to prepare certain blueprinting designs for Mobile Modulars. Shortly thereafter appellant prepared the work and billed the corporation the sum of $2,062.50. Within about thirty days after the corporation was organized A. J. Dakour resigned as vice president and director and sold his stock to appellee, Del Clow, thereby making Clow the holder of two fifths of the stock and thereafter Clow and his wife constituted two of the three members of the board of directors. On July 9,1970, Mobile Modulars, Inc., executed a note in the principal sum of $127,-500.00 payable to the order of Greenville West Corporation in payment of certain lots on which the homes were to be built. Ap-pellee also signed the note individually. On the same day Mobile Modulars, Inc., borrowed the sum of $262,000.00 from South Oak Cliff Bank by executing a promissory note in that amount which was executed by Del Clow as president of Mobile Modulars, Inc., and which was also signed by appellee individually. Thereafter, the corporation commenced the construction of several houses. On August 7, 1970, the office staff of Mobile Modulars made out a check to the appellant in the amount of $2,062.50 in payment of the blueprinting work. Although on that date Mobile Modulars’ bank account contained in excess of $20,000.00, appellee ordered the check voided because the disbursement was not authorized by the South Oak Cliff Bank and the bank would not approve the payment since the blueprint work was not made for the Greenville Housing project on which the bank made the interim financing loan but was designed to be used on future construction. Appellee and his wife continued to receive their monthly salaries of $2,000.00 and $450.00, respectively, from Mobile Modulars for approximately three months after the check was voided, but appellant never received payment for his work. In the meantime, Mobile Modulars, Inc., began to suffer financial problems due to the fact that the homes were not selling as well as expected and it finally became necessary to discontinue the project. The corporation ceased doing business in November, 1971, and its corporate charter was forfeited on May 8, 1972. The trial court found that during the time Mobile Modulars was doing business, there was an agreement between the directors of several corporations in which ap-pellee was interested that when one of the corporations became short of operating funds, its bills would be paid by one of the other corporations and the advancement would be charged on the books as a debt due and owing the advancing corporation. Numerous advancements were made from one corporation to another with one corporation paying all the rent, telephone bills and expenses for one month and another corporation paying the following month.

In addition the trial court further found: (1) that on or about June 17, 1970, the amount of One Thousand Dollars ($1,000.00) was paid as capital to organize Mobile Mod-ulars, Inc., and that this amount was adequate at that time to meet the corporate responsibility of the defendant, Mobile Modulars, Inc. In addition, defendant, Mobile Modulars, Inc., had an interim loan from South Oak Cliff Bank amounting to Two Hundred Sixty-Two Thousand Dollars ($262,000.00) and that this amount was believed to be sufficient to handle the debts of the corporation; (2) the only written minutes of the meeting of the stockholders of the defendant, Mobile Modulars, Inc., that could be found was held on June 12, 1970; (3) the only written minutes of the meeting of the Board of Directors of the defendant, Mobile Modulars, Inc., that could be found was held on June 12, 1970; (4) that a treasurer was elected for the defendant corporation, Mobile Modulars, Inc., but no written minutes could be found to substantiate the election of Jerry Davis as treasurer; (5) none of the corporate minutes of the defendant corporation, Mobile Modulars, Inc., could be found that were executed; however, the plaintiff, Bob R. Holmes, did not establish by the preponderance of probative evidence that defendant corporation, Mobile Modulars, Inc., did not hold meetings; (6) that there were Board of Directors’ minutes of the defendant corporation, Mobile Modu-lars, Inc., to authorize the execution of said note in the amount of One Hundred Twenty-Seven Thousand Five Hundred Dollars ($127,500.00), but copies of said minutes could not be found; (7) that there were Board of Directors’ meetings or minutes of the defendant corporation Mobile Modulars, Inc., to authorize the loan in the amount of Two Hundred Sixty-Two Thousand Dollars ($262,000.00) from the South Oak Cliff Bank, but the copies of said minutes or meetings could not be found; (8) that from on or about August 7, 1970, through on or about November 24, 1970, the defendant corporation, Mobile Modulars, Inc., paid the defendant, Del Clow and Grovonda Clow the sum of approximately One Thousand Six Hundred Seventy-Three Dollars and Forty Cents ($1,673.40) out of its checking account, which sum represented reimbursements of expenses incurred for the corporation; (9) that credit accounts and bills in the name of Del Clow, individually, were paid out of the checking account of the defendant corporation as reimbursement for expenses incurred on behalf of the corporation; (10) that there were Board of Directors’ meetings or minutes of defendant corporation, Mobile Modulars, Inc., authorizing payment of such charge accounts and bills in the name of the defendant, Del Clow, individually, by the defendant corporation, Mobile Modulars, Inc., but the minutes were not found; (11) that the defendant corporation, Mobile Modulars, Inc., was to pay its prorata part of the office expenses, including the telephone bills, for 6119 North Central Expressway, Suite 901, Dallas, Texas, and in that the defendant corporation had paid nothing for the months of May, June, and July, it consequently paid the office expenses for the months of August, September, October, and November to repay the other corporations for the amounts it owed them; (12) that during, and a short time thereafter, to August 1970, the defendant corporation, Mobile Modulars, Inc., paid credit accounts, gasoline charges, and bills incurred in the name of other said corporations when the charges were for the benefit of the defendant corporation, Mobile Modulars, Inc.; (13) there were Board of Directors’ meetings or minutes of the defendant corporation, Mobile Modulars, Inc., authorizing the payment of the rent as stated above, credit accounts, gasoline charges and bills in the name of the other corporations for the months of August, September, October and November 1970, but said minutes could not be found; (14) that the defendant, Mobile Modulars, Inc., executed a note payable to the order of the defendant, Del Clow, in the approximate amount of Twelve Thousand Three Hundred Seven Dollars and Thirty-Three Cents ($12,307.33) which was authorized by the Board of Directors, but the minutes could not be located; (15) that said note in the approximate amount of Twelve Thousand Three Hundred Seven Dollars and Thirty-three cents ($12,307.33) payable to the defendant, Del Clow, was given by the defendant Del Clow to Grodel Properties, Inc., as part of the consideration for the stock issued to him by Grodel Properties, Inc.; (16) that the Two Thousand Dollar ($2,000.00) check written to plaintiff, Bob R. Holmes, which later was voided by defendant, Mobile Modulars, Inc., was voided because the disbursement was not authorized as a legitimate disbursement in that the funds were for a specific construction site, while the plans of the plaintiff, Bob R. Holmes, were designed to be used at a future construction site. That the disbursements had to be approved by the bank advancing the moneys; (17) that plaintiff, Bob R. Holmes, did not establish by the preponderance of probative evidence that defendant, Del Clow, formed or operated Mobile Modulars, Inc., as his alter ego; (18) that plaintiff, Bob R. Holmes, did not establish by the preponderance of probative evidence that he personally dealt with the defendant, Del Clow, or billed the defendant Clow individually for any of the work in question. Furthermore, Plaintiff, Bob R. Holmes, was under a duty to exercise ordinary care when dealing and extending credit to his customers, and he failed to do so; (19) that plaintiff did not establish by the preponderance of the probative evidence that defendant, Del Clow, used Mobile Mod-ulars, Inc., as a sham to perpetrate fraud, to avoid personal liability, to avoid the effect of a statute, or take any other action to avoid personal liability to a third party creditor; and (20) that plaintiff, Bob R. Holmes, did not establish by the preponderance of the probative evidence that the defendant, Del Clow, exercised control over the other stockholders or directors of Mobile Modulars, Inc.

In determining whether the trial court’s findings are supported by any evidence of probative value we are required to give credence only to the evidence favorable to the findings and will disregard all evidence to the contrary. The findings of fact and the conclusions of law will be construed together; and if the findings of fact are susceptible to different constructions, they will be construed, if possible, to be in harmony with the judgment and to support it. If the findings and conclusions of the trial court are supported by some evidence of substantial and probated character, they are controlling upon the appellate court and will not be disturbed even though this Court might have reached a different conclusion. Brown v. Frontier Theatres, Inc., 369 S.W.2d 299, 301 (Tex.1963); Robert W. Payne Company v. J. W. Hill Construction, 387 S.W.2d 92, 94 (Tex.Civ.App.—Dallas 1965, n. w. h.).

First, we consider the question of the alleged fraud. There is nothing in the evidence indicating bad faith on the part of the appellee in forming the corporation. Insofar as the record shows, the corporation was formed for the purpose of constructing a large number of houses under a specific F.H.A. commitment. Appellee testified that prior to incorporation cost figures were prepared on the housing project and it was determined that the undertaking would be profitable. There is no evidence that appel-lee or Wayne Patty made any false representations to appellant or withheld facts concerning the corporation’s financial condition.

Appellant contends that fraud was shown because the record shows without dispute that while his bill was outstanding and unpaid, (1) the corporation paid appel-lee and his wife’s salaries totaling $2,450.00 per month, (2) the corporation paid all the rent and telephone bills of all the other corporations headquartered in the same office, (3) the corporation reimbursed appellee and his wife the sum of $1,290.12 for certain expenses, (4) the corporation executed a note to appellee for $12,307.33, (5) the corporation paid Condo, Inc., $1,295.82 without approval of the board of directors, and (6) during the three-month period in question paid personal bills incurred by appellee in the amount of $1,668.30. Appellant argues that the foregoing transactions had the effect of draining the assets of the corporation for appellee’s own benefit and thus shows appellee intended to defraud creditors. The only testimony explaining these transactions came from appellee and his wife. According to their testimony each of the transactions amounted to a legitimate debt owed by Mobile Modulars and were made for the purpose of reimbursement. With regard to the $12,307.33 note executed by Mobile Modulars, appellee testified that the note was given in payment of furniture supplied the corporation by him which was shipped from another business owned by appellee in another state. Thus, the record contains at least some evidence of probative force in support of the judgment. Appellant raises nothing more than a suspicion or surmise concerning the alleged fraud and therefore his contention in this regard must be overruled. Joske v. Irvine, 91 Tex. 574, 44 S.W. 1059 (1898); Moore & Moore Drilling Co. v. White, 345 S.W.2d 550 (Tex.Civ.App.—Dallas 1961, writ ref’d n. r. e.).

Next appellant contends that the corporation was under financed to the extent it constituted a fraud on persons dealing with it. The evidence shows that while the corporation had an authorized capital of $500,000.00, the sum of only $1,000.00 was paid in. The trial court found that the paid in capital was adequate at the time of incorporation in view of the fact that it had a commitment from a bank for an interim loan which the incorporators believed sufficient to cover its debts. There is no evidence that appellee or any other person misrepresented to appellant the extent of the capital of the company, nor is there any evidence that appellee personally received any benefit from the blue prints supplied by appellant. The trial court found that appellant failed to establish that appellee used the corporation as a sham to perpetrate a fraud, to avoid personal liability, or to avoid the effect of the statute. Subsequent events, namely the failure of the corporation, cannot afford the basis of finding fraud at the inception of the corporation. Moore & Moore Drilling Company v. White, supra. It is incumbent upon the one seeking to pierce the corporate veil to show by evidence tnat the financial setup of the corporation is just a sham and accomplishes an injustice. Carlesimo v. Schwebel, 87 Cal.App.2d 482, 197 P.2d 167 (1948); 63 A.L.R.2d 1051, 1055. Under the circumstances, and keeping in mind that the burden of proof on the issue was on appellant, we do not feel that the evidence is such as to require us to hold that, as a matter of law, the corporate entity should be disregarded on the grounds that the financial setup was a mere sham.

Next, appellant contends the appellee failed to adhere to the requirements concerning the operation of the corporation and that in so doing appellee assumed such control over the corporation as to make it, in effect, his alter ego. In this connection appellant argues that there is no evidence showing that corporate minutes were kept and there is no evidence showing that the board of directors ever approved the various corporate transactions. He further contends that the evidence conclusively shows appellee exercised control over the directors. As stated above, the only testimony before the trial court concerning the corporate operations was given by appellee and his wife. They both testified that while the corporate records could not be located, apparently due to the lapse of time, the directors met and approved all corporate transactions. They further denied that appellee exercised control over the directors and testified each director was afforded a right to vote his convictions. There is no direct evidence in the record to the contrary.

Generally speaking the courts will not disregard the corporate entity and treat it as the alter ego of an individual unless it is shown that there is such unity of interest and ownership that the individuality of the corporation and the owner or owners of its stock has ceased and that the observance of the fiction would sanction fraud or promote injustice. Bad faith in one form or another must be shown before the court will disregard the fiction of separate corporate existence. Hollywood Cleaning & Pressing Co. v. Hollywood Laundry Service, 217 Cal. 124, 17 P.2d 709 (1932); Carlesimo v. Schwebel, supra. The problem of determining whether the corporate entity ever existed, or if it did, whether it ceased to exist is primarily a problem for the trier of the fact, and is not a question of law. The conclusion of the trier of the fact will not be disturbed on appeal if it is supported by any evidence of probative force. H. A. S. Loan Service, Inc. v. McColgan, 21 Cal.2d 518, 524, 133 P.2d 391, 394 (1943), 145 A.L.R. 349. There is some evidence showing that the appellee did not operate the corporation in such a manner as to make it his alter ego. The credibility of the witnesses and the weight to be given their testimony is a matter for the trier of the fact. Under the circumstances we do not think this court is required to hold as a matter of law that the corporate entity ceased to exist and become appellee’s alter ego.

Neither do we believe that the evidence is such as to justify a holding that the judgment is so against the overwhelming weight and preponderance of the evidence as to be clearly wrong.

Finally, appellant complains by numerous points of error of the action of the trial court in refusing to make additional findings of fact. We have carefully examined each of the seven requested findings and have concluded that the same either conflict with the original findings or amount to evidentiary requests on matters which had already been expressly or impliedly found by the trial court. Rules 296 and 298, Texas Rules of Civil Procedure, require that the trial court make additional findings only if such request relates to ultimate and controlling issues. Where, as here, the requested additional findings do not relate to the ultimate or controlling issues or where they would conflict with the original findings, additional findings need not be made. Friedman v. Cohen, 429 S.W.2d 510 (Tex.Civ.App.—Houston 1968, writ ref’d n. r. e.); Guaranty Bond State Bank v. Tucker, 462 S.W.2d 398 (Tex.Civ. App.—Dallas 1970, writ ref’d n. r. e.).

The judgment of the trial court is affirmed.

      . Condo, Inc., Vondell, Inc., Norvon, Inc., Miral Management, Inc., Equipment International, and Gro-Del Properties, Inc.


source: Caselaw Access Project

author: McKAY, Justice.

license: Public Domain

text:
    Paul R. OATES, Appellant, v. Elva Naomi OATES, Appellee.
    No. 914.
    Court of Civil Appeals of Texas, Tyler.
    Jan. 22, 1976.
    Wilson F. Walters, Patrick M. Reed, Den-ison, for appellant.
    Donald J. Hand, San Antonio, for appel-lee.
   McKAY, Justice.

Appellant, Paul R. Oates, brings this appeal from a decree of divorce rendered April 8, 1975. The only errors urged by appellant relate to the refusal of the trial court to grant appellant’s motion for continuance due to the absence of counsel. We affirm.

Petition for divorce was filed in district court by appellee, Elva Naomi Oates. Upon appellee’s motion the cause was set for trial on the nonjury docket the 7th day of April, 1975, at 9:00 A.M. Notice of the setting was mailed by appellee to appellant on March 4, 1975. The transcript shows that appellant received notice of the setting on March 6, 1975.

On April 4, 1975, the following telegram was sent by appellant’s attorney and received by the trial judge:

“RE: NO. 74 CI-8328, OATES V. OATES PLEASE CONSIDER THIS AS RESPONDENT’S FIRST WRITTEN MOTION FOR CONTINUANCE REASON: RECORD ATTORNEY FOR PAUL OATES HAS PREVIOUS COMMITTMENT FOR TRIAL IN U S DISTRICT COURT SHERMAN TEXAS ON APRIL 7 1975 STYLED EARL WATSON VS MKT RAILROAD. THIS MOTION IS NOT MADE FOR PURPOSE OF DELAY BUT THAT JUSTICE MAY BE DONE. PLEASE WIRE ORDER CONFIRMING THIS MOTION COLLECT THIS DAY ADVISING COUNSUL (sic) FOR PETITIONER OF THIS MOTION”

The telegram was signed by attorney for appellant but was not supported by affidavit. Moreover, appellant did not notify ap-pellee of the motion for continuance.

Trial proceeded to the court without a jury on April 7, 1975, as previously scheduled. The decree of divorce was rendered April 8,1975, and recites, “The Respondent, although duly cited by personal service and duly notified of the setting of this cause for trial on April 7, 1975, through his attorney, did not appear.” In the decree appellant’s motion for continuance was denied.

Appellant subsequently perfected his appeal to this court. It should be noted, however, that appellant failed to file a motion for new trial.

Appellant’s first point asserts that the trial court abused its discretion in denying the motion for continuance. At the outset attention should be drawn to Rule 325, T.R.C.P., which provides, “In cases of motions for continuance . . . the rulings of the court thereon shall be considered as acquiesced in, unless complained of in the motion for new trial . . .” Since the appellant did not file a motion for new trial, any complaint concerning the denial of the motion for continuance has been waived.

Moreover, Rule 253, T.R.C.P., places the granting of a motion for continuance due to absence of counsel within the discretion of the court. Appellant’s motion for continuance did not comply with the requirements of either Rule 247, T.R.C.P., requiring notice to the opposing party of the motion, or Rule 251, T.R.C.P., requiring that the motion be supported by affidavit. Where a motion for continuance does not conform to the provision of a rule regulating the same, the presumption is that the court did not abuse its discretion. Watson v. Godwin, 425 S.W.2d 424 (Tex.Civ.App.—Amarillo, 1968, writ ref’d n. r. e.); Bray v. Miller, 397 S.W.2d 103 (Tex.Civ.App.—Dallas, 1965, no writ); Coleman v. Banks, 349 S.W.2d 737 (Tex.Civ.App.—Dallas, 1961, writ ref’d, n. r. e.); Jinks v. Jinks, 205 S.W.2d 816 (Tex.Civ.App.—Texarkana, 1947, no writ). In our opinion, the trial court did not abuse its discretion. Appellant’s first point is overruled.

Appellant’s second point alleges a denial of due process under the 14th Amendment of the Constitution of the United States in that, after receipt of the telegram on April 4, 1975, the trial court failed to notify appellant that trial would proceed on April 7,1975, as scheduled. This contention is without merit. Appellant had more than a month’s notice of the date set for trial. Appellant’s second point is overruled.

The judgment of the trial court is affirmed.


author: AKIN, Justice.

text:
    Ivan HARRISON, Appellant, v. AIR PARK ESTATES ZONING COMMITTEE, Appellee.
    No. 18816.
    Court of Civil Appeals of Texas, Dallas.
    Jan. 22, 1976.

      Donald A. Muncy, Fiedler & Fortescue, Richardson, for appellant.
    Robert J. Truhill, Dallas, for appellee.
   AKIN, Justice.

This is an appeal from a temporary injunction against defendant Ivan Harrison, obtained by plaintiff Air Park Estate Zoning Committee, restraining defendant’s completion of an aircraft hangar on property of which he is equitable owner. Plaintiff’s property is a part of a larger tract originally owned by Milton J. Noell, which was subdivided into individual lots to provide “homesites for people who like airplanes.” The development contemplated that persons buying lots would build both a hangar and a residence on each lot. In 1969, Harrison purchased one of the lots under a note and a contract for deed containing the following restrictions and provisions:

12b ... A hangar may be built before the home is built . 16 These covenants . . . shall be binding . . . until revoked or modified in whole or in part by a three-fourths majority vote of the then owners of real property therein, said vote to be on the basis of one vote per lot therein. [Emphasis added.]

Acting under paragraph 16, 12b was modified by written agreement of 76.4% of the equitable owners of lots in the development to read as follows:

. a home may be built with a hangar as a later addition but no hangar may be built before a home . [Emphasis added.]

The documents changing the restriction were filed of record on March 22, 1971, although the modification had been approved and executed on March 24, 1970. All equitable and legal lot owners were notified by plaintiff of this modification on February 19, 1971. Noell, the developer, owned equitably 42% of the lots which percentage he voted to change 12b.

On April 26, 1974, defendant Harrison submitted to plaintiffs a plan for the construction of a hangar on his lot without first building a house. This plan was disapproved on May 21st by plaintiffs because it violated restriction 12b as modified. Harrison, nevertheless, began construction of the hangar, and this action precipitated suit by the zoning committee to enjoin construction. The trial court issued its temporary injunction and Harrison appeals. We affirm.

Harrison contends that the trial court erred in granting the temporary injunction because: (1) The modification of paragraph 12b was not valid because it was approved by the various lot owners signing circulated documents rather than at a formal meeting, and (2) equity will not permit a grantor [Noell] to sell property under certain restrictions and to retain rights to impose further restrictions.

Since this is a temporary injunction, the principal question presented is whether the trial court abused its discretion in issuing the writ. Transport Company of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549, 552 (1953); Electronic Data Systems Corp. v. Powell, 524 S.W.2d 393, 395 (Tex.Civ.App.-Dallas 1975, writ ref’d n. r. e.). This inquiry requires a determination of whether a valid vote was taken and whether the modification of paragraph 12b was reasonable.

Validity of Vote

Harrison argues that the method of voting on amending the deed restrictions lacks specificity and is, therefore, ambiguous. He contends that “the very essence of the word vote denotes an opportunity by all persons entitled to vote to express their approval or disapproval.” [Emphasis added.] Although paragraph 16, supra, specifies no particular method of voting, this lack of specificity does not render the paragraph ambiguous. Moreover, Harrison and other lot owners had this opportunity. Consequently, we hold that this was a valid vote in accordance with the contract for deed. This is true because early in 1970 before execution of the document modifying the restrictions, notice was given of a meeting of equitable and legal owners of lots in the subdivision to discuss the modification of 12b. Although notice of the meeting was given to all owners, an insufficient number to modify the restriction attended. Although Harrison attended this meeting, he neither signed the petition nor voiced objection. After this meeting a petition to modify was hand circulated to other lot owners. By this effort the proponents of the modification were successful in securing sufficient votes to change the restriction. We see nothing unfair in obtaining the necessary vote by personal contact with the owners. We conclude, therefore, that this contention is without merit.

Reasonableness of Modification

Harrison also argues that the modification is void because it is more restrictive than the original covenant. We cannot agree with this contention because, even though the modification was more restrictive, it was consistent with the overall plan of development and was neither unreasonable nor prohibited by law. Furthermore, paragraph 16 of the covenants gave the right to amend the restrictions to three-fourths of the owners of the property. Since the subdivision was designed to provide “homesites for people who like airplanes,” the apparent purpose of the modification was to protect the rights of the property owners by insuring that both homes and hangars would be built. Because this modification enhanced, rather than abrogated, the original plan specified in the contracts between the developer and the various lot owners, we hold it to be reasonable. Couch v. Southern Methodist University, 10 S.W.2d 973 (Tex.Comm’n App.1928, jdgmt. adopted).

Landowners have the right to impose any restrictions they choose so long as the restrictions are not against public policy or illegal. Parker v. Delcoure, 455 S.W.2d 339, 343 (Tex.Civ.App.-Fort Worth 1970, writ ref’d n. r. e.); Goodstein v. Huffman, 222 S.W.2d 259, 260 (Tex.Civ.App.-Dallas 1949, writ ref’d). The restrictions imposed by Mr. Noell, the original owner and developer of the subdivision, were reasonable and compatible with the purpose of the development, and, the owners of the lots had a right under paragraph 16 of these restrictions to amend them commensurate with the purpose and intent of the development.

Harrison’s final contention is that the trial court erred in concluding that an equitable owner had no right to exercise incidents of ownership. We agree. City of Garland v. Wentzel, 294 S.W.2d 145, 147 (Tex.Civ.App.-Dallas 1956, writ ref’d n. r. e.); cf. City of Austin v. Capitol Livestock Auction Co., 453 S.W.2d 461, 464 (Tex.1970). However, if the court’s order is correct on any theory of law applicable it must be sustained. First National Bank v. Lone Star Life Insurance Co., 524 S.W.2d 525, 531 (Tex.Civ.App.-Dallas 1975, writ ref’d n. r. e.). We conclude that there is evidence to support the injunction because the modification was approved by 76.4% of the equitable owners as well as 98.53% of the legal owners.

Affirmed.


author: BREWSTER, Justice.

text:
    TEXAS STEEL COMPANY, Appellant, v. Edward DOUGLAS, Appellee.
    No. 17683.
    Court of Civil Appeals of Texas, Fort Worth.
    Jan. 23, 1976.
    Rehearing Denied Feb. 20, 1976.

      Mueller & Mueller, and Denning Schatt-man, Fort Worth, for appellant.
    Laurance L. Priddy, Fort Worth, for ap-pellee.
   OPINION

BREWSTER, Justice.

The plaintiff, Edward Douglas, sued Texas Steel Company, defendant, for damages that allegedly resulted to plaintiff, who was defendant’s employee, as a result of defendant firing plaintiff for instituting a proceeding under the Texas Workmen’s Compensation Law.

A jury trial was had and based on the jury verdict the trial court rendered a $2,500.00 judgment for damages in favor of plaintiff and against defendant and this appeal is made by defendant from that decree.

We affirm.

Plaintiff’s position was that the cause of action sued on arose under the provisions of Art. 8307c, V.A.T.S., which provides:

“Section 1. No person may discharge or in any other manner discriminate against any employee because the employee has in good faith filed a claim, hired a lawyer to represent him in a claim, instituted, or caused to be instituted, in good faith, any proceeding under the Texas Workmen’s Compensation Act, or has testified or is about to testify in any such proceeding.
“Sec. 2. A person who violates any provision of Section 1 of this Act shall be liable for reasonable damages suffered by an employee as a result of the violation . . .” (Emphasis supplied.)

The jury found that (1) plaintiff was terminated by defendant because he instituted a proceeding under the Workmen’s Compensation Law; (2) and (3) that the reasonable value of wages plaintiff lost to trial time as a direct result of his firing was $1,500; (4) that he will suffer a loss of earnings in the future as a result of the firing; and (5) that the reasonable value of the future loss of wages was $1,000.00.

Defendant’s first point of error is that the trial court erred in overruling its motion for a directed verdict. Its second point of error is that the trial court erred in overruling its motion for judgment non ob-stante veredicto. It advances five different reasons why it says those two rulings are erroneous, such reasons being: (a) there is no evidence to support the submission of any issues to the jury; (b) there is no evidence to support an affirmative answer to issues 1, 2 and 4 or a finding of money damages to issues 3 and 5; (c) there is insufficient evidence to support the submission of any issue to the jury; (d) there is insufficient evidence to support an affirmative answer to issues 1, 2 and 4 or a finding of money damages to issues 3 and 5; and (e) the plaintiff failed to exercise reasonable diligence to mitigate losses.

The assignment in defendant’s amended motion for new trial on which its first point of error is based shows that the motion for instructed verdict that defendant has reference to in its first point of error was made at the close of plaintiff’s case. The statement of facts shows the same thing. That motion for a directed verdict was dictated to the court reporter at the time plaintiff rested its case. When the trial court stated that he overruled the motion for a directed verdict, defense counsel then proceeded to put on the defendant’s evidence. He thereafter put several witnesses on the stand before resting. When both sides rested their cases the defendant did not reurge its motion for a directed verdict. Under that set of facts the defendant waived its motion for an instructed verdict.

The law is well settled that a defendant by electing not to stand on its motion for an instructed verdict made after the plaintiff had introduced its evidence and rested its case, and by proceeding with the introduction of its own evidence, waives its motion for an instructed verdict. Texas Construction Rentals, Inc. v. Harrison, 410 S.W.2d 482 (Waco, Tex.Civ.App., 1966, ref., n. r. e.) and Barrett v. Curtis, 407 S.W.2d 359 (Dallas, Tex.Civ.App., 1966, no writ hist.).

For this reason alone we are required to and do overrule defendant’s first point of error.

We are in agreement with the defendant’s contention that no evidence of probative force was offered to show that the plaintiff, Douglas, filed a formal claim for compensation with the Industrial Accident Board, prior to the time the employer discharged the plaintiff in this case.

The defendant’s argument under the points referred to appears to be largely based on its contention that in order for the plaintiff employee to make out a case under Art. 8307c, it was necessary for him to prove that the employee had filed a claim for Workmen’s Compensation insurance with the Board, that the employer had knowledge of that fact, and that because the employee had filed such claim the employer had fired the employee. Defendant argues that because there is no evidence and insufficient evidence to establish the facts referred to that there is no evidence and insufficient evidence to support the jury’s affirmative answers to issues 1, 2 and 4.

We do not agree with defendant’s contention that it was necessary in this case before plaintiff could make out a case under the particular part of Art. 8307c that is involved here that plaintiff had to prove that he had filed a claim for compensation, that defendant knew about it, and that because the employee had filed such claim the employer fired him.

The plaintiff’s case was pitched on the theory that the employer fired him because he had instituted a “proceeding under the Workmen’s Compensation Law.” That is the way the case was pleaded and that is the issue that was submitted to the jury.

The undisputed evidence in the case showed that: on March 8, 1973, the plaintiff sustained an on-the-job injury while working for defendant; that on March 12, 1973, he went to the first aid station to report his injury and to get treatment for it; he was sent to two different doctors for examination and treatment and he there received treatment of his on-the-job back injury; his employer’s superintendent, Pen-der, received notice of his injury shortly after plaintiff went to the first aid station; and the insurance carrier thereafter paid the plaintiff two or more weeks of Workmen’s Compensation insurance at the rate of $49.00 per week before plaintiff was fired on April 9, 1973. One of the checks for compensation insurance paid plaintiff by the carrier covered the week from March 23, 1973, to March 29,1973. On about April 6,1973, plaintiff was advised by his employer that Dr. Miller, who- was then treating him, had released him to report back to work to do light duty. He talked to Mr. Pender, defendant’s superintendent, and was told to report at defendant’s plant for work at 6 A.M. on April 9, 1973. Plaintiff testified that on that date he did not report for work until around 9 A.M. because he had been hurting and could not sleep so he had taken sleeping pills and overslept that morning. When he arrived at work, he reported to Mr. Pender, and was told that he was fired for not reporting to work when he was supposed to.

One question for our decision here is whether or not at the time defendant fired the plaintiff on April 9, 1973, the plaintiff had instituted a proceeding under the Workmen’s Compensation Law.

Article 8307, § 4a, provides that one step, after receipt of an injury, that an employee must take in order to maintain a proceeding for compensation is to give notice of the injury to the subscriber within 30 days after the injury, and another step is to make a claim for compensation with respect to the injury within six months after it happened.

Article 8307, § 7, V.A.T.S., requires employers, within eight days after an employee sustains an injury causing absence from work of more than one day, to file a report thereof with the Industrial Accident Board.

Article 8307, § 7a, V.A.T.S., provides that if such report is not filed as required by § 7 that the employees’ six months time for filing his claim for compensation does not begin to run until the report required by § 7 is filed.

In this case the employee had an on-the-job injury, he reported it to his employer, the carrier furnished him medical treatment as it was required by the Act to do, and it had paid him Workmen’s Compensation insurance for several weeks for the disability produced by the injury. This all occurred before the employee was fired on April 9, 1973.

The steps that had been taken by the parties set the wheels of the Workmen’s Compensation Law into motion and at the time the employee was fired he had been furnished the medical treatment and the Workmen’s Compensation benefits that the Workmen’s Compensation Law provided for.

“. . . each step in the progress of the maturity of a claim under the Workmen’s Compensation Act, . . . from the time of the injury to its final adjudication is a mandatory requirement, necessary to the exercise of jurisdiction by the first and succeeding statutory agencies.” American Surety Co. of New York v. Mays, 157 S.W.2d 444 (Waco, Tex.Civ.App., 1941, ref. want merit), and see Duncan v. Fidelity & Casualty Company of N. Y., 371 F.2d 646 (Fifth Circuit, 1967).

The references to Art. 8307, Sections 4a, 7 and 7a, mentioned above, make it apparent that it would be possible for an injured employee to draw full compensation benefits, even for total and permanent disability caused by an on-the-job injury, without ever filing the claim for compensation referred to in Art. 8307, § 4a. This being true it would be inconceivable to conclude that under those facts no proceeding under the Workmen’s Compensation Law was ever had even though the employee had collected all benefits the law provided for, just because the formal claim for compensation was never filed.

The Legislature’s purpose in enacting Art. 8307c, V.A.T.S., was to protect persons who are entitled to benefits under the Workmen’s Compensation Law and to prevent them from being discharged by reason of taking steps to collect such benefits.

If the Legislature’s intention was that the cause of action it created by Art. 8307c, V.A.T.S., should in all instances only arise in cases where the employee was fired after he had filed the claim for compensation provided for in Art. 8307, § 4a, then the law would be completely useless and would not accomplish the purpose for which it was enacted. This is true because all the employer would have to do in order to avoid the consequences of the statute would be to fire the injured workman before he filed the claim.

Black’s Law Dictionary, Revised 4th Edition, gives as one definition of a “proceeding” the following: “. . .a prescribed mode of action for carrying into effect a legal right.”

In the ease of W. S. Tyler Co. v. Rebic, 118 Ohio St. 522, 161 N.E. 790 (1928) the court held that, “A proceeding in the enforcement of a civil right is an act necessary to be done in order to attain a given end. It is a prescribed mode of action for carrying into effect a legal right.”

In that case the court held that an oral application for compensation that was refused by the employer constituted the commencement of a proceeding.

The Random House Dictionary of the English Language (College Edition, 1968) defines “proceeding” as “a particular action or course of action ... a legal step or measure.”

The court in the case of Braden v. Transport Insurance Co., 307 S.W.2d 655 (Dallas, Tex.Civ.App., 1957, no writ hist.) said the following: “It is well established that the provisions of our Workmen’s Compensation Statute with respect to the successive steps in the progress and maturity of a claim, are mandatory, and the provisions of the statute must be complied with or an action is not maintainable in the courts.”

We hold that under the undisputed facts of this case prior to the time the defendant fired the plaintiff on April 9, 1973, the plaintiff had instituted a proceeding under the Workmen’s Compensation Law within the meaning of Article 8307c, V.A.T.S., and that the defendant’s superintendent, Pen-der, was aware of that fact when he fired plaintiff.

Another case that supports our holding that a proceeding had been instituted within the meaning of the applicable statute is Green v. Board of Com’rs, 126 Okl. 300, 259 P. 635 (1927).

The following is from 53 Tex.Jur.2d 229, Statutes, § 159: “A cardinal rule of construction requires that all the language and every part of a statute shall be given effect, if reasonably possible. In other words, effect and meaning should be given to each and every sentence, clause, phrase, and word of the act, ... a construction should not be adopted, if it can be avoided, that will render any part of the act inoperative, nugatory, or superfluous. Every word . is presumed to have been used for a purpose, and should be given some effect other than that which would result from its omission.” And in § 160 thereof is: “Another . . . rúle requires that a statute be construed as a whole . . .

Those settled rules of statutory construction must be applied in construing the meaning of Article 8307c.

Under the appellant’s contention advanced in this case there could be no “proceeding under the Workmen’s Compensation Act” unless the employee had prior thereto filed a claim for compensation with the Industrial Accident Board. Appellant’s argument appears to be that the filing of the claim for compensation is the start of the “proceeding” that is referred to in Art. 8307c.

If that contention is correct then the Legislature’s act in inserting into the statute the words “instituted, or caused to be instituted . . . any proceeding under the Texas Workmen’s Compensation Act” would have been nugatory and superfluous because that situation would have been covered, even if those words had been left out of the statute completely, by the part of the statute that creates a cause of action against an employer for firing an employee because he filed a claim.

In order to give the words “instituted, or caused to be instituted . . . any proceeding under the Texas Workmen’s Compensation Act” some effect other than would result from their omission, we must construe this part of the statute to include a state of proceeding under the Workmen’s Compensation Act reached prior to the time the employee files his claim for compensation.

This is another reason why we hold that a “proceeding” had already been instituted under the Workmen’s Compensation Law by the plaintiff at the time the defendant fired him.

We also hold that the evidence was sufficient to raise a fact issue on the question of whether the defendant fired the plaintiff because he had instituted a proceeding under the Workmen’s Compensation Act. The evidence showed that defendant’s superintendent, Pender, after learning that plaintiff had reported an injury, went out of his way to get the doctor that was then treating plaintiff to release him for light duty work at a time when the doctor advised that his condition was such that he should not be required to lift more than five to eight pound objects or to bend more than one time each hour while performing such light duty work. Pender required him to report to work at 6:00 A. M. on April 9,1973, in that state of health and when he reported late that morning Pender immediately fired him, although the plaintiff testified that he had had to take sleeping tablets to get to sleep because of his pain that night, and that this caused him to oversleep and that he had advised Pender of those facts at the time he fired him. Plaintiff had been late to work on prior occasions and had not been fired because of it.

Defendant next argues that there was no evidence and insufficient evidence to support the jury’s answers to issues Nos. 2 through 5, inclusive. The evidence showed that the defendant employer paid the same amount of wages for light duty work as they paid for doing the work that plaintiff was doing when injured. The light duty job he had when he was fired paid plaintiff $2.70 an hour. The most he has been able to earn since is $2.40 an hour. He testified that when he was fired he could lift very little and could bend very little and that because of his physical condition there were very few jobs he could handle. He applied for jobs doing light work, but could not get any and it was October, 1973, before he was able to get a job. We hold that there was evidence and sufficient evidence to support the jury’s answers to issues Nos. 2, 3, 4 and 5. A Court of Civil Appeals in affirming a case in which sufficiency of the evidence points are involved is not required to set out the evidence pro and con on the issues, and we will not do so more than we have above. Hammond v. Stricklen, 498 S.W.2d 356 (Tyler, Tex.Civ.App., 1973, ref., n.r.e.).

Whether or nq.t plaintiff used reasonable diligence to mitigate damages was a fact issue for the jury under the facts of this case. The matter was submitted to the jury by an instruction given under issue No. 5 with no one objecting. See 17 Tex.Jur.2d 401, Damages, § 326.

The defendant makes a short argument under his first two general points of error to the effect that the trial court did not apply a correct measure of damages in rendering judgment. He makes that contention for the first time on appeal. Appellant has no point of error in his brief making such a contention.

It is also noted that the defendant made no objections whatever to the court’s charge, urging that an improper measure of damages was inquired about therein. There is no assignment urged in defendant’s amended motion for new trial contending that the trial court applied an improper measure of damages in rendering judgment. (Rule 324, T.R.C.P.) No motion for instructed verdict was urged and no motion for a judgment non obstante vere-dicto was urged wherein the contention was advanced by defendant that plaintiff had not proved up a proper measure of damages or that the trial court applied an erroneous measure of damages in rendering the judgment. With the record in that state the matter was waived.

Defendant’s third point of error is that the trial court erred in overruling its exceptions to plaintiff’s Second Amended Original Petition.

There is no showing in the record before us that the trial court made the ruling that is complained of in this point of error. The record contains no order overruling the exceptions referred to. With the record in this state appellant did not properly preserve the matter for appellate review. Special exceptions to pleadings that are not called to the attention of the trial court and on which the record does not show that the trial court acted are waived. Pure Oil Company v. Fowler, 302 S.W.2d 461 (Dallas, Tex.Civ.App., 1957, ref., n.r.e.); Cook v. Jaynes, 366 S.W.2d 646 (Dallas, Tex.Civ.App., 1963, no writ hist.); and Rothchild v. Fannin Bank, 407 S.W.2d 878 (Texarkana, Tex.Civ.App., 1966, ref., n.r.e.).

All of appellant’s points of error are overruled.

The plaintiff has filed herein two cross-points of error wherein he contends that the trial court erred in excluding certain evidence. We overrule both points. They have become immaterial in view of the fact that we are affirming the trial court’s judgment in favor of the plaintiff. Regardless of how we rule on the points such rulings could not be of aid to plaintiff in this case, because he has already won it regardless of how we ruled on those cross-points.

The judgment is affirmed.


author: O’QUINN, Justice.

text:
    Bob BULLOCK, Comptroller of Public Accounts of the State of Texas, et al., Appellants, v. GENERAL DYNAMICS CORPORATION, Appellee.
    No. 12350.
    Court of Civil Appeals of Texas, Austin.
    Jan. 28, 1976.
    Rehearing Denied Feb. 18, 1976.

      John L. Hill, Atty. Gen., R. L. Lattimore, Asst. Atty. Gen., Austin, for appellants.
    Mary Joe Carroll, Michael L. Cook, Clark, Thomas, Winters & Shapiro, Austin, for ap-pellee.
   O’QUINN, Justice.

General Dynamics Corporation brought this action in district court of Travis County to recover in excess of $2,000,000 in franchise taxes paid to the State of Texas under protest for the years 1968 through 1971.

General Dynamics is engaged primarily in manufacture and sales of defense equipment and supplies, and during the taxable years its operations were performed in Waco, San Antonio, Houston, and Dainger-field, as well as within a federal enclave in Tarrant County consisting of about 428 acres of land known as Air Force Plant No. 4 site, which is leased to the corporation.

The taxes arose out of operations of General Dynamics in Texas, including for computation purposes the gross receipts from the corporation’s operations within the federal enclave in Tarrant County. That portion of the taxes measured by gross receipts attributed to the enclave business constitutes the matter litigated in this cause.

The trial court sitting without a jury held that General Dynamics should recover all such taxes, amounting to $2,008,757.11, computed on the gross receipts from the corporation’s operation within the enclave, together with interest on each payment from the date paid.

The State, through proper representatives, has appealed. We will reverse the judgment of the trial court and will render judgment that General Dynamics take nothing by its suit.

The State presents a single point of error:

“The trial court erred in voiding the franchise tax assessed against the percentage of appellee corporation’s taxable capital measured by its gross receipts from business done in a federal enclave situated within the State . . . because such allocation is permitted under Article 12.02, Title 122A, Taxation-General, V.T.C.S., and the Buck Act, 4 U.S.C.A., Sections 105-110.”

The State contends, and we agree with the contention, that the holding of the Supreme Court in Humble Oil and Refining Company v. Calvert, 478 S.W.2d 926 (Tex.Sup.1972), is controlling of decision in this appeal. In that case the oil company sought to recover occupation taxes paid on production from leases on a federal enclave. The Supreme Court held that the company was not exempt from the tax, its imposition by the State being authorized under the Buck Act. Although in that case an occupation tax was involved, we conclude that the Supreme Court’s analysis of the Buck Act demonstrates that scope of the Act is sufficiently broad to include franchise taxes involved in this appeal.

Congress enacted the Buck Act in 1940 to enable states to impose certain taxes, including “income taxes,” on business conducted within federal enclaves. The Act defines “income taxes” in broad terms to mean “. . . any tax levied on, with respect to, or measured by, net income, gross income, or gross receipts.” 4 U.S.C.A. sec. 110(c), as amended 1947.

The Supreme Court, in Humble Oil and Refining Company v. Calvert, supra, noted the intent of Congress in this language:

“The Congressional intent is strongly stated in the bill’s Senate Report [Report of Senate Finance Committee, cited in footnote 2, 478 S.W.2d 929] where it is stated that ‘[t]his definition [of income tax] . . . must of necessity cover a broad field because of the great variations to be found between the different State laws. The intent of your committee in laying down such a broad definition was to include therein any State tax (whether known as a corporate-franchise tax, or business-privilege tax, or any oth-. er name) if it is levied on, with respect to, or measured by net income, gross income, or gross receipts.’ ” (Emphasis added by this Court)

General Dynamics argues that the Texas statutes by their terms merely tax stated capital and therefore the franchise tax is not one measured by income so as to come within the definition contained in the Buck Act. We find that analysis of the statutes fails to sustain this contention.

Article 12.01 states: “(1) . . . every domestic and foreign corporation . chartered or authorized to do business in Texas or doing business in Texas, shall . pay to the Comptroller a franchise tax . . . which shall be based on . (a)(i) Two Dollars and Seventy-five Cents ($2.75) per One Thousand Dollars ($1,000) . . . applied to that portion of the sum of the stated capital, surplus and undivided profits, the sum of which for the purposes of this Chapter is hereafter referred to as ‘taxable capital’ . . .” (Emphasis added)

This statute clearly demonstrates that the tax is based upon the three elements of stated capital, surplus, and undivided profits, with the result that the franchise tax will vary in direct proportion to changes in gross income or gross receipts as set out in the Buck Act.

Article 12.02 states: “(l)(a) Each corporation .... shall determine the portion of its entire taxable capital taxable by the State of Texas by multiplying same by an allocation percentage which shall be the percentage relationship which the gross receipts from its business done in Texas bear to the total gross receipts of the corporation from its entire business.” (Emphasis added)

By this article the Legislature merely allocated the taxable capital based upon the intrastate transactions, and the amount of income within Texas will determine what percentage of taxable capital is subject to the franchise tax.

General Dynamics relies upon the holding of the Supreme Court of the United States in Ford Motor Company v. Beauchamp, 308 U.S. 331, 60 S.Ct. 273, 84 L.Ed. 304 (1940), affirming Ford Motor Company v. Clark, 100 F.2d 515 (5th Cir.), in contending that the Texas franchise tax is a tax on capital as distinguished from income. This case was decided in 1939, rehearing denied in January, 1940, and of course does not purport to construe the measures provided in the Buck Act.

But in Clark the court observed that “The tax is not laid on property or income, though both are regarded in measuring it." (100 F.2d 516) (Emphasis added) The Buck Act, as already noted, defines “income tax” in terms of a tax “measured by” either “net income, gross income, or gross receipts.” In Beauchamp the Supreme Court stated: “The statute calls the excise a franchise tax. It is obviously payment for the privilege of carrying on business in Texas.” (308 U.S. 334, 60 S.Ct. 275) (Emphasis added) The legislative intent of the Buck Act, under its “broad definition was to include . any State tax (whether known as a corporate-franchise tax, or business-privilege tax, or any other name) . . . ” (478 S.W.2d 929) (Emphasis added)

We conclude that the principles of law applied by the Supreme Court of Texas to the oil and gas production tax are applicable with equal force to the franchise tax, for the reason that the definition of “income tax” contained in the Buck Act encompasses business-privilege taxes in both instances because each tax relates to and is measured by income or receipts. The trial cour,t erred in its conclusion that “the assessment and collection of taxes was unlawful, unconstitutional, wrongful and void.”

The judgment of the trial court is in all things reversed. Judgment is here rendered that appellee, General Dynamics Corporation, take nothing by its suit, and that all costs be assessed against the appellee.

Reversed and rendered.


author: CIRE, Justice.

text:
    Adolphus HALL et ux., Appellants, v. HARRIS COUNTY CHILD WELFARE UNIT, Appellee.
    No. 1258.
    Court of Civil Appeals of Texas, Houston (14th Dist.).
    Jan. 28, 1976.
    Martin J. Grimm, Houston Legal Foundation, Houston, for appellants.
    Robert D. Ford, Asst. Dist. Atty., Eric G. Andell, Houston, for appellee.
   CIRE, Justice.

This is an appeal from an order terminating the parent-child relationship between appellants, Mr. and Mrs. Adolphus Hall, and five of their children. The juvenile court granted the petition of appellee, the Harris County Child Welfare Unit, brought on the basis of section 15.02 of the Family Code under which the court may terminate the parent-child relationship if it finds the parent has

(C) knowingly placed or knowingly allowed the child to remain in conditions or surroundings which endanger the physical or emotional well-being of the child; or
(D) engaged in conduct or knowingly placed the child with persons who engaged in conduct which endangers the physical or emotional well-being of the child .

At the time of the termination hearing all six of the children were under the temporary managing conservatorship and in the custody of the appellee. The appellants appeared at the hearing but were not represented by counsel.

The evidence introduced at the hearing consisted of the testimony of two caseworkers from the Harris County Child Welfare Unit, and the testimony of the appellants. Ms. Karen Nelson testified that she became the appellants’ caseworker in June of 1974 at which time the children were in foster homes. In July, 1974 the children were returned to the parents’ home where Ms. Nelson visited an average of five to ten times per month until she ceased to be their caseworker in January, 1975. She testified that appellants’ home was usually dirty, and on several occasions she found the home to be without food, gas, lights, or heat. She had made arrangements for appellants to work with various social, health and welfare agencies, but testified the appellants failed to consistently follow the programs set up by these agencies. , Specifically, she testified that the youngest child was to have been given medication daily for cellulitis, but she later found that the medicine bottle was almost unused. In her opinion the home could be rehabilitated only with constant supervision, which she was unable to provide because of her heavy casework load.

Ms. Karen Lewis testified that she had been the Halls’ caseworker since February, 1975. She testified that although the children had been taken from the appellants’ possession on January 22, 1975, neither of the appellants had attempted to arrange to visit the children from that time until the date of the hearing, which was March 31, 1975. She testified that the parents were not living together, and in her opinion neither Mr. nor Mrs. Hall alone was capable of taking care of the children.

Mrs. Hall testified that she had been hospitalized on several occasions for psychiatric treatment, the last time in January of 1974; that she no longer had an emotional problem; that she was not living with her husband; that she had taken the children to their scheduled appointments at health care clinics; and that she and her husband planned to resume living together if the children were returned to them. Mr. Hall testified that he was working; that he and his wife were living apart only because his job kept him away from home; that he had made several attempts after January 22, 1975 to contact the caseworker and arrange visits with the children; that he believed he could financially support his family; he also testified that he had taken the children to the clinic, but was uncertain which clinic.

The appellee did not produce any medical records or introduce any expert testimony concerning any of the children’s health or their lack of medical treatment. The juvenile court terminated the parent-child relationships between appellants and the five youngest children and appointed appellee as their permanent managing conservator. The caseworkers testified that the oldest child Rita was not adoptable, and appellee, did not request termination as to her.

The primary consideration in such cases is the best interest of the children involved, and the trial court is vested with wide discretion in determining how best to serve that interest. Mumma v. Aguirre, 364 S.W.2d 220 (Tex.Sup.1963); Ex parte Gallop, 486 S.W.2d 836, 839-40 (Tex.Civ. App.—Beaumont 1972, writ ref’d). There is, however, a rebuttable presumption that the best interest of the child will be served by awarding the child to its natural parents. In order to rebut this presumption there must be clear and convincing evidence of the natural parents’ present unfitness. Calhoun v. Ruffer, 425 S.W.2d 50, 53 (Tex. Civ.App.—Houston [14th Dist.] 1968, no writ).

Appellants contend the state has not brought forth competent evidence sufficient to demonstrate a danger of physical or emotional harm to the children or to show the parents are presently unfit to care for them.

This is not a case in which it is alleged that the parents have willfully abused or abandoned their children. The ground on which termination is sought is that the parents are unable to provide adequate care for their children, and the primary evidence offered to prove this inability was the physical and emotional condition of the children and of their mother. The record, however, reflects almost no competent evidence of the children’s or their mother’s health. The social workers testified that two of the children were “severely anemic”, that the youngest child had cellulitis, and that the parents had failed to follow the treatment schedules set up for these children. Additionally, there was testimony that Mrs. Hall is emotionally unstable and therefore unable to care for the children. All these allegations concerned the medical conditions of the children and of their mother, but no expert testimony or medical records were introduced to substantiate them.

We do not intend to imply that this is not a proper case for termination; however, it is clear from the record that the evidence of the physical and emotional ill-health of the children and their mother was not sufficiently developed to satisfy the requirement of clear and convincing proof. Whenever a cause relies heavily, as does this one, on the proof of medical facts, then the party on whom rests the burden of proof must come forward with medical testimony or medical records, or some evidence other than hearsay or the unsubstantiated opinion of witnesses not qualified as medical experts.

We feel it is in the best interest of these children that this case be remanded for a fuller presentation of the evidence. For that reason the judgment of the trial court is reversed, and the cause is remanded for further proceedings to more fully develop all aspects of the case.

remanded. and Reversed


author: DUNAGAN, Justice.

text:
    Loiuse MUELLER, widow of Carl Mueller, Deceased, Appellant, v. The CHARTER OAK FIRE INSURANCE COMPANY, Appellee.
    No. 867.
    Court of Civil Appeals of Texas, Tyler.
    Jan. 29, 1976.
    Rehearing Denied Feb. 19, 1976.

      Otto B. Mullinax, Mullinax, Wells, Mauzy & Baab, Inc., Dallas, for appellant.
    C. L. Mike Schmidt, Vial, Hamilton, Koch, Tubb, Knox & Stradley, Dallas, for appellee.
   DUNAGAN, Justice.

This is a workmen’s compensation heart attack case. Louise Mueller brought suit to recover for the death of her husband, Carl Mueller. She appeals from a take nothing verdict entered upon an adverse jury finding. We affirm the judgment of the trial court.

Carl Mueller suffered a fatal heart attack on August 6, 1973, approximately 30 minutes after reporting to work as a lathe operator. This job, which he had held for 11 years, required the grinding of rubber printing rolls of various sizes upon the lathe machine. The job involved some lifting and concentration and was tiring primarily because of the monotony. Mueller was seen operating his machine shortly before he was discovered unconscious on the floor. The autopsy revealed that Mueller was suffering from severe atherosclerosis with an 80% occlusion of the anterior descending coronary artery and areas of complete occlusion of the circumflex and posterior descending coronary arteries.

The jury, in response to two special issues, found that Carl Mueller had a heart attack on August 6,1973, but failed to find that he had such heart attack in the course of his employment. The jury was instructed that “a heart attack is in the course of employment if it is produced or precipitated by an employee’s work or the conditions of his employment. Otherwise a heart attack is not in the course of employment, even if it occurs on the job.”

Appellant attacks the legal and factual sufficiency of the evidence to support the jury’s answer to SPECIAL ISSUE NO. 2. In determining the legal sufficiency point, we consider only the evidence and inferences therefrom tending to support that answer. In passing upon the factual sufficiency point, we consider all of the evidence and the reasonable inferences. Aetna Casualty & Surety Co. v. Scruggs, 413 S.W.2d 416, 423 (Tex.Civ.App.—Corpus Christi 1967, n. w. h.); Garza v. Alviar, 395 S.W.2d 821 (Tex.1965).

Appellant contends that a presumption of work activity as producing cause arose from the occurrence of the heart attack while Mueller was discharging his job. Causation is not generally presumed in heart attack cases. See Bean v. Hardware Mutual Casualty Co., 349 S.W.2d 284, 290 (Tex.Civ.App.—Beaumont 1961, writ ref’d n. r. e.). If such a presumption did arise, however, it was rebutted by evidence to the contrary. Scott v. Millers Mutual Fire Insurance Company of Texas, 524 S.W.2d 285, 288 (Tex.1975). This evidence was the testimony of appellant’s expert witness, Dr. Grollman, that the autopsy suggested that the pre-existing heart disease would probably have been the cause of death. However, the facts from which such a presumption arose remain in evidence and will support any inferences that may properly be drawn therefrom. Scott v. Millers Mutual Fire Insurance Company of Texas, supra.

Appellant relies upon two theories of causation in her attack on the legal and factual sufficiency of the evidence to support the jury’s failure to find that the heart attack was produced or precipitated by work. She first argues that some work activity on August 6, 1973, over-reached Carl Mueller’s diseased heart; she also contends that his death was caused by repetitious, physical, traumatic activities extending over a period of time and arising in the course of employment. We will discuss these theories in that order.

A heart attack caused by strain or exertion is an accidental injury within the meaning of the Workmen’s Compensation Act. Baird v. Texas Employers’ Insurance Ass’n, 495 S.W.2d 207, 211 (Tex.1973). A pre-existing condition such as diseased arteries will not preclude compensation. O’Dell v. Home Indemnity Co., 449 S.W.2d 485, 487 (Tex.Civ.App.—Amarillo 1969, writ ref’d n. r. e.). Since pre-existing heart disease is usually present in heart attack cases, it is important that the job related strain be the sole or contributing cause of the injury. Symposium on Workmen’s Compensation: A Pandect of the Texas Law, 6 St. Mary’s L.J. 608, 658. The question of causation in heart attack cases is usually close and the evidence is most often largely circumstantial or based on answers by medical witnesses to hypothetical questions. Baird v. Texas Employers’ Insurance Ass’n, supra.

Here, the pertinent evidence was as follows: Carl Mueller, a 59-year old man, reported to his job as a lathe operator on August 6,1973; this job involved the manual movement of rubber rolls weighing from 10 to 50 pounds and the mental strain from the inspection of the grinding of these rolls; he had complained in the two previous weeks of some pain in his chest and of tiredness; he began work at 7:30 a. m. and was last seen alive sitting near his grinding machine; he was found on the floor and was taken to the hospital where he was pronounced dead at 8:47 a. m.; the autopsy revealed severe atherosclerosis. Dr. Groll-man, in response to a hypothetical question assuming the aforementioned evidence, stated that in his opinion, based upon reasonable medical probability, Carl Mueller had suffered a heart attack which was precipitated by his employment activities on August 6, 1973.

The instant circumstances and Dr. Groll-man’s opinion called for a factual determination of whether Mueller’s injury was produced or precipitated by his employment activities on August 6, 1973. See Baird v. Texas Employers’ Insurance Ass’n, supra. The trier of fact, however, answered this question in the negative. In certain areas of workmen’s compensation cases, where courts and juries share knowledge and experience with medical witnesses, the jury may determine causation without, or even in spite of, expert medical testimony. Insurance Company of North America v. Kneten, 440 S.W.2d 52, 55 (Tex.1969). In the case at bar, appellee’s medical expert’s opinion was that Mueller’s heart attack was not precipitated by his employment activities on August 6, 1973. We are unable to say that the jury’s answer to SPECIAL ISSUE NO. 2 was against the great weight and preponderance of the evidence of this causation theory.

The contention that Carl Mueller’s heart attack was the result of repetitious, physical, traumatic activities extending over a period of time is based on the amendment of the Occupational Disease section of the Workmen’s Compensation Act. The last sentence of this section excludes from compensability those ordinary diseases of life to which the general public is exposed outside of the employment, unless such diseases follow as an incident to an occupational disease. This indicates a Legislative intent to require evidence of probative force of a causal connection between employment and occupational diseases. One scholar defines compensable occupational diseases as those diseases which are indigenous to the claimant’s work or present in an increased degree in that work as compared with employment generally. See Larson, The Law of Workmen’s Compensation, sec. 41.00. The only attempt in this record to establish a causal connection between Mueller’s heart attack and the cumulative strain of operating a lathe over an eleven year period occurred during the cross examination of Dr. Race. This evidence certainly did not establish that connection as a matter of law. We conclude that the jury’s failure to find a causal connection between Mueller’s heart attack and the cumulative strain of his work was not against the great weight and preponderance of the evidence.

In our opinion, the evidence is sufficient to support the jury’s answer to SPECIAL ISSUE NO. 2 and such answer is not against the great weight and preponderance of the evidence. Appellant’s points of error are overruled.

The trial court’s judgment is affirmed.

      . Tex.Rev.Civ.Stat.Ann. art. 8306, sec. 20 (Supp.1975).

      . “Q. Now, then, Doctor, I want to move to another area. In your medical experience will the repeated stresses and strains of normal work activity on a job acting upon a diseased heart over a period of time cause the heart to become weaker or less strong maybe I should say?
      “A. .1 don’t think you can say that. People live under terrifically stressful conditions for a lifetime and live to be ninety-five and there are many others who have apparently easy life who die of a heart attack at thirty-five. * * *
      ******
      “Q. And the fact that strains are brought to that diseased heart muscle this does not in any degree, as far as you are able to determine clinically or otherwise, increase or aggrevate the growth of this arterioscle-rotic process; is that what you are saying?
      “A. There is a great body of medical opinion that puts emphasis on the fact that chronic long-term stress such as an air traffic controller, in certain people who do hazardous occupation in fact does accelerate the rate in which they get arteriosclerosis, hardening of the arteries, and it may even in some instances, accelerate the possibility of high blood pressure and its consequent damaging effect over a period of a lifetime. The answer to that is yes.
      * # * * * #
      “Q. And I will ask you whether or not, in your opinion, one who works at a very complicated lathe handling — doing very minute calibrated work is — doesn’t experience some character of mental stress over a long period of time like ten years so that you could say that the atherosclerotic process in his body was in some degree accelerated by his job by his work?
      “A. I will answer that by saying there is no doubt he had atherosclerosis. There is no doubt that being alive he had some degree of stress since he couldn’t drive his automobile without having some stress or he couldn’t do a normal day’s work without having some stress. So there is no doubt that he had stress. There is no doubt that he had hardening of the arteries and narrowing of the arteries. How much of this would relate one to the other I think is argumentative. It’s unprovable.
      “Q. You can’t measure the quantity but you do know that over a long period?
      “A. In general there is probably some relationship between long-term stress and degree of elevation of blood pressure and acceleration of atherosclerosis, yes.”


author: EVANS, Justice.

text:
    DICKINSON INDEPENDENT SCHOOL DISTRICT, Appellant, v. Mary E. McGOWAN, Appellee.
    No. 16600.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    Jan. 29, 1976.

      George J. Prappas, Houston, for appellant.
    McLeod, Alexander, Powel & Apffel, James L. Ware, Galveston, for appellee.
   EVANS, Justice.

A delinquent ad valorem tax case.

Appellant, Dickinson Independent School District, brought this suit against appellee, Mary E. McGowan, to collect delinquent ad valorem taxes assessed by the School District for the year 1967 in the amount of $406.20 plus penalty, interest, costs and attorney’s fees, resulting in a total sum of $680.37. Appellee plead payment of the taxes and tendered into court the sum of $406.20. After a non-jury trial, judgment was rendered that appellant recover from appellee said sum of $406.20 without interest and all other relief was expressly denied. Costs of suit were charged against appellant.

The trial court filed findings of fact, unchallenged in this court, which establish the following:

Appellee has owned the land in question since 1940. During the years 1941 through 1973, appellee paid the annual school district taxes on the land by mailing her personal checks to appellant. These checks were always accepted by appellant and it never objected to the manner of payment. On December 27, 1967, appellee mailed her personal check for $406.26 to appellant in payment of the 1967 taxes. However, this check was apparently lost in the mail or in appellant’s office since appellant had no record of having received it. Due to ill health and personal concerns, appellee did not carefully check her bank statements and therefore did not realize the check had not been cashed until she received a delinquent tax notice from appellant in the latter part of 1969. This notice demanded payment of the tax of $406.26, plus interest, penalty and attorney’s fees in the amount of $78.19. Promptly on receiving this notice, appellee mailed another cheek to appellant on October 18, 1969, in the amount of $406.26, but this was returned because it did not include the penalty, interest and attorney’s fees.

Based on these findings the trial court concluded, as a matter of law, that appel-lee’s posting of her letter of December 27, 1967, addressed to appellant, in which she enclosed her check for the amount of the 1967 tax, constituted payment of the tax upon “the usual course of dealing between the parties,” even though the letter was lost. In its first point of error appellant attacks this legal conclusion.

In support of the trial court’s judgment, appellee relies upon Fant v. Miller, 218 S.W.2d 901, 903 (Tex.Civ.App.—Texarkana, 1949, ref’d n. r. e.), wherein the following statement appears from 40 Am.Jur., Sec. 36, p. 737:

“It is firmly established that payment may be made by mail where, by the creditor’s express direction or assent, the usual course of dealing between the parties, or other facts from which such direction or assent may be inferred, the creditor has authorized the money to be thus delivered to him. In such a case, the posting of a letter inclosing the remittance as directed constitutes payment, although the letter is lost, and a delay of the remittance in the mail will not result in a forfeiture or loss of the rights through non-payment.”

While we recognize that the legal relationship of private parties may be altered through custom or course of dealing, taxes are deemed paid only when the proper amount thereof is received by the proper official in cash or its equivalent, Stelter v. Calvert, 456 S.W.2d 202 (Tex.Civ.App.—Austin, 1970, no writ); 72 Am.Jur.2d, Sections 839-840, pp. 144-146. In the absence of some constitutional or statutory requirement, taxing officials are under no obligation to accept checks in payment of taxes and the fact that payments by check are usually and customarily received by the taxing authorities does not give legal sanctity to such method of payment. In Muldrow v. Texas Frozen Foods, 157 Tex. 39, 299 S.W.2d 275 (1957), the Texas Supreme Court, speaking through Justice Walker, stated:

“Since an individual is free to accept a check as conditional payment and the condition is satisfied when the instrument is paid, it is proper to treat the payment as having been made at the time the paper was received. We have concluded, however, that this rule cannot be applied to the payment of taxes by check. In the absence of a constitutional or statutory provision authorizing payment in some other medium, taxes must always be paid in money . . . Our Constitution and statutes do not provide for the payment of taxes by check, and no official can obligate the State to accept such an instrument as either absolute or conditional payment .
“We know that collecting officials customarily accept personal checks for taxes. If a check given for this purpose is promptly paid when first presented in due course to the drawee bank, then for all practical purposes the funds are as readily available to the taxing authority as if payment had been made in money. Under these circumstances we would have no difficulty in holding that the check was the legal equivalent of money and that the taxes were discharged when the payment was received by the collecting official. But if the instrument is dishonored when presented to the bank, it cannot be said that the taxes were paid at the time the check was received.
“The use of a check to pay taxes is always at the risk of the taxpayer, for whose accommodation the receiving official acts in attempting to collect the same

We hold that the posting of the letter of December 27, 1967, by appellee addressed to appellant, enclosing her personal check for the 1967 tax, did not constitute payment of the tax. We, therefore, sustain appellant’s first point of error.

In its second, third and fourth points of error appellant contends the trial court erred in failing to render judgment against appellee for penalty and interest in addition to the amount of the 1967 tax. It is appellee’s position that the mailing of the remittance of the amount of the 1967 taxes by appellee on December 27, 1967, and again, after receipt of the delinquent tax notice, on October 18, 1969, constituted effective tenders which preclude the attachment of penalty, interest and costs. While we again recognize some equitable basis for appellee’s position, the authorities do not support her contention. A proper tender may avoid the addition of penalty and interest. However, for such tender to be effective, it must be for the full amount owing at that time. A tax official is not required to accept partial payment of taxes upon the taxpayer’s claim that such amount is all that is due. Lufkin Land & Lumber Company v. Noble, 60 Tex.Civ.App. 30, 127 S.W. 1093, 1098 (1910, writ ref’d). A tender of the exact amount of the taxes due, but without including the proper amount of the statutory penalty and interest then due thereon, is ineffective. City of Odessa v. Lea, 381 S.W.2d 153 (Tex.Civ.App.—El Paso, 1964, no writ); 72 Am.Jur.2d, Sec., 841, p. 146. We sustain appellant’s second, third and fourth points of error.

Appellant’s fifth and sixth points of error assert error on the part of the trial court in failing to render a judgment in its favor for costs and attorney’s fees. Appellant has withdrawn its contention that it is entitled to attorney’s fees and in view of our determination that appellant is entitled to recover judgment ' against appellee for the amount of the 1967 taxes, penalties and interest, all costs will be adjudged against appellee under Rule 139, Texas Rules of Civil Procedure.

The trial court’s judgment awarding the appellant, Dickinson Independent School District, recovery against appellee, Mary E. McGowan, for the sum of $406.20, is affirmed. The judgment of the trial court denying appellant’s claim for attorney’s fees in the amount of $61.85 is also affirmed. The judgment of the trial court denying recovery to appellant of the claimed amount of penalty and interest due on said taxes is reversed and judgment is rendered in favor of appellant against ap-pellee for the amount of $32.50 as penalty, and the amount of $178.76 as interest. All costs of suit are taxed against appellee.