author: DANIEL, Justice. REAVLEY, Justice

text:
    O. L. GRAGG, Petitioner, v. CAYUGA INDEPENDENT SCHOOL DISTRICT, Respondent.
    No. B-5444.
    Supreme Court of Texas.
    June 16, 1976.
    Rehearing Denied July 21, 1976.

      Billy H. Gragg, Bradley R. Reeves, Palestine, for petitioner.
    James E. Pritchard, Fort Worth, Elvin E. Tackett, Bedford, for respondent.
   DANIEL, Justice.

This is a suit by the school district to collect ad valorem taxes on ranch land owned by O. L. Gragg for the years 1971, 1972 and 1973. Mr. Gragg’s defense is that the denial of an agricultural use designation for his land was contrary to law. The trial court rendered judgment in favor of the school district and the Court of Civil Appeals affirmed. 525 S.W.2d 32. We granted the writ to examine apparent differences between holdings in former cases and the manner in which the Court of Civil Appeals arrived at its judgment in this case. Although differing with its opinion in some respects, we arrive at the same result and affirm the judgment of the Court of Civil Appeals.

The special treatment of the assessment of agricultural lands for ad valorem tax valuation purposes, was effected by legislative resolution in 1965 and approved by popular vote in 1966. This self-enacting constitutional amendment is now Article 8, Sec. 1-d of the Texas Constitution.

The landowner, 0. L. Gragg, is a highly successful businessman who resides in Anderson County. One of his several businesses, and the one to which he devotes most of his time, is a ranching operation covering over 22,000 acres of land. About one-third of his ranch land lies within Cayuga Independent School District. Mr. Gragg testified that he spent ten hours a day, seven days a week, in the ranching business. This was not disputed. The trial court found, however, that Mr. Gragg received more income, both gross and net, from other business ventures, occupations, and investments than from his ranching business. Thus, the question is the legal effect of the income he receives from his “eight or twelve other businesses.” His sources of income in addition to agriculture include oil and gas operations (including personal working interests, a partnership oil company which he manages, and a partnership drilling company in the control of which he participates), oil and gas royalty, corporate stock sales and dividends, rent from an office building in Houston, and interest from notes and savings accounts.

The findings of the trial court with respect to the income of Mr. Gragg during each of the relevant preceding years were summarized by the Court of Civil Appeals in the following tables:

Petitioner Gragg did not challenge the substantial accuracy of the findings or the above summaries of his income from the various sources indicated. He does, however, complain of any use of “net” rather than “gross” income in comparing his ranch income with that from other sources. He also asserts error in balancing his agricultural income against the total income received from all other separate business enterprises in arriving at a determination of whether his ranching business is his “primary occupation and source of income.” His appeal presents three contentions which are contested by the school district: (1) that the agricultural assessment provision refers to “gross” rather than “net” income; (2) that “primary” occupation and source of income does not require a majority (more than 50%) of one’s income to be agricultural so long as it is more than the amount received from any one of several other businesses; and (3) that only other income from other business ventures or occupations should be considered in comparing sources of income — specifically that dividends and interest from investments should not be considered. Petitioner Gragg also presents constitutional questions which are conditioned upon our answers to one or more of the foregoing questions.

All of the above questions arise from the last phrase of the following sentence in Sec. l-d(a):

“. . . ‘Agricultural use’ means the raising of livestock or growing of crops, fruit, flowers, and other products of the soil under natural conditions as a business venture for profit, which business is the primary occupation and source of income of the owner.” (Emphasis added.)

Background and Purpose

The questions can be considered in proper context and perspective by first examining the background and purpose of the constitutional amendment which created the special agricultural use assessment for land “owned by natural persons which is designated for agricultural use . . . ,”

For the first one hundred years of its existence, Texas was largely a rural State. By 1965, increased urbanization had caused increased market values on agricultural lands near metropolitan areas due to industrial expansion, residential subdivisions, and speculative buying. Payment of taxes on market value as required by the Constitution of 1876 was discouraging farmers and ranchers from continuing their agricultural uses and was in some instances forcing sales and loss of both land and personnel from the essential business of producing food and fiber. See the Texas Legislative Council Report cited in note 2 and Report to the 62nd Legislature of the Agricultural Land Assessment Study Committee under H.C.R. 8, 61st Leg., Reg. Session.

The problem is shared by other states. Agricultural assessment aid with assessments based on value for agricultural uses rather than market values, has been extended to farm and ranch lands in 34 states, with proposed legislation pending in at least two other states. Most of the other states do not have the type of bona fide farmer-rancher safeguard that is a part of the Texas enactment, but many require that the land produce a minimum annual gross income.

Only Texas and Alaska appear to consider income of the landowner in determining the land’s eligibility for the agricultural assessment. The Alaska statute, enacted in 1974, follows many provisions of the Texas statute, but it is less cumbersome. For instance, its bona fide farmer provision requires only that the owner or lessee “must be actively engaged in farming the land, and derive at least 10 percent of his yearly gross income from the farm use land,” with a specific exception in the event of a crop failure.

It is obvious that the Texas “primary occupation and source of income” requirement was intended to prevent the lower agricultural assessment from being abused by allowing land investors and speculators to reduce their assessments and taxes simply by planting a crop or running livestock on the land. The provision also has the salutary purpose of encouraging not only that agricultural and ranch land be continued in production but that farmers and ranchers remain in the business of such production. So long as it is thus interpreted, we do not believe the classification will encounter the possible constitutional objections conditionally raised by Petitioner Gragg. The provision has been so interpreted in at least two Texas cases, San Marcos Consolidated Independent School District v. Nance, 495 S.W.2d 335 (Tex.Civ.App.1973, writ ref. n. r. e., 502 S.W.2d 694, 1974), and Klitgaard v. Gaines, 479 S.W.2d 765 (Tex.Civ.App.1972, writ ref. n. r. e.). See also Opinion of the Attorney General of Texas, M-1271, November 28, 1972.

Gross Income to be Considered

We agree with Petitioner Gragg’s contention that the “primary occupation and source of income” provision contemplates “gross” rather than “net” income. It is our duty in construing the Constitution to ascertain and give effect to the plain intent and language of the framers of a constitutional amendment and of the people who adopted it. Deason v. Orange County Water Control and Imp. Dist., No. 1, 151 Tex. 29, 244 S.W.2d 981, 984 (1952); Cramer v. Sheppard, 140 Tex. 271, 167 S.W.2d 147 (1942). When, as here, certain language is not plain, it is our duty to determine the intent from the other provisions, including the general purpose, of the entire enactment.

In writing and submitting to the electorate Section 1-d of Article 8, the Legislature failed to insert the word “net” or “gross” ahead of the word “income.” We are not authorized to supply a missing word for the purpose of clarity, but it is our duty to determine by recognized rules or judicial interpretation whether the Legislature intended the comparison of sources of income to be based upon net or gross income. We have concluded that this determination must be based upon the manner and context within which the term is used. This is because the word “income” is susceptible of various meanings. It has been interpreted by courts to mean “net” or “gross,” depending upon the connection in which it is used. In Words and Phrases, there are 116 pages of definitions of “income.” See 20A Words and Phrases, 163-279.

Different editions of the same legal dictionaries carry different definitions of “income,” depending upon the cases cited. For instance, the 1933 edition of Black’s Law Dictionary defined the term as “that which comes in or is received from any investment of capital, without reference to outgoing expenditures; while ‘profits’ generally means the gain which is made upon any business or investment when both receipts and payments are taken into account . ,” citing People v. Niagra County, 4 Hill (N.Y.) 20, and Bates v. Porter, 74 Cal. 224, 15 P. 732. Black’s Law Dictionary 944 (3rd ed. 1933). The 1968 edition gives a broader definition, including “return in money” and “profits,” as follows: “The return in money from one’s business, labor, or capital invested; gains, profits, or private revenue,” citing In re Slocum, 169 N.Y. 153, 62 N.E. 130 (1901). Slocum involved a bequest of “the income of my said estate, after deducting the necessary costs and expenses of investing the property and collecting the income . . . See the lower court opinion in the same case, styled In re Austin’s Will, 60 App.Div. 438, 69 N.Y.S. 1036 (1901).

There have been numerous cases in which the use of the word “income” has been held to mean “net income” because of the circumstances, purposes, and manner of its use, but which recognize that under other circumstances the word should be interpreted to mean gross income.” Such a case was Fullerton v. Central Lincoln People’s Utility District, 185 Or. 28, 201 P.2d 524 (1948), wherein the court said:

“The word ‘income’ is capable of a variety of meanings, depending upon the manner of its use. The ordinary meaning, without qualification, is as follows: ‘ “Income” means that which comes into or is received from any business or investment of capital, without reference to the outgoing expenditures. The term, when applied to the affairs of individuals, expresses the same idea that “revenue” does when applied to the affairs of a nation.’ 4 Words and Phrases, First Series, page 3504 [20 Words & Phrases, Perm.Ed., p. 492].”

A leading case on the subject in Texas is Houston Belt & Terminal Ry. Co. v. Clark, 122 S.W.2d 356 (Tex.Civ.App.1938, affirmed, 135 Tex. 388, 143 S.W.2d 373, 1940), in which the question was whether the railroad company was exempted from payment of a franchise tax under a provision that “this act shall not apply to corporations organized as terminal companies not organized for profit, and having no income from the business done by them.” In holding that the company had “income,” the court said:

“The term ‘income’ ordinarily means that ‘which comes into or is received by any business or investment of capital, without reference to the outgoing expenditures.’ 4 Words and Phrases, First Series, p. 3504. Income is the ‘gain which proceeds from property, labor, or business.’ 1 Bouv. Law Diet., Rawle’s Third Rev., p. 1527. The statutes use the word ‘income’ or the phrase, ‘income from the business done by them,’ in the sense of any income, as distinguished from net income.”

In affirming, this Court said:

“The contention of the terminal company finds complete answer in the opinion of the Court of Civil Appeals, which we approve in its entirety.”

See also Humble Oil & Refining Co. v. Calvert, 478 S.W.2d 926 (Tex.1972); San Marcos Consolidated Independent School District v. Nance, 495 S.W.2d 335 (Tex.Civ.App.1973, writ ref. n. r. e.); Denver Live Stock Comm. Co. v. Comm. of Internal Revenue, 29 F.2d 543 (8th Cir. 1928); Crider Bros. Comm. Co. v. Comm. of Internal Revenue, 45 F.2d 974 (8th Cir. 1931); In re Knight, 9 F.Supp. 502 (Conn.D.C.1934); Opinion of Justices, 254 Ala. 188, 47 So.2d 729 (1950); State v. Morgan Gin Co., 186 Miss. 66, 189 So. 817 (1939); Fullerton v. Central People’s Utility Dist, 185 Or. 28, 201 P.2d 524 (1948); State ex rel. McKay v. Keller, 140 Fla. 346, 191 So. 542 (1939); W. C. Sharp Drug Stores v. Hansard, 176 Tenn. 595, 144 S.W.2d 777 (1940).

In San Marcos Consolidated Independent School District v. Nance, supra, the decision in favor of farmer-rancher taxpayers was based on their gross income. Instructions to the jury which were held to be correct by the Court of Civil Appeals included the following:

“You are instructed that the term ‘income,’ as used in this charge, means that which comes in or is received from any occupation or business venture or investment of capital without reference to the outgoing expenditures.”

A similar term in the Federal Bankruptcy Act referring to farmer’s income was held to mean gross income in the case of In re Knight, 9 F.Supp. 502 (Conn.D.C.1934).

The statute, 11 U.S.C.A. § 203(r) or Bankruptcy Act, § 75(r), provided:

“The term ‘farmer’ means any individual who is personally bona fide engaged primarily in farming operations or the principal part of whose income is derived from farming operations.”

In discussing the meaning of “income,” the court said:

“And ‘income’ I construe to mean ‘gross income.’ Otherwise, when, by drought or depressed market conditions, the agricultural producer operates at a loss, he would cease to be a farmer entitled to the benefits of the act, if he had any net income from nonfarming operations. Certainly Congress did not intend that such a producer should cease to be a ‘farmer’ and lose the benefits of the act at the very time when he is most in need.”

The purpose of the self-enacting constitutional amendment and the manner in which the term was used in Section 1-d of Article 8 indicate that gross income was to be considered rather than net income. Use of the word “source” contributes to this conclusion. The word “source” as respects matters of taxation has been held to mean origin. Goldberg v. Gray, 70 N.D. 663, 297 N.W. 124 (1941). This and other terms of the amendment indicate an interest in the origin of the landowner’s gross income to determine whether he is a bona fide farmer or rancher. Since the amendment is self-enacting, it is believed that if net income had been intended, there would have been provisions as to how net income would be determined; whether it would be figured before or after taxes; whether depreciation would be allowed and if so at what rate; as well as other provisions necessary in determining net as opposed to gross income.

Furthermore, the interpretation contended for by the school district would defeat the purpose of the amendment. An almost insurmountable obstacle would be placed in the path of bona fide farmers and ranchers if their qualification under the amendment were to be tested by source of net income rather than gross income. There is a great difference, especially for those who depend upon the soil for their livelihoods. It is commonly known that farmers and ranchers require large expenditures in their operations'.and usually receive comparatively larger gross income than net income. Many of such bona fide farmers and ranchers depend upon additional sources of revenue in order to supplement their income from agricultural pursuits.

Meaning of “Primary” Occupation and Source of Income

For some of the same reasons stated above with respect to the meaning of “income,” we agree with Petitioner Gragg that the word “primary” should not be interpreted as requiring the farmer or rancher to receive more than 50% of his total gross income from his farming or ranching business.

The word “primary” has a plain and simple meaning of chief, first, or foremost in degree, quality, or importance or in a list, series or sequence. It is not a synonym for “majority.” Available dictionaries seem to agree substantially with Webster’s Third New International Dictionary (1967) which defines “primary” as “first in rank or importance; chief, principal,” or the additional meaning given in the American College Dictionary (1957), “first in order in any series, sequence, etc.”

A similar definition was employed in San Marcos, supra, wherein the following instruction of the trial court was approved:

You are instructed that the term “primary,” as used in this charge, means principal; chief; and greater portion of.

It has been specifically held that “primarily engaged in manufacturing” does not mean that a corporation must receive from manufacturing “over fifty percent” of its income in order to qualify for a statutory offset against corporate excise taxes granted to any corporation “which is primarily engaged in manufacturing, processing or assembling materials into finished products ..” Industrial Refrigeration Equipment Co. v. State Tax Commission, 242 Or. 217, 408 P.2d 937 (1965). In that case manufacturing and assembling constituted 46% of the corporation’s four sources of income in 1959 and 30% in 1962. These percentages were not exceeded by revenues from any of the three other categories of activities (rentals, sales, or services). In holding the corporation eligible, the court said:

We believe that “primarily” means “chiefly” or “principally” but that it does not necessarily mean “over 50 per cent.” The Commission contends that in determining the ratio of activities only two factors should be considered — manufacturing and nonmanufacturing — and that Plaintiff is not entitled to the offset as it was not primarily engaged in nonmanu-facturing activities. We cannot accept this premise. If the legislature so intended, it could have used the words “over 50 per cent” or similar words describing more than half. It did not. “Primary” can be given its usual meaning without requiring that it be more than 50 per cent.
We hold that “primarily” as used in ORS 317.070(2) means the largest category of several categories, but not necessarily more than 50 per cent of the total volume of business.

We hold that a landowner seeking the agricultural use designation and assessment can qualify by discharging his burden of timely showing in a proper administrative or judicial proceeding that his land is designated for agricultural use under the terms of Sec. 1-d of Article 8, including a showing that such use is a business which is his primary occupation and source of income, without showing that his agricultural business occupies more than 50% of his time or accounts for more than 50% of his total gross income for the relevant years. It is sufficient if the landowner shows that he devotes a greater amount of time to his agricultural business than to any other occupations or businesses and that he receives more gross income from his agricultural business than from any other occupation or business. As hereafter shown, Petitioner Gragg failed to carry his burden of proof timely or satisfactorily with reference to his gross income from agriculture as compared to other business ventures.

It has been suggested that this interpretation might lead toward the frac-tionalization of other businesses conducted by a farmer-landowner in order to make his gross receipts from agricultural uses larger than any one of several of his other businesses. Tax assessors are given sufficient authority under the amendment to ferret out and ignore any such artificial arrangements designed to qualify for the special agricultural tax assessment. If a landowner-agriculturalist with a greater gross income from the oil business or any other occupation intentionally divides his business into multiple corporations or partnerships for the purpose of making his agricultural income greater than the gross income of any one of the multiple separate but related business entities, the tax assessors have the authority to deny the application and prevent wrongful use of the agricultural assessment amendment.

Other Sources of Gross Income Should Include Only Business Occupations, Ventures or Investments

Petitioner Gragg contends that only sources of gross income from occupations or business ventures carried on for profit should be compared with gross income from agricultural sources in determining eligibility for the agricultural use designation. This seems to be the clear intent of the agricultural assessment amendment. Only farmers and ranchers who conduct agricultural uses of the soil “as a business venture for profit” are eligible, and then only if such business venture “is the primary occupation and source of income of the owner.” It would seem grossly unfair to disqualify a farmer or rancher because of greater receipts from social security, retirement pay, or any other source which was not an occupation or business venture operated for profit. In Klitgaard, supra, it was held that proceeds from several sales of land, principal and interest payments on notes given as partial payment for said lands, rentals from inherited commercial property, and oil and gas bonus and delay rentals from unsolicited mineral leases were occasional, isolated, and not part of any business venture. Therefore it was held that none of such receipts comprise the type of income from an occupation which must be balanced against the gross income from agricultural uses. The Court of Civil Appeals held: “Eligibility for benefits of the amendment is not to be determined by the vagaries of nature or the market, nor by fortuitous investment or inheritance.”

In San Marcos, supra, the trial court specifically instructed the jury that it should not consider the receipt by the owner of delay rentals or bonuses from non-producing oil and gas leases on the taxed lands; use of the land for residential purposes; or the receipt by the owner of any annuities, retirement income, pensions, social security payments, or old age assistance. We approve this instruction, because none of these uses or receipts constituted income from occupations or business ventures of the landowners. The non-agricultural sources of income to be considered in determining a landowner’s “primary source of income” should be those produced from his activity or business ventures in which he works or gives continuing supervision or attention. In San Marcos the jury was charged as follows:

“You are instructed that the term ‘income,’ as used in this charge, means that which comes in or is received from any occupation' or business venture or investment of capital without reference to the outgoing expenditures.” (Emphasis added.)

We approve that construction except with reference to “investment of capital.” Income from capital investments should not be considered when the receipts come from the sale of long held assets or as the consequence of an occasional purchase, sale, or investment or loan of funds. The gross income from the investment of capital should be considered only if such investments constitute an occupation or business which requires the management or continuing supervision or attention of the landowner.

Under the facts in the present case we approve the trial court’s consideration of investment income, because Mr. Gragg did not discharge his burden of proving that such receipts were not returns from related or separate business ventures or occupations.

In both San Marcos and Klitgaard, supra, it was held that the burden is upon the landowner claiming the agricultural use designation to show the tax assessor, or a court that he is entitled to the designation. Petitioner Gragg wholly failed to attack by appeal or seek injunctive relief from the assessment of his property upon which the school district’s suit is based. He sat by and permitted the assessments to be made, the tax rolls to be prepared, and this suit for taxes to be filed against him before challenging the refusal of the tax assessor to give his land the agricultural use designation. The proper procedure would have been to seek an injunction or mandamus requiring the tax assessor to give the agricultural designation as was done in San Marcos and Klitgaard, supra.

Even if the tax assessor had been given all of the evidence on this taxpayer’s income that was introduced at the trial, the denial of the agricultural use designation would have been justified. The taxpayer’s gross agricultural income during the three calendar years of 1970, 1971 and 1972 (added together), was approximately $1 million, as compared with $1.5 million income from all other sources. He admitted that his income reported from his oil operations was “net” rather than the “gross,” which he contended for and reported in connection with his agricultural income. There was simply no proof of his gross income from the oil business. Neither was there any proof that the gross receipts from his oil operations or another business venture did not exceed the gross receipts from his agricultural business.

The record fails to show that the denial of the agricultural use exemption to this taxpayer by the tax assessor was unreasonable, arbitrary or in violation of requirements of the law. The burden fell upon the taxpayer to make that showing, and the trial court and Court of Civil Appeals have correctly held that the taxpayer failed to do so. See State v. Whittenburg, 153 Tex. 205, 265 S.W.2d 569 (1954); State v. Houser, 138 Tex. 28, 156 S.W.2d 968 (1941).

The judgment of the Court of Civil Appeals is affirmed.

REAVLEY, Justice

(concurring).

The Court here writes upon the meaning of the words which require that the agricultural use—of the land being valued for taxation—be “a business venture for profit, which business is the primary occupation and source of income of the owner.” I differ with the opinion in two respects: its holding that gross income is the basis of comparison of the landowner’s occupations, and its holding that each non-agricultural business is to be compared separately with the landowner’s total agricultural business.

The agricultural land assessment provision of the Texas Constitution was originally designed in 1965 by the Legislature to permit the lands of farmers and ranchers to be assessed for ad valorem taxation by ignoring true market value and by valuing it as if agriculture were the highest and best use to which the land may be put. See King v. Real, 466 S.W.2d 1 (Tex.Civ.App.1971, writ ref’d n. r. e.). The objectives of that basis of valuation of farm and ranch lands are easily understood and justified. Since 1967 when the taxing officers and boards and the landowners began to apply this Section 1-d, Article 8, of the Constitution, they have faced the problems and restrictions of this requirement that the agricultural use be “a business venture for profit, which business is the primary occupation and source of income of the owner.” The Legislature attempted to remove this requirement from the Constitution in 1970, but the proposed change was not adopted in the popular vote.

Before addressing the critical questions of the meaning of “primary source of income” presented in the present case, I must first avow a basic precept: the judicial function is to construe the Constitution and not to rewrite it. The Court is confined to the words and composition of the Constitution as they are — not as we prefer them to be. The task of construing constitutional expressions must first be directed toward deciding — by the consideration of the total language as well as the context of circumstances that aid us in understanding the objectives of that language — an overall rationale of plan and purpose for the constitutional provision. I have several difficulties with the majority opinion. While it tries to simplify the administration of agricultural land assessment, it actually adds complexity and new puzzles. It seems motivated by the desire to enlarge the number of farmers and ranchers who will be entitled to the agricultural use designation of their land, but this may not be the result — since the predicted effect of basing the determination on gross income seems to me to be no more than the Court’s own estimate rather than a product of any evidence of the circumstances of most farmers and ranchers. I should think that the effect of the holding that compares all agricultural income to each separate non-agricultural business will be enjoyed by relatively few landowners. Few of them have so many extra businesses as to profit by this ranking procedure, and those who do operate on a multi-business scale are given the means to acquire an agricultural use designation beyond the intent of the constitutional language. It seems to me that the fundamental flaw of the majority is its failure to base these specific interpretations upon an overall rationale of the constitutional provision and its purpose. I will begin by locating that base as I see it.

The special treatment of Section 1-d was not granted to land investors who might plant a crop or put some livestock on their land. It was not even granted to bona fide ranchers or farmers. Anyone whose ranching operations cover over 22,000 acres of land, and who expends on that operation the time and effort that O. L. Gragg does, is certainly a bona fide rancher. But the Constitution requires more: the agricultural operation must be the primary business— as judged both by commitment of effort and receipt of income.

The taxpayer/landowner’s occupations and sources of income to be measured are only those which are business ventures, i. e., occupational endeavors to obtain earnings. The taxpayer/landowner’s agricultural business must be the business which is “the primary occupation and source of income of the owner” — as compared to his non-agricultural business or trade or professional occupation and as measured by the income to him produced by these occupations. The agricultural use designation is to be given only to those whose primary occupation is agricultural rather than non-agricultural. Not only time and activity is to be weighed but also income. The inquiry as to income is but part of the test of the priority of the landowner’s occupation. Which occupation is the most important source of his income — agricultural or otherwise? The landowner is not primarily a farmer if he operates a dozen businesses and the ten percent of his time and income allocated and collected from his farm exceeds that allocated to and collected from each of the other endeavors. Net profit — the income to the landowner — is the indicator of the priority of the source rather than, for example, gross income from the sale of cattle or gross income from occasional trading in mineral leases. The tax assessor and board of equalization are not directed to a consideration of the taxpayer’s income during any certain period of time — since casualties or unusual factors may affect profits briefly without changing the priority of the occupation to which the taxpayer/landowner looks for his income.

This is my construction of the constitutional provision. I now turn to my two specific points of dispute with the majority.

Gross or Net Income

The word “income” usually refers to gain or accretion or return. See Bowers v. Kerbaugh-Empire Co., 271 U.S. 170, 174, 46 S.Ct. 449, 70 L.Ed. 886 (1926); Humble Oil & Refining Co. v. Calvert, 478 S.W.2d 926 (Tex.1972); Fullerton v. Central Lincoln People’s Utility Dist., 185 Or. 28, 201 P.2d 524 (1948); Kennard v. Wiggins, 353 Mo. 681, 183 S.W.2d 870 (1944); State ex rel. Miller v. State Board of Education, 56 Idaho 210, 52 P.2d 141 (1935); Stanton v. Zercher, 101 Wash. 383, 172 P. 559 (1918); In re Niland’s Estate, 154 Wis. 514, 143 N.W. 170 (1913); Bingham v. Long, 249 Mass. 79, 144 N.E. 77 (1924); Connecticut General Life Ins. Co. v. Eaton, 218 F. 188 (D.C.Conn.1914); In re Owl Drug Co., 21 F.Supp. 907 (D.C.Nev.1937); Lyeth v. Hoey, 20 F.Supp. 619 (S.D.N.Y.1937); In re Phillips’ Will, 138 N.J.Eq. 96, 46 A.2d 796 (1946); Hattiesburg Grocery Co. v. Robertson, 126 Miss. 34, 88 So. 4 (1921); Black’s Law Dictionary (4th ed. 1951); Ballantine’s Law Dictionary (1969); Oran, Law Dictionary for Non-Lawyers (1975); Webster’s Third International Dictionary (1968); and Webster’s Seventh New Collegiate Dictionary (1967).

I agree that “income” has in some instances been used to mean the inflow without deduction for expenses. Our question then becomes a determination of the manner of use of the term in Section 1 — d, Article 8, of the Texas Constitution. It is not the purpose of this provision to prohibit gain or activity; it is a measurement of priority. Occupations are to be ranked according to their fruits or products or consequences for the person. The gross income of an occupation is a midway factor, but it is not the ultimate result of the occupation. Since the purpose of the constitutional provision is to test the priority of the taxpayer/landowner’s occupations, gross receipts or revenue is not the index; it is the gain or profit realized by the taxpayer/landowner from those occupations. We are directed by the Constitution to determine the business which is the primary source of income of the owner. Ranching and oil businesses are expected to have gross as well as net income, but the income of the owner from those businesses is his profit.

If O. L. Gragg were asked the amount of his income from his ranch business during 1971, would he be likely to give the total gross sales of livestock, etc., by his ranches ($299,205.84), or would he give the income produced for his benefit ($79,397.67)? Would Farmer Brown, who lost his crop and $50,000 last year, tell you that his income from his farm was $60,000 since the latter figure was the amount of his gross income received from the liquidation of his herd of cattle?

The majority seems to think that the determination of the gross income of a business is a simple matter. However, the gross income of a mercantile business is ordinarily considered to be the amount of total sales less the cost of goods sold. For the sake of simplicity let us assume that a farmer is on the cash basis of accounting; under federal tax regulations his “gross income” requires a computation of his profits from the sale of livestock or other items which were purchased by him. 1976 Federal Tax Regulations § 1.61-4. The full sales prices and receipts are not his “gross income”; the cost of the purchased livestock must first be deducted. I suggest that the determination of whether the taxpayer/landowner is primarily engaged in agriculture will not entail nearly so many difficult accounting problems as will the rule announced by the majority which requires a comparison of the gross income of each and every business in which the taxpayer/landowner is occupied. If the business is organized as a corporation, limited partnership or business partnership, there will be questions of how to allocate gross income to the taxpayer/landowner. Will it be possible to reduce the “gross income” by incorporating the business or by taking no money except in the form of wages or dividends?

I can find no rational purpose in requiring a comparison of the sources of gross income. If I understand the writing of the majority at this point, the thought is simply that more farmers and ranchers will be entitled to the agricultural use designation if only gross agricultural income is considered. I do not know that this is true, but if it is, I respectfully request that this reasoning be compared to the time honored rule that the courts will construe constitutional and statutory exemptions strictly. River Oaks Garden Club v. City of Houston, 370 S.W.2d 851 (Tex.1963); Morris v. Loan Star Chapt. No. 6, Royal Arch Masons, 68 Tex. 698, 5 S.W. 519 (1887). Whether or not the agricultural use designation must be termed an “exemption” from taxation, it is favored treatment and the constitutional amendment should not be liberally construed. See Driscoll Foundation v. Nueces County, 445 S.W.2d 1, 5 (Tex.Civ.App.1969, writ ref’d, n. r. e., Tex., 450 S.W.2d 320, 1970).

Meaning of “Primary” Business

The majority is most liberal in allowing the agricultural use designation to the landowner whose agricultural business produces more income than each of his other businesses or occupations — however many the non-agricultural occupations may be and despite the fact that the total non-agricultural income and time requirements may greatly exceed those of the agricultural business. Our first step in this analysis is to decide whether we must lump the agricultural operations together. Why not permit the tax assessor to rank each farm or ranch separately? O. L. Gragg, for example, operates several different ranches. Suppose the taxpayer and his wife operate a field where they grow vegetables, while he and his son have a large cotton farm, he and another son have some chicken houses, and he and a brother operate a large West Texas ranch. Are these separate businesses under the Constitution? I think not. The Constitution provides:

“Agricultural use” means the raising of livestock or growing of crops, fruit, flowers, and other products of the soil under natural conditions as a business venture for profit, which business is .

Any and all “agricultural use” is the one business that must be the taxpayer/landowner’s primary occupation.

The next step: “primary.” There is no problem as to the meaning of the word. The question is primary as to whatl I conclude that the objective, as indicated by putting agricultural uses together, is to determine whether agriculture is the primary occupation — as compared to non-agriculture. What would be the purpose of requiring that the farm be more significant than each of a dozen other ventures? This requirement of the Constitution is obviously restrictive. It was no casual bit of drafting; it was intended to prevent the owners of some farms and ranches from obtaining this advantageous assessment of their lands. The comparison that counts — the restriction that ensures that those who obtain the agricultural use designation truly deserve it — is the requirement that the taxpayer/landowner be primarily in the business of agriculture, whatever else (combined) he may do as an occupation.

If the rule of the majority is to apply, how shall we divide the non-agricultural occupations for purposes of comparison? Do oil and gas operations go together, or is Gragg Drilling Company one entity and Carter-Gragg Oil Company another, etc.? At some point the courts will have to write the rules for arranging these non-agricultural incomes. This could be avoided by following what seems to me to be the plain intent of the Constitution itself. The majority seems to be looking in the direction of that plain intent when it says that the denial of Gragg’s agricultural use designation was justified and cites the evidence that his gross agricultural income during the three calendar years of 1970, 1971 and 1972 (together) was approximately $1 million as compared to $1.5 million income from all other sources. I agree that this proof gets to the heart of the case and requires the affirmance of the judgments of the lower courts. The non-agricultural income was all profit or gain, and the gain to Gragg from the agricultural business was necessarily much less than the $1 million (actually about $320,000).

The argument for separation of the non-agricultural income would seem to be that the Constitution points to each “source of income” and thus requires that the taxpayer/landowner receive greater income from agriculture than from any other individual source. Gragg Drilling Company and Carter-Gragg Oil Company are two different sources of income, and their income would then be considered separately rather than added together. Gragg owns several different oil properties, and it seems that the production from each of these should be considered as income from a separate source. I conclude that whereas O. L. Gragg may have failed to make the proof required to obtain 1970, 1971 or 1972 agricultural use designations, the record and briefs in this case indicate that he may come within the new rules and be able to make the proof to qualify in future years.

McGEE and JOHNSON, JJ., join in this Concurring Opinion.

      . The full text of Article 8, Sec. 1-d follows:
      Sec. 1-d. (a) All land owned by natural persons which is designated for agricultural use in accordance with the provisions of this Section shall be assessed for all tax purposes on the consideration of only those factors relative to such agricultural use. “Agricultural use” means the raising of livestock or growing of crops, fruit, flowers, and other products of the soil under natural conditions as a business venture for profit, which business is the primary occupation and source of income of the owner.

        (b) For each assessment year the owner wishes to qualify his land under provisions of this Section as designated for agricultural use he shall file with the local tax assessor a sworn statement in writing describing the use to which the land is devoted.
      (c) Upon receipt of the sworn statement in writing the local tax assessor shall determine whether or not such land qualifies for the designation as to agricultural use as defined herein and in the event it so qualifies he shall designate such land as being for agricultural use and assess the land accordingly.
      (d) Such local tax assessor may inspect the land and require such evidence of use and source of income as may be necessary or useful in determining whether or not the agricultural use provision of this article applies.
      (e) No land may qualify for the designation provided for in this Act unless for at least three (3) successive years immediately preceding the assessment date the land has been devoted exclusively for agricultural use, or unless the land has been continuously developed for agriculture during such time.
      (f) Each year during which the land is designated for agricultural use, the local tax assessor shall note on his records the valuation which would have been made had the land not qualified for such designation under this Section. If designated land is subsequently diverted to a purpose other than that of agricultural use, or is sold, the land shall be subject to an additional tax. The additional tax shall equal the difference between taxes paid or payable, hereunder, and the amount of tax payable for the preceding three years had the land been otherwise assessed. Until paid, there shall be a lien for additional taxes and interest on land assessed under the provisions of this Section.
      (g)The valuation and assessment of any minerals or subsurface rights to minerals shall not come within the provisions of this Section.

      . The Texas Legislative Council published an analysis of the proposed amendment before it was adopted by the people in 1966, in which it was stated:
      “In 1876, when the present constitution was adopted, the state was largely rural and through the years one of the main forces behind constitutional change has been that of increasing urbanization. As the cities have grown, surrounding land areas have increased rapidly in value. Ordinarily, the owners of land on the fringes of urban areas have welcomed the great capital gains arising from the sale of their land. The profits have more than compensated for the higher tax levies. However, a farmer or rancher who continues to look upon his land as a home and a means of livelihood suffers from the high taxes imposed when the city expands toward his property line. This amendment is designed to give him some relief from the increasing tax burden which might eventually drive him off his land.”
      Under arguments stated by the Council in favor of the amendment, it was said:
      “Family farming is a wholesome occupation but is often a risky or marginal business. Any extra burden placed on the family farmers threatens to drive thousands off the land and onto the unemployment and welfare rolls. When the city approaches the farm, the tax burden to the farmer often becomes prohibitive. An equitable tax adjustment, such as the one proposed by this amendment will help to preserve the family farm.” Legislative Reference Library, Capitol Building, Austin, Texas.

      . An Analysis of Present and Proposed Texas Laws on Use-Value Assessment of Agricultural Land, prepared by Michael Moeller for the Texas Legislative Property Tax Committee, June, 1975. For a discussion of the general problem and varying state solutions, see also Recent Legislation — Ad Valorem Taxation of Agricultural Land in Tennessee, 4 Memphis St.L.Rev. 127 (1973); Property Taxation of Agricultural and Open Space Land, 8 Harvard J.Leg. 158 (1970); and Wershow, Ad Valorem Taxation and Its Relationship to Agricultural Land Tax Problems in Florida, 16 U.Fla.L.Rev. 521 (1964).

      . Alaska Mun.Gov. § 29.53.035 (Supp.1974).

      . See Report to the 62nd Legislature of the Agricultural Land Assessment Study Committee (H.C.R. 8, 61st Leg., Reg. Session), 6-14. This Committee, in its study of the Agricultural Assessment Amendment after it had been in effect for several years, said that it “feels that the assessor should look to the owner’s gross income because it is an easier figure to obtain and does not reflect high operating expenses which diminish a net income.” Id. 24. By 1970 the Committee found from questionnaires that only 1,433 applications were made for the agricultural use assessment and 1,053 were approved. Id. 16. Recent figures, however, based upon questionnaires submitted to school districts by the Education Resources Division of the Governor’s Office, with 1,000 school districts out of 1,100 reporting, indicate that 11,-727 applications for the special agricultural assessments were made in 1975, with only 739 rejections, and a total of 2,459,439 acres qualifying for the special assessments. See Preliminary Report from John H. Poerner, Director, Education Resources Office of the Governor, to the Commissioner of the Texas Education Agency dated April 15, 1976.

      . S.J.R. 15 of the 61st Legislature would have reduced Section 1-d, Article 8, to the following language: “The Legislature shall have the power to provide by law for the establishment of a uniform method of assessment of ranch, farm and forest lands, which shall be based upon the capability of such lands to support the raising of livestock and/or to produce farm and forest crops rather than upon the value of such lands and the crop growing thereon.” Acts 61st Leg., R.S.1969, pg. 3227.


source: Caselaw Access Project

author:
POPE, Justice.
      STEAKLEY, Justice

license: Public Domain

text:
    UNIVERSAL METALS AND MACHINERY, INC., Petitioner, v. James T. BOHART, et ux., Respondents.
    No. B-5351.
    Supreme Court of Texas.
    June 23, 1976.

      Turner, Rodgers, Sailers, Jordan & Callo-way, John H. McElhaney, Dallas, for petitioner.
    Tom James, Dallas, for respondents.
   ON MOTION FOR REHEARING

POPE, Justice.

Universal Metals and a number of amicus curiae briefs forcefully urge that this court did not give Article 1302-2.09 its intended meaning by our original opinion. We are convinced that we were wrong in holding that the Boharts were not guarantors within the meaning of that statute and that they could assert their claim for usury. We grant the motion for rehearing, withdraw our former opinion, set aside our former judgment, and substitute this opinion for our former one.

Universal Metals & Machinery, Inc., hereafter called Universal, instituted this suit against James T. Bohart and his wife Jean Bohart, to recover $219,000 which was the unpaid principal on a promissory note. Universal sought judgment against the Bo-harts on the legal theory that they were primary obligors under their guaranty agreement. A jury found that the purported maker’s signature on the promissory note which the Boharts guaranteed was a forgery. The trial court rendered judgment for Universal as the holder-payee against the Boharts and that court also denied the Boharts’ counterclaim that Universal charged them usurious interest. The court of civil appeals, with a divided court, reversed the judgment of the trial court and rendered judgment that Universal take nothing. 523 S.W.2d 279. We reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.

Universal sold and delivered some machinery to Beneficiadora de Minerales de Tlaxcala, S.A., a Mexican corporation hereafter called BMT. The Boharts owned a large proportion of the stock in the corporation and also owned all of the stock in a corporation which held the exclusive sales rights to BMT’s production. The machinery had already been shipped to BMT in Mexico when on November 1, 1971⅛ the Boharts signed the instrument which is the basis of this suit. In relevant parts the instrument was:

Plaintiff did not name BMT as a defendant in its suit. The jury made findings that the signature of Manuel Cortes, President of BMT, was not genuine; but that plaintiff, Universal, accepted the instrument without knowledge of that fact. The basis for the judgment of the court of civil appeals was that the Boharts signed the instrument as primary obligors and also as guarantors. The court was of the opinion that the two terms are mutually exclusive, an ambiguity existed and in that situation the instrument should be construed in favor of its being a guaranty which imposed only secondary liability. The court then reasoned that the Boharts, being only secondarily liable, are not liable at all because BMT is not liable on its forged signature.

The instrument clearly shows that: (1) the Boharts signed “as primary obligor(s),” and (2) they “jointly and severally unconditionally guarantee the prompt payment of the principal and the interest when and as due.” They called themselves guarantors. In our opinion, the Boharts agreed to be the kind of “guarantors” which the instrument details; that is, guarantors who are primarily liable, who are jointly, severally and unconditionally liable for the prompt payment of principal and interest, when due and whether any action is taken against the maker or not. 38 C.J.S. Guaranty § 43 (1943).

Section 3.416(a) of the Texas Business & Commerce Code codified what was already the law of Texas. Clark, Suretyship in the Uniform Commercial Code, 46 Tex.L.Rev. 453, 454 (1968). It was enacted on September 1, 1967, when the Code became effective. The section reads:

(a) “Payment guaranteed” or equivalent words added to a signature mean that the signer engages that if the instrument is not paid when due he will pay it according to its tenor without resort by the holder to any other party.

The Comment to the section which was prepared by the American Law Institute and the National Conference of Commissioners on Uniform State Laws is helpful. It says:

Purposes: The section is new. It states the commercial understanding as to the meaning and effect of words of guaranty added to a signature.
An indorser who guarantees payment waives not only presentment, notice of dishonor and protest, but also all demand upon the maker or drawee. Words of guaranty do not affect the character of the indorsement as an indorsement (Section 3 — 202(4)); but the liability of the indorser becomes indistinguishable from that of a co-maker. A guaranty of collection likewise waives formal presentment, notice of dishonor and protest, but requires that the holder first proceed against the maker or acceptor by suit and execution, or show that such proceeding would be useless. [Emphasis added.]

The Boharts guaranteed the prompt payment of the note, and they unconditionally guaranteed the payment when and as due. In 1 HAWKLAND, A TRANSACTIONAL GUIDE TO THE UNIFORM COMMERCIAL CODE at 492 (1964) the guaranty of payment and the waiver of conditions are discussed:

The most important situation in which primary liability is asserted against one who at first impression appears to be an indorser occurs when an apparent indorser guarantees payment or waives presentment and notice of dishonor. Since the difference in liability between an indorser and a maker is that the former has conditions precedent to liability, it follows that this difference disappears if these conditions are waived. Under section 3 — 416, one guaranteeing payment is treated as a primary party.

The Boharts waived any requirement that the holder of the note must exhaust its rights or take action against the maker, as a condition precedent to their liability. After the parties by their contract excluded certain conditions, the court should not again write those conditions into the note. We should interpret the instrument by the standard of performance upon which the parties agreed. Tex.Bus. & Comm.Code Ann. § 1.102 (1968).

A number of judicial precedents have held that guaranties, like the one in this case, are absolute rather than conditional, primary rather than secondary, and guarantees of payment rather than guarantees of collection. A discussion of many of those cases may be found in the dissenting opinion of the court of civil appeals and need not here be repeated. 523 S.W.2d 279, at 288-291. The guarantor, who contracted as a primary, absolute, unconditional obli-gor, is not freed from liability because of the forged signature of the maker. Ganado Land Co. v. Smith, 290 S.W. 920 (Tex.Civ.App.1927, writ ref’d); El Paso Bank & Trust Co. v. First State Bank, 202 S.W. 522 (Tex.Civ.App.1918, no writ); Reynolds v. Service Loan & Finance Co., 116 Ga.App. 740, 158 S.E.2d 309 (1967); Holm v. Jamieson, 173 Ill. 295, 50 N.E. 702 (1898); Helms v. Wayne Agricultural Co., 73 Ind. 325 (1881); Etelson v. Suburban Trust Co., 263 Md. 376, 283 A.2d 408 (1971); Newark Finance Corp. v. Acocella, 115 N.J.L. 388, 180 A. 862 (S.Ct.N.J.1935); Cusick v. Ifshin, 70 Misc.2d 564, 334 N.Y.S.2d 106 (Civ.Ct.N.Y.1972); Warner-Lambert Pharmaceutical Co. v. Sylk, 471 F.2d 1137, 1145 (3d Cir. 1972).

In El Paso Bank & Trust Co. v. First State Bank, 202 S.W. 522 (Tex.Civ.App.1918, no writ), the court held:

The rule is stated to be general that in case of an absolute guaranty, no demand upon the principal debtor is necessary. . It is not treated as a collateral liability, but is a primary and positive agreement, and the breach of the principal’s contract to pay the sum promised ipso facto imposes upon the guarantor a complete liability. (202 S.W. at 524.) [Emphasis added.]

Similar holdings are found in Estes v. Continental Bank & Trust Co., 421 S.W.2d 158 (Tex.Civ.App.1967, no writ); Dahmes v. Industrial Credit Co., 261 Minn. 26, 110 N.W.2d 484 (1961); Simon v. Landau, 27 Misc.2d 269, 208 N.Y.S.2d 120 (N.Y.Sp.Term 1960); Swift & Co. v. Geraghty, 199 Wis. 329, 226 N.W. 381 (1929). In Dahmes, supra, the court observed that the proceeds did not go to the one named guarantor and commented, “They are primarily liable in the sense that their guaranty was absolute rather than conditional.” In Simon, supra, the court wrote:

The term “primary obligors” contained in the guaranty agreements must be read in light of those instruments and the other documents in this case. The provisions of which these two words are part were intended to continue defendants’ personal liability as guarantors of payment, notwithstanding the possible subsequent extension, modification, substitution or other adjustment of the corporate debt without the consent of the guarantors. . The use of the words “primary obligors” in the foregoing context did not render the defendants co-makers or co-obligors liable jointly with Apex for its indebtedness under its bonds. They were and remain merely guarantors of the corporation’s debt to the plaintiff, and the mortgages executed and delivered to him were intended as additional security for the repayment of the indebtedness which they thus guaranteed. (208 N.Y.S.2d at 123-124.)

The Boharts assert as an additional defense to the suit against them that there was no consideration for their agreement. We do not agree. The agreement recites “value received.” About three months prior to the time that the Boharts signed the instrument, Mr. Bohart met with Universal’s sales representative and the president of BMT to discuss the equipment which Universal could supply the Mexican corporation. They discussed the financing arrangement and Universal’s representative at that time told Mr. Bohart that the company would require a guaranty. The machinery was then delivered to Mexico. When the guaranty agreement was later mailed to Mr. Bohart, he and his wife signed and returned it. The Boharts owned a large part of the stock in BMT and, as stated above, they owned all of the stock in another corporation which held exclusive sales rights to BMT’s production. The Bo-harts had a real interest in the acquisition of the machinery which was necessary to BMT’s continued and increased production. Mr. Bohart testified that the transaction would benefit his company. Under these facts there was consideration which supports the guaranty agreement between the Boharts as primary obligors and Universal. Motor & Industrial Finance Corp. v. Hughes, 157 Tex. 276, 302 S.W.2d 386 (1957); Robertson v. City National Bank, 120 Tex. 226, 36 S.W.2d 481 (1931); Waller v. Missouri City State Bank, 482 S.W.2d 40 (Tex.Civ.App.1972, writ ref’d n. r. e.); Wortham v. Lake Jackson State Bank, 435 S.W.2d 612 (Tex.Civ.App.1968, writ ref’d n. r. e.); Otto v. Republic National Co., 173 S.W.2d 235 (Tex.Civ.App.1943, writ ref’d); Commercial Inv. Co. of Uvalde v. Graves, 132 S.W.2d 439 (Tex.Civ.App.1939, writ ref’d). 38 Am.Jur.2d, Guaranty § 43 at 1046 (1968).

The Boharts asserted a counterclaim against Universal Metals & Machinery, Inc. for recovery of usurious interest on the note. The trial court held that the Boharts were not in the position of co-makers who could assert a usury claim. The court of civil appeals also denied the claim for usury. We agree with the proposition that the Boharts were not entitled to claim usury even though the forged promissory note for the corporation, which they absolutely guaranteed, charged more than ten percent interest. Article 1302-2.09, Vernon’s Annotated Texas Statutes, prohibits the claim or defense of usury by a guarantor of a corporate loan that is made in accordance with that section. We hold that the term “guarantor” includes those who are guarantors of payment. The article provides:

Notwithstanding any other provision of law, corporations, domestic or foreign, may agree to and stipulate for any rate of interest as such corporation may determine, not to exceed one and one-half percent (1½%) per month, on any bond, note, debt, contract or other obligation of such corporation under which the original principal amount is Five Thousand Dollars ($5,000) or more, or on any series of advances of money pursuant thereto if the aggregate of sums advanced or originally proposed to be advanced shall exceed Five Thousand Dollars ($5,000), or on any extension or renewal thereof, and in such instances, the claim or defense of usury by such corporation, its successors, guarantors, assigns or anyone on its behalf is prohibited; however, nothing contained herein shall prevent any charitable or religious corporation from asserting the claim or interposing the defense of usury in any action or proceeding. [Emphasis added.]

We have already held that the Boharts were guarantors and the prohibition of the claim or defense of usury expressed in the quoted article extends to guarantors of all kinds, Wood v. Canfield Paper Co., 117 Tex. 399, 5 S.W.2d 748 (1928). This was explained in E’Town Shopping Center, Inc. v. Lexington Finance Co., 436 S.W.2d 267, 269 (Ky.Ct.App.1969):

Conceding, as an explanatory note following this subsection [§ 3.416] of the UCC says, that the liability of a guarantor is made the same as that of a co-maker, it does not follow that he is in fact a comaker, and certainly he is not the borrower for whose protection the usury laws were designed. It appears to us that the basic purpose of UCC § 3-416(1) is to put one who is technically a “guarantor” in the same position as a surety with respect to enforceability of the obligation without first proceeding against the principal. The liability of a surety is of course commensurate with that of its principal, and if the defense of usury is not available to the principal, it is not available to the surety. .

These other precedents also support that view: Alling Paper Co. v. Massinin, 31 Conn.Sup. 154, 325 A.2d 533 (Ct. of Common Pleas 1974); Mercantile Nat’l Bank v. Berger, 129 Ga.App. 707, 200 S.E.2d 921 (1973); Reynolds v. Service Loan & Finance Co., 116 Ga.App. 740, 158 S.E.2d 309 (1967); Verson v. Hardt, 107 Ill.App.2d 480, 246 N.E.2d 461 (1969); Carozza v. Federal Finance & Credit Co., 149 Md. 223, 131 A. 332 (Md.Ct.App.1925); Pardee v. Fetter, 345 Mich. 548, 77 N.W.2d 124 (1956); Snyder v. Woxo, Inc., 185 Neb. 545, 177 N.W.2d 281 (1970); A. J. Armstrong Co. v. Janburt Embroidery Corp., 97 N.J.Super. 246, 234 A.2d 737 (1967); Ferdon v. Zarriello Bros., Inc., 87 N.J.Super. 124, 208 A.2d 186 (1965); Leader v. Dinkler Management Corp., 20 N.Y.2d 393, 283 N.Y.S.2d 281, 230 N.E.2d 120 (1967); All Purpose Finance Corp. v. D’Andrea, 427 Pa. 341, 235 A.2d 808 (1967); Robert L. Huffines, Jr., Foundation, Inc. v. Rockie Realty, Inc., 347 F.Supp. 1256 (D.S.C.1972).

We accordingly reverse the judgment of the court of civil appeals and affirm the judgment of the trial court.

STEAKLEY, Justice

(dissenting).

I am not content to join the majority for several reasons.

In the first place, the rationale of the majority is a retreat from the strictness with which we have viewed an obligation where one person assumes to answer for the debt of another. We have heretofore acted consistently “with the favoritism of the law for guarantors and indemnitors,” and this should be the road to decision here. Hernandez v. Great American Ins. Co. of N. Y., 464 S.W.2d 91 (Tex.1971); McKnight v. Virginia Mirror Co., Inc., 463 S.W.2d 428 (Tex.1971). In McKnight, we quoted the statement of the rule by the late Chief Justice Hickman in his writing in Jarecki Mfg. Co. v. Hinds, 295 S.W. 274 (Tex.Civ.App.1927, writ dism’d, 6 S.W.2d 343):

“It has been often said that he [one assuming to answer for the debt of another] is a favorite of the law. His obligation does not extend one jot or tittle beyond what is ‘nominated in the bond’. Smith v. Montgomery, 3 Tex. 199.”

A guaranty agreement is a species of indemnity contract, i. e., the promissor agrees to be responsible for the performance of another over whom he does not have direct control. The agreement is strictly construed. See Sira & Payne, Inc. v. Wallace & Riddle, 484 S.W.2d 559 (Tex.1972), where we restated the rule that an indemnity agreement will not be held to protect an indemnitee against the consequences of his own negligence unless the obligation is expressed in clear and unequivocal language. We should be no less strict in determining the obligation of the Boharts.

The circumstances of the execution of the note in question were these. Universal Metals, a Texas corporation, sold machine tools to BMT, a Mexican corporation. A promissory note in payment therefor was forwarded to the Mexican corporation and signed by it with no guarantors. The Foreign Credit Insurance Association, a group of domestic insurers who write insurance in conjunction with the Export-Import Bank, an agency of the United States, refused to accept the note without guarantors. FCIA wrote Export Credit Insurance upon the transaction and its form of promissory note obligation and guaranty was then utilized. A substitute note in this form was submitted and purportedly signed by BMT, and admittedly signed by the Boharts, and is the note upon which Universal Metals brought this suit against the Boharts.

It can hardly be gainsaid that, at the least, there is some doubt as to the nature of the obligation of the Boharts under the contract here. Witness the sharp divisions in the courts below; witness the terms of the contract and the circumstances of its execution. It is unmistakable on the face of the instrument that the Boharts signed in the stated capacity of guarantors, and not as co-makers. Cf. Reed v. Buck, 370 S.W.2d 867 (Tex.1963), where we recognized that, “Parties to a negotiable instrument are generally held to be liable in the capacity in which they sign the instrument and suable accordingly.” It is also reasonably evident from the words used that the obligation the Boharts assumed was that of guarantors of payment of the note, to which obligation they became unconditionally bound. An “unconditional guaranty” is “one whereby the guarantor agrees to pay or perform a contract upon default of the principal without limitation. It is an absolute undertaking to pay a debt at maturity or perform an agreement if the principal does not pay or perform.” See Joe Heaston Tractor & Implement Co. v. Securities Acceptance Corp., 243 F.2d 196 (10 Cir. 1957), where the contract under review unconditionally guaranteed payment of notes in accordance with their terms.

It is equally unmistakable that the agreement presupposed an obligated maker; otherwise, there was no reason for inclusion of the provision for waiver of “any requirement that the holder exhaust any right or take any action against the maker of the foregoing promissory note.”

I further disagree with the reliance of the majority on Sec. 3.416(a) of the Tex.Bus. & Comm.Code as a buttress to its holding that the Boharts signed the note as co-makers. Section 3.416(a) reads:

“(a) ‘Payment guaranteed’ or equivalent words added to a signature mean that the signer engages that if the instrument is not paid when due he will pay it according to its tenor without resort by the holder to any other party.”

It is evident on its face that Sec. 3.416 has no application to a contract of guaranty with stated terms and conditions, and that its provisions do not purport to define rights in this circumstance. As indicated in the Comment, quoted by the majority, the writing concerns an indorsement and speaks of words added to a signature: words like “payment guaranteed” or “collection guaranteed.” This is not the problem at hand.

It is not mentioned by the majority that the instrument in question was a form of promissory note obligation written by someone in the Foreign Credit Insurance Association. The inclusion by the unknown scrivener of the phrase “as primary obli-gor(s)” is really the only basis of any substance for the conversion by the majority of the obligation of the Boharts into that of co-makers. Of course, this phrase is the source of the problem of the case — really the whole problem — and must be considered. Admittedly, there is a surface plausibility to the overriding effect the majority has given the phrase; but in my view the phrase has been exaggerated out of proportion to the context in which it was included by the FCIA scrivener. The question is simply whether the effect of these words is to convert what is otherwise an obvious guarantee obligation into an obligation of the character that was itself guaranteed, i. e., a maker obligation. The contract provides that the guarantee obligation of payment of the note arises only “when and as due in accordance with its terms.” These are explicitly stated conditions to liability of the Boharts. The note did not and could not become due in accordance with its terms if its maker, BMT, is not bound to pay, and payment was guaranteed by the Boharts only in such event; and only in such event would the Boharts become primary obligors for payment of the note. So it is my view that the majority has reached conclusions inconsistent with the terms of the contract and the circumstances of its execution, as well as contrary to the strictness we have heretofore followed in favoring one who is sought to be held for the debt of another.

Finally, it is quite certain that a contract of guaranty cannot be such without an obligation to be guaranteed, and presupposes that the obligation guaranteed is the primary obligation of another. From this it necessarily follows that the obligation of a guarantor is co-extensive with the obligation guaranteed and cannot be more or less; and, further, that an obligation of guaranty cannot exist in the absence of an obligation to be guaranteed. It is undisputed that BMT is not bound here.

As stated in 3 J. Kent, Commentaries on American Law 162 (8th ed. 1854), “A guaranty . . . is a promise to answer for the payment of some debt or the performance of some duty, in the case of the failure of another person, who, in the first instance is liable.” A. Stearns, The Law of Suretyship § 4.1 (5th ed. 1951) states, “Since the contract of guaranty is collateral, a primary or principal obligation must exist to which it is secondary, as without a principal debt there can be no guaranty.” The guaranty contract is secondary or collateral to some principal contract between the creditor and his principal debtor. The guaranty promise is a promise to answer for the debt or the default of the principal debtor under his contract with the creditor. Therefore, unless the debtor is bound under the principal contract, there is no obligation which is guaranteed and the guarantor is not liable to the creditor if the debtor fails to perform. 38 Am.Jur.2d Guaranty § 51 (1968).

I would affirm the judgment of the Court of Civil Appeals.


author: POPE, Justice.

text:
    Dorothy STANDLEY, Relator, v. Wells STEWART, Judge, Respondent.
    No. B-6022.
    Supreme Court of Texas.
    June 30, 1976.
    Baker & Botts, Sheryl B. Johnson and Robert J. Piro, Houston, for relator.
    James T. Mullins, Houston, for respondent.
   POPE, Justice.

Dorothy Standley, our relator, seeks a writ of mandamus to compel Judge Wells Stewart, Judge of the Court of Domestic Relations, Number One of Harris County, to vacate his order denying her petition for writ of habeas corpus and to proceed to trial and judgment in accord with Section 14.10 of the Family Code.

A judgment of the Harris County Domestic Relations Court on March 14, 1969, decreed a divorce between relator Dorothy Standley and her former husband, George Haynes. That judgment also decreed that Neal, who was then eight years old, should be placed in the custody of his mother. That decree of custody has never been altered or modified.

On February 6, 1976, Neal voluntarily moved to his father’s home. In April the father filed a petition to modify the outstanding custody order and relator was served on April 23. On April 28, Mrs. Standley filed an application for writ of habeas corpus seeking an order for Neal’s return to her possession in accord with the prior custody decree. The trial of the application for change of managing conservator has not yet been heard. Relator asked for a jury in the modification suit to which she is entitled under the provisions of Section 11.-13 of the Family Code, and she has also insisted that she have the thirty-day notice to which she was entitled under Section 14.08(b). On May 14 the trial court commenced the hearing of the petition for ha-beas corpus, but over Mrs. Standley’s objections, the court treated the hearing as one to modify the prior existing order. The court on that same date denied the prayer for the writ, and expressly recited in its order that it was not acting under Section 14.10(c) of the Family Code.

The trial court’s method of handling the habeas corpus matter violated Section 14.10, the habeas corpus provision of the Family Code:

§ 14.10 Habeas Corpus
(a) If the right to possession of a child is presently governed by a court order, the court in a habeas corpus proceeding involving the right to possession of the child shall compel return of the child to the relator if and only if it finds that the relator is presently entitled to possession by virtue of the court order.
(b) The court shall disregard any cross action or motion pending for modification of the decree determining managing con-servatorship, possession, or support of or access to the child unless it finds that the previous order was granted by a court of another state or nation and that:
(1) the court did not have jurisdiction of the parties; or
(2) the child has been within the state for at least 12 months immediately preceding the filing of the petition for the writ.
(c) The court may issue any appropriate temporary order if there is a serious immediate question concerning the welfare of the child.

The Legislature in its enactment of the quoted section had as its purpose the avoidance of the kind of procedure employed by the court in this case. The former use of the habeas corpus in child matters opened anew the question of the best interest of the child and permitted the readjudication of the right to possession. The use of habe-as corpus as a vehicle for redetermination of the right to possession was precisely what the Legislature intended to change. Marvin W. Jones, Child Custody Modification and the Family Code, 27 Bay.L.Rev. 725 (1975); Eugene L. Smith, Texas Family Code Symposium, 5 Tex.Tech.L.Rev. 435-436 (1974). The Legislature intended to demand obedience to existing court orders and to compel that obedience by habeas corpus proceedings. Section 14.10(b) provides that a modification of an outstanding order should not be entertained in a habeas corpus action except in two instances which do not here exist. The Section makes allowance for temporary emergency orders which the judgment of the trial court in this instance recites is not the basis for the court’s action. See, Page v. Sherrill, 415 S.W.2d 642 (Tex.1967).

The trial court by ignoring Section 14.10 has returned the matters of possession and conservatorship of children to the kind of self-help that the Legislature, by forceful language, intended to prevent. The court by denying the habeas corpus employed a procedure which effectually transferred the possession of the child and changed the right of conservatorship in disregard of the statutory procedure.

This court has jurisdiction to issue its mandamus when a court acts beyond its power and jurisdiction and when by so acting it vacates or changes a final adjudication. McHone v. Gibbs, 469 S.W.2d 789 (Tex.1971).

The order of the trial court that denied the writ of habeas corpus is set aside and the trial judge is directed to proceed to trial and judgment enforcing the outstanding orders of the Court of Domestic Relations Number One of Harris County concerning possession and conservatorship as provided by the provisions of Section 14.10 pending the trial of the modification hearing pursuant to Section 14.08. The clerk of this court is directed to issue a writ of mandamus containing a copy of the foregoing order to the Honorable Wells Stewart, District Judge, if, and only if, he fails or refuses to comply with the terms of the order.

      . All statutory references are to the Texas Family Code Ann. (1975).


author: MORRISON, Judge.

text:
    Norman Cecil DONOVAN, Appellant, v. The STATE of Texas, Appellee.
    No. 50282.
    Court of Criminal Appeals of Texas.
    Dec. 10, 1975.
    David H. Berg and Paul E. Licata, Houston, for appellant.
    Oliver S. Kitzman, Dist. Atty., Hemp-stead, Jim D. Vollers, State’s Atty., and David S. McAngus, Asst. State’s Atty., Austin, for the State.
   OPINION

ON APPELLANT’S MOTION TO REINSTATE THE APPEAL

MORRISON, Judge.

The offense is burglary with two prior felony convictions alleged for enhancement; the punishment, life.

In a per curiam opinion delivered June 4, 1975, this appeal was abated because there was nothing in the record to indicate compliance with Article 40.09, Sec. 7, V.A.C.C.P. The record, as supplemented, now shows that the defect has been cured, and the appeal is reinstated.

We are met at the outset with a challenge to the sufficiency of the evidence. The Hruska store in the town of Ellinger was broken into at 3:30 in the morning. Mr. Hruska was alerted by a burglar alarm and called the sheriff and a neighbor. He did not see the burglar. His neighbor, Cer-noch, looked out his window and saw someone fleeing from the store. When asked if the appellant was the man he saw leaving the store, he repeatedly answered: “Well, he sure favors him. I can’t prove it was him, but it favors him.” Cernoch was certain that the burglar was wearing a coat. When the officers arrived, they discovered an automobile, apparently abandoned, in the general vicinity of the store, and found a rental slip showing that it had been rented to a Norman Cecil Donovan or Honovan. Officer Koopman “run a check” by radio, “and it came back to Norman Cecil Donovan, and it gave a full description of him and his address in Galveston.” Dellman Tarver, appellant’s cousin, testified that he saw appellant in La Grange in November of 1972, that appellant told him he was on his way to Galveston and his automobile had broken down and asked Tarver to take him 10 or 15 miles to Ellinger. Tarver said that he drove the appellant, who was wearing a coat, to Ellinger, but found no automobile and he and appellant were arrested.

No fingerprints were taken, and no property taken in the burglary was found in appellant’s possession.

Appellant did not testify or offer any evidence in his behalf.

In order to sustain a conviction based upon circumstantial evidence, there must be proof to a degree of certainty greater than a mere probability or suspicion, tending to establish that the party charged was the person who committed the offense. Resendez v. State, Tex.Cr.App., 495 S.W.2d 934; Caudillo v. State, 167 Tex. Cr.R. 147, 318 S.W.2d 891. The fact that appellant broke jail prior to the instant trial may have caused the jury to convict, but does not meet the quantum of proof required by law.

Further, if there was any evidence introduced to show that appellant was the same man convicted in the prior cases alleged for enhancement, we have been unable to find it in the record. See Baker v. State, Tex.Cr.App., 505 S.W.2d 869; Chaney v. State, Tex.Cr.App., 494 S.W.2d 813.

We have concluded that the evidence outlined above is totally insufficient to support the jury’s verdict of guilty of burglary or the court’s finding that he was the person who had been convicted in the priors.

The judgment is reversed and the cause remanded.


author: GREEN, Commissioner.

text:
    Diana G. MARTINEZ, Appellant, v. The STATE of Texas, Appellee. Hector C. MARTINEZ, Appellant, v. The STATE of Texas, Appellee.
    Nos. 50239 and 50240.
    Court of Criminal Appeals of Texas.
    Feb. 11, 1976.
    Rehearing Denied March 10, 1976.

      Warren Weir, San Antonio, for appellants.
    Ted Butler, Dist. Atty. and Michael Schill, Donald A. Roush, Jr., and Alan E. Battaglia, Asst. Dist. Attys., San Antonio, Jim D. Vollers, State’s Atty., and David S. McAngus, Asst. State’s Atty., Austin, for the State.
   OPINION

GREEN, Commissioner.

In a joint trial before a jury on separate indictments, appellants Diana G. Martinez and Hector C. Martinez were convicted of possession of a usable quantity of more than four ounces of marihuana. Punishment of appellant Diana G. Martinez was assessed by the court at five years, probated. The court assessed the punishment of appellant Hector C. Martinez at seven years’ confinement.

Appellant Diana G. Martinez raises the contention that the evidence is insufficient to establish that she knowingly possessed the marihuana.

The record reflects at about 9:15 a. m. on September 15, 1973, Officer George Wilson and three other officers executed a search warrant at the home of appellants Hector and Diana G. Martinez, husband and wife, at 3011 Hatton Street in San Antonio. Upon being permitted entrance by a small child, the officers found appellants in bed together, apparently asleep, in the bedroom. In plain view on a table next to the side of the bed occupied by Diana Martinez, they found a glass jar containing a small amount of marihuana. In the kitchen next to the bedroom, the officers found a bag containing nine “bricks” of marihuana, the total weight of which was approximately nine pounds. A metal box containing marihuana, hashish, cigarette papers, a cigarette roller and a knife was on the kitchen table. A utility bill dated September 5, 1973 for gas and light furnished the premises at 3011 Hatton Street made out to Hector Martinez was found in the house. There is no evidence that anyone other than the appellants Hector and Diana G. Martinez lived in the house. The only others in the house when the search was made were two young children under 6 years of age.

Possession of narcotics need not be exclusive, and evidence that the accused jointly possessed the narcotic with another is sufficient. Williams v. State, Tex.Cr.App., 524 S.W.2d 705; Curtis v. State, Tex.Cr.App., 519 S.W.2d 883; Villegas v. State, Tex.Cr.App., 509 S.W.2d 314; Simpson v. State, Tex.Cr.App., 486 S.W.2d 807. The evidence must affirmatively link the accused to the contraband in such a manner that the accused knew of its existence and whereabouts. Williams v. State, supra; Hineline v. State, Tex.Cr.App., 502 S.W.2d 703; Adair v. State, Tex.Cr.App., 482 S.W.2d 247.

The jury was charged on the law of circumstantial evidence. When construed in the light most favorable to the verdict, we conclude that the evidence is sufficient to link appellant Diana G. Martinez to the marihuana found in the house occupied by her and her husband as their residence. Villegas v. State, supra; Williams v. State, supra.

Appellant Hector Martinez does not challenge the sufficiency of the evidence to support his conviction.

Both appellants contend that “it was error to admit evidence that a third party possessed marihuana seeds when defendant is not shown to be the party of said offense.”

Specifically, appellants complain of the introduction of evidence from Officer Wilson that while the search was being conducted, two other individuals drove to the premises, stopped their car in front of the house and came to the door. Their car was searched, and a few marihuana seeds were found on its floor. These individuals were then placed under arrest. The objection that this evidence was immaterial and had no connection with what was found in the house was overruled.

The admission of this testimony was proper as a part of the circumstances surrounding the search and the arrest of appellants. See Cherry v. State, Tex.Cr.App., 479 S.W.2d 924; Wright v. State, 168 Tex.Cr.R. 645, 330 S.W.2d 620; Campbell v. State, Tex.Cr.App., 521 S.W.2d 636; Holcomb v. State, Tex.Cr.App., 484 S.W.2d 938.

Appellants next contend that the court erred in overruling their motion to suppress evidence of the results of the search since the officers did not execute the warrant immediately after it was issued, but waited until the next day. They base their contention on Article 18.14, V.A.C. C.P., as it read at the time of this search, which was as follows:

“Any peace officer to whom a search warrant is delivered shall execute it without delay and forthwith return it to the proper magistrate. It must be executed within three days from the time of its issuance, and shall be executed within a shorter time if so directed in the warrant by the magistrate.”

The record reflects that the officers, immediately after receiving the warrant, went to the neighborhood of the described premises and learned that appellant Hector Martinez was not at home. They went back several times that afternoon, but each time they found that appellant Hector Martinez was not there. At 3:00 p. m., these officers went off duty, so they postponed the search until the next morning.

Appellant argues that because the printed portion of the warrant directed the officers “to enter immediately and search the above described premises” the delay of one day invalidated the search since it was not made within the shorter time directed in the warrant by the magistrate.

In addition to the provisions of Article 18.14, supra, Article 18.15, V.A.C.C.P., provided that “The time allowed for the execution of a search warrant shall be three whole days, exclusive of the day of its issuance and of the day of its execution.”

We conclude that the delay of one day in the execution of the search warrant was reasonable, and that the warrant was executed within the time provided in the instrument, and within the three days provided in the above statutes. Hilson v. State, Tex.Cr.App., 475 S.W.2d 788.

The judgments are affirmed.

Opinion approved by the Court.

      . Now Article 18.06(a), V.A.C.C.P., effective January 1, 1974.


author: DOUGLAS, Judge.

text:
    Alvis L. SHAW, Appellant, v. The STATE of Texas, Appellee.
    No. 51701.
    Court of Criminal Appeals of Texas.
    Feb. 11, 1976.

      Jim D. Vollers, State’s Atty., and David S. McAngus, Asst. State’s Atty., Austin, for the State.
   OPINION

DOUGLAS, Judge.

This is an appeal from the trial court’s order correcting appellant’s sentence which was executed as a result of his conviction for the subsequent offense of driving while intoxicated. His punishment was assessed at confinement for one year in the Texas Department of Corrections. We shall treat this as an appeal from a nunc pro tunc order. See Article 42.06, V.A.C.C.P.; Kazmir v. State, 438 S.W.2d 911 (Tex.Cr.App.1969).

The record is before us without a transcription of the court reporter’s notes. No brief has been filed in behalf of appellant.

Appellant entered a plea of guilty to the court. On November 27, 1974, he was sentenced. The court ordered that the sentence “shall begin to run from and after the 17th day of September, 1974, the date the defendant was placed in jail in this cause.” After he was sentenced, appellant executed a “waiver of the right to appeal” which acknowledged that he had been advised of his right to appeal and if indigent to have counsel appointed to represent him on appeal.

The record reflects that appellant was transported to the Texas Department of Corrections by ambulance on June 5, 1975. The Department reviewed copies of the commitment papers and ascertained that, as a result of their computations of appellant’s jail time and “good time” credit received under Article 61847, V.A.C.S., appellant had already discharged his sentence and, therefore, the Texas Department of Corrections would not accept custody of the appellant.

He was apparently returned to Parker County and has been out of custody since that time on a $1,000.00 bond pending disposition of this case. The State filed a motion with the trial court asking that appellant be resentenced. Appellant’s counsel filed an objection to such a procedure on the grounds that there was no authority to conduct a second sentencing hearing. On July 25, 1975, the trial court conducted a hearing and made findings as follows:

“Whereupon, after hearing evidence and the argument of counsel, and the court finding that the defendant had nothing to present which would constitute a legal bar to sentencing and the court finding that the defendant should again be sentenced in accordance with the judgment rendered November 27, 1974, in order to correctly reflect the beginning time and/or credit to be given defendant against said sentence, and the court having found that immediately after sentence was pronounced November 27, 1974, the defendant, upon his request, was released by the sheriff and was not again incarcerated, except a portion of one day, between said date of November 27,1974, and June 5,1975; . and that since date, the defendant has not been in custody or incarcerated by any person or institution in connection with this cause; that the defendant has been incarcerated in connection with this cause, both prior to trial and subsequent thereto, for a total of 73 days; . . . ”

After this hearing, appellant gave notice of appeal and filed a pauper’s oath claiming that he was “unable to pay for the record on appeal.” The trial court set the hearing to determine the question of indigency for August 18, 1975. Appellant did not appear for the hearing. The trial court entered an order finding: “after appellant failed to appear for hearing on the above application (for permission to proceed as an indigent) and it appearing that defendant is not entitled to relief prayed for, motion is denied.”

Did the trial court have authority to make the record speak the truth? is the question. There is no claim that appellant has been denied his right to appeal from the original conviction.

The question of indigency was raised and the trial court set a hearing to determine if the appellant was an indigent and therefore entitled to a free record and the appointment of counsel for an appeal from the nunc pro tunc order. See Simmons v. State, 511 S.W.2d 308 (Tex.Cr.App.1975); Sowell v. State, 505 S.W.2d 877 (Tex.Cr.App.1974); Williams v. State, 530 S.W.2d 582 (Tex.Cr.App.1975).

The record reflects that on the date of this hearing the appellant failed to appear and failed to present evidence concerning his indigency. There has been no attempt to show why he did not appear. Under these circumstances such a failure to appear constitutes a waiver of any complaint as to appellant’s status as an indigent. See Foley v. State, 514 S.W.2d 449 (Tex.Cr.App.1975). Appellant, even though represented by retained counsel, has not challenged in any way the corrections of the trial court’s ruling on appellant’s status as an indigent. Where no objection to the trial court’s findings have been made, and no evidence or claim of evidence contrary to such findings has been shown, this Court will presume that such findings on the question of indigency are correct. See Barrow v. State, 502 S.W.2d 162 (Tex.Cr.App.1974). No abuse of discretion is shown.

The record shows that appellant, at his request, was not in custody after the date he was sentenced. The trial court’s findings of fact show that appellant was incarcerated for only 73 days; i. e., from September 17, 1974, until November 27, 1974, and at his request he was released from custody after that date and was not reincarcerated until June 5, 1975, the date that he was transported to Huntsville. The Texas Department of Corrections, on the record before it, considered appellant to have been incarcerated continuously from September 17,1974. The trial court has the authority to make corrections in the record to show the truth of what actually occurred in the case. See Article 42.06, V.A.C.C.P.; Chaney v. State, 494 S.W.2d 813 (Tex.Cr.App.1973); Cazares v. State, 488 S.W.2d 455 (Tex.Cr.App.1972).

This Court has previously held that, where a defendant has been denied credit for jail time to which he is entitled, the trial court may enter appropriate nunc pro tunc orders authorizing credit for the appropriate time. See Valdez v. State, 479 S.W.2d 927 (Tex.Cr.App.1972); Ex parte Griffith, 457 S.W.2d 60 (Tex.Cr.App.1970). See also Wagoner v. State, 434 S.W.2d 868 (Tex.Cr.App.1968).

We hold that the trial court has the right to correct the records to reflect the truth even though the findings might not be beneficial to the person convicted. Before any unfavorable nunc pro tunc orders are entered the person convicted should be given an opportunity to be present for the hearing, represented by counsel, in order to accord him due process of law. See and compare Ex parte Brown, 477 S.W.2d 552 (Tex.Cr.App.1972); Ex parte Hill, 528 S.W.2d 125 (Tex.Cr.App.1975); Cooper v. State, 527 S.W.2d 898 (Tex.Cr.App.1975); Melvin v. State, 471 S.W.2d 853 (Tex.Cr.App.1972).

We hold that the trial court did not abuse its discretion in entering the nunc pro tune order.

There being no reversible error, the order of the trial court correcting appellant’s sentence to show the actual amount of time credit earned is affirmed.

      . In determining when an inmate’s sentence is to begin, the officials of the Texas Department of Corrections review the commitment papers filed with the judgment and sentence. The papers recited that the sentence was to begin September 17, 1974, and there was no indication in any of the commitment papers that appellant had been out of custody since that time. There was no indication from the commitment papers that petitioner received a bad conduct rating in the Parker County Jail while incarcerated there. Under these circumstances, the Texas Department of Corrections appropriately accorded appellant with his flat time credit beginning as of September 17, 1974, and additionally gave him credit for “good time” during that period as required by Article 42.-03(4), V.A.C.C.P.

      . Another question would have been presented had he not requested to be released. See Ex parte Downey (Tex.Cr.App.), 471 S.W.2d 576; Ex parte Morgan, 159 Tex.Cr.R. 241, 262 S.W.2d 728 and Ex parte Griffin, 158 Tex.Cr.R. 570, 258 S.W.2d 324. See also Ex parte Moneyhun, 161 Tex.Cr.R. 19, 274 S.W.2d 546; Ex parte Francis (Tex.Cr.App.), 510 S.W.2d 345, and Ex parte Williams, 164 Tex.Cr.R. 568, 301 S.W.2d 84.

      . A copy of this opinion shall be delivered to the Texas Department of Corrections.