author: ROBERTS, Judge.

text:
    Ricky Lawrence CARPENTER, Appellant, v. The STATE of Texas, Appellee.
    No. 53314.
    Court of Criminal Appeals of Texas.
    Oct. 6, 1976.
    Louis Dugas, Jr., Orange, for appellant.
    Bill A. Martin, Dist. Atty., Newton, Monte D. Lawlis, Asst. Dist. Atty., Jasper, Jim D. Vollers, State’s Atty. and David S. McAngus, Asst. State’s Atty., Austin, for the State.
   OPINION

ROBERTS, Judge.

This is an attempted appeal from a conviction for aggravated kidnapping. Punishment was assessed at imprisonment for sixty (60) years.

The record before us does not reflect that notice of completion thereof was given to the parties as required by Article 40.09, Sec. 7, Vernon’s Ann.C.C.P. Further, the record on appeal has not been approved by the trial court as required by that statute. Neither the appellant’s nor the State’s brief bears a file mark of the Clerk of the trial court. Consequently, even had the record been properly approved, we would be unable to determine whether or not the briefs were timely filed. See Article 40.09, Secs. 9 and 10, Vernon’s Ann.C.C.P.

For the reasons stated above we would ordinarily abate this appeal for compliance with Article 40.09, Vernon’s Ann.C. C.P. However, even if the record were properly before us pursuant to Article 40.-09, supra, the papers contained therein reflect that an appeal has not been properly perfected and we must dismiss same for lack of jurisdiction.

After appellant was convicted by a jury of the offense of aggravated kidnapping, the jury returned its verdict assessing appellant’s punishment at imprisonment for sixty (60) years on February 10, 1976. See Faurie v. State, 528 S.W.2d 263 (Tex.Cr.App.1975). The record reflects that appellant timely filed a motion for new trial on February 20, 1976. See Article 40.05, Vernon’s Ann.C.C.P. On the same date sentence was pronounced; however, the record does not reflect that the trial court had acted on the motion for new trial prior to pronouncing sentence. On March 3, 1976, and within 20 days of the filing of the original motion for new trial, appellant filed a motion to extend the time for filing an amended motion for new trial. The trial court granted appellant’s motion and extended the time in which to file an amended motion for new trial for 20 days from March 3, 1976. On March 22, 1976, and within the time as extended by the trial court, appellant filed his amended motion for new trial. On April 9, 1976, the trial court overruled the amended motion for new trial and appellant gave notice of appeal. Sentence was not re-pronounced after the amended motion for new trial was overruled.

Article 42.03, Vernon’s Ann.C.C.P., relating to sentences in felony and misdemeanor cases, provides that such sentences shall be pronounced “at any time after the expiration of the time allowed for making the motion for new trial or the motion in arrest of judgment . . . .” Article 40.05, supra, and Article 41.02, Vernon’s Ann.C.C.P., provide that a motion for new trial and a motion in arrest of judgment must be made within ten days after conviction. See Faurie v. State, supra. Therefore, sentence is not to be pronounced until after the expiration of the time for filing such motion. Adams v. State, 440 S.W.2d 844 (Tex.Cr.App.1969); Payne v. State, 471 S.W.2d 815 (Tex.Cr.App.1971). Further, we held in Bedell v. State, 443 S.W.2d 850 (Tex.Cr.App.1969), that where a motion for new trial or motion in arrest of judgment is timely filed, sentence should not be pronounced until such motions have been overruled following a hearing or by operation of law, or the motion is withdrawn, accompanied by a waiver of any unexpired time in which to file another such motion. See also Matheson v. State, 492 S.W.2d 273 (Tex.Cr.App.1973); James v. State, 480 S.W.2d 690 (Tex.Cr.App.1972); Duke v. State, 462 S.W.2d 596 (Tex.Cr.App.1971); Scott v. State, 452 S.W.2d 915 (Tex.Cr.App.1970).

In the instant case appellant’s timely filed original motion for new trial would not have been overruled by operation of law until March 11, 1976, twenty days after it was filed. See St. Jules v. State, 438 S.W.2d 568 (Tex.Cr.App.1969); Morton v. State, 502 S.W.2d 121 (Tex.Cr.App.1973). As stated above, the record in the instant case is silent as to whether the trial court overruled the motion for new trial prior to pronouncing sentence on February 20,1976; and, we find nothing in the record to show that the original motion for new trial was withdrawn. On the contrary, the record reflects that the trial court extended the time to file an amended motion for new trial until March 23, 1976. Appellant filed such motion on March 22,1976, and the trial court overruled it on April 9, 1976.

We conclude that the February 20, 1976, sentence was untimely. See Woods v. State, 532 S.W.2d 608 (Tex.Cr.App.1976), and the numerous cases there cited. To confer jurisdiction on this Court sentence should have been pronounced after the amended motion for new trial was overruled. No such sentence appears to have been pronounced and we must, therefore, dismiss the appeal.

Upon receipt by the Clerk of the trial court of mandate of dismissal the trial court should pronounce sentence and appellant may give notice of appeal, if he so desires. See Article 44.08(c), Vernon’s Ann.C.C.P. In such event, proceedings pursuant to Article 40.09, Vernon’s Ann.C.C.P., may be had.

The appeal is dismissed.


source: Caselaw Access Project

author: COLEMAN, Chief Justice.

license: Public Domain

text:
    INVERNESS FOREST IMPROVEMENT DISTRICT et al., Appellants, v. HARDY STREET INVESTORS et al., Appellees.
    No. 16700.
    Court of Civil Appeals of Texas, Houston (1st Dist.).
    July 22, 1976.
    Rehearing Denied Sept. 30, 1976.

      Butler, Binion, Rice, Cook & Knapp, Tom P. Alexander, Robert M. Hardy, Jr., Houston, for appellants.
    Sears & Bums, Will Sears, C. Charles Dippel, Houston, for appellees.
   COLEMAN, Chief Justice.

This is an appeal from a judgment awarding mandatory relief and permanent mandatory and prohibitory injunctions which, in effect, ordered the defendants to construct specific utility improvements to appellees’ land, and in connection therewith to sell certain authorized and unissued utility bonds of the improvement district for use in financing such construction.

The case was tried to a jury and in answer to the only special issue submitted, the jury found that the district had acted arbitrarily in failing to provide utility services to appellees’ land. The judgment will be reversed and the cause remanded.

Hardy Street Investors and Kingsbridge Development Corporation, the plaintiffs in the trial court, each owned a tract of land located within Inverness Forest Improvement District, a municipal corporation created by statute. The two tracts of land combined contain 65 acres. The improvement district together with its directors were the defendants in the trial court. The plaintiffs sued to require the improvement district to extend water, sewer, and drainage facilities to the land located within the district which they owned. The plaintiffs alleged that the district had discriminated against them in refusing to install utility lines and drainage facilities in and on the land owned by them when bonds for that specific purpose had been voted and were available at the time service was requested.

The district presents in this court points of error asserting that the finding made by the jury together with the undisputed facts do not authorize the specific relief granted by the trial court. The district asserts that the trial court lacked the authority to compel the district by writ of mandamus to sell its bonds and construct specific improvements because such matters are within the discretionary powers of the district.

By preliminary motion the landowners have moved to dismiss this appeal because the notice of appeal failed to name a specific court of civil appeals, there being two courts of civil appeals having concurrent jurisdiction of the appeal. This point cannot be sustained. Texas State Board of Pharmacy et al. v. Gibson Discount Centers, Inc., et al., 539 S.W.2d 141 (Tex.1976).

The appellees further argue that this appeal should be dismissed because the appellants merely gave notice of an intent to appeal in the future rather than giving “present notice.” The defendants filed in the trial court under a proper style and number the following instrument:

“COME NOW INVERNESS FOREST IMPROVEMENT DISTRICT, . . . and respectfully give notice of their intent to appeal to the Court of Civil Appeals the Final Judgment of this Court.”

Rule 353, Vernon’s Annotated Rules of Civil Procedure, in paragraph (b) provides:

“Such notice, when filed the clerk (sic), shall be sufficient if it state the number and style of the case, the court in which pending, and that appellant desires to appeal from the judgment or from some designated portion thereof.”

The notice of appeal filed by the defendants complies with Rule 353, supra, in that it gives notice of their present intention to appeal. A judgment had been entered, and the defendants’ motion for new trial had been overruled at the time the notice of appeal was filed. These facts distinguish this case from the case of Yancy v. Wolfe, 523 S.W.2d 516 (Tex.Civ.App. — Ft. Worth 1975, writ ref’d n. r. e.). The wording of the notice substantially complies with the rule. Calame v. Prudential Ins. Co. of America, 423 S.W.2d 940 (Tex.Civ.App.— Waco 1968, no writ history).

Inverness Forest Improvement District was created by act of the 59th Legislature, which has been codified as Article 8280-325, and came into existence June 17,1965. It is located within Harris County and contains 473 acres of land. The district is located in northern Harris County. Approximately 261 acres are located south of Cypress Creek and west of Hardy Street Road. This area is known as Inverness Forest Subdivision. The rest of the district is situated north of Cypress Creek and east of Hardy Street Road. The plaintiffs, Hardy Street Investors, and Kingsbridge Development Corporation, together own approximately 65 acres of land within the tract located south of Cypress Creek. Practically all of the remaining acreage in the land south of Cypress Creek has been fully developed.

At the first meeting of the board of directors of the district in 1965 the district adopted a detailed plan of improvements and called for a bond election in the amount of 1.7 million dollars. The bond election carried and the district issued 5% bonds in the amount of $750,000.00 in September 1965. The district secured from the Texas Water Pollution Control Board a permit to discharge into Cypress Creek a volume of treated sewage (not to exceed an average of 400,000 gallons per day). The permit contained a clause requiring the district to go to regional or area-wide system treatment plants if same were established in the future. Thereafter some $600,000.00 worth of the issued bonds were sold and water, sewer, and drainage lines were constructed in Sections 1 through 3 of Inverness Forest Subdivision, and a water and sewer treatment plant for the district was constructed.

In 1967 the district found that it could not market the 5% bonds and called a second bond election authorizing the issuance of 1.35 million dollars in 6% bonds. This bond election passed and $570,000.00 worth of the bonds were ordered issued in 1967. $300,000.00 of the issued bonds were sold in February 1968 and an additional $250,000.00 worth were sold in January 1969. These funds were used for completing service in Sections 2 and 3 of Inverness Forest and for installing water, sanitary sewer, and drainage improvements in Section 4 of the Inverness Forest.

In 1969 it was determined that 6% bonds were unmarketable and a new bond election was called, but the election failed to carry. The minutes of the district reflect that all of these bond elections were predicated on the original plan of improvements adopted in 1965.

The witness, Coulson, who was the district engineer in 1969, testified that after the defeat of the third bond issue he was requested by the district to prepare a new plan of improvements for the next proposed bond election. He testified that he prepared plans for the improvement of the entire remainder of the district including the part east of Hardy Street Road, and an estimate of the construction costs and incidental bond costs associated with the improvements plan. At a meeting of the board of directors of the district held on December 23,1969, Coulson presented the new plan of improvements and his estimate to the board. The minutes of this meeting recite:

“There were submitted to the meeting engineering plans, specifications, surveys, maps, drawings and explanatory data for the construction of extensions and additions to the district’s existing water and sewer system and drainage system adequate to service the area of the district. Accompanying said plans were the engineer’s report, the engineer’s estimate of the cost of said extensions and additions, . and full information on the program contemplated. Said plans and other items submitted were examined and fully considered by the board, after which it was duly moved, seconded and unanimously carried . . . that said plans and items be adopted and approved in their entirety without changes therein, and that the same be filed in the office of the district and be and remain open to public inspection.”

The minutes continued with a summary of the engineer’s estimates as contained in the report of cost of said extensions and additions to the district’s improvements. The minutes also reflect that a motion was unanimously carried authorizing a bond election to be held on February 14,1970, for the authorization of $780,000.00 construction bonds, and directing the president and secretary of the board to publish a notice of said election as provided by law. The minutes reflect that both the order calling the election and the notice of the election recite that “the plan of improvements is on file” in the office of the district and open to inspection. The evidence reflects that thirty-one days prior to the election the district’s directors discussed an explanatory letter to be sent to all residents of the district in connection with the bond election. The letter was introduced into evidence dated January 23, 1970, authored by one of the directors of the district, and signed by all directors. The evidence reflects that this letter was mailed to all residences in the district.

This letter reads:

January 23, 1970
“Dear Residents:
“Inverness Forest Improvement District now operates with only one water well and a sewage disposal plant which has just about reached maximum capacity. In order to drill and complete another water well to assure service if the present one should fail; to erect a high rise water tower to provide adequate reserves and pressure if the pumps fail; enlarge the sewage plant to avoid backups; construct water and sewage trunk lines to serve the undeveloped sections of Inverness Forest Subdivision, the District must sell bonds which you previously approved for this purpose.
“The water, sewage disposal and drainage facilities provided for you by the Inverness Forest Improvement District are paid for by a combination of water and sewer service revenue and an annual property tax. The new connections that can be served by the completion of these facilities will add to the District’s taxable property thus benefitting all Inverness Forest owners.
“Because of the increased cost of money for all purposes, your Directors ask your approval to adjust the interest rate on the remaining unsold bonds in accordance with allowable rates recently authorized by the Texas State Legislature and the City of Houston. An election for this purpose will be held at the Inverness Forest Sales Office on February 14.
“If you have questions concerning this proposal, please feel free to write or call any of us. We urge the approval of the proposal to be voted on February 14.
Sincerely, ”

The voters of the district approved the proposal for the issuance of bonds as submitted to them in the February 1970 bond election. Coulson testified that he then completed the detailed construction plans and specifications for the water, sewer and drainage lines, an additional water plant, and a 3,000 population addition to the sewage treatment plant to serve the undeveloped 65 acre tract of the Inverness Forest Subdivision. Coulson testified that he advertised for bids upon such plans, and they were received from contractors on July 6, 1970. He transmitted the bids along with his recommendation to the district on July 29, 1970. He testified that the lowest and best bid of four contractors for all water, sanitary sewer and drainage improvements was the sum of $420,279.00 which was $79,-521.00 less than the estimated cost.

The construction bids received by Coulson came up for action before the directors on August 6, 1970. In the minutes of that meeting the following statements appear:

“It appeared that the engineer for the District had heretofore taken bids for the next phase of water, sewer and drainage construction with the District. No authority for such action was ever granted by the Board. ... It was further brought to the Board’s attention that the current plans of the developer differed from the original preliminary plans drawn by the District Engineer for development within the District in that apartment construction was now contemplated, whereas only single family residential construction had been originally contemplated. . . . ”

Following some discussion it was resolved by the board that the consideration of the taking of bids for the construction contracts be tabled. Coulson testified that he was authorized to advertise for construction bids by the district’s attorney. Coulson was never asked by the district to re-bid the plans. He ceased to be the district engineer on September 22, 1971.

Coulson testified that he submitted a set of plans for improvements to the two tracts of land belonging to the plaintiffs to the board of directors at the December 23,1969, meeting. This plan was introduced into evidence as Plaintiffs’ Exhibit # 227. This plat shows the various streets, the location of a proposed water plant, a proposed sewage pump station, proposed water and sewer lines as well as existing streets, water lines and sewer lines adjacent to and within the property. Various areas depicted on the plat are labeled “Reserve”, and “Apart-merits.” The plaintiffs contend that Exhibit 227 is a copy of the plan adopted by the board at the December 28, 1969 meeting and that this fact is established in the evidence as a matter of law. However, Mr. Volbrecht, a director from 1968 to 1974, testified that Px 227 was not the set of plans presented at the August 6, 1970, meeting and that prior to August 1970 he had never seen any plans that resembled Px 227 and that he had not seen any plans that included apartments. He testified that neither Px 227 nor any plans substantially similar to Px 227 were submitted to the board on December 23, 1969, but that he could not identify what plans were submitted. There is evidence that the board did not maintain a record known as “Engineer’s Report” as required by the Texas Water Code. Neither did the district maintain a record known as “Engineer’s Record” as required by the Code. The district failed to produce the plan of improvements adopted at the December 1970 meeting of the directors of the district. A series of dates preceded by the letter “R” appears on Px 227. There is testimony that these dates reflect the instances on which revisions of the plat were made. There is evidence that these revisions were minor. Nevertheless it affirmatively appears that the plat introduced into evidence as Px 227 is not identical to the plat which was on file in the office of the district at the time of the election. There is also evidence that the plans filed by the district engineer three days prior to the directors’ meeting depicted the plan for improvement of the remainder of the district including property other than that owned by the plaintiffs. The estimate of costs filed by the engineer included the cost of the improvement of the entire district. The summary of the cost of improvements found in the district’s minutes is a lesser amount than the estimate and may reflect a decision of the board to improve only the property belonging to plaintiffs. There is no evidence that this decision was made known to the voters in such a readily understandable form as to form the basis of a contract with them.

The minutes of the August 6 meeting establish that a plan for the improvement of the entire district was approved. This included “engineering plans, specifications, surveys, maps, drawings and explanatory data for the construction of extensions and additions to the District’s existing water and sewer system and drainage system adequate to service the area of the District.”

These minutes constitute evidence that several maps were on file as part of the plan for improving the district. If Px 227 is a copy of one of these maps, there is nothing to show that the voters at the election relied on that map, and the plan of improvement shown thereon, as being the only area to be improved with the proceeds of the proposed bonds.

The evidence does not establish that Px 227 was part of the plan for improvements on file in the district’s office on the date of the 1970 bond election. It raised a fact-issue only. The trial court erred in ordering the district “to provide the specific services required by the district’s comprehensive plan of improvements for the subject property set out and described in paragraphs 4 and 11 above of Plaintiffs’ Second Amended Original Petition which paragraphs are herein incorporated by reference as part of this judgment.”

On January 23, 1970, as shown by the letter previously quoted, the directors of the improvement district represented to the voters that if they approved the bond propositions to be submitted on February 14, 1970, the district would drill and complete an additional water well, erect a high rise water tower, enlarge the sewage plant, and construct water and sewage trunk lines to serve the undeveloped sections of Inverness Forest Subdivision. The evidence reflects that the voters generally had notice that the judgment and discretion of the board had already been exercised in respect to these improvements.

Since a regional waste disposal system is in operation in the area of the district, it appears that the district can no longer use the excess capacity granted by their waste disposal permit. Conditions have so changed that the district cannot now carry out its agreement with the voters to enlarge the existing sewage plant. It does not follow, however, that the district cannot furnish sewer service to the remaining lands of the district. The district cannot be compelled to sell the 1970 bonds for the purpose of enlarging the sewer plant, although the directors in their discretion might devise a plan by which part of the bond proceeds could be used legally to furnish sewer service to the remaining lands of the district. The evidence establishes that the unissued 1970 bonds are insufficient in value to pay for the improvements promised the residents of the district by the letter of January 23, 1970. There is no contention, however, that the conditions have so materially changed since the bonds were voted that the improvements here involved would be an unwise and unnecessary expenditure of public funds. The improvements desired will require that additional funds be made available. The method by which the necessary funds are raised is within the discretion of the directors of the district.

The proceeds of bonds voted by the people must be expended for the purposes for which they were voted. Where the law visits upon a governing body the duty to exercise its sound judgment and discretion, courts have no right to interfere so long as such body acts lawfully. If such governing body acts illegally, unreasonably, or arbitrarily, a court of competent jurisdiction may so adjudge, but there the power of the court ends. Lewis v. City of Fort Worth, 126 Tex. 458, 89 S.W.2d 975 (1936).

The order calling the bond election in question specified the purpose of the election was to authorize the issuance of bonds “for the purpose of purchasing and constructing extensions and additions to the system’s existing water and sanitary sewer system and drainage system.” Both the order calling the election and the notice of the election recite that the “plan of improvements is on file” in the office of the district and open to inspection. The letter of January 23, while not shown to be official action of the board, must be considered as accurately reflecting portions of the plan of improvements on file in the district’s office. The voters of the district authorized such bonds to be issued in reliance on the plan of improvements and the directors’ letter representing that certain improvements would be made and showing the necessity for same. The letter had the effect of representing and pledging to the voters that the judgment and discretion of the board had already been exercised by naming these particular projects as projects to which part of the proceeds of these bonds would be appropriated. The directors of the district cannot arbitrarily ignore or repudiate their pledge. Hudson v. San Antonio Independent School District, 127 Tex. 517, 95 S.W.2d 673 (1936).

There is evidence that projects other than those mentioned in the letter were included in the plan. The judgment of the trial court ordered the bonds to be issued and sold and the proceeds applied to the cost of constructing certain named improvements. The district was permanently enjoined from using the proceeds of the bonds authorized by the 1970 election for any purposes or improvements other than the improvements set out in paragraph 11 of the Plaintiffs’ Second Amended Petition. In this paragraph is set out the location of proposed water and sewer lines, as well as storm sewer and drainage lines. The paragraph also refers to the “construction or causing to be constructed additional sewage treatment facilities (or enlargements to existing facilities) adequate to treat the sewage and waste generated by a population of 3,000 people.”

The letter of January 23 did not refer to storm sewers or drainage lines. It did not refer to the location of proposed improvements or the size of the proposed enlargement of the sewer treatment plant. The representations made to the voters in the letter did not affect or in any manner control the discretion of the governing board of the district with regard to these matters. This is a jury case. The trial court lacked authority to make a finding of fact determining the specific content of the plan of improvement adopted by the district. A jury issue was raised by the evidence. Under these circumstances the trial court erred in issuing the permanent injunction, and the order requiring the proceeds of the bonds applied to the specific projects referred to in the judgment.

There is evidence that the bonds are sale-able, and that other sources of revenue are available to the district. There is also evidence that because of the increased value of the property to be improved, and because of the increased water use fees to be derived from the sale of water to the residents of the property to be developed, the extension of utility service to the area would not be unduly burdensome to the district. The district is under a duty to serve the public without discrimination. City of San Antonio v. Texas Water Commission, 407 S.W.2d 752, 768 (Tex.1966). The district has not attacked the jury finding that the district arbitrarily and capriciously failed and refused to extend water, sewer and drainage service to the land owned by the plaintiffs.

The district was created by an act of the legislature codified as Article 8280-325, V.A.C.S. Section 17 of the act granted the district the authority to purchase and construct, or otherwise acquire water works systems, sanitary sewer systems, storm sewer systems and drainage facilities or parts of such systems or facilities. It is a political subdivision of the State, and its function is to furnish these services to the land forming the district. The district adopted a general plan for the furnishing of such services to all of the lands within the district. Since it has undertaken to supply such services, it is obligated to supply them to all of the landowners within the district without discrimination. Allen v. Park Place Water, Light & Power Company, 266 S.W. 219 (Tex.Civ.App.—Galveston, 1924, error ref’d).

The finding of discrimination made by the jury, together with the undisputed facts established in the evidence, are sufficient to require the trial court to issue its writ of mandamus, or mandatory injunction, compelling the district to make available the requested utility services to the lands owned by the plaintiffs. City of Galveston v. Kenner, 111 Tex. 484, 240 S.W. 894 (1922); Allen v. Park Place Water, Light & Power Company, supra.

The district contends that the trial court erred in excluding the testimony of the tax assessor and collector of the water district which would have established that the plaintiffs refused to pay taxes on their real estate from the year 1972 to the date of trial. The district asserts that this evidence was admissible as tending to explain the failure of the district to extend services to the land owned by the plaintiffs. They contend that the evidence was relevant on the issue of whether or not the water district acted arbitrarily and capriciously in failing to furnish utility service to such land. The district has not complained on appeal of the instructions given by the trial court with reference to the special issues submitted. The trial court instructed the jury that unreasonable discrimination by the district against the subject property whether accomplished by failure to act or by refusal to act constituted arbitrary and capricious action. By this instruction the jury was instructed to concentrate its attention on the question of unreasonable discrimination.

The district contends that the failure to pay taxes on part of the plaintiffs is a good and sufficient reason for the district to refuse to extend utility services to the property belonging to the plaintiffs. It contends that provisions of the Texas Water Code authorize the district to discontinue services to patrons who fail to pay real estate taxes. Texas Water Code, Sec. 51.-338, permits a district to discontinue a service to enforce payment of “specific charges, fees, or rentals in addition to taxes.” While it is not clear whether this provision of the Code authorizes a district to discontinue the service to enforce payment of taxes, it does not specifically authorize the district to refuse to make services available in accordance with a plan adopted by the district. The question under this provision of the Code would arise when the plaintiffs made application to tap onto the water or sewer lines. The service cannot be discontinued since it has never been established.

Sections 51.311 and 51.321 are cited by the district, but these sections are contained in Subchapter g of the Water Code which is speaking to irrigation services and are not applicable to the questions which arise in this case. Section 51.587 of the Water Code is the section clearly applicable to this situation. This section allows the district to file suit to collect back taxes, and to sell the property under judgment of the court. No provision of the Water Code authorizes the district to refuse to proceed with the plan of improvement on the faith of which the voters of the district authorized the issuance of the bonds. The trial court did not err in refusing to admit the testimony.

The evidence establishes without dispute that the district proposes to issue a portion of the 1970 bonds to finance proposed improvements to the existing drainage system in an area outside of the undeveloped sections of Inverness Forest Subdivision. The evidence does not establish the exact plan on file in the office of the district at the time the 1970 bond election was held. The proposition voted on at that time is sufficiently broad to authorize use of the proceeds of the bond election for drainage projects. While the evidence shows that the authorized but unissued bonds will not be sufficient to fully finance the improvements shown on Px 227, the evidence does not establish the inability of the district to finance the improvements required to service the plaintiffs’ property and the desired improvement to the drainage system, when all the resources available to the district for financing are considered. The plaintiffs have failed to establish that the bonds were authorized for the particular purposes alleged, and that the district threatens to use the proceeds from such bonds for a purpose other than that for which they were originally authorized. The trial court erred in enjoining the use of the proceeds of the 1970 bonds for the Hardy Street drainage project. Lewis v. City of Fort Worth, 126 Tex. 458, 89 S.W.2d 975 (1936).

The district was under a duty to furnish water, waste disposal and drainage facilities to all requesting these services within the perimeters of the district without discrimination. It is also under a duty to use the proceeds of the bonds authorized by the 1970 elections to implement the plan for improvements which the directors of the district represented to the voters they had adopted. The district has no duty to sell its authorized bonds if other methods of financing can be provided. The trial court was authorized to require the district to provide utility services to the plaintiffs’ land. However, the trial court erred by ordering the district to sell all its authorized and unissued bonds, by ordering the district to construct the improvements described in paragraph 11 of Plaintiffs’ Second Amended Petition, and by enjoining the use of proceeds of the 1970 bond issue for use in constructing improvements on the Hardy Street drainage ditch.

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

ON MOTION FOR REHEARING

The plaintiffs have complained that we erred in our disposition of this case in that we failed to affirm the judgment of the trial court insofar as it required the District to make available the requested utility services to the subject property. For the reasons stated in our original opinion we conclude that the plaintiffs were entitled to an injunction requiring the District to make available to the lands owned by the plaintiffs the utility services which they have previously requested.

The plaintiffs also allege that the Water District’s 1970 utility bonds had been authorized for the sole purpose of implementing a certain specific plan of improvements detailed in Plaintiffs’ Exhibit No. 227. They sought injunctive relief to prevent these bonds from being used on any project other than that described on Px 227 and also for a mandatory injunction to compel the Water District to sell the bonds and implement Px 227. We consider these issues to be separate and severable from the issue of arbitrary refusal to extend services to the lands owned by the plaintiffs. The plaintiffs failed to request issues establishing that the voters adopted the bond issue in question in reliance on representations made by the District that the bond proceeds would be used by the District to construct the improvements as reflected by Plaintiffs’ Exhibit 227. As a result plaintiffs waived any recovery based on this theory. Rule 279, Texas Rules of Civil Procedure; Glen Falls Insurance Co. v. Peters, 386 S.W.2d 529 (Tex.1965).

Nevertheless, the trial court has broad discretion in fashioning the relief to which the plaintiffs are entitled by reason of the jury’s finding that the District had discriminated against the plaintiffs in making available utility services. The trial court had discretionary power to enter a decree which would effectively prevent this practice. We quote from Wesware, Inc. v. State, 488 S.W.2d 844 (Tex.Civ.App. — Austin 1972, no writ history):

“As the Supreme Court held in San Antonio Bar Association v. Guardian Abstract & Title Company [156 Tex. 7], 291 S.W.2d 697 (1956), the injunction decree must be as definite, clear and precise as possible and when practicable it should inform the defendant of the acts he is restrained from doing, without calling on him for inferences or conclusions about which persons might well differ and without leaving anything for a further hearing. But obviously the injunction must be in broad enough terms to prevent repetition of the evil sought to be stopped. It should not be greatly concerned with rights of the defendant which are asserted largely in the abstract . . .”

The evidence clearly shows that the bond funds available to the District are not sufficient to provide adequate water, sewer and drainage to serve the property belonging to the plaintiffs. There is evidence that other methods of financing are available to the District, but that the District is reluctant to implement alternative plans for financing the needed improvements. The trial court erred in enjoining the use of bond funds on any project other than that described on PX 227, but it properly could have enjoined the use of these funds until such time as a plan had been adopted and implemented to end the discriminatory practices. Miers v. Brouse, 153 Tex. 511, 271 S.W.2d 419 (1954).

The motion for rehearing is granted in part and in part overruled. The cause is reversed and remanded to the trial court with instructions to enter a decree requiring the District to cease its discriminatory practices and to proceed to make available to the property owned by Hardy Street Investors and Kingsbridge Development Corporation located within said District water and sewer disposal and drainage services upon the terms previously granted to other property owners within the District.


author: AKIN, Justice.

text:
    CRAWFORD ENERGY, INC., Appellant, v. TEXAS INDUSTRIES, INC., Appellee.
    No. 18941.
    Court of Civil Appeals of Texas, Dallas.
    July 22, 1976.
    Rehearing Denied Aug. 19, 1976.

      C. Taylor Ashworth, Jenkens & Gilchrist, Dallas, for appellant.
    Gaynell C. Methvin, Hewett, Johnson, Swanson & Barbee, Dallas, for appellee.
   AKIN, Justice.

This is an appeal by Crawford Energy, Inc. from a temporary injunction granted by the trial court to Texas Industries, Inc. (hereinafter referred to as TXI) prohibiting Crawford from continuing oil and gas drilling on a tract of land in which TXI was quarrying rock. The defendant Crawford had the right to the oil, gas and minerals in the same tract of land in which TXI had the right to quarry rock. Two principal questions are presented by this appeal: (1) Has TXI established an immediate probable injury justifying injunctive relief? (2) if not, is TXI entitled to a temporary injunction to prevent the breach of a negative covenant? Because TXI has failed in its burden of establishing an immediate probable injury, and, because it has also failed to prove a distinct and substantial breach of the negative covenant, we hold that the trial court abused its discretion. Consequently, we reverse the order of the trial court and dissolve the injunction.

TXI’s right to quarry rock and stone was obtained by lease in 1946, and quarrying commenced in 1952. In that conveyance, the owners of the fee granted TXI “the full and exclusive right to take and remove from said . . . leased premises any and all rock and stone which may be situated thereon . . . .” However, the fee owners expressly reserved in that instrument certain rights as follows:

The right to use said lands and premises for grazing and any other purpose not inconsistent with the rights herein granted to said lease and especially . the right to drill . . . wells for oil and gas on said lands, provided such wells shall be so located ... as not to interfere with the . . . operations of lessee and his successors and assigns under said lease. But, it is expressly agreed and understood that no use of said lands by the lessor shall in any manner interfere with the rights herein granted to the lessee, his successors and assigns. [Emphasis added.]

Thereafter, on November 12, 1975, Crawford obtained from the fee owners a two-year lease of the oil, gas and minerals. Drilling commenced in December 1975. Because Crawford and TXI failed to agree on locations for drilling sites, TXI obtained a temporary restraining order against Crawford which, after hearing, became a temporary injunction. This injunction extended to all drilling operations except well number two, which by agreement of the parties was expressly excluded. Since well number one is the only other well being drilled by Crawford, it is the only current activity affected by the injunction.

Before we reach the determinative points of this appeal, we must first address Crawford’s argument that the temporary injunction was issued in contravention of Tex.Rev.Civ.Stat.Ann. art. 4644 (Vernon 1952) which provides:

No injunction or temporary restraining order shall ever be issued prohibiting subsurface drilling or mining operations on the application of an adjacent land owner claiming injury to Ms surface or improvements or loss of or injury to the minerals thereunder, unless the party against whom drilling or mining operations is alleged as a wrongful act is shown to be unable to respond in damages for such injury . . . . [Emphasis added.]

Crawford argues that since TXI has failed to plead or prove that Crawford is unable to respond in damages, it is, therefore, prohibited from obtaining injunctive relief pursuant to this statute. In support of its position Crawford cites Town of Refugio v. Strauch, 29 S.W.2d 1041 (Tex. Comm’n App. 1930, judgmt adptd); Magnolia Petroleum Co. v. McClendon, 123 Tex. 10, 65 S.W.2d 484 (1933); Gulf Production Co. v. Railroad Commission of Texas, 84 S.W.2d 359 (Tex.Civ.App. — Austin 1935, no writ); and Winslow v. Duval County Ranch Co., 519 S.W.2d 217 (Tex.Civ.App. — Beaumont 1975, no writ).

TXI argues, however, that Crawford’s reliance on art. 4644, and those cases interpreting it, is inappropriate because each of those cases concern disputes between owners of adjacent lands or of leasehold estates in adjacent lands. We agree. The instant controversy concerns the dispute between respective leasehold rights in the same property. In Hastings Oil Co. v. Texas Co., 149 Tex. 416, 234 S.W.2d 389 (1950), the supreme court held that art. 4644 was passed to insure that one who drilled a well on his own premises and produced oil that migrated from neighboring land could not be enjoined from such production even though he was draining oil from adjacent land. The court concluded that “the article was intended to refer to one taking oil from his own land, not to one taking oil from the land of the adjoining owner by means of a deviated well.” Likewise, the Texarkana Court of Civil Appeals held in Baton v. Key Production Co., 315 S.W.2d 59 (Tex.Civ.App. —Texarkana 1958, writ ref’d n.r.e.), that a suit involving adjacent landowners only was within the ambit of art. 4644.

Crawford contends, however, that this case is controlled by Winslow v. Duval County Ranch Co., 519 S.W.2d 217 (Tex.Civ. App. — Beaumont 1975, no writ). In that case, one of the plaintiffs held the grazing rights of the surface and the mineral estate was owned by the defendant. The court held the plaintiff to be an adjacent landowner and, therefore, required him to plead the insolvency of the defendant in order to obtain injunctive relief pursuant to art. 4644. Consequently, Crawford argues that the Winslow court extended the definition of “adjacent” landowners to include the surface owner and the mineral feeholder of the same tract. We cannot agree. The court in Winslow noted that although the original tract encompassed 144,000 acres originally, in 1965 by agreement, plaintiff and Exxon Corporation partitioned the land and minerals with plaintiff receiving the south 100,000 acres and Exxon receiving the north 44,000 acres, including the tract on which one of the wells was drilled. With respect to that tract, the court observed that plaintiff had formerly held a grazing lease, but since that lease had expired, plaintiff was merely an “adjacent landowner” within art. 4644. Id. at 225. Consequently, we do not read Winslow to extend the definition of adjacent landowners to include parties with leasehold interests in and to the same tract of land.

Temporary Injunction

In temporary injunction cases, the issue presented on appeal is whether the trial court abused its discretion in issuing or refusing the writ. Transport Co. of Texas v. Robertson Transports, Inc., 152 Tex. 551, 261 S.W.2d 549, 552 (1953); Electronic Data Systems Corp. v. Powell, 524 S.W.2d 393, 395 (Tex.Civ.App. — Dallas 1975, writ ref’d n.r.e.). A temporary injunction will be properly issued where the applicant shows a probable right and a probable injury. Transport Co. of Texas v. Robertson Transports, Inc., supra at 552. The applicant is not required to establish that it will finally prevail in the litigation. Id. at 552. The probable right upon which TXI relied is that granted by its lease agreement. In that agreement the fee owner’s right to re-lease the premises was limited so that TXI’s quarrying right would be protected. That agreement provided “But it is expressly agreed and understood that no use of said lands by the lessor shall in any manner interfere with the rights herein granted to the lessee . . . .” [Emphasis added.] Since this provision in the lease establishes TXI’s probable right subject to protection, the critical question is whether TXI has met the second prerequisite of their burden of establishing a probable injury if the temporary injunction is not granted. The injury to be prevented by the granting of a temporary injunction is an immediate injury and not merely an injury that may arise at some point in the future. E. g., Dallas Joint Stock Land Bank v. Davis, 73 S.W.2d 989 (Tex.Civ.App.- — Waco 1934, no writ).

The trial court found: (1) Crawford was not entitled to conduct oil and gas operations on the premises without either TXI’s approval or prior judicial determination of the propriety of the operation; (2) TXI’s blasting operations in its quarrys may result in injuries to persons and property at Crawford’s well site; (3) if Crawford discovered either oil or gas at some time in the future, TXI’s blasting may result in injury to the Crawford well site; (4) if Crawford struck oil or gas in the future, Crawford’s operations may pollute TXI’s rock deposits; (5) if Crawford’s operations become successful, TXI may be prevented or delayed in quarrying some of the rock deposits in the immediate vicinity of Crawford’s well; (6) and because of the above reasons, TXI was entitled to have Crawford enjoined from conducting operations without TXI’s consent.

With respect to these findings, the only present danger revealed by the evidence is the potential injury to persons and property in the vicinity of Crawford’s well. This danger, however, is no greater to Crawford personnel than to TXI employees because TXI makes sure that the entire area is cleared before blasting. However, a TXI witness stated there may be a potential injury of lost time, and, consequently, lost profits due to the clearing of people from an area before blasting. These potential injuries are not grounds, however, for the granting of a temporary injunction. Mr. Virgil Sewell, TXI’s vice president of manufacturing, testified that TXI would suffer no direct injury even if TXI was blasting within 400 feet of Crawford’s well unless it was a producer. According to the evidence, Crawford’s well is 2,000 feet from TXI’s quarry and its quarrying operations are moving toward Crawford’s well at the rate of 200 feet per year. Consequently, it will be approximately ten years before TXI’s quarrying operations reach the location of Crawford’s well. This is so even though one of TXI’s witnesses estimated that its quarrying operations would not reach Crawford’s well until at least five years hence. Even the trial court stated: “I don’t see any big urgency here.” We conclude, therefore, that TXI failed to show any immediate probable injury. This precludes its right to a temporary injunction pending trial on the merits. Moreover, the findings of the trial court pertaining to the possible pollution of the rocks and possible damage to TXI by being unable to quarry the rock in the immediate vicinity of Crawford’s well are likewise not immediate probable injuries justifying a temporary injunction to protect its interest. We conclude, therefore, that the injunction was improvidently granted.

Negative Covenant

TXI also argues that even if it was not entitled to a temporary injunction to preserve the status quo, it nevertheless was entitled to an injunction for the enforcement of the negative covenant running with the land. In this regard, TXI contends that in order to satisfy the requirements of this exception to the general requirements for injunctive relief, it need only show a probability that a distinct breach of the negative covenant will occur by the reason of a producing well on the property. We cannot agree. In Protestant Episcopal Church Council v. McKinney, 339 S.W.2d 400 (Tex.Civ.App. — Eastland 1960, writ ref’d), the court stated that a covenant restricting the use of land may be enforced by injunction “where a distinct or substantial breach is shown, without regard to the amount of damages caused by the breach . [Emphasis added.] Id. at 403. It was, therefore, incumbent upon TXI to show a distinct and substantia} breach of the restrictive covenant. Again, TXI relies on that portion of the agreement providing that Crawford could not in any manner interfere with TXI’s use of the property. We do not read that language to give TXI the absolute power to determine where Crawford may drill an oil or gas well so as to require TXI’s consent. Instead, we construe that provision to require TXI to show an interference with its quarrying operation that amounts to a substantial and unreasonable breach of the covenant. To construe the language as TXI would have us do would render the reservation of the oil and gas rights meaningless. Indeed, the extension of TXI’s contention to its ultimate conclusion could preclude any drilling. In this respect, construing the evidence most favorably to the trial court’s order, the evidence at best shows only a potential interference with TXI’s rights in the future. Since TXI has failed to show any present substantial interference with its operations, it failed to meet the requirements of the exception to show a distinct and substantial breach of the negative covenant. Having failed so to do, it was not entitled to an injunction.

In our view, in a case such as this, the trial court should not proceed into a temporary-injunction hearing unless the rights of one of the parties need preservation pending final trial. Instead, the trial court should advance the trial on the merits so as to eliminate two hearings as well as two appeals. This is particularly true because virtually the same evidence adduced at the temporary-injunction hearing will be required on trial on the merits. Ordinarily, justice will be served by eliminating the temporary-injunction hearing. Our views are best expressed in the words of the late Justice Norvell in Southwest Weather Research, Inc. v. Jones, 160 Tex. 104, 327 S.W.2d 417, 421-22 (1959), as follows: lows:

Deliberate action is essential for the accurate determination of legal rights and upon occasion this can be secured only by issuing a temporary decree protecting a status quo. Ordinarily, the hearing upon the temporary injunction is not a substitute for, nor does it serve the same purpose as the hearing on the merits. Generally the most expeditious way of obviating the hardship and discomforture of an unfavorable preliminary order is to try the case on its merits and thus secure a hearing wherein the case may be fully developed and the courts, both trial and appellate, may render judgments finally disposing of controversies. [Emphasis added.]

In view of our disposition of these points, we need not address Crawford’s other contentions. The order of the trial court is reversed and the injunction dissolved.


text:
    Rex R. NEWSOM, Appellant, v. Jerry STARKEY et al., Appellees.
    No. 18861.
    Court of Civil Appeals of Texas, Dallas.
    July 29, 1976.
    Rehearing Denied Sept. 9, 1976.

      B. Michael Chitty, Terrell, for appellant.
    B. Bryan Leitch, III, Dallas, for appellees.
   AKIN, Justice.

This is an appeal from a summary judgment granted plaintiffs-appellees. Since plaintiffs’ summary-judgment proof and defendant’s deposition establish plaintiffs’ primary cause of action as a matter of law, the principal question on this appeal is whether the defendant has sustained his burden of raising fact issues with respect to his affirmative defenses. Because defendant has not sustained his burden, we affirm.

Jerry Starkey, Ben F. Freeman, and R. L. Taylor sued Rex R. Newsom for breach of a covenant to pay the prior lien note and to recover $36,383.90, previously paid by plaintiffs to defendant in a real estate transaction. The sale from defendant to plaintiffs was consummated on December 21, 1973, and was a fourth “wraparound” note and deed of trust transaction. Plaintiffs paid defendant on this note a total of $36,383.90, inclusive of a down payment and a subsequent annual installment on December 21, 1974. The basis of plaintiffs’ cause of action is the following language, contained in all instruments in the sale transaction:

3(b) Seller hereby agrees for the benefit of Purchaser, to pay or cause to be paid the principal of and the interest on the First, Second and Third Lien Notes as and when such amounts become due and payable, in strict accordance with their terms, both before and after the closing date, and that the indebtedness evidenced by the First and/or Second and/or Third Lien Notes (or any part thereof) will not be renewed or extended beyond the date of maturity of the First and/or Second and/or Third Lien Notes without Purchaser’s consent.

Although plaintiffs made all payments to defendant pursuant to the fourth lien “wraparound” note, defendant failed to pay the March 1, 1975, payment due on the third lien note as he had agreed to do in the sale documents. Consequently, the holder of the third lien note foreclosed upon the property on May 6, 1975.

In response to plaintiffs’ action, defendant alleged that without his knowledge his real estate agent in the transaction was acting (1) in the dual capacity of broker and undisclosed principal and (2) as agent for the plaintiffs. Defendant asserted that the broker thereby perpetrated a fraud and pleaded this in defense of plaintiffs’ suit. Alternatively, he alleged mutual mistake because he claimed there was an agreement with his agent that he would have no personal liability in the transaction. He has neither prayed for reformation of the contract to vitiate the effect of the above-quoted language in the transaction documents nor filed a third-party action against his agent, J. E. Taylor.

During the pendency of the suit, plaintiffs obtained a temporary restraining order preventing the defendant from disposing of funds in his bank account and from alienating funds due him on a note payable by a third party. Additionally, plaintiffs sought a temporary injunction and a prejudgment writ of garnishment to impound these funds. The trial court denied the temporary injunction, but ordered in this cause that a prejudgment writ of garnishment be issued in a separately docketed ancillary proceeding. Thereafter, the trial court granted plaintiffs’ motion for’ summary judgment and defendant appeals.

The defendant’s points of error are that the trial court erred (1) in rendering summary judgment because the defendant established his affirmative defenses by proper summary-judgment evidence; and (2) in issuing a writ of garnishment because no application for it had been filed and because the Texas garnishment statutes are unconstitutional since they deny due process.

Summary Judgment

Summary judgment is properly rendered if it is shown that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Tex.R.Civ.P. 166-A; Great American Reserve Insurance Co. v. San Antonio Plumbing Supply Co., 391 S.W.2d 41, 47 (Tex.1965). The burden of proof is on the moving party and any doubt as to the existence of a material question of fact will be resolved against him. Great American Reserve Insurance Co. v. San Antonio Plumbing Supply Co., supra; Wyche v. Works, 373 S.W.2d 558, 560 (Tex.Civ.App. —Dallas 1963, writ ref’d n. r. e.). The rule is different, however, where a defendant asserts an affirmative defense to the plaintiffs’ action. If the defendant wishes to avoid the summary judgment, he must adduce summary-judgment evidence raising a fact issue on all elements necessary to establish his affirmative defense. Swilley v. Hughes, 488 S.W.2d 64, 67 (Tex.1972); see Nichols v. Smith, 507 S.W.2d 518, 520 (Tex. 1974); Seale v. Nichols, 505 S.W.2d 251, 254 (Tex.1974); “Moore” Burger, Inc. v. Phillips Petroleum Co., 492 S.W.2d 934, 936 (Tex. 1972). Since plaintiffs have sustained their burden of proof, the question is whether the defendant raised fact issues on each element of the pleaded affirmative defenses of fraud and mutual mistake by proper summary-judgment evidence. Santos v. Mid-Continent Refrigerator Co., 471 S.W.2d 568, 569 (Tex.1971).

Defendant, in his affidavit, avers that: His real estate agent, J. E. Taylor, represented to him at all times that there would be no personal liability on defendant resulting from the transaction; he relied upon this representation in signing all of the instruments without reading them; R. L. Taylor, one of the plaintiffs, is the wife of J. E. Taylor; J. E. Taylor was acting in a dual capacity as broker and undisclosed principal; J. E. Taylor had an agreement with plaintiff Starkey, prior to consummation of the sale, whereby, upon closing, J. E. Taylor would have an ownership interest in the property; and J. E. Taylor was acting in the transaction as an agent for plaintiffs.

Fraud

Defendant argues that he has established his affirmative defense of fraud because his affidavit shows that he relied on the representation of his agent, J. E. Taylor, that he would have no personal liability as a result of the transaction, and that J. E. Taylor was acting in a dual capacity representing both parties to the contract. He reasons that since J. E. Taylor’s wife is one of the plaintiffs, and, since J. E. Taylor in December 1974 tendered to him a cheek in partial payment of an interest payment due him, this established his affirmative defense of fraud. We cannot agree. The only evidence that connects J. E. Taylor to the plaintiffs is the averment that his wife is a party plaintiff. We cannot draw from this an inference that J. E. Taylor was acting for plaintiffs. J. E. Taylor is not a party here and, consequently, even if fraud on his part were proved, it would not affect plaintiffs’ right to recover in the absence of evidence showing plaintiffs’ responsibility for J. E. Taylor’s alleged fraud. To sustain defendant’s burden on his affirmative defense it was incumbent upon him to show by proper summary-judgment evidence that his agent was acting for plaintiffs in the sale. This he failed to do.

Defendant also contends that he has established fraud because J. E. Taylor, his agent, was an undisclosed principal in the sale and that this constituted fraud. With respect to this contention, defendant avers that he would not have entered into the sale had he known his agent was an undisclosed principal. In his deposition, which was before the trial court, in response to an inquiry of in what way J. E. Taylor deceived him, he answered: “He didn’t let me know who the purchasers were, that he was interested in it.” He also testified that he first knew that J. E. Taylor had an interest in the property on December 20, 1974, when he accepted a check from J. E. Taylor as part of the payment due him from plaintiffs. Thereafter, he accepted and deposited a second check for the balance of the payment from plaintiffs Starkey and Freeman. By accepting and using these funds after knowledge of an interest in the property by J. E. Taylor, the defendant, as a matter of law, affirmed the contract and waived any right of rescission based on his undisclosed principal theory. As Justice Hickman stated in Rosenbaum v. Texas Building & Mortgage Co., 140 Tex. 325, 167 S.W.2d 506, 508 (1943):

[I]f a person who is induced by fraud to enter into a contract continues to receive benefits under the contract after he becomes aware of the fraud, or if he otherwise conducts himself in such manner as to recognize the contract as subsisting and binding, he thereby affirms the contract and waives his right of rescission. An express ratification is not necessary; any act based upon a recognition of the contract as subsisting or any conduct inconsistent with an intention of avoiding it has the effect of waiving the right of rescission.

Since defendant could not obtain a rescission of the contract based upon an undisclosed interest in the property of his agent, J. E. Taylor, it follows that he cannot assert this as a defense to plaintiffs’ recovery.

Defendant also argues that the summary-judgment evidence shows that by an amendment he could raise an issue of fact on his claim of fraud, and, therefore, the summary judgment should be denied. In support of this contention, he cites Womack v. Allstate Insurance Co., 156 Tex. 467, 296 S.W.2d 233 (1956) in which the supreme court said:

The trial court will normally look to the pleadings to determine the issues that may exist in the case, but when the depositions, admissions or affidavits disclose facts which show that an amendment to the pleadings of the opposite party will render the position of the moving party insupportable under the substantive law, it cannot be said that the latter has established his right to judgment as a matter of law.

This statement of law is inapplicable here because there is no summary-judgment evidence pertaining to plaintiffs. Womack concerns an amendment of pleadings when the summary-judgment proof reveals facts not pleaded which would defeat recovery. We do not read Womack to mean that a summary judgment will be reversed in order to give the opposing party an opportunity to plead a ground of recovery or defense against a person not a party to the litigation.

Mutual Mistake of Fact

Defendant also asserts that the averments in his affidavit raise issues on the affirmative defense of mutual mistake of fact. We cannot agree. By definition a mutual mistake of fact occurs where the parties to an agreement have a common intention, but the written contract erroneously reflects that intention due to a mistake on the part of both parties in writing the agreement. Cf. Temple Electric Supply, Inc. v. Simmons, 328 S.W.2d 931, 934 (Tex.Civ.App. — Austin 1959, writ ref’d n. r. e.); Paine-Fishburn Granite Co. v. Reynoldson, 115 Neb. 520, 213 N.W. 750, 751 (1927); Northwest Thresher Co. v. McNinch, 42 Okl. 155, 140 P. 1170, 1172 (1914). See Black’s Law Dictionary 1152 (rev. 4th ed. 1968). Accordingly, in order for the affirmative defense of mutual mistake to be sustained, defendant must raise fact issues showing that both parties were acting under the same misunderstanding of the same material fact. Morris v. Millers Mutual Fire Insurance Co. of Texas, 343 S.W.2d 269, 271 (Tex.Civ.App. — Fort Worth 1961, no writ). Here, defendant contended that he had an understanding with his agent, J. E. Taylor, that he would have no personal liability resulting from the sale. He does not, however, suggest that plaintiffs also acted upon this same “mistake” of fact in entering into the sale. We conclude, therefore, that defendant failed to sustain his burden of raising a fact issue as to mutual mistake.

Garnishment

Defendant also argues that the trial court erred in issuing a prejudgment writ of garnishment. The only reference to garnishment in this record is contained in the order of the trial court denying plaintiffs’ application for a temporary injunction and directing the issuance of a writ of garnishment. That order recites that the defendant

. having been given due notice of plaintiffs’ application for a writ of garnishment and given an opportunity in the hearing to show cause why such writ should not issue, it is of the opinion that the defendant, Rex Newsom, has had due process and that such writ should issue.

Since it is defendant’s burden to bring the record up to the appellate court, he must present a record which is sufficiently full to show clearly the action of the court and the area in which he complains. Redman v. Bennett, 401 S.W.2d 891, 895 (Tex.Civ.App. —Tyler 1966, no writ); Hassle v. New England Mutual Life Insurance Co., 506 S.W.2d 727 (Tex.Civ.App. — Waco 1974, writ ref’d); and Weems v. Henry, 375 S.W.2d 791, 792 (Tex.Civ.App. — Fort Worth 1964, no writ). Because the defendant failed to bring up any proceedings concerning garnishment other than the above language in an interlocutory order, we have no way of knowing whether a writ of garnishment was actually issued impounding assets of the defendant in derogation of due process. Neither do we know what, if any, further proceedings were had with respect to the writ. Since appellate courts do not issue advisory opinions, we do not pass upon the constitutionality of the garnishment statutes because that issue is not properly preserved on this appeal. Morrow v. Corbin, 122 Tex. 553, 62 S.W.2d 641, 646 (1933); see also Shaddix v. Kendrick, 430 S.W.2d 461, 464 (Tex.1968).

Affirmed.

        See also Daniel v. Goesl, 161 Tex. 490, 341 S.W.2d 892, 895 (1960).


author: CLAUDE WILLIAMS, Chief Justice.

text:
    Stanley C. STONE, Appellant, v. Raymond A. ENSTAM, Andrew G. Dean, and Worldcom, Inc., Appellees.
    No. 18923.
    Court of Civil Appeals of Texas, Dallas.
    August 5, 1976.
    Rehearing Denied Sept. 2, 1976.

      Charles A. Girand, Herndon, Girand & Dooley, Dallas, for appellant.
    Raymond A. Enstam, Warren E. Zimmerman, Zimmerman & Zimmerman, Dallas, for appellees.
   CLAUDE WILLIAMS, Chief Justice.

Stanley C. Stone brought this action against Raymond A. Enstam, Andrew G. Dean, and Worldcom, Inc. alleging that under article 581-1 et seq. of the Texas Securities Act and Section 27.01 of the Texas Business and Commerce Code he was entitled to recover $5,000 paid for 2,000 shares of Worldcom stock purchased by Stone from Enstam, together with interest and exemplary damages. Following a nonjury trial, the court rendered a take-nothing judgment against Stone and in favor of Enstam, Dean and Worldcom. Stone appeals from that judgment asserting that the trial court erred (1) in finding that defendants did not violate Tex.Rev.Civ.Stat.Ann. art. 581-33A (Vernon 1964) or Tex.Bus. & Comm.Code Ann. § 27.01 (Vernon 1968); (2) in finding that Stone ratified any sale of stock; and (3) in setting aside an interlocutory default judgment against Dean on its own motion. We find no merit to any of these contentions and, accordingly, affirm the judgment.

In 1970, Worldcom was engaged in the sale and leasing of data communications equipment. At the time of the subject securities transaction, Dean was president and Enstam was vice president of World-Com. In the summer of 1971, Stone, while selling communications services, visited Worldcom and met Enstam. On October 14,1971, Enstam entered into an agreement whereby Stone bought from him 2,000 shares of Worldcom stock for $5,000. Stone did not pay for these shares in cash but on that date signed a note, security agreement and a letter agreeing to purchase the shares for investment only and further agreeing not to resell these shares without the written consent of Worldcom. Stock certificates representing these shares were not issued by Worldcom to Stone until he paid the total sum of $5,000 on January 17,1972. In December 1971, Worldcom agreed to merge with Strategic Metals Research, Inc., a publicly-traded company. The merger was completed in February 1972, and Worldcom stock thereafter was publicly traded.

The present action was filed on December 9, 1974, against the three defendants. En-stam and Worldcom answered with a general denial and an affirmative defense of statute of limitations. Dean failed to file an answer. Stone sought a separate hearing concerning Dean and when Dean failed to appear, the trial court entered an interlocutory default judgment against this defendant. Dean filed a motion for new trial which was overruled.

During a later contested nonjury trial against Enstam and Worldcom, Stone testified that in the summer of 1971, Dean told him that: (1) Worldcom would be in the black in its first year; (2) Worldcom was going to go public; (3) the stock was selling to other people at four dollars to five dollars per share; (4) the stock would sell in the future for forty dollars to fifty dollars per share; and (5) no audited financial statement was available at that time. Since Dean was not present at this trial, he did not confirm or deny these allegations.. Stone further testified that after he asked Dean how he might acquire stock in World-Com, Dean told him Dean would not sell his personal stock and that Worldcom would not sell any stock, but that Dean would try to find someone interested in selling stock to Stone. At this time there were about twelve small shareholders in addition to the three founders. According to Stone, Dean told him he had found a possible seller in Enstam. Both Enstam and Stone testified that Stone had already made up his mind to acquire the stock before talking to Enstam. Enstam testified that his only discussion with Stone involved terms of payment and that he made no further representation.

On November 29, 1971, Arthur Young & Company delivered an audited financial statement to Worldcom for its fiscal year ending September 30, 1971. Robert E. McKee, III, an independent business consultant, testified as a disinterested witness that this financial statement was freely available at Worldcom’s office after November 29, 1971. This report was copied into a proxy statement which was issued in connection with the merger between World-Com and Strategic Metals Research, Inc. Stone admits that he obtained the proxy statement and financial statement in January or February 1972, and further admits it contained the information which he claims was misstated or omitted. Stone further testified that if he had known the omitted and misstated facts, he would not have purchased the stock. He testified that he did not complain to Enstam, Dean or anyone else about what he learned in the financial statement, nor did he attempt to return the stock for three years after discovering these alleged misrepresentations. He also testified that the fact the stock was trading around $9.50 per share was part of the reason he did not to return the stock during this period of time.

Following the hearing, the trial court rendered a take-nothing judgment in favor of Enstam and Worldcom. Subsequently, the court on its own motion set aside the interlocutory default judgment previously rendered against Dean and then proceeded to hold a contested hearing. Dean filed a general denial but did not testify. The only evidence admitted at the hearing was the record of the previous hearing against En-stam and Worldcom. Thereupon the court proceeded to render a take-nothing judgment in favor of Dean thereby making the judgment final as to all parties.

Before considering Stone’s basic contentions we must dispose of two threshold questions dealing with procedure. The first question is presented by appellees Enstam and Worldcom in which they contend that appellant Stone’s points of error are improper and should be stricken. The second question is presented by appellant Stone in which he argues that the trial court had no authority to set aside the interlocutory default judgment against Dean and, therefore, such judgment became final.

Improper Points of Error

Stone presents twenty-four points of error, each of which alleging that there was no evidence or in the alternative insufficient evidence to support the various findings of the court. Illustrative of these points are points one and two quoted in the margin. Enstam and Worldcom argue that since Stone had the burden of proof in the trial court on each of the questioned issues of fact found by the court adversely to him, such points of error are improper and incorrect as a matter of law, and we do not have jurisdiction to review these points on appeal. As authority for this proposition, they cite Prunty v. Post Oak Bank, 493 S.W.2d 645, 646 (Tex.Civ.App.-Houston [14th Dist.] 1973, writ ref’d n.r.e.), wherein that court held that on appeal by plaintiff, “no evidence” points of error with reference to the jury’s failure to find the defendant negligent in its conduct were improper and did not invoke the appellate court’s authority to review. The Houston Court of Civil Appeals cited C. & R. Transport, Inc. v. Campbell, 406 S.W.2d 191 (Tex. 1966) to support this holding. A careful review of Campbell reveals that Chief Justice Calvert wrote only that the defendant had raised proper points of error in the court of civil appeals. However, the issue of an appellate court’s authority to review when the points of error are improper was not raised. Also, the Houston court cites as authority Calvert, “No Evidence” and “Insufficient Evidence” Points of Error, 38 Texas L.Rev. 361, 369 (1960) in which Chief Justice Calvert wrote concerning “no evidence”:

Before a party is entitled to have a judgment based on the answer reversed and judgment rendered in his favor, it must appear that the evidence establishes conclusively that the act was committed. In this situation it would be much better to forget the words “no evidence” and assert in the point of error, as well as in the basic procedural step in the trial court, that the evidence establishes conclusively, or as a matter of law, that the act was committed. [Emphasis added.]

At page 366, Chief Justice Calvert also wrote concerning “insufficient evidence”:

A point of error asserting that a jury’s finding of the existence of a vital fact is contrary to the great weight and preponderance of the evidence means exactly what it states in very simple language. It needs no explanation. The point is an “insufficient evidence” point in the sense that it asserts the insufficiency of the evidence to support a finding of the existence of a vital fact when the great weight and preponderance of the evidence supports its non-existence. [Emphasis added.]

Recently, this article has been cited for the rule that:

When a party gets an adverse answer to special issues on which he had the burden of proof (e. g., the jury gives a negative answer to his issue regarding his opponent’s negligence), it may be attacked with a legal sufficiency point of “as a matter of law” and the factual sufficiency point “against the great weight.” [Emphasis added.] O’Connor, Evidence Points on Appeal, 37 Tex.B.J. 879 (1974).

We do not read these authorities as a mandatory requirement that a party on appeal must properly state its points of error in his brief if the total content of his brief as well as his oral argument shows the court his intention to urge the correct point of error. For a court to hold otherwise would create the harsh procedural result denying the party an appeal on the merits. Tex.R.Civ.P. 1 states that the objective of our rules of civil procedure is to obtain a fair, equitable and impartial adjudication of the rights of litigants under established principles of substantive law, and in accordance with this objective these rules should be given a liberal construction. This court, when answering the argument that a point of error is too general, has long held that we will discuss the grounds as we understand them upon which the appellant apparently relies to support his appeal, as disclosed in the statements and argument accompanying his points on appeal. Wyche v. Noah, 288 S.W.2d 866, 867 (Tex.Civ.App.— Dallas 1956, writ ref’d n. r. e.), citing Fambrough v. Wagley, 140 Tex. 577, 169 S.W.2d 478 (1943); A. T. Little v. Employees Security Life Insurance Co., 343 S.W.2d 517, 518 (Tex.Civ.App. — Dallas 1961, writ ref’d n. r. e.). From a reading of appellant’s complete brief, as well as from appellant’s oral argument, we are convinced that appellant’s “no evidence” and “insufficient evidence” points also incorporate the contention that the findings of the trial court are against the great weight and preponderance of the evidence as to be manifestly unjust. Accordingly, we overrule the contention advanced by appellees and will consider the points of error in the light of these rules.

Interlocutory Default Judgment

Appellant Stone urges that the trial court was without authority to set aside the interlocutory default judgment against Dean because no grounds for setting it aside were established. The record shows that within ten days after the entry of the interlocutory default judgment, Dean filed a motion for new trial which was overruled. Subsequently, the trial court upon its own motion set aside the interlocutory default judgment and ordered the cause set for trial. The hearing was held in which the court admitted the factual record of the trial proceedings concerning the other defendants and rendered a final take-nothing judgment against Dean. Stone asserts that the trial court was not authorized to set aside this default judgment without proof of the requirements stated in Craddock v. Sunshine Bus Lines, Inc., 134 Tex. 388, 133 S.W.2d 124 (1939, opinion adopted) and Ivy v. Carrell, 407 S.W.2d 212 (Tex.1966). We do not agree. In both of thesfe cases, a final default judgment against the defendants had been rendered and the question was whether the court erred in refusing to set it aside. In the pending case, the default judgment against Dean was interlocutory since Stone’s claims against Enstam and Worldcom were still pending. The court did not sever Stone’s claim against Dean under Tex.R.Civ.P. 174(b) and did not enter a final judgment on that claim. Since the judgment remained interlocutory, a motion for new trial under Tex.R.Civ.P. 329b was premature, and the court retained jurisdiction over the cause. Therefore, the trial court had authority to set aside the interlocutory judgment on its own motion and subsequently enter a final judgment adjudicating the rights of all parties.

We now consider the basic issues that are determinative of this appeal.

Statute of Limitations

Two of the appellees, Enstam and World-Com, pleaded as an affirmative defense against Stone’s cause of action, the applicable statute of limitations. Consequently, we must first decide whether limitations bars Stone’s claims against them.

Claim Against Enstam and Worldcom Under Texas Securities Act § 33 A(l)

Stone also contends that the trial court erred in finding that the sale of stock by Enstam to him did not violate the provisions of Texas Securities Act § 33 A(l). In response Enstam and Worldcom argue that any claim under this section is barred by the three-year statute of limitations pursuant to Texas Securities Act § 33 C which states:

No person may sue under Subdivision A(l) of this Section 33 more than three (3) years after the contract of sale.

The trial court found that on October 14, 1971, Enstam sold to Stone 2,000 shares of common stock in Worldcom. A review of the evidence reveals that Stone signed a promissory note, dated October 14, in the amount of $5,000 payable to Enstam. Also on that date Enstam and Stone signed and executed a security agreement granting Enstam a security interest in the shares of Worldcom, Inc. to secure payment due on the $5,000 note. Thus, the trial court’s finding that the stock was sold on October 14 is not against the great weight and preponderance of the evidence. The present action was filed on December 9, 1974, which was more than three years after the execution of the sale contract. Consequently, we hold that the trial court was correct in finding that the three-year statute of limitations barred Stone from recovery against Enstam and Worldcom.

Claim Against Enstam and Worldcom Under Texas Securities Act § 33 A(2)

Stone asserts that the trial court erred in finding that the sale of stock by Enstam to him did not violate any of the provisions of Texas Securities Act § 33 A(2). Again, Enstam and Worldcom argue that appellant’s claim is barred by the three-year statute of limitations under Texas Securities Act § 33 C which states:

No person may sue under Subsection A(2) more than three (3) years after the contract of sale or more than (3) years after the buyer in the exercise of ordinary care should have discovered that such sale was made in violation of said Subsection A(2).

The trial court found that each fact which Stone claims was omitted or misstated was reasonably available to Stone after November 29, 1971, and that he could reasonably have ascertained these facts after that date. A review of the evidence shows that the audited financial report of World-Com was available in its offices on that date and the trial court’s finding that a reasonable purchaser could have ascertained the omitted facts from this financial report on that date is not against the great weight and preponderance of the evidence. Hence, the three-year statute of limitations provided in § 33 C of the Texas Securities Act begun running on November 29, 1971. Since the present action was not filed until December 9, 1974, more than three years had elapsed and the action is barred.

Claim Against Enstam and Worldcom Under Texas Business & Commerce Code, § 27.01

Stone alleged that the sale of stock by Enstam to Stone violated Tex.Bus. & Comm.Code Ann. § 27.01 and contends here that the trial court erred in failing to find such a violation. Enstam and Worldcom contend that any right to bring an action under this section is barred by the two-year statute of limitations provided in Tex.Rev. Civ.Stat.Ann. art. 5526 (Vernon 1958). We agree with their contention. The supreme court has held that limitations will bar an action based on fraudulent misrepresentations that induce a purchase of stock if it is filed more than two years after plaintiff has acquired knowledge of facts which would cause a reasonably prudent person to make an inquiry which would lead to discovery of the fraud. White v. Bond, 362 S.W.2d 295, 296 (Tex.1962); Ryan v. Collins, 496 S.W.2d 205 (Tex.Civ.App. — Tyler 1973, writ ref’d n. r. e.). As shown in the preceding section of this opinion, the evidence shows that Stone could have discovered the alleged misstated or omitted facts on November 29, 1971. Since he filed this action more than two years, later, he is barred by the statute of limitations.

Securities Actions Against Dean

Inasmuch as Dean did not plead the statute of limitations as an affirmative defense, we must determine if Stone proved the essential elements of a claim against him, as a matter of law and whether the trial court’s adverse finding is against the great weight and preponderance of the evidence.

Claim Against Dean Under the Texas Securities Act § 33 A(l)

Stone argues that Texas Securities Act § 33 A(l) creates liability because Dean failed to secure a permit or registration for issue under Texas Securities Act § 7 A(l). However, a close analysis of § 7 A(l) reveals that it is limited to dealers, agents or salesmen who sell or offer to sell any security unless exempted by the Securities Act. A dealer is one who attempts to sell securities for himself or others as a business, and a salesman is one employed by a dealer to sell, offer to sell, solicit subscriptions, or deal in any other manner in securities. Cosner v. Hancock, 149 S.W.2d 239, 243 (Tex.Civ.App. — El Paso 1941, writ dism’d jdgmt. cor.), Anderson v. Eliot, 333 S.W.2d 654, 658 (Tex.Civ.App. — Eastland 1960, writ ref’d). The evidence is insufficient to show that Dean was acting in the capacity of a dealer, agent or salesman concerning this transaction. Inasmuch as this is an essential element to sustain recovery under the act and since it was not proved, we hold that the trial court did not err in failing to find the violation of Texas Securities Act § 33 A(l), and certainly such finding on the part of the court is not contrary to the great weight and preponderance of the evidence.

Claim Against Dean Under the Texas Securities Act § 33 A(2)

This provision states:

Any person who offers or sells security (whether or not the security or transaction is exempt under Section 5 or 6 of this Act) by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made not misleading (when the person buying the security does not know of the untruth or omission, and who in the exercise of reasonable care could not have known of the untruth or omission) is liable to the person buying the security from him, who máy sue either at law or in equity to recover the consideration paid for the security, together with interest at six per cent (6%) per year from the date of payment, less the amount of any income received on the security upon the tender of the security, or for damages if he no longer owns the security.

Stone argues that a cause of action against Dean under § 33 A(2) was established by proof that Dean made statements: (1) Pertaining to the future value of the stock; (2) promising a profit from operations by the end of the first year; (3) representing audited financial statements were not available because the corporation was changing auditors and the books and records were not available; and (4) asserting that the corporation could not directly sell stock to him because a sale would place the corporation in jeopardy of losing its status under state and federal securities regulations concerning unregistered securities. Stone further asserts that financial information such as profitability, working capital deficits, dependence upon one customer, and shares outstanding are per se material facts necessary to make other statements made in connection with the sale of stock not misleading. Our examination of the record convinces us that Stone failed to prove Dean was a seller of securities under the Texas Securities Act. The wording of § 33 A(2) states:

Any person who offers or sells . is liable to the person buying the securities from him.

The supreme court has said:

Section 33A states that the seller “is liable to the person buying the security from him, who may sue either at law or in equity to recover the consideration paid . . .” Meadows v. Bierschwale, 516 S.W.2d 125, 130 (Tex.1974).

Stone cites and relies upon Brown v. Cole, 155 Tex. 624, 291 S.W.2d 704, 708 (1956) as authority that under the Texas Securities Act “the seller may be any link in the chain of the selling process” or in the words of the Act he is the one who performs “any act by which a sale is made.” Although we are aware of this general statement of law, we must look to the facts of that case to determine the context in which the statement was made. In Brown, the defendant was an active negotiator between other parties, and his active negotiation resulted in the sale of stock. The supreme court in Brown distinguished the facts before it from the facts in Herren v. Hollingsworth, 140 Tex. 263, 167 S.W.2d 735 (1943). In Herren, the court held that a property owner’s agent who was authorized only to find an oil driller and who was not authorized to negotiate a contract was not selling securities under the Texas Securities Act. In the case before us, Dean was not acting as an agent of either Stone or Enstam. He only volunteered without benefit to himself to find someone who would sell Worldcom stock to Stone. It is apparent that Brown is distinguishable from the situation presented here and that Dean was not a seller of securities under the Texas Securities Act. Thus, Stone has failed to establish his claim under the Texas Securities Act § 33 A(2) against Dean as a matter of law and it cannot be said that the trial court’s finding of no violation of this statute is contrary to the great weight and preponderance of the evidence.

Claim Against Dean Under Texas Business & Commerce Code § 27.01

The Texas Business and Commerce Code § 27.01 provides:

A person who makes a false representation or false promise, and a person who benefits from that false representation or false promise, commit[s] the fraud described in Subsection (a) of this section and are jointly and severally liable to the person defrauded for actual damages. [Emphasis added.]

Stone argues that Dean made false representations which induced him to purchase the stock. We find no evidence of a false representation of existing material fact. Where statements or representations are alleged to have been fraudulent but are in the nature of a promise or of an act to be performed in the future and not statements of existing facts, such statements cannot legally be said to be a fraudulent misrepresentation unless it is alleged and proved that at the time the statement or promise was made the person making the same did not intend to perform it. The mere failure to perform a promise is not of itself evidence of an intent not to perform. Rapid Transit Co. v. Smith, 98 Tex. 553, 86 S.W. 322, 335 (1905); Precision Motors v. Cornish, 413 S.W .2d 752, 756 (Tex.Civ.App.— Dallas 1967, writ ref’d n. r. e.); and Morgan v. Box, 449 S.W.2d 499, 504 (Tex.Civ.App.— Dallas 1969, no writ). The speculative statements asserting that stock would eventually sell at a high price and that World-corn would show a profit in the future are not statements of material fact presently existing which would constitute fraud under this section" but rather are only statements of optimism and conjecture. The statement by Dean that audited financial statements were not available to him at the time prior to November 29 was in fact a true representation. Further, the representation that WorldCom would not sell the stock without losing exempt status for unregistered securities was in the opinion of Dean, an attorney, a true statement of the law. We hold that under the facts contained in this record the trial court did not err in failing to find that Dean violated the Texas Business and Commerce Code § 27.01. The trial court’s finding was not so contrary to the great weight and preponderance of the evidence as to be manifestly wrong or unjust.

In view of our holdings, we find it unnecessary to pass upon Stone’s point of error complaining of the trial court’s action in finding that he had ratified the stock transaction. Finding no reversible error presented in this record we affirm the judgment of the trial court.

      . There is no evidence to support the finding of the court that the sale of stock by Enstam to Stone did not violate any provisions of article 581-33 A(l) of Texas Revised Civil Statutes.
      There is insufficient evidence to support the finding of the court that the sale of stock by Enstam to Stone did not violate any provisions of article 581-33 A(l) of the Texas Revised Civil Statutes.


author: GUITTARD, Justice.

text:
    The STATE of Texas, Appellant, v. AMVETS POST NUMBER 80 et al., Appellees.
    No. 19024.
    Court of Civil Appeals of Texas, Dallas.
    Aug. 5, 1976.

      Henry Wade, Dist. Atty., Edgar A. Mason, Asst. Dist. Atty., Dallas, for appellant.
   GUITTARD, Justice.

The district attorney brought this suit on behalf of the State under Tex.Rev.Civ.Stat. Ann. art. 4667 (Vernon Supp.1975) to restrain Am vets Post Number 80 and its officers and members from operating bingo games in which the participants pay for the privilege of playing and prizes are determined by chance. The trial court granted a temporary injunction restraining the defendants from operating the games insofar as persons other than Amvet members and their families are allowed to participate, but the court otherwise denied the relief sought. From this denial the State appeals. We hold that the game is an illegal lottery,

whether or not restricted to members and their families, and, therefore, that the State is entitled to the broader injunction.

The term “lottery” is defined in Tex. Penal Code Ann. § 47.01(6) (Vernon 1974) as follows:

“Lottery” means any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value, whether such scheme or procedure is called a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name.

Tex. Penal Code Ann. § 47.03 (Vernon 1974) provides that a person commits an offense if he intentionally or knowingly

(5) for gain, sets up or promotes any lottery or sells or offers to sell or knowingly possesses for transfer, or transfers any card, stub, ticket, check, or other device designed to serve as evidence of participation in any lottery.

The undisputed facts bring the case squarely within the definition of a “lottery” in § 47.01(6). The players purchase bingo cards from the Post for a fixed charge. The object of the game is to cover the numbered spaces on the card in a designated pattern as numbers are selected at random by a mechanical device and called out to the players. The first player to complete the pattern receives a cash prize ranging from $35 to $500, depending upon the pattern designated. From this evidence it is clear that the game is, in the words of the statute, a “scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value.”

Denial of the broader injunction sought cannot be justified on the theory that if the game is restricted to members and their families it is not operated “for gain,” as prohibited by § 47.03(5). The trial court expressly found and recited in its order that the Post realizes a financial gain. The evidence shows that the games are held three times a week and are undertaken for the express purpose of raising money. The revenues are used for the Post’s general operating expenses as well as for charitable contributions. Obviously such proceeds are a regular and an expected part of the scheme. Cf. Wink v. Griffith Amusement Co., 129 Tex. 40, 100 S.W.2d 693 (1936). Even if all the proceeds were contributed to charity, the game would still be an enterprise undertaken “for gain.” A gain is no less a gain if it is contributed to charity. Consequently, a lottery is no less a lottery if the proceeds are used for charitable purposes. See Tussey v. State, 494 S.W.2d 866 (Tex.Crim.App.1973).

Neither can such a game escape condemnation as a lottery on the ground that no individual received any benefit other than personal winnings. Other gambling statutes provide for a defense if the accused shows that the gambling occurred in a private place, that no person received any economic benefit other than personal winnings, and that the risk of losing and the chance of winning was the same for all participants. Tex.Penal Code Ann. §§ 47.02(b), 47.04(b) (Vernon 1974). No such defense is provided to the charge of operating a lottery under § 47.03.

Accordingly, we reverse the order of the district court insofar as it denies the complete relief sought by the State and we issue our temporary injunction restraining Am vets Post Number 80 and its officers and members from setting up, operating or promoting for gain bingo games or any other lottery scheme whereby one or more prizes are distributed by chance among persons paying for the privilege of participating, whether or not the participants are limited to members of the Post and their families, until a final order in this cause is issued by the trial court.

We observe, however, that we can find no good reason why the State should have sought a temporary injunction rather than an early setting on a permanent injunction. Such an early setting on the merits would avoid duplication of effort both in the trial court and on appeal, and would cause little more disruption of the docket than a hearing on an application for temporary injunction. See Southwest Weather Research, Inc. v. Jones, 160 Tex. 104, 327 S.W.2d 417, 421-22 (1959).

Reversed and rendered.