The Court of Civil Appeals erred in holding that the evidence showing a permit necessary to prevent waste, does not measure up to the substantial, evidence rule; and in substituting its judgment on the sufficiency of evidence for the judgment of the Railroad Commission, and that it was not error for the trial court to exclude the transcript of the hearing before the Commission or if such ruling of the trial was error it was harmless. Thomas v. Stanolind Oil Gas Co., 145 Tex. 270, 198 S.W.2d 420, Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424; Railroad Commission v. Shell Oil Co., 139 Tex. 66, 161 S.W.2d 1022; Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73. Fred T. Couper, Jr., and John C. Jackson, both of Houston, and Black and Stayton, of Austin, for respondents.
The "criteria or safeguards" do not have to be found in the statutory delegation, however: the separation of powers required by section 1 of article II of the Texas Constitution does not forbid that an administrative agency itself make rules establishing standards to guide its exercise of power in effectuation of the legislative purpose, provided that the rules are made pursuant to power delegated by the legislature and in accordance with procedures that protect the rights of persons affected by the exercise of regulatory discretion. See Trapp v. Shell Oil Co., 198 S.W.2d 424, 438-39 (Tex. 1946) (on motion for rehearing); see also Texas Antiquities Comm., 554 S.W.2d at 928 (plurality opinion) ("We have, in this case, no standard or criteria either by statute or rule which affords safeguards for the affected parties"). Thus, to constitute a valid delegation of legislative power, an organic statute that lacks meaningful standards must at least have a discernible general regulatory purpose.
d. 1424; Crichton, et al. v. Lee, et al., (La.), 45 So.2d 229; Crooper v. Hollingsworth, 46 So.2d 541; Grayson, et al. v. Berry Asphalt Co., Inc., et al., (Ark.), 243 S.W.2d 1; Gruger v. Phillips Petroleum Co., 192 Okla. 259, 135 P.2d 485; Gulf Ref. Co. v. B.C. Griffith, Docket Nos. 38511 and 38566 consolidated; Gulf v. Stanford, 202 Miss. 602, 30 So.2d 516; Harris v. Wood County Cotton Oil Co., 222 S.W.2d 331; Humble Oil Ref. Co. v. Bennet, (Tex.), 149 S.W.2d 220; Hunter Co. v. McHugh, 320 U.S. 222, 88 L.Ed. 5, 64 S.Ct. 19; Japhet v. McRae, et al., 276 S.W. 669; Lilly v. Conservation Commissioner of Louisiana, 29 Fed. 892; Loeffler v. King, 228 S.W.2d 201; Marrs v. City of Oxford, 32 F.2d 134, 67 A.L.R. 1336; Mueller v. Sutherland, 179 S.W.2d 801; Noe v. Gully, 189 Miss. 1, 193 So. 36; Phillips Petroleum Co. v. Davis, 147 P.2d 135; Placid Oil Co. v. North Central Texas Oil Co., Inc., et al., 206 La. 693, 19 So.2d 616; Simpson, et al. v. Ricketts, et al., 185 Miss. 280, 186 So. 318; Trap v. Shell Oil Co., 145 Tex. 323[ 145 Tex. 323], 198 S.W.2d 424; Secs. 6132-01, 6132-08(1), 6132-10(a), 6132-22, 6140(d), Code 1942 (Supp.); 31 C.J.S., Estoppel, Secs. 1, 63, 73, 74 and 110(g); Griffith's Miss. Chancery Practice, 2nd Ed., Sec. 40.
Under these principles, if there was substantial evidence which supports the agency's ruling, the trial court must yield to the discretion that was exercised by the agency empowered by law to make that ruling. Id. When conducting the trial de novo, the trial court may go no further than to examine the evidence heard by the agency and determine whether it was incredible, perjured, or unreasonable, id.; Trapp v. Shell Oil Company, 145 Tex. 323, 198 S.W.2d 424, 440 (1946), because evidence in those categories is deemed not substantial. Trapp, 198 S.W.2d at 440. Evidence heard by an agency may even preponderate against its own ruling, yet still be "substantial evidence," if it is more than a mere scintilla. City of El Paso v. Public Utility Comm'n of Texas, 883 S.W.2d 179, 185 (Tex. 1994).
The Growing Substantial Evidence Rule, Texas Bar Journal, December 22, 1958, page 742. 'The Supreme Court in 1946 recognized that there was a conflict in its previous decisions, and in the case of Trapp et al. v. Shell Oil Co., Inc., 145 Tex. 323, 198 S.W.2d 424, resolved the conflict by approving the holding of the court in the Gulf Land Co. case.' However, in the Trapp case the Supreme Court approved the definition in the 'Trem Carr' case for the substantial evidence rule in the following language:
The Civil Service Commission having upheld these charges it was the duty of the trial court to sustain and not set aside such findings, if they were reasonably supported by substantial evidence. Texas Liquor Control Board v. Armstrong, Tex.Civ.App., 300 S.W.2d 146; Fire Department of City of Fort Worth v. City of Fort Worth, 147 Tex. 505, 217 S.W.2d 664; Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424. There is no contention here but that the so-called 'substantial evidence rule' applies, the only controversy along this line seems to be, what is the 'substantial evidence rule,' and just how is it applied in cases of this nature?
And the burden of proof is on the party who attacks the validity of such orders. Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73; Trapp v. Shell Oil Co., Inc., 145 Tex. 323, 198 S.W.2d 424; Board of Firemen's Relief Retirement Fund Trustees of Houston v. Marks, 150 Tex. 433, 437, 242 S.W.2d 181, 27 A.L.R.2d 965; Jones v. Marsh, 148 Tex. 362, 224 S.W.2d 198. We sustain appellants' point to the effect that the court erred in holding that appellants were limited to introducing in the court action only such evidence as had been introduced before the Board, and in holding that no witness could be heard to testify in court unless he had testified before the Board; and we also sustain appellants' point that the court erred in holding that the sole test of admissibility of evidence was whether the Board had heard same in the hearing before it.
Board of Firemen's Relief Retirement Fund Trustees of Houston v. Marks, 150 Tex. 433, 242 S.W.2d 181, 183 (1951). Thus, while the reviewing court is to a certain extent a fact-finder, it may not substitute its judgment for that of the agency on controverted issues of fact. Trapp v. Shell Oil Company, 145 Tex. 323, 198 S.W.2d 424, 436 (1946). When there is substantial evidence which would support either affirmative or negative findings the administrative order must stand, notwithstanding the agency may have struck a balance with which the court might differ.
Railroad Commission v. Oilfield Haulers Association, 442 S.W.2d 874 (Tex.Civ.App. 1969). See also Trapp v. Shell Oil Company, Inc., 145 Tex. 323, 198 S.W.2d 424 (1946). In contrast, Section 19(e) provides that a reviewing court may affirm, reverse or remand agency orders.
This presumption is strengthened in an exertion of the police power where the regulation is adopted after notice and public hearing. Trapp v. Shell Oil Co., 145 Tex. 323, 198 S.W.2d 424 (1946). Article 666 — 7a does not require an order of the Board adopting rules in an exercise of its delegated powers to contain findings of fact, or that findings of fact be otherwise reduced to writing.