Portland Sav. and Loan Ass'n v. Bevill, Bresler & Schulman Government Securities, Inc.

• Citation: 619 S.W.2d 241
• Decision Date: 18 June 1981
• Docket Number: No. 1893,1893
• Parties: PORTLAND SAVINGS AND LOAN ASSOCIATION, Appellant, v. BEVILL, BRESLER & SCHULMAN GOVERNMENT SECURITIES, INC., Art Frey and Edward E. Rotenberry, Appellees.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 241

619 S.W.2d 241

PORTLAND SAVINGS AND LOAN ASSOCIATION, Appellant, v. BEVILL, BRESLER & SCHULMAN GOVERNMENT SECURITIES, INC., Art

Frey and Edward E. Rotenberry, Appellees.

No. 1893.

Court of Civil Appeals of Texas, Corpus Christi.

June 18, 1981.

Rehearing Denied July 23, 1981.

Joseph A. Kutch, Harris, Cook & Browning, Corpus Christi, for appellant.

Andrew Wooley, Butler, Binion, Rice, Cook & Knapp, Houston, for appellees.

OPINION

BISSETT, Justice.

This is a venue case. The Pleas of Privilege of Defendants Bevill, Breslar & Schulman Government Securities, Inc., (hereinafter called "Bevill"), Art Frey and Edward E. Rotenberry were sustained and the cause of action was transferred to Harris County. We affirm in part and reverse and render in part.

Portland Savings & Loan Association, (hereinafter "plaintiff"), filed suit in the District Court of Nueces County, Texas, against Bevill, Frey and Rotenberry to recover damages for alleged misrepresentations of material facts occurring during the sale of certain securities. All defendants filed pleas of privilege. Bevill, a nonresident of Texas, is a New Jersey corporation, and is a broker and dealer in the business of buying and selling securities. Frey and Rotenberry are salesmen for Bevill, who reside in Houston, Texas.

Plaintiff controverted the pleas of privilege. It asserted that venue was sustainable in Nueces County, Texas, under the provisions of Subdivisions 3 and 29a of Tex.Rev.Civ.Stat.Ann. art. 1995 (1964). It further claimed that venue was maintainable in Nueces County under the provisions of Tex.Bus. & Com.Code § 17.56 (Supp.1980).

On December 12, 1980, a hearing was had on the pleas of privilege of all three defendants. The testimony adduced showed that the alleged misrepresentations of a material nature occurred in telephone conversations by defendants Frey and Rotenberry made from Harris County to San Patricio County, Texas. Plaintiff's principal place of business is located in San Patricio County; it also maintains a business office in Nueces County. Ben Eastland, the managing officer of plaintiff, testified that defendants Frey and Rotenberry had called him personally several times at his home in Nueces County in regard to the involved securities.

Bevill, in answer to requests for admissions served upon it, in effect, admitted: 1) Bevill is not licensed to do business in Texas; 2) Bevill does not have an agent for service of process in Texas; 3) Bevill is not incorporated in Texas; 4) Bevill does not have a place of business, or office, in Texas; 5) Bevill does not have a certificate of authority to transact business in Texas; 6) Bevill is not registered as a dealer with the Texas Securities Commission; and 7) Bevill is not a resident of Texas.

At the conclusion of the hearing, the trial court sustained the pleas of privilege of all three defendants and transferred the cause to the District Court of Harris County, Texas. Plaintiff has appealed.

Findings of fact and conclusions of law were not requested or filed in this case. The trial court's judgment sustaining the pleas of privilege should therefore be affirmed if it can be upheld on any legal theory that finds support in the evidence. Bishop v. Bishop, 359 S.W.2d 869, 871 (Tex.1962); Rouse v. Shell Oil Co., 577 S.W.2d 787, 789 (Tex.Civ.App. Corpus Christi 1979, writ dism'd).

Plaintiff first contends that the trial court erred in sustaining Bevill's plea of privilege because: 1) Bevill, a foreign corporation, is not a resident of Texas and was not such a resident on the date suit was filed; 2) Bevill "has no venue rights" under Tex.Rev.Civ.Stat.Ann. art. 1995, and cannot "assert" a plea of privilege; and 3) Bevill's plea of privilege is "fatally defective in that it does not state a county in Texas to be the county of residence of said Appellee (Bevill)." We agree.

The courts of Texas have frequently followed the rule that a nonresident defendant has no venue rights to assert under Article 1995. This rule stems from the language of Article 1995, which provides: "No person who is an inhabitant of this State shall be sued out of the county in which he has his domicile except in the following cases: ..." (Emphasis added). The rule, as stated in McDonald, provides:

"... One having no residence in Texas, or a foreign entity without a registered office or place of business in the state, has no right to be sued in any particular county unless the venue of the action is controlled by some mandatory provision of the statute." 1 McDonald: Texas Civil Practice, sec. 4.03.2 (1981).

In O. F. Mossberg & Sons, Inc. v. Sullivan, 591 S.W.2d 952 (Tex.Civ.App. Austin 1980, no writ), the plaintiff sustained an injury from a gunshot wound. Among those who were sued was the manufacturer of the firearm from which the shot was fired. The manufacturer was a foreign corporation with no agent, representative or office in the State of Texas. A special exception was filed by the plaintiff to the plea of privilege on the ground that the plea of privilege was insufficient on its face since it did not allege a place of residence in a county in Texas. The appellate court, reviewing the special exception to the plea of privilege, stated:

"(The manufacturer) was unable to state, and did not allege in its plea of privilege a county of residence, thereby failing to meet the requirement of Rule 86, Texas Rules of Civil Procedure, that 'A plea of privilege to be sued in the county of one's residence ...' (Emphasis added). (The manufacturer's) plea of privilege was fatally defective in having failed to meet this requirement, and due exception having been taken to the plea, the trial court was compelled to strike the plea." Id. at 956.

See also Dealer Service Plan, Inc. v. Chabarria, 543 S.W.2d 740 (Tex.Civ.App. El Paso 1976, no writ); Delaporte v. Currey, 486 S.W.2d 114 (Tex.Civ.App. Waco 1972, no writ); Aviation Credit Corp. v. University Aerial Service Corp., 59 S.W.2d 870 (Tex.Civ.App. Eastland 1933, writ dism'd); Holcomb v. Williams, 194 S.W. 631 (Tex.Civ.App. Ft. Worth 1917, no writ).

In Peacock v. Bradshaw, 145 Tex. 68, 194 S.W.2d 551 (1946), the suit was for custody of child between the father, plaintiff and the maternal grandparents, defendants. The defendants were served in Maricopa County, Arizona with copies of the petition. They filed pleas of privilege asserting that they were not residents of Cherokee County, Texas, where the suit was filed, but instead, were residents of Maricopa County, Arizona. The Supreme Court held that the plea of privilege of the maternal grandparents was insufficient since they failed to allege that they were residents of any county in the State of Texas.

Bevill failed to allege a county of residence in Texas in its plea of privilege as required by Rule 86, T.R.C.P. This deficiency was timely brought to the attention of the trial court. The evidence presented at the venue hearing showed that Bevill is a New Jersey corporation, with no place of business or registered agent in Texas. Defendant Frey testified that during the tenure of his employment with Bevill as a salesman, he was "based" in Houston, Texas. This testimony is not sufficient, as argued by Bevill, to establish residence of Bevill in Harris County, Texas. For venue purposes, the residence of a corporation may be either the place designated in its charter as its principal place of business, where the principal place of business is actually located or where its registered office and agent is located. Ward v. Fairway Operating Company, 364 S.W.2d 194 (Tex.1963); Sudderth v. Grosshans, 581 S.W.2d 215 (Tex.Civ.App. Austin 1979, no writ); Calborn Corp. v. Waxahachie Ind. School Dist., 540 S.W.2d 544 (Tex.Civ.App. Waco 1976, no writ); Vines v. Harry Newton, Inc., 445 S.W.2d 260 (Tex.Civ.App. Houston (1st Dist.) 1969 writ dism'd).

Venue was proper against nonresident defendant Bevill in Nueces county, texas.

Plaintiff also contends that it is entitled to maintain venue in Nueces County as to all defendants under Tex.Bus. & Comm.Code Ann. (hereinafter "DTPA") § 17.46 where "the defendant or an authorized agent of the defendant solicited the transaction made the subject of the action." That section provides that venue is proper under the DTPA "in a county in which defendant or an authorized agent of the defendant solicited the transaction made the subject of the action at bar." But, in order to establish venue in Nueces County under that particular section of the DTPA, plaintiff was required to initially allege facts sufficient to show that it was a "consumer" of "goods" or "services" within the definitions set out in the DTPA § 17.45 (Supp. 1980- 81), and to prove that the solicitation made the subject of the action took place in Nueces County. This, it did not do. Concerning the necessary allegations in order for the DTPA to apply, see Farmers and Merchants State Bank of Krum v. Ferguson, 617 S.W.2d 918 (1981); Smith v. Baldwin, 611 S.W.2d 611 (Tex.1980). With respect to the proof needed to maintain venue under the terms of the DTPA, see Otto, Inc. v. Cotton Salvage & Sales, Inc., 609 S.W.2d 590 (Tex.Civ.App. Corpus Christi 1980, writ dism'd); Frost v. Molina, 595 S.W.2d 184 (Tex.Civ.App. Corpus Christi 1980, writ dism'd).

Plaintiff's pertinent allegations concerning a violation of the DTPA read:

"... Defendants offered and sold securities to Plaintiff by means of misrepresentations and untrue statements of material fact and/or omissions to state a material fact or facts necessary in order to make statements made not misleading...."

This petition alleges a claim for relief from misrepresentations occurring during the sale of securities. It does not allege that plaintiff is a "consumer" of "goods."

A "consumer" is one who purchases or leases goods or services. DTPA § 17.45(4) (1980). "Goods" are tangible chattels or real property purchased or leased for use. DTPA § 17.45(1) (1980). As stated by Chief Justice...