Brooks v. Parr, 8436

• Decision Date: 18 March 1974
• Docket Number: No. 8436,8436
• Citation: 507 S.W.2d 818
• Parties: T. M. BROOKS, Appellant, v. Bruce PARR, Appellee.
• Court: Texas Court of Appeals

Page 818

507 S.W.2d 818

T. M. BROOKS, Appellant, v. Bruce PARR, Appellee.

No. 8436.

Court of Civil Appeals of Texas Amarillo.

March 18, 1974.

Rehearing Denied April 15, 1974.

Gibson, Ochsner, Adkins, Harlan & Hankins (Mac W. Hancock III), Amarillo, for appellant.

Witherspoon, Aikin, Langley, Woods, Kendrick & Gulley (Thomas W. Kendrick), Hereford, for appellee.

ROBINSON, Justice.

Appellant Brooks challenges an order overruling his plea of privilege in a suit wherein appellee Parr alleges that Brooks, a corporate promoter, fraudulently induced him to borrow $50,000 and to invest that money by subscribing to the unissued shares of Agricultural Computing Company (ACC). No findings of fact or conclusions of law were filed. Appellee contends that venue was properly retained in Deaf Smith County pursuant to Article 1995, subdivision 7, Vernon's Ann.Civ.St. Reversed and rendered.

Appellant contends by points of error that the trial court's judgment should be reversed because plaintiff failed to established by a preponderance of the evidence a cause of action in fraud. The essence of his argument under these points is that there is no evidence to establish a cause of action in fraud. Under the liberal briefing rules, we have treated these as 'no evidence' points. Rules 1 and 418, Texas Rules of Civil Procedure; Woodward v. Ortiz, 150 Tex. 75, 237 S.W.2d 286, 292 (1951). Therefore, the inquiry is whether the evidence, when viewed in the light most favorable to the judgment, as a matter of law requires a conclusion contrary to the judgment. Renfro Drug Co. v. Lewis, 149 Tex. 507, 235 S.W.2d 609, 613 (1950).

Subdivision 7 of Article 1995, relied upon by plaintiff, requires that plaintiff plead and prove that the defendant committed actionable fraud in the county where the suit was filed. Coalson v. Holmes, 111 Tex. 502, 240 S.W. 896 (1922); Guerra v. Texas Employers Insurance Association,480 S.W.2d 769 (Tex.Civ.App.--Corpus Christi 1972, no writ). The plaintiff has the burden of pleading and proving by a preponderance of the evidence every element of a cause of action for fraud. These elements of actionable fraud are (1) a false representation made by the defendant; (2) reliance thereupon by the plaintiff; (3) action in reliance thereon by the plaintiff; and (4) damage resulting to the defrauded party from such representation. Madison v. Harper,395 S.W.2d 842 (Tex.Civ.App.--Amarillo 1965, no writ). It is not necessary to prove a specific amount of damages at a subd. 7 venue hearing. Cockburn v . Dixon, 152 Tex. 572, 261 S.W.2d 689, 691 (1953).

To be fraudulent, the misrepresentation must be one of present or past facts. Before a promise to do something in the future can be actionable fraud, plaintiff must additionally plead and prove that at the very time such promise was made, the promisor did not intend to carry it out. Urso v. City of Dallas, 221 S.W.2d 869, 872 (Tex.Civ.App.--Dallas 1949, writ ref'd); Morgan v. Box, 449 S.W.2d 499, 504 (Tex.Civ.App.--Dallas 1969, no writ).

By his counterpoints, Parr contends that the evidence is sufficient to support the trial court's implied findings of the existence of the elements of fraud and its implied conclusions of law that defendant Brooks committed actionable fraud in Deaf Smith County. Parr argues that Brooks, as an experienced promoter, 'worked his way upon a farmer who did not know better' for Parr declined to invest any money in the shares of ACC until Brooks told him 'there is no risk.' Parr concludes that Brooks' representation that 'there is no risk' is a representation of the future value of the ACC stock and amounts to fraud because Brooks had special knowledge upon the subject of which Parr is excusably ignorant.

We recognize that a stock salesman's representations in the form of opinion or promises concerning future returns on the stock can amount to actionable fraud if the plaintiff proves that the representations were known to be false by the salesman making them when they were made, were made to deceive the purchaser and to induce him to purchase the stock, and were relied upon by the purchaser. Russell v. Industrial Transp. Co., 113 Tex. 441, 251 S.W . 1034, 1037 (1923), 258 S.W. 462 (1924); Texas Industrial Trust v. Lusk,312 S.W.2d 324, 326--327 (Tex.Civ.App.--San Antonio 1958, writ ref'd). However, that principle does not apply to the facts of the case...