Business Men's Oil Co. v. Priddy

• Decision Date: 18 April 1923
• Docket Number: (No. 416-3837.)
• Citation: 250 S.W. 156
• Parties: BUSINESS MEN'S OIL CO. et al. v. PRIDDY.
• Court: Texas Supreme Court

250 S.W. 156

BUSINESS MEN'S OIL CO. et al. v. PRIDDY.

(No. 416-3837.)

Commission of Appeals of Texas, Section A.

April 18, 1923.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Action by W. M. Priddy against the Business Men's Oil Company and others. Judgment abating the action was reversed by the Court of Civil Appeals (241 S. W. 770), and defendants bring error. Affirmed.

See, also, 248 S. W. 408.

H. C. Ray and Stanley Boykin, both of Fort Worth, for plaintiffs in error.

Martin & Oneal, of Wichita Falls, for defendant in error.

RANDOLPH, J.

From a judgment in the district court of Wichita county sustaining a plea in abatement in this case, defendant in error, hereinafter styled plaintiff, appealed to the Court of Civil Appeals at Amarillo (241 S. W. 770), and that court reversed the case, and the Supreme Court granted the writ of error herein.

This suit was brought by plaintiff in the district court of Wichita county against the Business Men's Oil Company, a trust estate composed of W. E. Austin, J. J. Walden, S. M. Harrison, Roy J. Beard, J. F. Foster, A. W. Jonte, T. R. Hayes, R. H. Tash, O. F. Olmstead, residing in Tarrant county, and J. M. Palmer, who resides in Wichita county, as defendants, upon two notes alleged to have been executed by such defendants. Prior to the filing of this suit in Wichita county the defendants, with the exception of J. M. Palmer, had filed suit for rescission and cancellation of the notes herein sued on in the district court of Tarrant county against Priddy, the plaintiff in this cause. In their petition in the Tarrant county cause the defendants alleged that J. M. Palmer, as the agent of Priddy, had made certain fraudulent representations with reference to, and involved in, a contract for the sale of an oil lease upon which the notes herein sued on were based, such as, if true, would avoid the contract and the notes. The defendants herein did not make J. M. Palmer, their coobligee on the notes, and who had also signed the contract with them, a party plaintiff or defendant in the Tarrant county cause, and did not in their petition filed in said cause allege any reason or excuse for not doing so. However, in their plea in abatement filed in this cause they set out their petition in the Tarrant county case in hæc verba, and further alleged that there was no necessity for making Palmer a party to the Tarrant county suit for the reason that he was acting in the matter of the sale of the oil lease and of the making of the contract and the notes as the agent of Priddy, and that he (Palmer) was wholly insolvent.

No statement of facts has been sent up with the record, but the findings of fact and conclusions of law filed by the trial court are in the record, and other statements will be made by us from this record as are needed to sustain our rulings herein.

The correctness of the trial court's judgment in sustaining the plea in abatement is solved by a decision of the questions: (1) Did the plaintiff have the right of election of a forum before which his suit was to be tried? and (2) was this right taken from him by the defendants having filed a prior suit for rescission and cancellation of his cause of action in the district court of Tarrant county?

It is true that a party who is sued may file a cross-action in such suit and secure any relief he may be entitled to in law or equity, but that fact does not in itself compel him to present such cause of action in that particular suit. 1 R. C. L. last part of section 5, p. 15. Such party has the right to insist upon the exercise of his election of his forum for trial, and this privilege should not be taken from him unless it is clear that the law requires that he surrender that right and litigate his cause of action in a forum chosen by his adversary.

In adjudicating the rights of parties under plea of privilege, the fact that the party pleading privilege has the right to present his cause of action or defenses to the tribunal before which he is haled has never been held by our court as determining the question of jurisdiction. In the case at bar the plea in abatement sets out the petition filed in the Tarrant county district court. It does not appear from that petition that there were any reasons or excuses alleged for not making Palmer a party, and yet it shows him to have been a full participant with the defendants in all the transactions. In the plea in abatement the defendants do allege as their reason and excuse for not making Palmer a party in the Tarrant county case that he was the agent of Priddy, and that he was wholly insolvent. They thus made these issues of fact before the trial court, and upon the hearing of the plea in abatement the Wichita county district court held adversely to the defendants, and found expressly that Palmer was not the agent of Priddy, and that he was not insolvent. This finding by the trial court destroys the issues made by the defendants for not joining Palmer in the suit, and, as the defendants did not contest these findings, they have become res adjudicate. For that reason, and for the further reason that defendants' petition in the Tarrant county case in no wise excuses or accounts for their failure to make Palmer a party, we will consider the case from the standpoint of Palmer's being left out of the case without excuse, explanation, or reason.

We have reached the conclusion that Palmer was a necessary party in the defendants' suit to rescind and cancel the contract and notes, and that his absence from the suit, either as plaintiff or defendant, violates the requirement that in such suits all parties who are interested in the subject-matter of the suit must be made parties to such suit, and we will discuss some of the authorities we rely on to sustain our conclusion.

A judgment or decree in an action for the cancellation of a written instrument operates in personam rather than in rem. 3 R. C. L. § 3. If this is correct, before such judgment or decree could operate upon the interested parties—those who are interested in the contract —they must be brought into court by the terms of the petition and the...