Chandler v. Butler

• Decision Date: 10 November 1955
• Docket Number: No. 6840,6840
• Citation: 284 S.W.2d 388
• Parties: H. E. CHANDLER, Appellant, v. Thomas W. BUTLER, Appellee.
• Court: Texas Court of Appeals

Page 388

284 S.W.2d 388

H. E. CHANDLER, Appellant, v. Thomas W. BUTLER, Appellee.

No. 6840.

Court of Civil Appeals of Texas, Texarkana.

Nov. 10, 1955.

Rehearing Denied Dec. 8, 1955.

R. T. Wilkinson, Leonard Passmore, Mt. Vernon, for appellant.

Nelson & McCleskey, Harold O. Harriger, Lubbock, for appellee.

FANNING, Justice.

This is an appeal from an order sustaining a plea of privilege. Dr. H. E. Chandler, a resident of Franklin County, Texas, sued Thomas W. Butler, a resident of Lubbock County, Texas, alleging that Butler or his agents and employees, acting within the scope of their employment, had by fraudulent representations made in Franklin County, Texas, induced Dr. Chandler to sell to Butler certain shares of stock; and sought recovery of damages both under Article 4004, R.C.S., and in the general sense. The plea to be sued in Lubbock County was seasonably filed and controverted on the ground that Butler (either in person or through his agents or employees acting within the scope of their employment) had committed a fraud on the plaintiff in Franklin County, Texas, within the meaning of exception No. 7, Article 1995, R.C.S., Vernon's Ann.Civ.St. art. 1995. On the hearing the plea of privilege was sustained. Appellant, Dr. H. E. Chandler, has appealed.

Appellant contends in essence that the trial court erred in sustaining defendant's plea of privilege because the pleading and evidence show that the defendant (either in person or through his agents or employees acting within the scope of their authority), in Franklin County, Texas, made a false and fraudulent representation relied on by plaintiff as to the value of the stock Butler purchased from plaintiff Chandler, which induced plaintiff to sell his stock for $9,850, when it had a market value of $14,442.50. Appellant in connection with the above contention also contends in essence that fraud may be shown by an affirmative statement or by artifice and concealment; that a representation need not be a direct lie in order to constitute remedial fraud and that a false representation may consist of a deceptive answer or any other indirect or misleading language. The essence of appellant's contentions is that under the pleadings and the undisputed evidence in the case plaintiff pleaded and proved a case of fraud on the part of appellee against appellant, committed in Franklin County, Texas, and which damaged appellant.

Appellee contends in essence that: (1) There was no showing that any fraud was committed; (2) that there was no showing that appellee was in Franklin County at the time of the alleged fraud; (3) that there was no showing that the parties involved in the transaction were the agents, employees or representatives of the appellee; and (4) that the fact issues were presumed to have been found in favor of appellee inasmuch as no findings of fact or conclusions of law were filed by the trial court.

Defendant's plea of privilege and plaintiff's controverting plea were introduced in evidence. The defendant, Thomas W. Butler, did not appear in person and did not testify at the hearing. Neither did Butler offer in evidence any testimony from either of the two parties (one of whom may have been Butler himself) who purchased for him the stock of Dr. Chandler. The only evidence offered in behalf of Butler was the testimony of his attorney, whose entire testimony was as follows:

'My name is G. H. Nelson. George W. McClesky, who signed the affidavit, is one of the attorneys, and was one of the attorneys at the time of the execution of the plea of privilege representing the Defendant Thomas W. Butler who resided in Lubbock County, Texas, at the time of the alleged offense and at this time.'

The following witnesses testified on behalf of the plaintiff: Dr. H. E. Chandler, plaintiff, L. D. Lowry, Mrs. H. E. Chandler and J. H. Conley.

The plaintiff, Dr. H. E. Chandler, testified that he was 79 years of age, a medical doctor who had been practicing medicine since 1902, was a resident of Franklin County, and had resided there about 30 years, that the only business or calling that he had ever engaged in was the practice of medicine; that the only stock that he had ever owned was Franklin Life Insurance Company stock (except a little in another life insurance company which he still owned at the time of the trial); that on April 13, 1954, he owned common stock in Franklin Life Insurance Company and on that date he was contacted at his home in Mt. Vernon, Franklin County, Texas by two men, relative to selling his common stock in Franklin Life Insurance Company, that the men were strangers to him and he had not seen them before. He testified that the men introduced themselves to him and that 'I think one of them was Thomas W. Butler.' We quote further from Dr. Chandler's testimony as follows:

'Q. Do you have any recollection of what the name of the second individual was? A. No, I don't.

'Q. With which one of those men did you talk primarily? A. It was Butler.

'Q. Well, when they came to your door did they state the purpose of their calling on you? A. After they came in and sat down they did.

'Q. What was that purpose? A. They said they understood that I had stock in the Franklin Life Insurance Company.

'Q. Did they state how they learned that you owned such stock? A. No, they didn't.

'Q. What else did they say? A. They told me they wanted to buy some stock in that company, and they had made a deal with a millionaire to buy it for them, to buy stock for him.

'Q. Did they say they were buying it for the millionaire? A. That was the purpose.

'Q. State whether or not they asked you if you would be interested in selling your stock in Franklin Life Insurance Company. A. Yes.

'Q. How many shares did you own in the company at that time? A. Two hundred eighteen shares.

'Q. When they asked you if you would be willing to sell your stock what reply did you give? A. I told them I might do so if I could get a good value.

'Q. Did you at that time know the market value of the stock? A. No, I didn't.

'Q. State whether or not you had any notion whatsoever as to the market value of that stock? A. No, I had no idea.

'Q. Well, state whether or not you inquired of the two men as to the market value of the stock? A. Well, when he asked me if I would sell I told him I might do so if I could get something like market value for it.

'Q. State whether or not you asked them if they knew the market value of the stock? A. I am not so sure that I asked them that, only to tell them that I would expect market value.

'Q. Did you ask them what the stock was worth? A. Well, when I told them about the market value they said We are paying $45 a share.

'Q. What interpretation did you place on that reply at the time? A. Well, I expected what they meant by that was that was the market value.

'Q. Did they make another offer for the stock that afternoon? A. I told them there after they figured up what that much would be there, I said how about $10,000 for it instead of Ninety-eight hundred and something, and he figured there awhile.

'Q. You say he figured, what do you mean by that? A. He took a paper and pencil and was figuring there, and then he said No, and told how much he would give but that was all I can do.

'Q. How much was it he offered for your stock then? A. It was up close to $10,000 and that is the reason I asked them if they couldn't make it $10,000.

'Q. Why did you ask him to make it $10,000? A. Because it was pretty close to that and we hadn't yet traded.

'Q. Now, after he did the figuring there in your office did he make a better offer on the stock than he had first made? A. He made some better offer, but not much, and he said that is all I can do.

'Q. Did the two men state where they lived? A. At Lubbock.

'Q. I will ask you whether or not they made any mention of having bought Franklin Life stock from other persons? A. Yes, they did. In the argument persuading me to sell they said they had made several people happy and some of them had paid their mortgages off on their places.

'Q. Their statement that they were making people happy buying their stock, what significance did you attach to that? A. Well, I thought they were satisfying those people that sold that way.

'Q. I will ask you whether or not either of them made mention of what they had paid those other people for their stock? A. They didn't say how much.

'Q. I will ask you whether or not you thought they were paying you what they had customarily been paying for your stock? A. Yes, naturally I would think that was a good square deal, if they had bought those people's property and they were happy over it.

'Q. I will ask you whether or not you accepted their offer to buy your stock? A. I finally did, yes.

'Q. And how much per share did they pay you for stock? A. A little more than $45 I understand, I don't remember exactly to the dollar.

'Q. Was it less that $46 a share? A. I don't know about that, it all amounted to-I don't remember just exactly the dollar it did amount to.

'Q. Approximately what was the total amount they paid you for your 218 shares? A. Nine Thousand Eight Hundred Fifty Dollars.

'Q. That was the total consideration that they paid for your shares? A. The best I remember.

'Q. How was payment made, by check or cash? A. By check.

'Q. Did they have a check already made out, or was the check filled out in your office, or how? A. He filled that check out in the office.

'Q. One of the two men did? A. Yes, I believe it was Butler, the man that signed the check, Thomas W. Butler.

'Q. What did you do with the check when they filled it out? A. I told him we would have to investigate the check and he said he would pay the telephone bill, and we telephoned the bank.

'Q. Where was the bank located? A. Here in Mt. Vernon.

'Q. Why did you call the Mt. Vernon bank? A. I called the Mt. Vernon bank and asked him to-I believe that he talked to the banker.

'Q. Who talked to the banker? A. Butler.

'Q. That is the banker in the...