Commonwealth Bonding & Casualty Ins. Co. v. Bowles

• Decision Date: 24 January 1917
• Docket Number: (No. 1097.)
• Court: Texas Court of Appeals
• Parties: COMMONWEALTH BONDING & CASUALTY INS. CO. et al. v. BOWLES.

192 S.W. 611

COMMONWEALTH BONDING & CASUALTY INS. CO. et al. v. BOWLES.

(No. 1097.)

Court of Civil Appeals of Texas. Amarillo.

January 24, 1917.

On Motion for Rehearing, February 28, 1917.

Appeal from District Court, Lubbock County; W. R. Spencer, Judge.

Suit by J. C. Bowles against the Commonwealth Bonding & Casualty Insurance Company and others. From a judgment for plaintiff, defendants appeals. Judgment reversed, and defendants' plea of privilege ordered to be sustained, and the venue changed.

Ocie Speer and Marvin H. Brown, both of Ft. Worth, for appellants. Bean & Klett and W. F. Schenck, all of Lubbock, for appellee.

BOYCE, J.

This suit was brought by the appellee, J. C. Bowles, in the district court of Lubbock county, against the Commonwealth Bonding & Casualty Insurance Company, J. W. Mitchell, and C. D. Hill, receivers of said corporation, and certain individuals residing in Tarrant county, Tex., for the purpose of recovering money and canceling a note and deed of trust paid and given in payment for stock in said company. The plaintiff alleged that his subscription for the stock in said company was procured by certain false representations, the fraud being perpetrated in Lubbock county; that the note was invalid for such reason, and for the further reason that it was given in violation of the law prohibiting a corporation from issuing stock except for money paid, etc. The receiver, in due time and in proper order of pleading, filed a plea of privilege, claiming the right to be sued in Tarrant county. The defendants answered, denying the allegations of plaintiff's petition, and the receivers in a cross-action asked for judgment on said note executed by the plaintiff. It was alleged and shown upon the trial of the plea of privilege filed by the receivers that the principal office of the defendant corporation was at Ft. Worth, in Tarrant county, Tex.; that said corporation was created under the laws of the state of Arizona, for the purpose of doing a bonding, fidelity, and casualty insurance business; and that J. W. Mitchell and C. D. Hill were acting as receivers of the affairs and property of said corporation, under appointment of the district court of Tarrant county. The court overruled the plea of privilege, and, proceeding with the trial of the case, judgment was entered for the plaintiff on the merits.

C. D. Hill, one of the receivers, was discharged by order of the district court of Tarrant county, Tex., and he was dismissed from this suit, and the suit proceeded against J. W. Mitchell, as receiver.

The first assignment questions the action of the court below in overruling the plea of privilege filed by the receivers. The decision of this question depends on the construction to be placed on article 2147 of the Revised Statutes, which provides that:

"Actions may be brought against receivers of a corporation in the county where the principal office of said corporation may be located," etc.

Ordinarily, the word "may," as used in legislative enactments, denotes permission, and will not be construed as having a mandatory effect, though it will be given such meaning if such appears to have been the intention of the Legislature, to be ascertained from an examination of the whole of the enactment on the subject under regular rules of construction. Rains v. Herring, 68 Tex. 468, 5 S. W. 370; San Angelo National Bank v. Fitzpatrick, 88 Tex. 213, 30 S. W. 1053; People v. City of Syracuse, 59 Hun, 258, 12 N. Y. Supp. 890; Bass v. Doughty, 5 Ga. App. 458, 63 S. E. 516; In re Chadbourne's Est., 15 Cal. App. 363, 114 Pac. 1012; Words and Phrases, 1st Series, vol. 5, pages 4421, 4446; 2d Series, vol. 3, pp. 335, 337, 345; Minor v. Mechanics' Bank, 1 Pet. 46, 7 L. Ed. 55.

In the absence of statutory law, a receiver could only be sued with the permission of the court appointing him. The Legislature, by an act of 1887, providing for the appointment of receivers and regulating proceedings under such appointment, provided by section 8 of such act that such receivers might "sue or be sued in any court of this state having jurisdiction of the cause of action, without first having obtained leave of the court appointing such receivers to bring said suit." Gammels Laws, vol. 9, p. 918. Section 9 of said act contains the provision of article 2147, Revised Statutes, as above quoted. These two sections of the act of 1887 appear on our statutes as sections 2146 and 2147, respectively.

Under these circumstances we think it was the intention of the Legislature in granting the permission to sue, which had not theretofore existed, to permit suits only in the venue prescribed. As we construe the law, article 2146 was intended to grant general permission to bring the suits without obtaining order of the court appointing the receiver, and article 2147 was intended to fix the venue of such suits; the filing of the suit itself is not a matter of right except under the permission granted by the statutes, and this permission should not be extended beyond the terms of the statute granting it. This construction of the statute has been adopted by the Court of Civil Appeals for the Fourth District, in the case of Kirby Lumber Co. v. McLendon, 56 Tex. Civ. App. 279, 120 S. W. 227.

As this suit is to remove cloud from title to land in Lubbock county, and plaintiff alleges that he was induced to execute the contract which is sought to be canceled by fraud alleged to have been committed in Lubbock county, the question then arises as to whether the respective provisions of the statute, with reference to venue in such cases (R. S. art. 1830, subds. 7, 14), will control, or the provision with reference to suits against receivers as we have construed it. The two provisions referred to are subdivisions of article 1830, and such article is styled by the statute, "Venue, General Rule." Subdivision 30 of this same article provides that:

"Whenever, in any law authorizing or regulating any particular character of action, the venue is expressly prescribed, the suit shall be commenced in the county to which such jurisdiction may be so...