Cotton v. Cooper

• Decision Date: 22 October 1913
• Citation: 160 S.W. 597
• Parties: COTTON v. COOPER.
• Court: Texas Court of Appeals

160 S.W. 597

COTTON v. COOPER.

Court of Civil Appeals of Texas. San Antonio.

October 22, 1913.

On Motion for Rehearing, November 26, 1913.

Appeal from District Court, Harris County; Norman G. Kittrell, Judge.

Action by Will Cooper against Almon Cotton and another. From a judgment for plaintiff, the defendant named appeals. Affirmed.

J. V. Meek, of Houston, for appellant. K. C. Barkley, John E. Green, Jr., and Ashley N. Denton, all of Houston, for appellee.

TALIAFERRO, J.

This is the suit of Will Cooper against Almon Cotton and G. E. Cotton to recover actual damages in the sum of $700, alleged to have been suffered by appellee by reason of the wrongful, fraudulent, and malicious conduct of the Cottons and their agents, and for $5,000 punitive damages. Appellee alleged: That the defendants, falsely claimed that he was indebted to them in the sum of $35, filed with the Houston & Texas Central Railway Company, his employer, copies of two written instruments, purporting to be assignments made by the plaintiff of portions of his salary or wages to Almon Cotton. That at the time the said assignments were filed by the defendants the said railway company had in force a custom or rule, to the effect that any employé known to have given an assignment of any part of his salary or wages should at once be discharged from its service. That although the defendants were aware of such rule at the time, and were also aware that at such time he was not indebted to them in any sum, that they nevertheless wrongfully, willfully, and maliciously, and with wanton disregard of the rights of the plaintiff, and for the purpose of procuring his discharge, filed copies of said assignments together with notice thereof with the said railway company, and that because of the acts of defendants complained of he was discharged by the said railway company from their service and his wages then due were withheld from him. Trial in the district court before a jury resulted in a verdict and judgment for plaintiff against Almon Cotton for $400 actual damages and $3,500 exemplary damages.

It is necessary, for a comprehension of the case, to recite the facts which led up to this suit and to reveal the devious and disgusting details of the methods used by those engaged in the business of extracting usury from the ignorant and helpless; but only such facts as may be necessary will be discussed.

Almon Cotton is father of G. E. Cotton. G. E. Cotton is 28 years old, and appellants' evidence impresses upon us that he is married and has four children. Almon Cotton owns and operates what he calls "loan offices" in many of the Southern states, in Louisiana, Mississippi, Alabama, Florida, Arkansas, and Texas, apparently only where ignorant negro labor is abundant. In some cities he conducted several of these agencies or loan offices, always under high-sounding names, such as the "Dixie Loan Company," or some name concealing his own identity and calculated to give to the public the impression of a corporation. In Houston, Tex., he operated the Texas Loan Company, the Empire Loan Company, the New York Loan Company, and the Eagle Loan Company. His business was to loan money on chattels and to "buy" salaries or wages. And this was his method: His own office, called "Central Office," was in one of the large office buildings of the city of Houston. His various loan companies were scattered about town. In general charge of the loan offices he had one L. H. Joyner, who was his general agent and manager, vested with full authority to act at all times. He also had "outside men" whose duty it was, among others, to advise the needy and helpless that they could always get money from one of Cotton's institutions. The interest charged upon loans seemed uniformly to be 20 per cent. per month to whites and 30 per cent. per month to negroes. Each office had positive orders not to make a "loan" upon salaries or wages, but, instead, to "buy" salaries and wages or any such part thereof as the customer should desire to sell and to take an assignment of such an amount thereof as should be "bought" together with power of attorney to Almon Cotton to collect from the borrower's employer. The advances were made in this manner: The borrower executed his assignment and power of attorney, we will say, for $19.50, and was thereupon given $15 in cash. At the end of the month he was "permitted" to collect his own salary and bring in the portion which he had pledged to the loan office. If he desired to retain the money he had borrrowed, he did not pay the 30 per cent. interest and renew the obligation. Instead, he went through the formality of paying $19.50 in cash. He then executa new obligation and assignment and received back $15 of the money paid by him. An extract from a page of the tabulation of accounts, made by the general manager for use in this suit, is as follows:

                   Received.                                Paid Back.             Difference
                12—16—08....$10.00     1—15—09....$13.00    $3.00
                 2—15—09.... 15.00     2—16—09.... 19.50     4.50
                 2—16—09.... 15.00     3—16—09.... 19.50     4.50
                 3—16—09.... 15.00     4—15—09.... 19.50     4.50
                

Appellee Cooper, in December, 1909, negotiated with appellants' office, known as the Texas Loan Company, what he thought was a loan of $10 on his salary. The contract he signed was for $13, which, instead of being in form of a loan, was written so that it appeared that he had "sold" that portion of his salary to accrue the succeeding month and also made a power of attorney for the collection of the amount by Cotton. Cooper was a negro brakeman or yardman in the service of the Houston & Texas Central Railway Company, earning about $115 per month. He could not read or write, and the paper which he signed was never read to him. Monthly thereafter, with perhaps a few exceptions, he renewed this loan in the manner above described, up to the time of beginning litigation with appellant. The amount was increased or was made less in accordance with his needs; it appearing that at least once he was entirely out of debt to Cotton. He also had some dealings with another of Cotton's loan offices. The method of doing business was always the same and the rate of interest was always the same. In August of 1911, litigation was begun between appellee and appellant in the courts of Harris county involving the transactions above mentioned. On January 2, 1912, Almon Cotton transferred all his loan business in Texas to G. E. Cotton, his son. The terms of that assignment, briefly stated, were: The consideration was $300,000 all on credit. G. E. Cotton executed his note for that sum to Almon Cotton, due on or before two years after date, and bearing 8 per cent. interest. In case the note should not be paid at maturity, G. E. Cotton agreed to convey the business to any one named by Almon Cotton and at the price fixed by him. And it was also agreed that all the moneys collected by G. E. Cotton, whether principal or interest, except necessary operating expenses and a salary of $100 per month to be retained by him for his services, should be "turned over to Almon Cotton or placed in the Commercial National Bank of Houston, Tex., to his credit." He agreed to apply such money first to payment of interest and next to discharge of the principal. Almon Cotton was a man of large means, while G. E. Cotton was then insolvent and wholly execution proof. No effort was made to show that the business, purported to have been sold to G. E. Cotton, was worth $300,000 or any other sum. At this time the litigation filed by Cooper against Almon Cotton was pending. On January 8, 1912, L. H. Joyner, who claimed he was acting under the advice of J. V. Meek, attorney for Almon Cotton, wrote upon the back of the two salary assignments referred to an indorsement, "Without recourse," to G. E. Cotton, which was then signed Almon Cotton. Joyner then filed copies of said assignments with the Houston & Texas Central Railway Company accompanied by a letter asserting that appellee was then indebted to G. E. Cotton, assignee of Almon Cotton, in the sum of $35 upon those assignments. The railway company at once discharged Cooper and retained funds due to him in the sum of $99.60 to satisfy the appellants' assignments. Further necessary facts will be stated in the opinion.

By his first assignment of error appellant contends that the court erred in not sustaining his general demurrer to appellee's second amended original petition upon the ground that the petition nowhere alleges "that the defendant acted maliciously and without justifiable cause, nor that the means adopted by the defendant were false statements or threats, or that he put in fear the plaintiff's employer so that his acts in discharging plaintiff were not voluntary."

There are three propositions presented under this assignment, all of which may state very correct propositions of law in themselves, but none of which in any sense are applicable to the law or facts in this case. In the main part this assignment of error is too abstract to be considered. In stating a cause of action against appellant it was not in any manner necessary that the plaintiff should allege that his employer was put in fear or coerced to act without its consent. The plaintiff did allege in the most positive terms that the acts of appellant were malicious, wanton, unjustified, and that all his statements were false and known by him to be false. Stronger language could hardly be used than that employed by appellee in his allegation of appellant's willful, deliberate, wanton, and malicious effort to obtain his discharge from employment because he refused to pay a debt which he alleged had been long since paid.

The first assignment of error is overruled, and so also are the second, third, fourth, fifth, and sixth, all of which question the sufficiency of the petition against general demurrer. The petition is not subject to any of the objections urged in these...