Ferguson Seed Farms v. McMillan

• Decision Date: 28 June 1929
• Docket Number: (No. 1046-4969.)
• Parties: FERGUSON SEED FARMS, Inc., v. McMILLAN et al.
• Court: Texas Supreme Court

18 S.W.2d 595

FERGUSON SEED FARMS, Inc., v. McMILLAN et al.

(No. 1046-4969.)

Commission of Appeals of Texas, Section A.

June 28, 1929.

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

Action by J. E. McMillan and others against the Ferguson Seed Farms, Inc. Judgment for plaintiff was affirmed by the Court of Civil Appeals (296 S. W. 902), and defendant brings error. Reversed and remanded.

T. S. Henderson, of Cameron, F. L. Henderson, of Bryan, Owsley & Owsley, of Denton, and Jesse F. Holt, of Sherman, for plaintiff in error.

Freeman, McReynolds & Hay, of Sherman, for defendant in error.

CRITZ, J.

On the 2d day of September, 1924, J. E. McMillan, joined by his wife, executed a deed to certain gin property located in Grayson county, Texas, to Ferguson Seed Farms, Inc., a corporation, for a consideration of $25,000, evidenced by 5 notes, of the sum of $5,000 each, secured by a vendor's lien on said land and by deed of trust with power of sale. On October 7, 1924, McMillan filed suit to cancel said deed on the ground of alleged insanity at the time of its execution. Ferguson Seed Farms, Inc., in the meantime, had executed a deed of trust on this land, with other properties owned by the company, to secure a bond issue, and this suit is also to cancel this deed of trust as well as the deed. Plaintiff alleged in substance that he, while insane, conveyed to the defendant the properties here involved, which he alleged were worth $65,000, for an inadequate consideration; that plaintiff was of unsound mind and wholly lacking in mental capacity to execute a valid deed; and that he was caused to execute said deed by said diseased mental condition. McMillan further alleged that the deed was void on account of the facts aforesaid, and further pleaded that, if the deed was not void, it was voidable for the same reason. McMillan further pleaded that he had recovered from his mental derangement, and had made demand on the defendant for rescission and cancellation of the instrument. McMillan further pleaded that he had tendered the notes back to Ferguson Seed Farms, Inc., and renewed such offer in his petition.

Ferguson Seed Farms, Inc., answered by general demurrer, general denial, denying that plaintiff was of unsound mind at the time the deed was executed, and further alleged that the defendant had bought the land in good faith, and if plaintiff was of unsound mind, and afflicted with any mental derangement, which is denied, that it did not know it, and that Ferguson Seed Farms, Inc., was ready, able, and willing at all times to perform its part of the contract. The defendant also filed an application to change the venue of the case from Grayson county, which was overruled.

The case was submitted to the jury on special issues, and on the answers of the jury to these issues the court rendered judgment for McMillan, granting him the relief prayed for, and further rendered judgment in McMillan's favor for damages in the sum of $5,000, with interest from the date of the judgment. Ferguson Seed Farms, Inc., prosecuted writ of error from this judgment to the Court of Civil Appeals at Dallas, but the case was transferred by the Supreme Court to the Court of Civil Appeals at Amarillo, in equalizing the dockets of the several Courts of Civil Appeals. The Court of Civil Appeals at Amarillo affirmed the judgment of the trial court. 296 S. W. 902. The case is now before the Supreme Court on writ of error granted on application of Ferguson Seed Farms, Inc. For further statement of the case, we refer to the opinion of the Court of Civil Appeals.

Opinion.

For convenience, we will hereafter refer to McMillan as plaintiff and Ferguson Seed Farms, Inc., as defendant. The defendant made application in the trial court for change of venue, and the part of said application germane to this opinion reads as follows:

"That there exists in Grayson county, Texas, so great a prejudice against the defendant and its president, A. M. Ferguson, that it cannot obtain a fair and impartial trial in said county. That there is a combination against this defendant instigated by influential persons, by reason of which it could not expect a fair and impartial trial of this case in said county."

The plaintiff urged the following special exception to this application for change of venue:

"He specially excepts to that part of said application in which it is alleged that so great a prejudice against the president of the defendant, Ferguson Seed Farms, Inc., viz. A. M. Ferguson, exists in Grayson county, Texas, that defendant Ferguson Seed Farms, Inc., cannot obtain a fair and impartial trial in Grayson county, because the statute does not warrant changing the venue of civil cases because of any prejudice against the president or other officer of the defendant corporation, and the said allegations constitute no ground for the change of venue prayed for, and of this he prays judgment of the court."

The trial court sustained the above special exception, and heard testimony only on the other grounds set out in the application. After hearing of such testimony, the application was overruled. The Court of Civil Appeals holds that this action presents no error.

Article 2170, Rev. Civ. St. of Texas 1925, provides:

"A change of venue may be granted in civil causes upon application of either party, supported by his own affidavit and the affidavit of at least three credible persons, residents of the county in which the suit is pending, for any following cause:

"1. That there exists in the county where the suit is pending so great a prejudice against him that he cannot obtain a fair and impartial trial.

"2. That there is a combination against him instigated by influential persons, by reason of which he cannot expect a fair and impartial trial.

"3. For other sufficient cause, to be determined by the court."

The allegation contained in the application to the effect that there existed in Grayson county so great a prejudice against the president of the defendant corporation as to prevent a fair and impartial trial was clearly an allegation of fact, and not a conclusion of the pleader. Further, it was sufficient as against the above special exception. Under the very broad language of subdivision 3 of the statute, if so great a prejudice exists against the president, who is the chief officer of a corporation, as to prevent the corporation from obtaining a fair trial in that county, the venue should be changed, where application alleging such grounds is properly filed, supported, and proved. It is true that the president of the corporation and the corporation are two distinct entities in law; but, in its transactions, a corporation must always act through and by its officers and agents. In matters involving local prejudice, such prejudice against the president or a part owner of the corporation would, in many instances, be just as potent to defeat a fair trial as prejudice against the corporation itself. The purpose of the act is to guarantee to every litigant a fair and impartial trial, be such litigant a corporate or natural person, and, if local prejudice exists in any county against the officers of a corporation to such an extent that the corporation cannot get a fair trial, the venue should be changed where application therefor properly supported and proved is seasonably filed. Trimble v. Borroughs, 41 Tex. Civ. App. 554, 95 S. W. 614.

In the Trimble Case, supra, it is shown that suit was brought in Coke county, Texas, to recover a section of land situated in that county. The defendant presented a motion for change of venue and among other grounds for such change of venue alleged: "That the belief that in making the application for the purchase of the land in controversy from the state by the defendant he was acting in collusion with F. L. and R. H. Harris, for the purpose of acquiring said land for said Harrises, is so general, and there exists in this, Coke county, so great a prejudice against F. L. and R. H. Harris that the defendant cannot obtain a fair and impartial trial of this case in Coke county, Tex."

Appellee excepted to the allegations in the application with reference to prejudice against the two Harrises on the ground, among others, that they were not parties to the suit, and that prejudice against them would not authorize a change of venue, and because the question of collusion in the purchase of the land in controversy could not be litigated in the case, and was not an issue therein. The trial court sustained said exception. The Court of Civil Appeals for the Third District held that the above allegation presented a good cause for change of venue. In other words, it was held that whether the Harrises had any interest in the land was not an issue, but if the opinion that they did have such...