First City Mtg. Co. v. Gatling
| Decision Date | 26 November 1975 |
| Docket Number | No. 996,996 |
| Citation | 530 S.W.2d 636 |
| Parties | FIRST CITY MORTGAGE COMPANY et al., Appellants, v. Roy J. GATLING and Gatling Construction Company, Appellees. |
| Court | Texas Court of Appeals |
Ward Williford, Williford & Carlock, Dallas, for appellants.
Asa V. Bland, Atlas, Hall, Schwartz, Mills, Gurwitz & Bland, McAllen, for appellees.
This is a venue case. Roy J. Gatling and Gatling Construction Company, Inc., plaintiffs and residents of Cameron County, Texas, filed suit based upon a breach of a loan commitment contract against First Home Savings Association of Pittsburg, Pennsylvania and First City Mortgage Company of Dallas County, Texas (called defendant herein). Plaintiffs sought specific performance of the commitment contract and in the alternative damages resulting from the alleged breach of the loan commitment contract made by First Home Savings Association (called First Home) through the defendant company. Only the defendant timely filed its plea of privilege to be sued in the county of its residence, that being Dallas County. Plaintiffs controverted the plea of privilege. The trial court overruled defendant's plea of privilege from which ruling the defendant has duly perfected its appeal to this Court.
In March 1970, the plaintiff Corporation commenced construction of what will be referred to as the Tulane Apartment Project located in Brownsville, Cameron County, Texas. At this time plaintiffs were in need of financing for the project and had contacted the defendant for assistance in this matter. Prior to contacting defendant, First Home had been in contact with defendant company informing them that they had funds available to loan. An agreement was then reached between First Home and the defendant on March 23, 1973, whereby plaintiffs obtained a commitment for permanent financing from First Home. First Home's principal place of business was in Pittsburg, Pennsylvania. First Home has no offices, agents or representatives within the State of Texas, nor a license to do business in this State.
The loan commitment was in the original amount of $650,000.00 with interest at the rate of 8 3/4% For a term of 27 years. A commitment fee of $6,500.00 was paid by plaintiff, Mr. Gatling, to First Home through the defendant. This original commitment was for a period of nine months and was to expire in January, 1974, with the closing of the loan to be on or before January 10, 1974.
At the time of the expiration of the original commitment (January 10, 1974), the apartment project had not yet been completed. Although the evidence is conflicting, during the months of January through April, the loan commitment was extended on two or three more occasions and on at least a couple of these occasions there was another $6,500.00 paid by plaintiff Mr. Gatling for the privilege of receiving the extension of the loan commitment. After a renegotiation of the loan commitment between First Home and plaintiff on May 30, 1974, the amount of the commitment was reduced to $635,000.00 with the rate of interest increased to the current rate of 9 3/4%, with 1/8 of 1% To go to defendant for securing the loan. The commitment was for a 30 day period which was to expire on July 6th or 7th, 1974. As a condition to this renegotiation of the loan commitment, an additional loan commitment fee in the amount of $6,350.00 was paid to defendant by plaintiff Gatling.
On June 12, 1974, First Home wired the $635,000.00 to Cameron County Title Company to fund plaintiffs' loan. This was done as an accommodation to defendant as they requested that it be wired direct to the title company rather than having First Home wiring funds to them and First City then having to rewire them to the title company. The funds were kept by the title company during this time.
Plaintiff discovered through his superintendent just prior to closing that he had an overrun in excess of $200,000.00 of the cost of the anticipated budget for the project. After learning this, the plaintiff found that he would not have sufficient money for closing and thus sought a purchaser for the project so that he could get out of this financial dilemma. The plaintiff contacted a Mr. B. P. Newman, who was a prospective purchaser. After ensuing negotiations, a contract for sale was entered into between Gatling Construction Company, Inc. and B. P. Newman Investment Company for the purchase of the Tulane Apartment Project. The basis of the agreement was that Newman would assume plaintiffs' position. The property would be conveyed to Newman, subject to the loan and he (Newman) would provide the necessary funds to close.
Gatling and Newman approached defendant with this arrangement, but such an arrangement was not acceptable to the defendant. During these negotiations, First Home was unaware of the Newman prospective sale or the refusal of defendant to accept such an arrangement in order to close, nor were they made aware of the problems existing as to the closing.
On or about July 6, 1974, the loan commitment expired by its own terms without the loan having been closed. There was no further extension by First Home of the loan commitment. On July 10, 1974 (four days after the loan commitment had expired), defendant's attorney sent a letter to the Cameron County Title Company stating that it was his understanding that the parties were now ready for disbursement of the funds and that the title company was thereby authorized to make such disbursement. The closing still did not take place. On July 19, 1974, the president of First Home sent a telegram to the title company advising them that plaintiffs' commitment expired July 6, 1974, and they absolutely forbid the closing of the mortgage and distribution of the funds. First Home requested the immediate return of the funds. On or about August 1, 1974, the funds were wired back to First Home in Pennsylvania.
The plaintiffs then filed suit against the defendant First City and First Home alleging that they had breached their loan commitment contract with plaintiffs and therefore plaintiffs sought equitable relief in the nature of specific performance. In the alternative, plaintiffs sought damages for the fees paid for the commitment and the extension thereof in the total amount of $28,850.00, damages for the wrongful breach of the commitment which prevented the sale to B. P. Newman resulting in damages in the sum of $115,000.00, and other relief.
The defendant filed its plea of privilege to be sued in Dallas County, the county of its residence. Plaintiffs controverted defendant's plea of privilege. The trial court found venue to be proper in Cameron County under Subdivision 5, Art. 1995 as to First Home and as to defendant First City under Subdivision 29a, Art. 1995. The trial court held that defendant First City was a necessary party to plaintiffs' action against First Home. Defendant appeals from that ruling.
The defendant in its points of error claims that the trial court erred in overruling its plea of privilege because: 1) the defendant did not contract in writing to perform the alleged obligation sued on in a particular county, that county being Cameron, expressly naming such county, or a definite place therein (V.A.T.S.1995, Subd. 5); 2) that the defendant is not a necessary party to this suit because Gatling may obtain complete relief to which he may be entitled in this lawsuit under the facts of the case against First Home; that because First Home is properly sueable in Cameron County, both defendants are not needed in this suit to afford plaintiffs complete relief. (V.A.T.S.1995, Subd. 29a).
The courts in Texas have consistently held that a person's right to be sued in the county of his residence is a valuable right and should never be denied except upon clear and convincing proof that the alleged cause of action comes within an exception to Article 1995. City of Mineral Wells v. McDonald, 141 Tex. 113, 170 S.W.2d 466 (1943); Shaw v. Allied Finance Company, 161 Tex. 88, 337 S.W.2d 107 (1960); Stanley v. Savage, 489 S.W.2d 461 (Tex.Civ.App.--Corpus Christi 1972, no writ). The plaintiff has the burden to allege and prove the facts he relies upon to bring his case within an exception to the general rule. Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69 (1945); Stanley v. Savage, supra; Socony Mobil Company, Inc. v. Southwestern Bell Telephone Co., 518 S.W.2d 257 (Tex.Civ.App.--Corpus Christi 1974, no writ).
In order for the plaintiffs to maintain venue in Cameron County, Texas, under Subdivision 5, proof of the existence of a cause of action is not required. The single fact issue that plaintiff was required to prove was that the defendant First Home contracted in writing to perform the obligation sued upon in the county of the suit and that such instrument of writing expressly named that county, or a definite place therein, as the place where the obligation was to be performed. Petroleum Producers Co. v. Steffens, 139 Tex. 257, 162 S.W.2d 698 (1942); Vahlsing, Inc. v. Esco, Ltd., 496 S.W.2d 652 (Tex.Civ.App.--Corpus Christi 1973, writ dism'd). If the written instrument states a definite place where the contract is to be performed, such definite place may be identified as being located within a particular county by extraneous proof. Burtis v. Butler Bros., 148 Tex. 543, 226 S.W.2d 825 (1950); Vahlsing, Inc. v. Esco, Ltd., supra.
In defendant's first point of error, it complains not of venue found under Subdivision 5...
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...or (b) which are established as a matter of law by the allegations of the petition." See also First City Mtg. Co. v. Gatling, 530 S.W.2d 636 (Tex.Civ.App. Corpus Christi 1975, writ dism'd); Loyd W. Richardson C. C. v. Corpus Christi State Nat'l. Bank, 513 S.W.2d 287 (Tex.Civ.App. Corpus Chr......