Gray Co. v. Ward

• Decision Date: 12 December 1940
• Docket Number: No. 2326.,2326.
• Parties: GRAY CO., Inc., v. WARD.
• Court: Texas Court of Appeals

145 S.W.2d 650

GRAY CO., Inc., v. WARD.

No. 2326.

Court of Civil Appeals of Texas. Waco.

December 12, 1940.

Rehearing Denied December 19, 1940.

Appeal from District Court, McLennan County, Seventy-Fourth District; Giles P. Lester, Judge.

Garnishment proceedings by Joe L. Ward against the East Texas Auto Supply Company, Beard & Stone Electric Company, Inc., and Archenhold Automobile Supply Company, as garnishees, based on a judgment by default previously recovered by Joe L. Ward against Gray Company, Inc. The Gray Company intervened to challenge the jurisdiction of the court to enter judgment in the main cause. From a judgment for plaintiff in each of the garnishment proceedings, intervener appeals. The three causes were consolidated.

Affirmed.

Scott & Wilson, of Waco, for appellant.

Conway & Scharff, of Waco, for appellee.

TIREY, Justice.

This is an appeal from three judgments in garnishment in favor of Joe L. Ward, appellee. These judgments are, respectively, Joe L. Ward against East Texas Auto Supply Company, Beard & Stone Electric Company, Inc., and Archenhold Automobile Supply Company as garnishees, and by order of this court these three causes were consolidated under the above number, because the sole question involved is the validity of the judgment on which the writs of garnishment are predicated. The judgment in the main cause is in favor of Joe L. Ward against Gray Company, Inc., a corporation, organized under the laws of the state of South Dakota, with its office and principal place of business located at Minneapolis, Minnesota. Plaintiff alleged that Jim Sampson of Tarrant County was the agent of said defendant corporation and service was had upon him. Hon. Frank M. Wilson of the Waco Bar, in the capacity of amicus curiae, averred that the court did not have jurisdiction of the defendant for substantially the following reasons: That the defendant was a foreign corporation engaged wholly in interstate commerce and was not doing business in Texas; that Jim Sampson was not an agent of defendant; that it did not have a permit to do business in Texas; and that it had neither employees nor property in Texas. The court heard evidence on the matters raised by amicus curiae, and, upon a motion of plaintiff to correct sheriff's return, entered an order overruling the contentions raised by amicus curiae and granted plaintiff's motion to amend the return and found that the Gray Company, Inc., the defendant, was subject to the jurisdiction of the court and that Sampson was such agent of the defendant upon whom service of citation could be had. Gray Company, Inc., entered no appearance in the main case, whereupon judgment was entered by default in favor of Joe L. Ward against defendant for the amount sued for (after hearing evidence on plaintiff's claim). Thereafter, Joe L. Ward instituted garnishment proceedings against the above named garnishees. Each garnishee answered and Gray Company, Inc., filed its plea of intervention in each of said garnishment proceedings, and in each plea raised the question that the judgment in the main cause was void for want of jurisdiction of the trial court to enter the same, because (a) defendant, a foreign corporation, was not doing business in Texas; and (b) Sampson was not an agent (or proper agent) for service of process and that the service upon him was insufficient to confer jurisdiction. It has long been the rule in Texas that the defendant in the main suit has the right to appear in a garnishment suit and make his own defense. See Kelly v. Gibbs, 84 Tex. 143, 19 S.W. 380, 563; Hale County State Bank v. Bray, Tex.Civ.App., 97 S.W.2d 337, point page 339; 17 Tex.Jur. 206, par. 29; Missouri Pacific Ry. Co. v. Whipker, 77 Tex. 14, 13 S.W. 639, point page 640, 8 L. R.A. 321, 19 Am.St.Rep. 734; Revised Statutes of 1925, Art. 4094; Continental Supply Co. v. Carter, Tex.Civ.App., 13 S.W.2d 927.

Trial of the garnishment cases was without the intervention of a jury. The court found in favor of plaintiff, Joe L. Ward, against the respective garnishees and in each judgment made the finding that the judgment in the main case was valid and unsatisfied. The intervener has appealed and has assailed the judgment of the trial court on the grounds raised by it in its pleas of intervention, as hereinbefore stated.

The first question presented is: Was Gray Company, Inc., doing business in Texas? Joe L. Ward, plaintiff, testified in substance, as follows: That he had been in the wholesale automotive accessory and equipment business in Waco, Texas, for approximately 22 years; that he had known Jim Sampson 15 years as a salesman representing the Gray Company, Inc., of Minneapolis, Minnesota, defendant in the main suit; that since 1930 down to the present time, said company had been maintaining service of the equipment it sold in Texas; that Jim Sampson carried with him equipment, replacement parts and tools for the purpose of servicing defective equipment sold by said company and that Jim Sampson did actually service defective equipment formerly owned by said company, and sold by it to jobbers and wholesalers and their trade; that he (Ward) would take the matter of servicing the defective equipment up with the Gray Company, Inc., and that it would send Sampson to service it; that Sampson made adjustments on accounts for merchandise sold; that Gray Company, Inc., had on two different occasions maintained exhibits in the state of Texas, one of which was at Houston (at a county fair) during the first part of the year 1939, at which time an executive officer of the company was present, and that it had a great amount of its merchandise and equipment on exhibit (covering its entire line), and that said company was soliciting business and taking orders in conjunction with the jobbers handling its merchandise, which merchandise was sold to service stations, car dealers and garagemen. It was at this exhibit that Ward made his agreement with an executive officer of the company and Jim Sampson to discontinue the sale of the line of products of Gray Company, Inc., and return such of its equipment as he had on hand, and out of this agreement the controversy in the main suit arose.

On October 3, 1935, L. L. Gray, general manager of Gray Company, Inc., wrote plaintiff as follows:

"Your letter of September 3rd, addressed to our accounting department, with reference to invoices covering replacement units for certain pieces of our equipment which did not work out so well, has been referred to my attention.

"Of course, it is true, we experienced some troubles with a few of the earlier pieces of our new type of equipment. To be frank about it, some of the troubles were our own manufacturing problems. These troubles, whatever they may have been, were exaggerated to some extent due to the fact that the equipment was new to our own selling organization and they lacked knowledge of, and, if you please, confidence in the units themselves because of this lack of knowledge.

"Mr. Jim Sampson spent about ten days here in Minneapolis about three weeks ago, at which time he was thoroughly schooled in these units. Jim quite frankly stated that much of the trouble he experienced could have been overcome had he been as familiar with the units earlier as he was when he left our factory here.

"Again, honestly these troubles were trivial and I write to you now to assure you that our units as we have manufactured them for the last four or five months are all you could desire or wish for in a unit of this kind. Jim Sampson will bear me out in what I claim and I urge that you do not hesitate to place the efforts of your selling organization squarely behind these automatic units of ours, including particularly the new cheaper series units we are about to announce, and which Jim has knowledge of, at any time. In fact, Jim has sold a lot of these small units and is all `hopped' up over the possibilities of same. Discuss this question with Jim upon the occasion of your next visit, and take my assurances given in this letter for whatever they are worth as to the merit of these new units of ours."

Jim Sampson, who was served with citation, testified substantially that he called on some four jobbers in the state of Texas and solicited and took orders for Gray Company, Inc.; that if said orders were accepted by said company it would ship the merchandise direct to the wholesaler and that when the merchandise so ordered and shipped was paid for, that he would then receive a commission from Gray Company, Inc.; that he made recommendations for adjustments and replacement of parts on the merchandise so sold when there was trouble with reference to said equipment, and that he did this service work on his own volition in order that this equipment might "stick"; that "if I can't make it `stick', it is returned and I do not get any commission"; ...