Griffin v. Burrus

• Decision Date: 31 October 1928
• Docket Number: (No. 3096.)
• Citation: 24 S.W.2d 805
• Parties: GRIFFIN v. BURRUS.
• Court: Texas Court of Appeals

24 S.W.2d 805

GRIFFIN v. BURRUS.

(No. 3096.)

Court of Civil Appeals of Texas. Amarillo.

October 31, 1928.

Rehearing Denied December 5, 1928.

Error from District Court, Lubbock County; Clark M. Mullican, Judge.

Suit by John R. Griffin against J. R. Burrus, in which the defendant filed a cross-action, and in which B. K. Isaacs, as trustee in bankruptcy of John R. Griffin, intervened. From an adverse judgment, John R. Griffin appeals. Affirmed.

See, also, 292 S. W. 561; 24 S.W.(2d) 810.

J. Rob Griffin and Carl W. Wade, both of Fort Worth, and Jas. A. Stephens, of Benjamin (Phillips, Trammell, Chizum & Price, of Fort Worth, of counsel), for appellant.

Bean & Klett, of Lubbock, for appellee.

JACKSON, J.

On March 19, 1926, the appellee, J. R. Burrus, filed suit, cause No. 2493, in the district court of Lubbock county, Tex., against the appellant, John R. Griffin, and on March 22d thereafter filed his amended original petition, in which he alleged that in the latter part of 1909 appellant falsely and fraudulently represented to appellee and others that 5,350 acres of rich agricultural land in the republic of Mexico could be bought for $5 per acre American money; that it would be a remunerative investment for appellee and the others to subscribe and pay for shares in a corporation to be organized with a capital stock of $250,000 or more; that on the payment of $150,000 the company would be incorporated, and that appellant would subscribe and pay for $50,000 of the capital stock, which would be valued at $1 per share and sold for $2 per share; that appellant represented that the land was situated in the state of Vera Cruz, republic of Mexico, had a navigable river frontage, was 10 to 15 miles from the Vera Cruz & Isthmus Railroad, had superb transportation and exporting facilities, and the land was very rich, fertile, and productive, with seasons continuous, every day a growing day, and every month a harvest month; that appellant represented to appellee that $150,000 of the capital stock had been subscribed and paid for, that appellant had subscribed and paid for $50,000 of said capital stock, that the land was worth and cost $5 per acre; that on said representations the appellee purchased from appellant 7,500 shares of the capital stock, for which he paid $15,000; that a corporation was organized under the laws of the state of Texas, under the name of American-Mexico Land & Cattle Company, and appellant, as president of said company and as agent and trustee for appellee, about January 10, 1910, bought said land and received a conveyance from the owners thereof; that such representations were false and fraudulent, made in Lubbock county, Tex., and made for the purpose of and did induce appellee to purchase said 7,500 shares of capital stock; that in fact not to exceed $20,000 of the money paid for capital stock was used in buying said tract of land; that there were not 150,000 shares of the capital stock subscribed and paid for; that the money actually paid was furnished by appellee and his neighbors in the vicinity of Lubbock county; that appellant did not pay for any of the 50,000 shares he claimed to have subscribed and paid for; that the land did not cost but $2 per acre; that appellant received and converted appellee's money to his own use and benefit; that appellee believed and relied on the false representations made to him by appellant, and because thereof subscribed and paid for said capital stock, which was without value and worthless; that appellee was ignorant of the falseness of said representations, had no facts to cause him to doubt the truth of such representations, the land was purchased in a foreign country, and the negotiations had in a foreign language, and the appellant repeatedly and continuously declared and affirmed to appellee the truth of said representations, concealed the true facts from appellee, and kept him in ignorance of the falsity of such representations, and appellee, though he used diligence to investigate the truth, was unable to learn until about two or three months before filing his suit of the falsity of the representations and promises made to him.

The appellant filed his plea of privilege in the district court of Lubbock county to have the case transferred to the county of his residence. This plea was properly controverted by the appellee and overruled by the trial court, from which action an appeal was prosecuted to this court, and the judgment of the trial court overruling appellant's plea of privilege was affirmed. Griffin v. Burrus (Tex. Civ. App.) 292 S. W. 561.

While the appeal from the order of the trial court overruling the plea of privilege was pending, the appellee, on the 18th day of September, 1926, obtained a judgment by default against the appellant for the sum of $30,000.

The appellant then, as plaintiff, on October 5, 1926, filed what he calls his bill of review, cause No. 2719-A, and made application to the trial court for a temporary injunction to restrain the appellee, his agents and the officers of Lubbock county, from the issuance and service of any writ of execution on said default judgment, and such temporary restraining order was granted by the court in vacation. On December 19th thereafter, the appellant filed his amended original petition in his bill of review and injunction suit, in which he alleged that the trial court was without authority to render a default judgment in said cause on the last day of the August term of court without an agreement of the parties litigant; that such default judgment was rendered upon the request of attorneys for appellee in violation of an agreement between attorneys for appellant and appellee to continue said cause, provided that appellant would answer during said term of court; that said judgment was rendered at the request of appellee in violation of a contract in writing between attorneys for the parties for continuing the case if appellant's answer was filed at that term of court; that such default judgment was not supported by the pleadings or the evidence adduced upon the trial, was not properly entered in the minutes of said court before the term was adjourned; and that the minutes of said term were not read and signed by the judge in open court before adjournment of the term.

The appellant then sets forth various exceptions he would have urged to appellee's petition in cause 2493, if he had not been prevented from doing so by the action of the attorneys for appellee, and followed such exceptions by alleging as a meritorious defense the statute of two and four year limitation against appellee's cause of action; that such cause of action, if any, would inure to the benefit of the corporation, and it was necessary for appellee to allege and prove that the officers of such corporation had been requested and failed and refused to prosecute such suit; that the appellant would have denied committing any fraud in Lubbock county or that he formed or caused to be formed any conspiracy to defraud appellee or any one else, and that he was induced to assist in the formation of the company by those associated with appellee; that $5,000 of the money invested in shares of the company by appellee was expended before he met appellant, who could in no event be responsible for said $5,000; that all the money paid to appellant by appellee was used in purchasing and paying for the land, and he expended more than $100,000 of his own funds in good faith, believing the purchase was a good investment; that, at the time of the purchase, the government of Mexico was in peace, but soon thereafter said government became torn by internal strife and rebellion, cattle were taken by armed forces, and the improvements on the land totally destroyed, which was the cause of the failure of the company; that in 1911 and 1912 the appellee, together with others, made a complete investigation of the books of the company, learned the true facts, and in 1924, more than two years before the institution of this suit, the appellee participated in a stockholders' meeting of said company and was informed as to the debts, delinquent taxes, and the facts and circumstances pertaining to the condition of the company, and was fully acquainted with all the facts relative to the transaction, and he is now estopped by reason thereof to allege such facts as of recent discovery.

The appellee, as defendant, in cause 2719-A, filed a general demurrer, denied under oath the material allegations in appellant's pleadings and motion, and alleged, in the alternative, by way of cross-action, that, if he was mistaken as to the validity of the default judgment, and it should be set aside, nevertheless he was entitled to recover in the suit and entitled to the judgment entered and to judgment against the appellant, and pleaded substantially in this cross-action the allegations contained in his amended original petition in cause 2493, on which the default judgment was rendered.

In reply to appellee's cross-action, the appellant answered by various...