Hollingsworth v. Northwestern Nat. Ins. Co.

• Decision Date: 25 March 1975
• Docket Number: No. 8251,8251
• Parties: Carolyn HOLLINGSWORTH, Individually and d/b/a Insurance Associates, Appellant, v. NORTHWESTERN NATIONAL INSURANCE COMPANY, Appellee.
• Court: Texas Court of Appeals

Page 242

522 S.W.2d 242

Carolyn HOLLINGSWORTH, Individually and d/b/a Insurance

Associates, Appellant, v. NORTHWESTERN NATIONAL INSURANCE COMPANY, Appellee.

No. 8251.

Court of Civil Appeals of Texas,

Texarkana.

March 25, 1975.

Frank L. Supercinski, Longview, for appellant.

Guy N. Harrison, Longview, for appellee.

CORNELIUS, Justice.

Appellee filed suit against appellant upon sworn account to recover $789.55 and attorney's fees. In a jury trial, appellee recovered judgment. Appellant urges twelve points of error.

Appellee's petition alleged that 'As shown in the attached statement of account, Plaintiff sold to Defendant goods, services, wares, and merchandise, which Defendant accepted and thereby became bound to pay to Plaintiff the stated price thereof, which is a reasonable, fair, and customary price.' Attached to the petition was a list of what appeared to be premiums due for certain insurance policies and the usual 'sworn account' affidavit. The appellant filed a verified denial of the account and later filed a cross-action claiming that, as agent of appellee, she had actually overpaid the amounts she owed appellee, and was therefore entitled to recover $441.48.

At the trial, appellee made no attempt to prove the allegations of its petition, but rather introduced evidence to show that it issued insurance policies to customers of appellant, and that by the terms of her agency contract appellant was obligated to pay certain premium installments which those customers owed, but had not paid, to appellee on the policies. Evidence was introduced that the amounts shown in the verified account represented such unpaid premiums. At the outset and throughout the trial, appellant vigorously objected to evidence of any such contractual obligation, claiming that it was not within the cause of action pleaded. The objections were overruled. At the close of appellee's case, appellant moved for an instructed verdict on the additional ground that appellee had failed to introduce any evidence to prove the cause of action which it had alleged. That motion was also overruled. Appellant then objected to the submission of special issues to the jury on the account, but these objections were overruled. The jury found for appellee on the issues of account as submitted and against appellant on her cross-action.

In this appeal appellant contends, among other things, that her motion for instructed verdict should have been sustained because there was no evidence to prove the cause of action which appellee alleged. Appellee contends that its evidence was sufficient to prove the cause of action alleged as a sworn account. We have concluded that appellant's motion for instructed verdict should have been granted.

The cause of action which appellee attempted to sustain by its evidence was not an action on sworn account within the meaning of Rule 185, Texas Rules of Civil Procedure. That rule applies only to actions involving the sale of goods, wares and merchandise whereby title to personal property passes from one party to another and the relation of debtor and creditor is thereby created, or where the action is for personal services rendered or for labor done or for labor or materials furnished. It does not apply to transactions between parties resting upon special contracts other than those giving rise to the transactions mentioned in the rule. Langdeau v. Bouknight, 162 Tex. 42, 344 S.W.2d 435 (1961); Meaders v. Biskamp, 159 Tex. 79, 316 S.W.2d 75 (1958); Searle-Taylor Machinery Company, Inc., v. Executive Car Leasing Company of Houston, 477 S.W.2d 696 (Tex.Civ.App. Houston 14th Dist. 1972, no writ); Mergele, d/b/a Bexar Vending Company v. Houston, Jr., d/b/a Sam Houston Vending Company, 436 S.W.2d 951 (Tex.Civ.App. San Antonio 1968, writ ref'd n .r.e.); Robinson v. Faulkner, 422 S.W.2d 209 (Tex.Civ.App. Dallas 1967, writ ref'd n.r.e.); Ball v. Cooper-Stanley Company, Inc., 413 S.W.2d 467 (Tex.Civ.App. Dallas 1967, no writ); Parmer v. Anderson, 456 S.W.2d 271 (Tex.Civ.App. Dallas 1970, no writ); Mauldin v. Sullivan, 484 S.W.2d 157 (Tex.Civ.App. Eastland 1972, no writ); Langdeau v. Bouknight, supra, was a case with facts strikingly similar to those here, except that the petition there did not rely merely upon the formal language of Rule 185, but specifically alleged the agency agreement and sought recovery under the contract provisions, with the unpaid premiums being set out in a 'sworn account'. There, the Supreme Court said, 'As to what is meant by 'sworn account', under our holding in Meaders v. Biskamp, Tex.1958, 316 S.W.2d 75, Langdeau's cause of action is not founded upon a sworn account, although he verified the same.' Although Langdeau v. Bouknight and others of the cases cited, determined the narrow issue that 'sworn account' as used in Art. 2226 means only the traditional sworn account recognized at common law, several of those cited involved the specific applicability of Rule 185, and all of them are consistent with the explicit language of the rule.

Formerly, an action in sworn account could only be founded on an 'open account' as distinguished from an 'account stated' (an agreed or liquidated amount). Wroten Grain & Lumber Company v. Mineola Box Mfg. Co., 95 S.W. 744 (Tex.Civ.App.1906, no writ). In an amendment to the statute (now Rule 185) the phrase '. . . Including claims or suits for liquidated demands based upon written contracts or business dealings between the parties' was added after the phrase 'claim for goods, wares or merchandise', in order to make accounts stated as well as open accounts included in the actions contemplated by the rule. See emergency clause (Sec. 2) of H.B. 348, 42nd Leg.Reg.Session, Gammel & Son Laws of Texas, p. 394. Glasco v. Frazer, 225 S.W.2d 633 (Tex.Civ.App.Dallas 1949, writ dism'd). The addition of such language did not, however, enlarge the rule to cover actions other than for goods sold, services rendered or labor done or materials furnished.

It is true that an action on sworn account presupposes a contract between the debtor and creditor. Dyche v. Simmons, 264 S.W.2d 208 (Tex.Civ.App. Ft. Worth 1954, writ ref'd, n.r.e.). But the contract must be for the items of liability specified in Rule 185. It is also true that a suit for insurance premiums may be brought as a sworn account, If it is for the recovery of premiums on policies sold by the plaintiff to the defendant. Rudi's Automotive Corporation v. Heeth, 509 S.W.2d 428 (Tex.Civ.App. Houston 1st Dist. 1974, no writ); Moore v. McKinney, 151 S.W.2d 255 (Tex.Civ.App. Dallas 1941, no writ); Crowe v. Union Automobile Ins. Co., 79 S.W.2d 168 (Tex.Civ.App. El Paso 1935, writ dismissed). That is not the case here. Appellee did not seek to recover premiums on policies sold to the appellant, but on those Sold to third parties.

Regardless of whether appellee's real cause of action here was properly brought as a sworn account, appellee wholly failed to prove the specific cause of action it alleged. Sworn account is not a form of fictitious pleading which will allow proof of just any cause of action for debt. It is not a substantive cause of action but is merely a rule of evidence which, if there is no proper denial, avoids the necessity of proving the correctness of the account. Meaders v. Biskamp, supra; Wilkinson v. Texas Employers' Insurance Association, 444 S.W.2d 222 (Tex.Civ.App. San Antonio 1969, no writ); McCollum v. May, 396 S.W.2d 170 (Tex.Civ.App. Dallas 1965, no writ). But proof of the contract or sale which gave rise to the account must be made As alleged. Here appellee pleaded a sale of goods, wares, merchandise and services to the appellant. There was no trial amendment or any request therefor. The proof, on the other hand, was to the effect that policies of insurance were sold to third parties and that by special contract appellant had agreed to pay the premiums therefor which the third parties did not pay.

It is elementary that a plaintiff must recover, if at all, on the contract alleged. If an essentially different contract is proved he must fail, unless the issue has been tried by consent under Rule 67, Tex.R.Civ.P. Morris v. Kasling, 79 Tex. 141, 15 S.W. 226 (Tex.1890); Island City Boating & Athletic Ass'n. v. New York & T.S.S. Co., 80 Tex. 375, 16 S.W. 112 (1891); Giant Mfg. Co. v. Davis, 121 S.W.2d 590 (Tex.Comm'n App.1938, opin. adpt.); Gilmer v. Graham, 52 S.W.2d 263 (Tex.Comm'n App.1932, holding approved); Hillmer v. Asher, 29 S.W.2d 1011 (Tex.Comm'n App.1930, holding approved); Snow v. Prince, 13 S.W.2d 342 (Tex.Comm'n App.1929, jdgmt . adpt.); West Texas Utilities Company v. Pirtle, 444 S.W.2d 202 (Tex.Civ.App. Eastland 1969, no writ); Stradley v. Southwestern Life Insurance Company, a Corporation, 341 S.W.2d 195 (Tex.Civ.App....