Horton Mfg. Co. v. Hardy Light Co.

Citation294 S.W. 320
Decision Date31 March 1927
Docket Number(No. 2023.)
PartiesHORTON MFG. CO. v. HARDY LIGHT CO. et al.
CourtCourt of Appeals of Texas

Appeal from District Court, Dallas County; Royall R. Watkins, Judge.

Action by the Horton Manufacturing Company against the Hardy Light Company and another. Judgment for defendants, and plaintiff appeals. Reversed and rendered.

Carter, Bailey & Berwald, of Dallas, for appellant.

J. E. Gilbert, and Gilbert & Hardy, all of Dallas, for appellees.

HIGGINS, J.

This suit was brought by appellant, Horton Manufacturing Company, against the Hardy Light Company, a corporatoin, and J. V. Hardy, trading as Hardy Light Company. The material allegations of the amended petition, stated briefly, are as follows: During the months of June, July, August, September, and October, 1921, and April, 1922, plaintiff sold and delivered to defendants certain goods, wares, and merchandise specified in account, for which defendants promised and agreed to pay the sum charged therefor, aggregating $2,305.42. In part payment therefor the Hardy Light Company, Incorporated, on January 6, 1922, executed and delivered its note in favor of plaintiff for $619.50, payable April 6, 1922, bearing interest at rate of 8 per cent. per annum from maturity, and containing 10 per cent. attorney's fee clause. On October 19, 1921, the defendant, Hardy Light Company, was incorporated to buy and sell goods, wares, and merchandise at wholesale and retail, which was the same character of business theretofore conducted by J. V. Hardy in the name of Hardy Light Company. At that time the defendant Hardy Light Company took over the property, or some of the property, then owned by J. V. Hardy, and succeeded to, and acquired, the business, property, contracts, and other things of value of the said J. V. Hardy in connection with the business which he had been conducting in the name of the Hardy Light Company. On October 25, 1921, November 16, 1921, and November 22, 1921, Hardy agreed and promised in writing to pay plaintiff all sums due on account of his purchases individually and under his trade-name. On the same dates said corporation in writing assumed, agreed, and promised to pay plaintiff said obligations of J. V. Hardy. After allowing credit for said note, there was a balance due upon the account in the sum of $1,107.41, and the balance due upon the note is $419.15, with interest and attorney's fees, for all of which the plaintiff sued. (The account sued upon, which by reference is made a part of the petition, shows the correct balance due to be $1,093.92.)

In due order of pleading, the Hardy Light Company set up that the matter in controversy against it was $419.15, with interest and attorney's fees, of which the county court at law alone had jurisdiction, and the plaintiff, for the purpose of conferring jurisdiction upon the district court, had fraudulently joined this demand with the open account against J. V. Hardy, for which account it was not, and never had been liable.

It also filed special exceptions of misjoinder of parties and causes of action in that the suit against it upon the note was improperly joined with the suit against Hardy upon the open account. To the merits it answered by general denial and special plea that it had never become surety for Hardy, and, if it had attempted to do so, it was ultra vires.

Hardy answered by like special exceptions as to misjoinder of parties and causes of action; general denial; and two-years statute of limitations in bar of the account sued upon.

The case was tried without a jury, the court reserving its ruling upon the plea in abatement and the exceptions until the conclusion of the trial, when it rendered judgment sustaining the plea in abatement of the Hardy Light Company, Incorporated, and dismissed the suit against it. The special exceptions of both defendants setting up misjoinder of parties and causes of action were also sustained. Upon the merits J. V. Hardy's plea of limitations was sustained, and judgment rendered that plaintiff take nothing against him.

Upon the trial the following facts were agreed to, viz.:

The account sued on was correct in so far as it represented sales and deliveries of goods, wares, and merchandise sold and delivered by plaintiff to J. V. Hardy, trading under the name of Hardy Light Company. Certain of the goods were redelivered to plaintiff by Hardy, and the corporate defendant bought them to the amount of $619.50, and in payment therefor executed the note sued on. After its incorporation, said defendant carried on and continued the same kind of business theretofore conducted by J. V. Hardy. The following correspondence was introduced in evidence:

                                 "Dallas, Tex. Oct. 25, 1921
                

"Horton Mfg. Company, Ft. Wayne, Ind. — Gentlemen: I desire to adjust all my personal affairs, paying any and all existing liabilities, and to retire from business individually under the firm name of Hardy Light Company.

"I am in debt to you several hundred dollars, which I desire to transfer to the account of the Hardy Light Company, Inc., which has prepared and filed its charter and received same.

"I hope that this will meet with your approval, and that the dealings with the new concern will be as pleasant as they have been with me as an individual, and that you will comply with this request. The officers elected are: J. V. Hardy, President; W. T. Hardy, vice president; W. A. Boatman, secretary; W. F. Carter, treasurer.

"The capital stock paid in cash is $10,000. Yours truly, Hardy Light Company, by J. V. Hardy."

                                       "November 16, 1921
                

"Horton Mfg. Co., Ft. Wayne, Ind. — Gentlemen: The writer was unable to materialize on the sale of his ranch, which was faithfully promised yesterday. We have promise from the real estate people in El Paso, who are handling the deal, that they hope to get it through next week, but, if money continues to get tighter in this country, we do not see how they are going to do it.

"This is to also call your attention to the fact we have several times asked for a transfer invoice from the Hardy Light Company as a trade-name to Hardy Light Company, Inc., for all merchandise owing and billed.

"If we recall correctly, the writer pledged to you the same obligation as now exists personally on merchandise which has been shipped.

"If you do not feel disposed to do this, you will kindly send us some blank invoices and some blank credit memos, and we will make the necessary transfer here for you, which is absolutely imperative on account of our "sales in bulk" laws in Texas.

"Trusting you will give this your immediate attention, we are yours truly, Hardy Light Company, by J. V. Hardy."

                           "Ft. Wayne, Ind. Nov. 17, 1921
                

"Hardy Light Company, Dallas, Tex. — Dear Mr. Hardy: We have yours of the 8th, enclosing trade acceptance for $105.00, which we have placed to your credit with thanks.

"We note you expect to get some money from the sale of a ranch and assure you that we will greatly appreciate at least part of it to be applied against your account.

"We note what you say in regard to the transfer, and in reply would say that we do not know exactly what you mean by this. We have always carried your account on our books in the name of the Hardy Light Company, and are doing so at the present time. If this is not proper, we wish you would kindly advise just what you wish us to do, and we will endeavor to comply with your request.

"Awaiting your further advices, we beg to remain, yours very truly, Horton Manufacturing Company, A. F. Ruhl, Ass't Treas."

Below the last quoted letter, and upon the same sheet, the following letter was written:

"Gentlemen: As have tried to explain to you the former `Hardy Light Co.' was a trade name and was owned by the writer. On Oct. 1921, `Hardy Light Co.' was incorporated for $10,000.00 fully paid — 2/c of our Texas laws goods cannot be legally sold in bulk — I advised you I held myself personally responsible so long as any obligations remained of the firm as a trade name regardless of the corporation but that I turned back to you as a tradename firm all and everything to equal your a/c & merely wanted a cr memo for the trade name firm & regular invoices for the Inc firm as they must be separate on our records — Hope you will now understand & act — If you do not as I asked you few days ago please send me some blank invoices and cr memo and we will work it out for you on our typewriter — It must be done & the sooner the better it may be for all concerned. Yours truly, J. V. Hardy,

                                "Waco, Texas. 11/22/21."
                                          "Nov. 22, 1921
                

"Hardy Light Company, Dallas, Tex. Gentlemen: Attention Mr. J. V. Hardy. In compliance with your request of the 16th, we enclose herewith invoices covering all open items in our ledger which we believe are made out in accordance to your wishes.

"If they are not — kindly tell us just exactly what you do want, and we will endeavor to comply. Yours very truly, Horton Manufacturing Company."

Hardy testified:

"I owned and...

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