International Shelters, Inc. v. Pinehurst Inv. Corp.

• Decision Date: 24 November 1971
• Docket Number: No. 646,646
• Citation: 474 S.W.2d 497
• Parties: INTERNATIONAL SHELTERS, INC., Appellant, v. PINEHURST INVESTMENT CORPORATION et al., Appellees.
• Court: Texas Court of Appeals

Page 497

474 S.W.2d 497

INTERNATIONAL SHELTERS, INC., Appellant, v. PINEHURST INVESTMENT CORPORATION et al., Appellees.

No. 646.

Court of Civil Appeals of Texas,

Corpus Christi.

Nov. 24, 1971.

Rehearing Denied Dec. 16, 1971.

Schenk & Wesbrooks, Milton E. Douglass, Jr., Wichita Falls, for appellant.

W. T. Blackburn, Corpus Christi, for appellees.

OPINION

NYE, Chief Justice.

This is a suit on a promissory note. The defendant filed its plea of privilege which was duly controverted. The trial court overruled the plea and the defendant appeals.

Phelan Sulphur Company, a Texas corporation, executed its promissory note on July 2, 1969, payable to Post Oak Investment Company or order at Corpus Christi, Nueces County, Texas. The note was signed 'Phelan Sulphur Company by John H. Phelan, III.' Post Oak Investment Company assigned its interest in the note to Pinehurst Investment Corporation, the original plaintiff in this suit. Phelan Sulphur Company did on May 27, 1970, change its name to International Shelters, Inc., the defendant herein.

On December 4, 1970, Pinehurst Investment Corporation brought this suit against International Shelters, Inc. on the note in question. International Shelters, Inc. (hereinafter called defendant) filed its plea of privilege. The plaintiff's controverting plea maintained that venue was in Nueces County because the note contained the express promise to make payment in such county (naming the county) by virtue of Subdivision 5 of Article 1995, Vernon's Ann . Civ.St. Plaintiff alleged that the defendant was in default. The trial court overruled the plea of privilege on May 13, 1971, and the defendant perfected its appeal from such order.

On June 8, 1971, Pinehurst Investment Corporation filed its second amended original petition in which it substituted O. S. Wyatt, Jr. as plaintiff for Pinehurst Investment Corporation. It alleged that on December 17, 1970, after the original suit had been filed, Articles of Dissolution of Pinehurst Investment Corporation were executed which showed that all of the assets including the note in question, were transferred to its shareholders. The Articles showed that O. S. Wyatt, Jr. was the sole shareholder of Pinehurst Investment Corporation.

Two supplemental transcripts have been filed in this appeal. They show that on June 14, 1971, the defendant filed its second plea of privilege. Plaintiff did not controvert the second plea but did on June 25, 1971, file a motion to strike the second plea of privilege. On July 6, 1971, the defendant filed a plea of res judicata and motion to transfer cause 'because of plaintiff's failure to controvert defendant's second plea of privilege.' The record now before us shows that on October 4, 1971, the trial court entered various orders striking defendant's second plea of privilege, an order denying and overruling defendant's plea of res judicata and motion to transfer the cause and orders denying and overruling defendant's plea to the jurisdiction and pleas in abatement. In the meantime, the defendant had properly perfected its appeal from the original order overruling the first plea of privilege to this Court.

The appellant, by its first and second points of error, complains of the trial court overruling its plea of privilege contending that plaintiff's second amended petition which substituted Wyatt for Pinehurst, amounted to a non suit or an abandonment of plaintiff Pinehurst's cause of action, and in effect constituted an acquiescence to the transfer of venue, especially since plaintiff did not controvert the second plea of privilege.

We recognize the general rule applied in venue cases which protects a defendant upon the taking of a non-suit. If a plaintiff takes a non-suit after filing a controverting affidavit, he thereby abandons his contest of the plea of privilege and in effect withdraws his controverting affidavit. This action amounts to an admission by the plaintiff that the defendant's plea of privilege is well taken. Tempelmeyer v. Blackburn, 141 Tex. 600, 175 S.W.2d 222 (1943); Phipps v. Reed, 219 S.W.2d 561 (Tex.Civ.App.--Eastland 1949).

The principal question to be decided is whether the substitution of O. S. Wyatt, Jr. for Pinehurst Investment Corporation subsequent to the trial court's overruling of defendant's plea of privilege constitutes a non-suit or an abandonment of Pinehurst's cause of action.

It is admitted by the appellant that no formal non-suit has been taken by plaintiff. Appellant contends that the filing of the second original petition whereby Wyatt was substituted as party plaintiff, constituted a non-suit as a matter of law regardless of the intent of the parties. Appellant indirectly argues that because of this substitution of parties, this appeal is moot and the venue should be ordered transferred.

A plaintiff may in an amended petition, substitute new parties for those named or may add new parties as plaintiffs or as defendants, so long as the addition by amendment does not unreasonably delay the trial of the case. Rule 37, Texas Rules of Civil Procedure. This rule authorizes the plaintiff to add such parties upon such terms as may be prescribed by the court. This implies a judicial scrutiny of plaintiff's justification for adding the parties. Where leave of the court has not been secured prior to the filing of a pleading, a motion to strike would be in order. However, the test that the court must apply is that unless the defendant will in some way be prejudiced, the substitution of parties should be granted. The defendant in his plea in abatement here, plead that Wyatt was a necessary party and asked that the suit be abated until he was made a party to the suit. We do not see how appellant can now complain either or surprise or of prejudice, by the substitution of Wyatt in the second amended petition.

There is no...