James v. Eagle Rock Ranch

• Decision Date: 12 June 1957
• Docket Number: No. 10491,10491
• Parties: Edward C. JAMES et al., Appellants, v. EAGLE ROCK RANCH et al., Appellees.
• Court: Texas Court of Appeals

Page 471

304 S.W.2d 471

Edward C. JAMES et al., Appellants, v. EAGLE ROCK RANCH et al., Appellees.

No. 10491.

Court of Civil Appeals of Texas, Austin.

June 12, 1957.

Rehearing Denied July 10, 1957.

Patterson & McDaniel, Houston, for appellants.

William Kay Miller, Bagby & Winters, Austin, Tom G. Oliver, Jr., San Marcos, for appellees.

HUGHES, Justice.

This is a venue case.

Eagle Rock Ranch, a domestic private corporation, and C. B. Smith sued appellants Edward C. James, Conso Realty Co. and Eagle Rock Corporation, both domestic private corporations, in the District Court of Hays County. By their petition appellees alleged:

That pursuant to certain contracts and deeds, attached to the petition as exhibits, Eagle Rock Ranch became the owner of certain real and personal property therein described. As part of the consideration of such purchase the payment of one promissory note was assumed and certain vendor's lien notes were executed.

That prior to the execution of such instruments appellants represented to appellees, upon which representations appellees relied, that all such property was free and clear of liens and encumbrances except those specified but that appellees 'say that they have recently discovered that various persons in the vicinity of the lands involved (the names of which persons are too numerous to plead, but are well known to the defendants) claim and own rights of entry, and other easements, for use of the ranch lands set forth in the aforesaid exhibits and described therein, and by reason of which such representations, agreements, and warranties have proved to be false and untrue, and plaintiffs say that said easements and rights of entry are of numerous classes and kinds and are well known to defendants, * * *'

The nature of these rights is more fully described in an exhibit attached to the petition.

The petition contained an offer to do equity and prayed for rescission of the contract and deeds, for incidental damages and, in the alternative for damages at law.

Each appellant filed a plea of privilege to be sued in Harris County.

After hearing these pleas were overruled.

In the controverting affidavits filed by appellees to the pleas of privilege it was alleged that the representations, above referred to, were made by appellants in Hays County.

Venue in the court below is sought to be sustained under subdivisions 7, 14, 23 and 29a, Art. 1995, V.A.C.S.

We will first discuss subd. 7, supra, which fixes venue in cases based on fraud in the county where the fraud was committed.

Appellants concede that the evidence shows that they represented to appellees in Hays County that the properties were free and clear of all encumbrances except those specified. They deny that there is any probative evidence of the falsity of such representations.

The Eagle Rock Ranch consists of land which, for our purposes here, falls into three categories (1) the ranch proper, about 900 acres (2) the club property, about 20 acres and (3) subdivided lots known as Eagle Rock Ranchitos.

The Club property on which is located the Eagle Rock Ranch Club, swimming pool etc. was under lease to the Club and the conveyance to appellee Eagle Rock Ranch was made subject to the terms of such lease. One provision of this lease reads:

'During the entire term of this lease the following improvements and/or facilities of the Club, included in this lease, shall be furnished by Lessor to the members of Lessee free of any charge: The swimming pool, tennis courts; fishing privileges; use of roads, bridle paths and the airplane landing field; * * *'

The conveyance of the Ranchitos was made subject to the terms and conditions of previously recorded instruments.

These instruments are not in the record but there is verbal testimony that they provided that Ranchitos purchasers automatically became members of the Eagle Rock Ranch Club.

Also absent from the record are deeds to individual purchasers of Ranchitos.

We find, however, an affidavit in the record made by eleven Ranchito owners from which we quote:

'Each of us is an owner of property in Eagle Rock Ranchitos, Section One, and/or Eagle Rock Ranchitos, Section Two, and/or Eagle Rock Ranchitos, Section Three, according to a plat of each of the said sections now of record in the Deed Records of Hays County, Texas; or is an owner of property within the area that is commonly known as Eagle Rock Ranch and was subdivided into tracts or lots but not designated as a section. The area commonly called Eagle Rock Ranch is on Cypress Creek about 2 1/2 miles north of Wimberley, Texas.

'* * *

'We and each of us received either in person or by mail from a duly authorized agent of Eagle Rock Corporation and Eagle Rock Ranch Club, a corporation, an exact copy of Exhibit A and of Exhibit B. In addition to receiving the copies of Exhibit A and B from the duly authorized agent of Eagle Rock Corporation and Eagle Rock Ranch Club, one or more duly authorized agent of each of the two corporations assured us that the information in the brochures, marked Exhibit A and Exhibit B and attached hereto, was true and correct. In addition, there were stacks of Exhibit B placed in the lobby of the clubhouse located on the property leased to Eagle Rock Ranch Club for any one to see or to take and read at his convenience.

'Each of us says that, except for the representation made and inducements offered by the duly authorized agent or agents of Eagle Rock Corporation and Eagle Rock Ranch Club, as outlined in each of the exhibits, we, and each of us, would not have purchased the property that we now own in Eagle Rock Ranchitos, Section One and/or Eagle Rock Ranchitos, Section Two and/or Eagle Rock Ranchitos, Section Three, or in a subdivided area of the Ranch not called a Section.

'Each of us is a member of Eagle Rock Ranch Club. Exhibit 'A' contains, among other statements as to rights of property owners and members of Eagle Rock Ranch Club, the following:

"Certainly the million dollar Eagle Rock Ranch is an above average investment; yet all of Eagle Rock actually becomes a part of your easement when you buy one of the existing ranch homes or buy a lot for construction of the home of your choice.'

'Exhibit 'B' in the paragraph referring to the subdivision of areas of the ranch into lots contains this language:

"These Ranchitos are just large enough to provide plenty of space between you and your congenial neighbor--no responsibility or a lot of land to look after. But, all around, you have more than 1,000 acres of park-like ranch that's yours to play in.

"While the property outside your own Ranchito is owned by a separate corporation, Eagle Rock Ranch members have an easement over the entire ranch. In other words, members of the club have all the pleasure rights over the entire ranch property. These rights are legally binding against any owner of the property for 25 years, and are subject to renewal after that time.'

'Each of us has for a year or longer used for recreational purposes many times, frequently for long periods, the property called Eagle Rock Ranch, claiming the right to do so as an easement. The use by us as by many others, who are property owners within the ranch area, and by member of Eagle Rack Ranch Club has been based in part on the right to do so as indicated in the Exhibits A and B attached.'

This affidavit was admitted in evidence under an agreement by counsel that all exhibits attached to the pleadings of either party 'may be considered as in evidence.'

The affidavit was hearsay. None of the affiants testified. We do not interpret the agreement of counsel as admitting the truthfulness of the statements in the affidavit or as admitting that affiants would have testified to the matters sworn to in the affidavit.

Without the affidavit there is no evidence, except perhaps other hearsay statements made by witnesses as to what Ranchito owners had said about the matter, that Ranchito owners were claiming or had permanent easements over the ranch proper.

Hearsay evidence is no evidence. It will not support a judgment. Henry v. Phillips, 105 Tex. 459, 151 S.W. 533.

Appellees cite McCormick and Ray, 2d ed., Sec. 787, as authority for admitting affidavits in evidence on venue hearings. To read the text is to refute this contention. To read Winkfield v. State, 41 Tex. 148, cited as to venue one will note that a change of venue in a criminal case was involved under a statute authorizing the use of affidavits.

In view of another trial we suggest that the brochure be fully indentified by showing under whose authority it was published and circulated as this will undoubtedly bear upon its admissibility and effect.

Since, in our opinion, there is no evidence that the representations made by appellants were false there is no evidence of fraud and the requirements of showing venue under subd. 7 have not been met. See Texas Employers Ins. Ass'n v. McDaniel, Tex.Civ.App., Amarillo, 286 S.W.2d 465.

This holding likewise disposes of the attempt to invoke the provisions of subd. 23, supra. In the absence of the proof of fraud there is a failure to prove a cause of action and hence a failure to prove that the cause of action or a part thereof arose in Hays County under subd. 23. ¹ Castro Cooperative Gin Co. v. Harrison, Tex.Civ.App., Eastland, 272 S.W.2d 538.

We do not find it necessary to discuss the applicability of subd. 29a, supra, relating to retaining venue in Hays County as to necessary parties for the reason that venue as to all appellants in Hays County depends upon establishment of the falsity of the representations made as to property being unencumbered. They were all parties to the contract which stated that the property was free of 'encumbrances of every character' except those specified. If the falsity of this representation is established by competent evidence venue will be properly laid in Hays County under subd. 7, supra, as to all appellants.

There remains for us...