Killian v. Trans Union Leasing Corp.

• Decision Date: 31 August 1983
• Docket Number: No. 04-81-00362-CV,04-81-00362-CV
• Citation: 657 S.W.2d 189
• Parties: John M. KILLIAN, Appellant, v. TRANS UNION LEASING CORPORATION, Appellee.
• Court: Texas Court of Appeals

Page 189

657 S.W.2d 189

John M. KILLIAN, Appellant, v. TRANS UNION LEASING CORPORATION, Appellee.

No. 04-81-00362-CV.

Court of Appeals of Texas,

San Antonio.

Aug. 31, 1983.

Rehearing Denied Sept. 14, 1983.

Pepos S. Dounson, San Antonio, for appellant.

Don Erickson, Chicago, Ill., for appellee.

Before ESQUIVEL, BUTTS and TIJERINA, JJ.

OPINION

BUTTS, Justice.

Trans Union Leasing Corporation, appellee, sued for possession or recovery of damages for conversion of a self-propelled irrigation system after John M. Killian, appellant, obtained it in a foreclosure sale of a farm. Following a bench trial, the trial court found there was conversion and awarded Trans Union the sums of $7,500.00 actual damages, $1,155.00 prejudgment interest, and $3,750.00 exemplary damages. Assigning nine points of error, Killian challenges the sufficiency of the evidence and the authority of Trans Union, a foreign corporation, to maintain the suit. We affirm the judgment as reformed.

The record shows Killian purchased at a Medina county bank's foreclosure sale the Frio county farm of Mary and R.O. Hundley in November 1978. The Hundleys had entered into a lease agreement with Trans Union in April 1975 for a Valley irrigation sprinkler system which was installed on their farm by Peerless Equipment Company. Peerless placed the purchase order with a Nebraska manufacturer and secured financing for the unit from Trans Union, a Chicago, Illinois leasing business. The Hundleys became the lessees under a ten year lease of the irrigation system, the basis of this conversion action, from the lessor, Trans Union.

It is undisputed that Trans Union had no certificate of authority to conduct business in Texas. In his first four points of error Killian challenges the trial court's finding that the foreign corporation's suit was properly brought as exceptions under two statutory provisions. The judgment recites the following exceptions in Tex.Bus.Corp.Act Ann. art. 8.01 (Vernon 1980) as applying to Trans Union:

B. Without excluding other activities which may not constitute transacting business in this state, a foreign corporation shall not be considered to be transacting business in this state, for the purposes of this Act, by reason of carrying on in this state any one (1) or more of the following activities:

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(7) Creating evidences of debt, mortgages, or liens on real or personal property;

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(9) Transacting any business in interstate commerce;

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"Evidences of debt" include all contractual obligations to pay in the future for consideration presently received. Searsy v. Commercial Trading Corp., 560 S.W.2d 637, 641 (Tex.1977). We hold the lease agreement entered into by the Hundleys was a contractual obligation and evidence of their indebtedness.

The lease agreement expressly provided that all payments be made at the Chicago office of the lessor. Executed by Trans Union in Chicago, it further set out, "... This Lease shall be deemed to have been made and accepted in Cook County, Illinois...." The manager of Peerless testified that no agency relationship existed between his company and Trans Union, rather Peerless secured financing arrangements not only with Trans Union but also with other leasing companies as an accommodation to their customers. We agree with the trial court's finding, recited in the judgment, that Trans Union transacted business in interstate commerce, not intrastate.

When the petition of a foreign corporation does not affirmatively disclose it is a foreign corporation which cannot maintain a suit in Texas, the defendant must assume the burden of pleading and proving facts to show the corporation cannot maintain the suit. Continental Supply Co. v. Hoffman, 135 Tex. 552, 144 S.W.2d 253, 255 (1940); Jay-Lor Textiles v. Pacific Compress Warehouse Co., 547 S.W.2d 738, 740 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.). No permit or certificate of authority is required for a foreign corporation to transact interstate business. Continental Supply Co. v. Hoffman, at 255. Therefore, Trans Union is not barred from maintaining this suit by reason of article 8.18, as Killian contends. The article provides in part:

A. No foreign corporation which is transacting, or has transacted, business in this State without a certificate of authority shall be permitted to maintain any action, suit, or proceeding in any court of this State ... on any cause of action arising out of the transaction of business in this State, until such corporation shall have obtained a certificate of authority....

Since there is no evidence to show Trans Union conducted an intrastate transaction, the burden of proving facts to show the foreign corporation cannot maintain this suit has not been sustained. See Squyres Construction Co., Inc. v. Chemical Bank, 596 S.W.2d 283 (Tex.Civ.App.--Houston [1st Dist.] 1980, no writ). We overrule points of error one through four.

In points of error five, six and seven, Killian challenges the sufficiency of the evidence to prove conversion, to prove the value of the property, and to prove the conversion, if any, was willful and malicious. He says also the three findings are against the great weight and preponderance of the evidence. In reviewing a factual insufficiency point the reviewing court will consider all of the evidence in the record that is relevant to the fact being challenged. See generally, In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951). A great weight point requires a review of all of the evidence. Id. When the challenged fact is one on which the complaining party has the burden, it is properly a great weight point. 4 R. McDONALD, TEXAS CIVIL PRACTICE § 18.14 (1971). In all non-jury trials, where no findings of fact or conclusions of law are filed or requested it will be implied that the trial judge made all the necessary findings to support its judgment. Burnett v. Motyka, 610 S.W.2d 735, 736 (Tex.1980).

Conversion is the wrongful exercise of dominion and control by one person over the property of another. Waisath v. Lack's Stores, Inc., 474 S.W.2d 444, 446 (Tex.1971); Groves v. Hanks, 546 S.W.2d 638, 647 (Tex.Civ.App.--Corpus Christi 1976, writ ref'd n.r.e.). Conversion may be direct or constructive; it is concerned with possession, not title; it is complete when a person unlawfully and wrongfully exercises dominion and control over the property of another to the exclusion of the right of possession of the owner or of the person entitled to possession of the property involved. McVea v. Verkins, 587 S.W.2d 526, 530-31 (Tex.Civ.App.--Corpus Christi 1979, no writ). It is the act of conversion itself that gives a right of action and not the intention to convert. Id. at 531. Thus wrongful intent to convert another's property is not an essential element of conversion, nor is it material to any issue involved in a conversion suit except the issue of exemplary damages. Powell v. Forest Oil Corporation, 392 S.W.2d 549, 552 (Tex.Civ.App.--Texarkana 1965, no writ).

Trans Union sued the Hundleys on November 27, 1978, for rental due under the ten year lease. The Hundleys had, in the meantime, defaulted in their payments on the farm, and the trustee's foreclosure sale resulted. Killian purchased the farm at that sale and some of the property on it. Trans Union had filed their evidence of debt in the county of the Hundley's residence, which was Medina County. The bank which foreclosed on the farm was a Medina County bank. The farm was located in the near county of Frio. Killian testified there were two irrigation systems on the farm, and he thought they both were included in the sale. After he was notified on March 1, 1979, of the claim by Trans Union, Killian testified he placed the disputed unit in storage until the legal owner could be ascertained. Trans Union filed this suit on November 19, 1979. The Medina bank had financed the first irrigation system for the Hundleys in 1973, secured by a chattel mortgage. It is undisputed that Killian obtained that system at the sale.

We find there is sufficient evidence to support the finding of conversion by the trial court. Trans Union made a demand for the property but was refused by Killian. See Sunray Enterprises, Inc. v. Rosenaur, 335 S.W.2d 670 (Tex.Civ.App.--Dallas 1960, writ ref'd n.r.e.). By storing the unit, he committed an act of wrongful dominion over the property.

The lease agreement shows the irrigation unit with fixtures and insurance was valued at $18,144.86 at the time of purchase in April 1975. The vice-president of the San Antonio office of Peerless testified the fair market value of the unit, based on his field reports, to be about fifty percent of the original price. Another witness testified that in its condition, unused and rusted in places, it was worth much less, about $2,000.00.

The reviewing court may not pass upon the credibility of witnesses or the weight to be given their testimony, nor may it interfere with the fact finder's resolution of conflicts in the evidence. Benoit v. Wilson, 150 Tex. 273, 239 S.W.2d 792, 796 (1951). Nor may we substitute our conclusions for those of the trier of fact. Riley v. Crossley, 383 S.W.2d 427, 428 (Tex.Civ.App.--Houston 1964, no writ). We hold the trial court had before it sufficient evidence upon which to base its conclusion that the irrigation system was worth $7,500.00 on March 1, 1979. Further, we are unable to say, in light of all of the evidence, that the findings of the trial court are against the great weight and preponderance of the evidence as to be manifestly unjust. Points of error five and six are overruled.

We agree with Killian when he argues that his acts of conversion, if any, were not committed willfully and maliciously. In Ogle v. Craig, 464 S.W.2d 95, 97 (Tex.1971), the rule to determine whether exemplary damages may be recovered is stated:

The fact that an act is unlawful is not of itself ground for an award of exemplary or punitive...