Ladner v. Reliance Corp.

• Decision Date: 01 December 1955
• Docket Number: No. 6012,6012
• Citation: 288 S.W.2d 129
• Parties: N. W. LADNER, Appellant, v. RELIANCE CORPORATION et al., Appellees.
• Court: Texas Court of Appeals

Page 129

288 S.W.2d 129

N. W. LADNER, Appellant, v. RELIANCE CORPORATION et al., Appellees.

No. 6012.

Court of Civil Appeals of Texas, Beaumont.

Dec. 1, 1955.

Rehearding Denied Dec. 30, 1955.

Tonahill & Fortenberry, Jasper, for appellant.

Oster & Kaufman, Dallas, Norman, Rounsaville & Hassel, Jacksonville, for appellees.

WALKER, Justice.

The appeal is from an order sustaining pleas of privilege.

The suit was for an injunction and an accounting. Plaintiff alleged, in substance, that on or about December 27, 1952, his father, J. J. Ladner, had granted to him for ten years the exclusive right to manufacture and to sell in Texas a certain substance which was, in formula, a trade secret and had, at the same time and for the same term, granted to his sister and her husband, Mrs. Margueritte A. Newman and Arthur A. Newman, the exclusive right to manufacture and sell this product in certain other states of the United States, and that Mrs. Newman and her husband had made a covenant for plaintiff's benefit, as a part of this transaction with plaintiff's father, not to compete with the plaintiff in Texas; that Mrs. Newman and her husband had nevertheless sold the product in Texas, although under a different name, in competition with the plaintiff, and had thereby breached their covenant; and that they did this 'personally and through the instrumentalities' of three corporations, namely, Reliance Corporation (of Texas), Reliance Corporation (of Alabama), and National & Foreign Corporation (of Alabama). Plaintiff alleged that his own residence was in the county of suit; that Mrs. Newman and her husband resided in Alabama; and that the three corporate defendants had a common agent in Harris County, Texas, on whom service of process could be had. Plaintiff prayed that the defendants be enjoined from competing with him and that he have an accouting from them of their profits, and for other relief which need not be stated. Mrs. Newman and her husband filed an answer to the petition and so conferred venue of themselves on the trial court without objection on their part. The three corporate defendants filed pleas of privilege, the two Alabama corporations joining in one plea and the Texas corporation filing a separate plea, to be sued in Harris County where the principal place of business of the Alabama corporations and the residence of the Texas corporation were alleged to be. The plaintiff controverted these pleas, alleging that all of the defendants were necessary parties to the suit, that the trial court had venue of the suit against Mrs. Newman and her husband under Subdivision 3 of art. 1995, Vernon's Ann.Tex.Civ.Stat., and that said court had nenue of the three corporate defendants under Subdivision 29a of said statute. Plaintiff adopted his First Amended Original petition as a part of his controverting pleas and repeated certain allegations of that pleading. The issue of venue thus made was tried to the court without a jury and the pleas of privilege were by that court sustained and it is from this order that the plaintiff has taken this appeal.

At the hearing in the trial court, plaintiff adduced much evidence concerning his course of action against Mrs. Newman, apparently on the theory that the rule declared applicable to Subdivision 4 of art. 1995 in Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300, was applicable to his own combination of Subdivisions 3 and 29a, and there is authority for such procedure, as this opinion will show. However, the order sustaining the pleas of privilege has resolved all questions of fact against plaintiff and he has not assigned error to the trial court's implied findings of fact except to the very limited extent required by his contention in this court. Pertaining to that contention we find that plaintiff did prove as a matter of law that he resided in Jasper County and that the defendants Mrs. Newman and her husband resided in Alabama. We also find, however, that the plaintiff did not prove, or at least that the trial court was authorized to find that he did not prove, a cause of action against the defendants who filed the pleas of privilege, independently of or in connection with plaintiff's demand against the defendants Mrs. Newman and her husband, nor did he prove by evidence in addition to his petition that the defendants who filed pleas of privilege were necessary parties to plaintiff's demand against the Newmans.

Plaintiff now contends that the trial court erred in sustaining the pleas of privilege for these reasons: First: Venue of defendants Mrs. Newman and her husband under Subdivision 3 was established by the proof of residence which we referred to. Second: The evidence or proof which determines whether a defendant is a necessary party within the meaning of Subdivision 29a is the allegation made against him and his co-defendant held under another Subdivision of art. 1995, not the evidence by which this allegation is to be proved or disproved. He alleged a joint cause of action against all of the defendants, those held under Subdivision 3 and those who filed the pleas of privilege, and so it was immaterial whether he proved any cause of action against any of them.

The submission to the venue of the trial court by Mrs. Newman and her husband did not prove that the trial court had venue of them against the defendants of whom plaintiff claimed venue under Subdivision 29a, and we will, therefore, discuss each element of plaintiff's contention. See McDonald's Texas Civil Practice, Sec. 4.36, p. 413.

We agree with plaintiff that he proved venue of the defendants Mrs. Newman and her husband under Subdivision 3 of art. 1995 by the proof of residence to which we have referred and that, to hold venue of these defendants, it was unnecessary for the plaintiff to adduce proof of his cause of action against them. See Camtex Oil Corporation v. Huffines, Tex.Civ.App., 273 S.W.2d 471; Ward v. Davis, Tex.Civ.App., 262 S.W.2d 533. The relevant part of Subdivision 3 is the provision authorizing suit to be brought against non-residents of the state in the county in which the plaintiff resides, and concerning this the Supreme Court said in Taylor v. Wilson, 99 Tex. 651, at page 654, 93 S.W. 109, at page 111: 'The third provision covers a case, which, but for it, would not have been provided for, where the defendant is not an inhabitant of this state at all, but resides out of it. In such cases, as there is no residence in the state to be considered but that of plaintiff, it is made to fix the venue.' There is no reason in such a case for going beyond the letter of the statute and requiring any proof of the cause of action charged against the defendant non-resident.

We also agree with plaintiff that, according to the allegations of the petition, the defendants who filed pleas of privilege were necessary parties, within the meaning of Subdivision 29a, to the principal demand alleged against them and the defendants held under Subdivision 3, namely, that for injunction; but this statement is not to be understood as a holding that plaintiff is or has been entitled to protection against competition by Mrs. Newman and her husband and the other defendants, or by any of them, singly or in combination less than all.

Finally, we do not agree with plaintiff's contention that his petition is sufficient proof under Subdivision 29a that the defendants who filed pleas of privilege were necessary parties, within the meaning of Subdivision 29a, to the demand alleged against the defendants held under Subdivision 3. For his position the plaintiff cites the recent decision of the Waco court in Ward v. Davis, supra (262 S.W.2d 535), but that decision does not support plaintiff. In that case the court did say that it was not necessary for the plaintiffs before them to prove a cause of action, but the court also said that those plaintiffs had to make 'proof that the party claiming privilege is a necessary party to the suit' and then demonstrated that 'the proof adduced' established facts which showed that the defendants were necessary parties to the particular cause of action alleged. These facts were alleged, too, so the court did not have to determine whether the allegations alone were sufficient proof of venue under Subdivision 29a, but we infer that the court considered the facts proved (tieing the matter alleged against the defendants to be held under Subdivision 29a to the matter alleged against the defendants held under Subdivision 3) had legal significance, as they had previously done in Brooks Supply Co. v. First Nat. Bank, Tex.Civ.App., 242 S.W.2d 956.

There is support for plaintiff's conention in a series of decisions by the Eastland court, which held that the petition, or the pleadings, constitute the sole proof of what is a necessary party within the meaning of Subdivision 29a. See Reed v. Walker Tex.Civ.App., 158 S.W.2d 894; Crawford v. Sanger, Tex.Civ.App., 160 S.W.2d 115; Moreland v. Hawley Independent School Dist., Tex.Civ.App., 163 S.W.2d 892; Ulmer v. Dunigan Tool, etc., Co., Tex.Civ.App., 163 S.W.2d 901; Moreland v. Hawley, Independent School Dist., Tex.Civ.App., 169 S.W.2d 227; Southwestern Peanut Growers Ass'n v. Womack, Tex.Civ.App., 179 S.W.2d 371.

On the other hand, in recent decisions the Eastland court has sustained pleas of privilege because of a failure of evidence to prove allegations under which the defendant was a necessary party. See ...