Ladner v. Reliance Corp.

• Decision Date: 03 October 1956
• Docket Number: No. A-5759,A-5759
• Citation: 293 S.W.2d 758,156 Tex. 158
• Parties: N. W. LADNER, Appellant, v. RELIANCE CORPORATION et al., Appellees.
• Court: Texas Supreme Court

Page 758

293 S.W.2d 758

156 Tex. 158

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

No. A-5759.

Supreme Court of Texas.

Oct. 3, 1956.

Joe H. Tonahill, Jerry P. Fortenberry, Jasper, for appellant.

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

WALKER, Justice.

The principal question we are required to determine in this case, which is before us on certificate from the Court of Civil Appeals at Beaumont, is whether the allegations of the plaintiff's petition are 'the best and all-sufficient evidence' that a defendant is a necessary party to the suit under Subdivision 29a of Art. 1995, Vernon's Ann.Tex.Civ.Stat.

Appellant, N. W. Ladner, instituted suit in the District Court of Jasper County against his sister, Mrs. Margueritte A. Newman, and her husband, who reside in Alabama, and three corporate defendants, who are the appellees. The petition alleges that in 1952 Mr. and Mrs. Newman entered into a written contract with appellant's father, J. J. Ladner, by the terms of which said defendants obtained the right to manufacture and sell in all of the United States except Mississippi, Louisiana, Florida and Texas, a livestock medicine known as 'Lander's,' the formula to which is a valuable trade secret, and obligated themselves not to compete for ten years in the manufacture and sale of such product in the four excepted states; that appellees had notice of such contract and by their conduct became parties thereto; that as part of the same transaction, J. J. Ladner granted to appellant for a period of ten years the exclusive right to manufacture and sell such product in Texas; that Mr. and Mrs. Newman, personally and through appellees, and appellees under claim of right from Mr. and Mrs. Newman, have been and are producing and marketing in various sections of Texas a similar product known as '8-Plus', which is compounded from the J. J. Ladner formula; and that Mr. and Mrs. Newman have an interest, contractual or otherwise, in the corporate defendants. Appellant prayed that the defendants be enjoined from producing or marketing '8- Plus' or any similar product compounded from the J. J. Ladner formula, that appellant be adjudged the owner of all rights, royalties and trade secrets to 'Ladner's', that the defendants be required to render an accounting of profits, and for damages.

Mr. and Mrs. Newman filed a general denial. Appellees, two of which are organized under the laws of Alabama and the third under the laws of Texas, filed pleas of privilege to be sued in Harris County, the principal place of business of the Alabama corporations and the residence of the Texas corporation. Appellant's controverting affidavits assert that the suit is lawfully maintainable in Jasper County against Mr. and Mrs. Newman under Subdivision 3 of Art. 1995, and against appellees under Subdivision 29a.

At the hearing on the plea of privilege, which was before the trial court without a jury, appellant established that he resides in Jasper County and that Mr. and Mrs. Newman are residents of Alabama, and offered considerable evidence concerning his cause of action against such defendants. The trial court sustained the pleas of privilege, and this judgment was affirmed by the Court of Civil Appeals, which concluded: (1) that the suit is maintainable in Jasper County against Mr. and Mrs. Newman under subdivision 3; (2) that according to the allegations of the petition, appellees are necessary parties to the suit within the meaning of Subdivision 29a; (3) that appellant has not proved by competent evidence that appellees are necessary parties to the suit; and (4) that the allegations of the petition alone do not discharge appellant's burden of proving that the trial court has venue of appellees under the last mentioned subdivision. Tex.Civ.App., 288 S.W.2d 129.

Pursuant to a motion to certify duly filed by appellant after his motion for rehearing was overruled, the Court of Civil Appeals has certified to us the following two questions:

1. In view of the first two of our conclusions stated above, did we err in holding that the allegations of the petition alone were not enough to show, or were not proof, as a matter of law, that the trial court also had venue of the suit against appellees under Subdivision 29a of Article 1995, in combination with Subdivision 3 of said article?

2. If we did not err in this holding, then what facts alleged in the petition was appellant Ladner required to prove in order to show that the trial court did have venue of the suit against appellees under Subdivisions 29a and 3 of Art. 1995? That is, was appellant Ladner required to prove a joint cause of action against appellees and Mrs. Newman and her husband? Or only a cause of action against Mrs. Newman and her husband, the defendants who resided out of the State of Texas? Or if not these matters, then the fact or facts which make the appellees necessary parties to the cause of action against Mrs. Newman and her husband?

We answer the first question in the negative. It is incumbent upon a plaintiff who seeks to maintain venue under any exception of art. 1995 to plead and prove the facts, usually referred to as the venue facts, which bring the case within that exception. In some instances the courts by judicial construction have required the plaintiff to establish venue facts which are not specified in the statute, but as a general rule the facts which the plaintiff must allege and prove are those stated in the particular exception upon which he relies. See Compton v. Elliott, 126 Tex. 232, 88 S.W.2d 91; Stockyards Nat. Bank v. Maples, 127 Tex. 633, 95 S.W.2d 1300.

Exception 29a is one which is never considered alone, but always in conjunction with some other subdivision of the statute. A plaintiff who relies upon this exception must therefore allege and prove: (1) the venue facts which show that the suit is maintainable where brought against at least one defendant under another subdivision of the statute, and (2) that the remaining defendants, whom he seeks to hold under Subdivision 29a, are necessary parties to the suit within the meaning of that subdivision. We are not concerned at this point with the first of these requirements, and in the ensuing discussion of the manner in which the plaintiff must prove the venue facts to hold a defendant under Subdivision 29a, we assume that it has been properly established that the suit is maintainable where brought against another defendant under some other subdivision.

Whether the plaintiff must prove by independent evidence that the defendant whom he seeks to hold under exception 29a is a necessary party to the suit, is a problem which has troubled our courts of civil appeals for many years. The question has been certified to us on at least on previous occasion, but was not reached in our decision of the case. See Moreland v. Hawley Independent School District, 140 Tex. 391, 168 S.W.2d 660.

Before examining the applicable decisions of the courts of civil appeals, it is necessary to notice the case of Stockyards Nat. Bank v. Maples, supra, where it was held that the plaintiff who wishes to maintain venue under subdivision 4 must prove that one defendant resides in the county and that he has a cause of action against such defendant, and allege facts showing that the nonresident defendant is properly joined in the suit, but need not prove a cause of action against the latter. The opinion points out that the language of the subdivision names as one of the venue facts to be alleged and proved by the plaintiff that the suit is brought against two or more defendants, and that this contemplates a suit in which the defendants are properly joined. It is then reasoned that whether the defendants are properly joined is a matter which pertains to the nature of the suit, and that proof that the suit is of such a nature is supplied by the plaintiff's petition, for it is 'the best and all-sufficient evidence of the nature of the action.'

In a number of decisions the courts of civil appeals have taken the position that proof that a defendant is a necessary party to the suit within the meaning of subdivision 29a is supplied by the allegations of the plaintiff's petition. 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 District, Tex.Civ.App., 163 S.W.2d 892, 169 S.W.2d 227 decisions of Supreme Court on petition for mandamus and certified questions in Moreland v. Leslie, 140 Tex. 170, 166 S.W.2d 902; 140 Tex. 391, 168 S.W.2d 660; Ulmer v. Dunigan Tool & Supply Co., Tex.Civ.App., 163 S.W.2d 901; Monte Oil Co. v. McFall, Tex.Civ.App., 114 S.W.2d 596; Southwestern Peanut Growers Ass'n v. Womack, Tex.Civ.App., 179 S.W.2d 371. See also Dunn v. Johnson, Tex.Civ.App., 274 S.W.2d 108. In reaching this conclusion, the courts have relied primarily upon the Stockyards National Bank case, reasoning that whether a defendant is a necessary party to the suit under Subdivision 29a also pertains to the nature of the suit and is established by the allegations of the petition.

Other decisions hold, either expressly or by necessary implication, that the petition alone is not sufficient, and that a plaintiff who relies on Subdivision 29a must prove by independent evidence the facts which require the joinder of the defendant as a party to the suit. Williams v. First Nat. Bank of Midland, Tex.Civ.App., 115 S.W.2d 1209 (writ dis.); Stephenville Production Credit Ass'n v. Drake, Tex.Civ.App., 226 S.W.2d 888; Agua Dulce Supply Co. v. Chapman Milling Co., Tex.Civ.App., 37 S.W.2d 768; Brown v. Neyland, Tex.Civ.App., 62 S.W.2d 227; Safety Convoy Co. v. Largen, Tex.Civ.App., 84 S.W.2d 754 (wr. dis.); Gibson Oil Corporation v. Grayburg Oil Co., Tex.Civ.App., 40 S.W.2d 222; Thomason v. Sparkman, Tex.Civ.App., 55 S.W.2d 871. See also Ward v. Davis, Tex.Civ.App., 262 S.W.2d 533, and Stark v. Super-Cold Southwest...