Leavell v. Lincoln County Mut. Fire Ins. Co.

• Decision Date: 28 September 1951
• Docket Number: No. 14382,14382
• Citation: 243 S.W.2d 223
• Parties: LEAVELL et al. v. LINCOLN COUNTY MUT. FIRE INS. CO.
• Court: Texas Court of Appeals

Page 223

243 S.W.2d 223

LEAVELL et al. v. LINCOLN COUNTY MUT. FIRE INS. CO.

No. 14382.

Court of Civil Appeals of Texas, Dallas.

Sept. 28, 1951.

J. Edwin Fleming, Dallas, Scott, Wilson & Cureton, Waco, for appellants.

Chaney & Davenport, Dallas, J. L. McGarity and Renne Allred, Jr., Austin, for appellee.

CRAMER, Justice.

This is an appeal by appellants from orders overruling their pleas of privilege. The Lincoln County Mutual Fire Insurance Company of Dallas, Texas, hereinafter called 'Lincoln,' filed its petition in the District Court against R. B. Leavell, a resident of Port Arthur, Jefferson County, Texas, who was, immediately prior to December 21, 1949, the president and treasurer of the Security County Mutual Fire Insurance Company of Port Arthur, Texas, hereinafter called 'Security.'

Also joined as defendants were the U.S. Trust and Guaranty Company of Waco, McLennan County, Texas, hereinafter called 'Guaranty,' and Lawyers Surety Corporation of Dallas, Dallas County, Texas, hereinafter called 'Lawyers,' who had theretofore executed individual fidelity bonds protecting Security against acts of fraud or dishonesty, etc., on the part of Leavell and payable to the Board of Insurance Commissioners of Texas, hereinafter called 'Board.'

Both Security and Lincoln were county mutual insurance companies organized under art. 4860a-20, Vernon's Tex.Civ.St The subject matter of the suit on its merits relates to and arises out of the 'sale' of Security to Lincoln as of January 2, 1950 whereby Lincoln reinsured the Security risks and took over the assets and liabilities of Security. Insofar as defendant Leavell is concerned, the suit is for damages alleged to have been sustained by Lincoln by reason of fraudulent representations made by Leavell to one Jordan, president of Lincoln, as to the amount of outstanding claim losses against Security as of December 31, 1949. The suit also seeks an order for an accounting to determine the amount of insurance premiums collected by defendant Leavell on 'commercial risks' which Security was not authorized by law to insure, so that in the event Lincoln suffers any monetary damage in connection with cancellation of such policies, it might know the amount of insurance premium commissions retained by defendant Leavell on such illegal risks. The suit is also one for debt in several particulars: (1) It is alleged that as of August 31, 1949 Leavell was indebted to Security in the amount of $1,366.87 and that defendant Leavell has never paid this debt; (2) that Leavell was also personally indebted to Security in the sum of $12,290, representing agent's accounts receivable and that he has not paid such sum to Lincoln, the successor to the Security; (3) that as of December 31, 1949, Security had a bank balance of $436.15 and that said sum has not been received by Lincoln; (4) damages for loss of business in the amount of $20,000 from defendant Leavell for certain alleged damaging acts and conduct subsequent to the 'sale' of Security to Lincoln. The suit also seeks to have Lincoln relieved from its obligation of paying the defendant Leavell some $24,000 represented by premium notes personally held by defendant Leavell and which notes were payable by Security to Leavell at the time of the 'sale.' In this regard the suit asks that defendant Leavell be required to prove he actually paid $24,000 to Security for the notes he holds. In the absence of such showing, the plaintiff seeks relief from this purported obligation. A total recovery of $59,642.50 is sought against defendant Leavell plus any further damages, if any, shown by an accounting.

The recovery sought against the bonding companies is $13,840.50 (items 1, 2, and 3 above), plus any additional damages shown by an accounting.

The controverting pleas sought to hold venue in Dallas County as against Leavell under subds. 4, 7 and 29a, art. 1995, V.T.C.S., and against Guaranty under the same subdivisions, plus subd. 23.

The hearing was before the court without a jury and resulted in the overruling of each appellant's plea of privilege. This appeal has been duly perfected from such orders.

Appellants alone have filed briefs, and we therefore avail ourselves of Rule 419, V.T.R.C.P., and accept appellants' statements as to the facts and the record as correct. Gonzales v. Gonzales, Tex.Civ.App., 224 S.W.2d 520.

Points 1 and 2 in appellants' brief complain of the overruling of their pleas because Lincoln failed to prove a cause of action against Leavell based on fraud in Dallas County. The evidence quoted in appellants' brief and their statement with reference thereto disclose that in December 1949 negotiations were entered into between Leavell and Jordan resulting in Lincoln taking over the assets and liabilities of Security, and Lincoln's reinsuring the liabilities of Security....