Leonard v. Burton

• Decision Date: 08 November 1928
• Docket Number: (No. 2197.)
• Citation: 11 S.W.2d 668
• Parties: LEONARD et al. v. BURTON et al.
• Court: Texas Court of Appeals

11 S.W.2d 668

LEONARD et al. v. BURTON et al.

(No. 2197.)

Court of Civil Appeals of Texas. El Paso.

November 8, 1928.

Rehearing Denied December 13, 1928.

Appeal from District Court, Tarrant County; H. S. Lattimore, Judge.

Action by J. E. Burton and others against J. M. Leonard and others. Judgment for plaintiffs, and defendants appeal. Affirmed.

Houtchens & Clark, of Fort Worth, for appellants.

M. B. Harris and Chas. Mays, both of Fort Worth, for appellees.

HIGGINS, J.

There was no conflict in the evidence adduced upon the trial of this case. It is brief. The material facts shown are as follows:

December 15, 1924, appellees, Burton and others, leased to Prentice and Jarrell a building at 1622 Main street, in Fort Worth, to be used as a restaurant, at a rental of $1,875, payable monthly. The term of the lease was from its date to December 31, 1925. The lessees later assigned the lease to a Mrs. Austin, and also sold and delivered to her the personal property in the building used in conducting the restaurant.

About February 12, 1925, Mrs. Austin assigned the lease and sold said personal property to appellants J. M. and O. P. Leonard. Upon the same date the lessors assented, in writing, to such assignment and sale. On February 15, 1925, appellants paid a month's rent up to March 15, 1925. Later they moved the personal property, vacated the building, and failed to pay further rent. On May 15, 1925, the lessors leased the building at $125 per month for the unexpired term. Other pertinent facts will be stated in the course of the opinion.

The petition sets up the lease contract and additional allegations as follows: The lessees owned all the fixtures, furniture, and kitchen utensils then in the building; the lessees remained in possession a short time; in January, 1925, they sold to Mrs. Austin, plaintiffs subsequently assenting to the sale; Mrs. Austin operated the business and paid rent to February 14, 1925, when she sold the lease, furniture, and fixtures to appellants Leonard, who went into possession, assumed payment of the rents, paid one month's rent, and since have failed and refused to pay rent; on April 15, 1925, appellants removed the furniture and utensils, and sold or converted the same, with intent to defeat plaintiffs' lien; on May 15, 1925, plaintiffs relet the premises at $125 per month; the petition then describes the personal property upon which a lien was claimed and alleged the value thereof to be $750. Other allegations of the petition will be later stated. The prayer was judgment for the balance of the rentals, with foreclosure of "their landlord's lien and mortgage lien" upon said chattels.

The jury was peremptorily charged to return a verdict for plaintiffs against appellants for $487.50, principal, and 6 per cent. interest, which was done, and judgment rendered accordingly. Most of the many propositions submitted by appellant relate to the overruling of a general demurrer to the petition. We shall not attempt to discuss the same separately.

Where the amount in controversy does not exceed $500, exclusive of interest, the district court has no jurisdiction; the same being vested exclusively in the justice and county courts. Where such amount exceeds $500, but does not exceed $1,000, exclusive of interest, the district court has concurrent jurisdiction with the county court. Articles 1906, 1949, 1950, R. S. It is settled law in this state, in actions to foreclose chattel mortgages, where the amount of the debt secured is less than the jurisdictional amounts mentioned, but the value of the property upon which foreclosure is sought exceeds such amounts, then the value of such property is regarded as the amount in controversy, and determines the question of jurisdiction.

It is also well settled that in such actions the alleged value of the property is accepted as true, unless challenged by plea in abatement filed in due order of pleading, setting up that it was falsely and fraudulently made for the purpose of conferring jurisdiction. Hoffman v. Cleburne, etc., 85 Tex. 409, 22 S. W. 154. There is another line of decisions which hold that, in suits to foreclose a landlord's lien, the question of jurisdiction is controlled by the amount of the debt, regardless of the value of the property upon which the lien is sought to be foreclosed. Childress Oil Co. v. Wood, 111 Tex. 165, 230 S. W. 143, and cases cited.

In the present action the debt sued for, exclusive of interest, is $487.50. Under the authority last cited, the district court would lack jurisdiction of the present action, if the same was based solely on the debt and landlord's lien. But the plaintiffs also alleged they had a mortgage lien upon chattels of the value of $750, and sought to foreclose this lien, as well as the landlord's lien. Under the settled rule of law governing jurisdiction of such actions, the district court had jurisdiction of the suit to recover the debt of $487.50 and foreclose the asserted chattel mortgage, as the petition sought to do.

The question is here presented in support of the contention that the petition was subject to general demurrer. Upon demurrer the allegations as to value are accepted as true. There is a lengthy answer to the merits, in the last paragraph whereof appear averments that the allegations of the petition respecting the value of the property were falsely and fraudulently made for jurisdictional purposes, because plaintiffs knew they had waived their lien and had no right to foreclosure. As to this plea it may be remarked it was not in due order of pleading, as was necessary. Hoffman v. Cleburne, etc., supra. The only evidence offered as to the value of the chattels was that they were worth from $900 to $1,000, and there was no evidence that plaintiffs knew they had waived their lien. Hence there could be no error in refusing to dismiss the suit upon the allegations of said last paragraph in the answer.

Nor was there any waiver of the mortgage lien, a question which will be discussed in connection with the further claim that there was no mortgage lien, and that this is all shown by the averments of the petition. In this state mortgages are regarded as liens for the security of the debt.

Unless the contrary is provided by statute, the general rule in all jurisdictions is that no particular form of words is necessary to create a chattel mortgage. Any language showing an intention to create a lien upon chattels to secure a debt is sufficient. See 11 C. J. 452, title "Chattel Mortgages," where it is also said: "So it has been held that a mortgage is created by reserving a lien in an instrument, or by creating a charge against the property in the nature of a mortgage."

In 36 C. J. title "Landlord and Tenant," p. 486, it is said: "In many cases, the courts have placed liens for rent reserved by the lease in the category of chattel mortgages, and, where the lease was not recorded as a chattel mortgage, have refused to enforce the lien against third persons against whom an unrecorded chattel...