McCloskey v. San Antonio Traction Co.

• Decision Date: 07 February 1917
• Docket Number: (No. 5799.)
• Citation: 192 S.W. 1116
• Parties: McCLOSKEY v. SAN ANTONIO TRACTION CO.
• Court: Texas Court of Appeals

192 S.W. 1116

McCLOSKEY v. SAN ANTONIO TRACTION CO.

(No. 5799.)

Court of Civil Appeals of Texas. San Antonio.

February 7, 1917.

Rehearing Denied March 14, 1917.

Appeal from District Court, Bexar County; W. F. Ezell, Judge.

Suit by the San Antonio Traction Company against Frank P. McCloskey. From a temporary restraining order against defendant, he appeals. Judgment reversed, and cause remanded.

R. H. Ward, J. F. Carl, Jno. H. Bickett, Jr., and P. H. Swearingen, Jr., all of San Antonio, for appellant. Templeton, Brooks, Napier & Ogden, of San Antonio, for appellee.

SWEARINGEN, J.

The San Antonio Traction Company, appellee, filed this suit against Frank P. McCloskey, appellant, to have him restrained by temporary and permanent injunction from pursuing the business of claim adjuster. The detailed methods by which appellant conducted the business are alleged in appellee's petition. The allegations, relevant to the questions we consider conclusive of this case, are substantially these:

"In the conduct of its [appellee's] said business and in the operation of its said street railway system as is necessarily incident in carrying on such business accidents occur in which passengers on plaintiff's cars and travelers on the streets are involved; that said accidents may, and frequently do, result in claims of injury to the persons involved; that many claims for injuries sustained in such accidents, and for alleged injuries sustained in alleged accidents, are presented against plaintiff [appellee], and many suits for such damages are filed against plaintiff [appellee] on account of such injuries and alleged injuries; that the costs and expenses to plaintiff of investigating, handling, settling, and defending such claims and suits is approximately * * * $1,000,000 per annum; that the said costs and expenses are greatly, unnecessarily, wrongfully, and unlawfully increased by the acts and practices of defendant [appellant] as hereinafter set out." The pro rata of the $1,000,000 above mentioned, incurred by reason of the practices of appellant, it is alleged, will be in excess of ten thousand dollars unless appellant is restrained. Appellant's business is that of a common barrator soliciting and stirring up claims and suits for unliquidated damages for personal injuries against appellee, soliciting and stirring up vexatious and speculative litigation based on such claims. Appellant "maintains offices and employs a large number of agents to handle his office and field work. He advertises and holds himself out as an adjuster of claims for unliquidated damages for personal injuries. He and his agents make it their business to look out for the happening of accidents that may serve as the basis of such claims for damages, hunt up and get in touch with possible and prospective claimants, and solicit such claimants to make and urge claims for damages on account of such accidents and to enter into contracts with defendant [appellant], employing him to take charge of and handle their claims. He secures and obtains a great many such contracts, usually by the means stated. Such contracts generally, if not invariably, transfer and assign to him an interest in the alleged * * * cause of action as a consideration for his services; such interest transferred and assigned being usually for one-third or one-half of such * * * cause of action. Upon obtaining such contract, he gives notice to the party against whom such claim is made that he holds such contract and has such transfer and assignment, * * * which makes it impossible for such party to deal directly with the claimant, and settle the claim upon terms satisfactory to such party and claimant, and makes it necessary for such party to deal with defendant [appellant], and to settle the claim upon terms satisfactory to defendant [appellant] or let the claim go to suit. * * * By the means aforesaid * * * [appellant] causes and procures a great number of such claims to be presented against plaintiff [appellee] * * * that otherwise would never be presented or urged. Many of such claims so presented are * * * claims concerning which plaintiff [appellee] * * * knows nothing and can learn nothing; in a great many of them the injuries claimed to have been sustained are grossly exaggerated; in many of them there appears to be no real basis of the claim of liability. * * * In cases where [appellee] refuses to settle on [appellant's] terms, he employs or causes attorneys to be employed to bring suit thereon." The appellant "usually * * * agrees to become responsible for the costs and expenses of the litigation, and frequently advances money for that purpose. * * * He sometimes advances money to the claimant to induce him to make such claim and to give such contracts to [appellant], and he generally makes advances in monthly or weekly installments to the claimant pending the settlement of the claim."

And appellee closed his petition with the prayer that appellant be notified to appear and show cause why a writ of injunction should not be granted, restraining him from each and all of the acts and practices herein above set out. Appellant's answer consisted of a general demurrer, several special exceptions, a general denial, and special admissions. After hearing the evidence, the court made the following order:

"It is therefore ordered, adjudged, and decreed by the court that the clerk of this court be and he is hereby directed, on the filing by the plaintiff of a bond herein in the sum of $5,000, conditioned and payable as required by law, to issue a writ of injunction against the defendant, F. P. McCloskey, enjoining and restraining him, his agents, servants, and employés, during the pendency of this suit, from soliciting, inciting, or inducing, or attempting to induce, any person or persons to present claims or bring suits for unliquidated damages against the plaintiff, and from soliciting, inciting, or inducing any person or persons to turn over their claims for such damages to him, or to employ him in connection therewith, and from soliciting, inciting, or inducing any person or persons to present exaggerated or fraudulent claims for such damages against the plaintiff, or to conceal the true character or nature of their condition, and from buying or offering to buy any such claim from any person or persons unsolicited by such person, and from offering any money or other thing of value to any person as an inducement to such person to employ him to represent such person in such claim or suit against plaintiff, unless such person shall first go to defendant and request him to represent him in such claim or suit, and from interfering with settlements between plaintiff and persons having claims against it, and from attempting to prevent such person or persons from making settlement with plaintiff."

From this temporary restraining order this appeal is taken.

The evidence introduced at the hearing is fairly summarized by the trial judge in his terse, lucid, and able opinion, as follows:

"The testimony offered by the plaintiff tends strongly to establish the material allegations in the plaintiff's petition. It appears that about 60 per cent. of all the claims presented against the plaintiff are presented by the defendant. A large number of witnesses testified that they had received slight injuries, or been on cars which were derailed, in which they received practically no injuries; that they were not acquainted with the defendant or his agents, and that almost immediately after such accidents the defendant or his agents approached them and solicited his employment by the claimants, urging them to present claims against the plaintiff for large damages, and that, if they would give him the claims to handle, he could obtain large sums of money for them, and urging them to exaggerate their injuries, to remain in bed as long as they could endure it, and when they went out insisted upon their using crutches when not necessary, and by various means trying to induce them to assist him in obtaining large sums of money from the plaintiffs, in many instances paying them a considerable sum of money in advance for the purpose of securing contracts of employment from them, and in some instances calling in a doctor to advise the claimants that they were seriously and permanently injured, when in truth and in fact they were only slightly injured, or not injured at all; that a great number of suits for hundreds of thousands of dollars were filed by attorneys employed by the defendant on claims presented by the defendant, and that the defendant is still continuing said business, one claim having been presented during the hearing of this application, and that he proposes to so continue the same. Although the defendant and his principal agent and assistant were present in court during the hearing of this application and heard the testimony of these witnesses, in which they were charged with the things hereinabove stated, they did not take the stand to deny or refute the testimony of these witnesses."

The controlling question presented for our determination is this: Do the allegations in appellee's petition authorize an injunction?

We will say, incidentally, that the order made by the court was probably not in all respects supported by appellee's pleading. For example: The order restrains appellant from soliciting, inciting, or inducing any person * * * to present * * * fraudulent claims, * * * or to conceal the true character or nature of their condition. The only allegation in the petition that might have been construed to support the last-stated portion of the order is this:

"Many of such claims so presented are what is known as `blind claims'; that is, claims concerning which plaintiff [appellee] knows nothing and can learn nothing; * * * in a great many of them there appears to be no real basis of the claim of liability."

Neither the allegation that appellee knows nothing of the claim, nor the...