McNeill v. Casey

• Decision Date: 29 March 1911
• Citation: McNeill v. Casey, 135 S.W. 1130 (Tex. App. 1911)
• Parties: McNEILL et al. v. CASEY.
• Court: Texas Court of Appeals

135 S.W. 1130

McNEILL et al. v. CASEY.

Court of Civil Appeals of Texas.

March 29, 1911.

Appeal from Williamson County Court; T. J. Lawhon, Judge.

Action by W. F. Casey against A. A. McNeill and others. From a judgment in favor of plaintiff, defendants appeal. Reversed and dismissed.

James M. Robertson, for appellants. H. N. Graves, for appellee.

RICE, J.

This suit was brought in the county court of said county by appellee, Casey, against the appellants on contract entered into between them and J. C. McElroy on the 26th of June, 1909, binding them to convey to him a certain tract of land situated in Bosque county, with the terms of which it is alleged they failed to comply. McElroy assigned and transferred a one-half interest in said contract to W. F. Harty, Esq., his attorney, in consideration of legal services; and subsequently both McElroy and Harty, for an alleged valuable consideration, transferred and assigned to plaintiff Casey all their interest in said contract. It is alleged that by the terms of said contract McElroy was bound to pay over as earnest money the sum of $1,000 to said appellants, which he did, and which was to be applied in part payment of the purchase money for said land, if the trade was consummated; but if the same fell through on account of the default of appellants, then the amount was to be refunded by them to said McElroy. Plaintiff alleged that the said appellants had defaulted and failed to perform their part of said contract, whereby they became bound to refund said money to him as assignee thereunder, but which they had wholly failed and refused to do, whereby he, as assignee of said contract, is entitled to bring this suit for its recovery. He also alleged that McElroy and Harty guaranteed to him in writing the payment of said contract; whereupon he brought this suit against appellants, as well as McElroy, for the recovery of said $1,000 upon the alleged breach of said contract, as well as 8 per cent. interest thereon from the date thereof.

Appellants, defendants below, were alleged and shown to be residents of Bosque county, and the appellees McElroy and Harty were alleged and shown to be residents of Ellis and Williamson counties, respectively. The petition fully set out the contract between said McElroy and appellants, alleging its breach on their part, the transfer of the claim by McElroy to Harty, and its subsequent transfer and guaranty by them to appellee Casey, who brought this suit, as above stated, against appellants on said contract and against the appellees McElroy and Harty upon their guaranty of the payment thereof.

Appellants answered, first, by plea of personal privilege to be sued in Bosque, the county of their residence; second, by plea setting up that said transfer and guaranty was fraudulent, without consideration, and intended solely for the purpose of conferring jurisdiction over the defendants in Williamson county. They further pleaded that the contract between themselves and McElroy for a valuable consideration had been canceled, and by the terms thereof appellants were entitled to retain the money so paid thereon, in consideration of their releasing McElroy from said contract; also by general denial and a plea setting up that deeds had been tendered to said McElroy in accordance with the terms of said contract.

There was a judgment in favor of appellee Casey for $1,000, with interest thereon, and also judgment in his favor against McElroy and Harty upon their contract of guaranty in the sum of $500 each, with judgment over in their favor against appellants, from which this appeal is prosecuted.

The first questions raised by appellants in their brief is whether or not the county court of Williamson county had jurisdiction of the amount in controversy. [1] This suit is based upon breach of contract for the recovery of $1,000, with 8 per cent. interest thereon from the date of the alleged breach thereof. If plaintiff was entitled to recover interest upon said contract eo nomine, and not to recover the same as an element of damages for breach thereof, then the county court of Williamson county had jurisdiction; but otherwise not. In 2 Cyc. p. 565, it is said: "Where interest on a principal amount is a part of the claim or subject-matter involved in the controversy, such interest will be considered as determining appellate jurisdiction, and interest which is not given eo nomine, as upon a contract ascertaining the sum payable, but which is a part of the damages, is to be included in the amount in controversy in determining appellate jurisdiction."

In 22 Cyc. p. 1495, it is said: "Although in some cases of breach of contract to pay money, interest has been allowed thereon on the ground of an implied contract to pay interest that arises from the failure to pay the principal, the general rule, established by the great weight of authority, is that where there is a contract, express or implied, to pay money, even though such contract be silent as to interest, interest will be allowed upon its breach as damages, and not because of any promise to pay it. Interest in such cases is merely the measure of damages to be allowed, and this measure is a fixed and invariable standard, not subject to be varied because of peculiar or unusual damages sustained in any particular case, as the law contemplates no damages for the detention of money beyond the interest on such money. In some cases it has been held that, even where interest is provided for by contract in case of breach of contract to pay the principal sum when due, such interest is recoverable only as damages which have been liquidated by such agreement."

The settled rule in this state with reference to this matter seems to be that when interest is sought eo nomine, as flowing from and incident to the contract in writing sued upon, it will not be taken into account in determining the jurisdiction of the court; but the contrary is true where the same is sued for as an element of damages arising from the breach of the contract, and where the same is not specially recoverable as due under the contract itself. See Heidenheimer v. Ellis, 67 Tex. 426, 3 S. W. 666; Schultz v. Tessman & Bro., 92 Tex. 491, 49 S. W. 1031, and authorities there cited; Watkins v. Junker, 90 Tex. 584, 40 S. W. 11; Houston & Texas Central Railroad Co. v. Jackson, 62 Tex. 209, and authorities there cited; Dazey v. Pennington, 10 Tex. Civ. App. 326, 31 S. W. 312.

In Heidenheimer v. Ellis, supra, which

was a suit to recover the amount due upon a stated account and for interest thereon, wherein the court charged the jury, in effect, that if they believed that defendant was indebted to plaintiffs on stated account to return a verdict for the amount of said account, and interest thereon at 8 per cent. from the date of acknowledgment and promise to pay the same, it was contended that the charge was erroneous, in so far as it instructed the jury to allow interest from the time at which the payment was to have been made, etc. The court, in discussing this question, says: "It is frequently said in the decisions of the courts that interest is the creation of the statute. In a certain sense this is...