Mercure Co., N.V. v. Rowland

• Decision Date: 24 April 1986
• Docket Number: No. 01-85-0861-CV,01-85-0861-CV
• Citation: 715 S.W.2d 677
• Parties: MERCURE CO., N.V., Appellant, v. Sam E. ROWLAND and Kenneth Keim, Appellees. (1st Dist.)
• Court: Texas Court of Appeals

Page 677

715 S.W.2d 677

MERCURE CO., N.V., Appellant, v. Sam E. ROWLAND and Kenneth Keim, Appellees.

No. 01-85-0861-CV.

Court of Appeals of Texas,

Houston (1st Dist.).

April 24, 1986.

Rehearing Denied Aug. 14, 1986.

Kathleen A. Slaydon, Dona Szak, Ross, Banks, May, Cron & Cavin, Houston, for appellant.

Tom Edwards, Houston, for appellees.

Before EVANS, C.J., and WARREN and JACK SMITH, JJ.

OPINION

WARREN, Justice.

This is an appeal from the trial court's judgment of dismissal.

In a single point of error (with seven subparts), the appellant, Mercure, asserts that the trial court abused its discretion in ordering a dismissal of the lawsuit. In a single crosspoint, the appellees allege that we erred in overruling the appellees' motion to dismiss this appeal because the appellant elected to pursue an alternative remedy by refiling the same suit, thereby waiving this appeal.

On November 29, 1978, Century, as agent for Mercure, entered into a written agreement to lease office space to appellees for a term of three years. The lease agreement stated on its face that Century was acting as agent for Mercure. The signatures to the lease showed Mercure as lessor.

On November 17, 1980, Century filed suit against appellees for unpaid rent, plus interest.

In its original pleadings, Century asserted the right to sue the appellees in its own right, rather than as agent for Mercure. The pleadings contradicted the express terms of the lease by alleging that Century was the lessor.

The appellees then filed an unsworn plea in abatement on September 25, 1982, and alleged that Century did not have legal capacity to bring the suit, was not a entitled to recover in the capacity in which it sued, was not a principal to the contract upon which the suit was based, and that there was no showing of authority for Century to maintain the suit. A sworn first-amended plea in abatement was filed November 12, 1982.

On October 18, 1982, between the time that appellees filed their first and amended pleas in abatement, appellant designated the plaintiff as "Mercure Company, N.V., by its agent Century Development Corporation."

Finally, in the plaintiff's fourth amended original petition, which was filed August 17, 1983, and was the live pleading in this case below, the name of Century was dropped as a party and the plaintiff's name designated as Mercure Company, N.V.

The defendants filed a motion to dismiss on August 26, 1985, and alleged that the plaintiff's attempt to substitute parties was without leave of court and not in response to any court order concerning the defendant's plea in abatement. Further, the motion to dismiss alleged that the first attempted appearance of Mercure in October 1982, was at a time prior to any attorney at law being authorized to appear on its behalf.

On September 3, 1985, apparently in response to appellees' motion to dismiss, the trial court ordered the law suit of trial court no. 80-53707, styled Century Development Corporation v. Sam E. Rowland and Kenneth Keim, both individually and d/b/a Rowland and Keim, dismissed without prejudice. The trial court's order recited no reason for the dismissal; it did not name Mercure as plaintiff, nor did Mercure's name appear anywhere on the order.

On appeal, the appellant, Mercure, asserts seven different arguments under a single point of error. The appellant argues in seriatim that the trial court erred in dismissing the lawsuit because:

1. The method of substituting plaintiffs was proper;

2. The appellees waived and are estopped from complaining of the substitution of plaintiffs;

3. The statute of limitations does not bar Mercure's claim;

4. The issue of lack of authority was not properly presented to the trial court;

5. The appellees did not properly present their objections to substitution of plaintiffs to the trial court;

6. Mercure should have been given an opportunity to amend its pleadings before its cause was dismissed; and

7. The trial court abused its discretion by dismissing Mercure's cause.

Before addressing the appellant's point of error, there are threshold questions concerning whether Mercure is properly before this appellate court and can appeal the trial court's judgment of dismissal where it was not a named party in the court's order.

An amended pleading supersedes and supplants earlier original pleadings. Tex.R.Civ.P. 65. Parties to a suit are just as effectively dismissed from a suit by omitting their names from an amended pleading as where a formal order of dismissal is entered. Burton v. Bridges, 641 S.W.2d 635, 637 (Tex.App.--El Paso 1982, writ ref'd n.r.e.); Sparks v. Aetna Life and Casualty Co., 554 S.W.2d 228, 230 (Tex.Civ.App.--Dallas 1977, no writ). When Century's name was dropped from the plaintiff's fourth amended original petition on August 17, 1983, Century was effectively dismissed from the suit by the intentional omission of its name from the pleading. In effect, Century was not a party to the lawsuit at the time the trial court ordered the dismissal of the lawsuit.

The next issue is whether Mercure properly became a plaintiff and if so, whether it has standing to appeal a judgment of dismissal in which it was not named.

Additional parties may be brought in, either by the plaintiff or the defendant, upon such terms as the court may prescribe; but not at a time nor in a manner to unreasonably delay the trial. Tex.R.Civ.P. 37. The word "may" in rule 37 is regarded as permissive and not mandatory. Hudson Underwriters Agency of Franklin Fire Insurance Co. v. Ablon, 203 S.W.2d 584, 585 (Tex.Civ.App.--Dallas 1947, writ dism'd).

The appellees claim that permission of the trial court was necessary before Mercure became a plaintiff. But rule 37 does not mandate such permission.

Mercure maintains that it was a proper plaintiff under rule 37, additional parties, and also that it was added as plaintiff in response to the defendant's plea in abatement.

In International Shelters, Inc. v. Pinehurst Investment Corp., 474 S.W.2d 497 (Tex.Civ.App.--Corpus Christi 1971, writ dism'd), the principal question was whether the substitution of the sole shareholder of the plaintiff assignee of a note for the plaintiff subsequent to the trial court's overruling of the defendant's plea of privilege constituted a non-suit or an abandonment of the plaintiff's cause of action. In holding that such a substitution did not constitute a non-suit or the filing of a new lawsuit, the court relied on rule 37 and said that the test the court must apply is that unless the defendant will in some way be prejudiced, the substitution of parties should be granted. Id. at 499. "The amendment by the mere substitution of a different party plaintiff did not inject into the lawsuit a matter that was materially different in substance or form, nor did it appreciably alter the rights and obligations of the parties to the prejudice of the defendant." Id. at 500.

Mercure was added as a plaintiff in the plaintiff's third amended petition, filed October 18, 1982. Mercure argues that was the amendment made in response to the defendant's plea in abatement, filed September 25, 1982. There is no showing in the record that the trial court sustained the defendant's first amended plea in abatement filed November 12, 1982, despite assertions to the contrary in both appellant's and appellee's briefs.

A party who wishes to contest the opponent's lack of capacity to sue must do so in a verified plea in abatement. Bluebonnet Farms, Inc. v. Gibraltar Savings Association, 618 S.W.2d 81, 83 (Tex.Civ.App.--Houston [1st Dist.] 1980, writ ref'd n.r.e.) (holding that trial court abused its discretion by allowing the untimely filing of appellee's plea in abatement with the summary judgment, thereby denying the appellant his day in court).

A plea in abatement is a plea setting forth some obstacle to the further prosecution of the cause until it is removed, and if it is sustained, the proper action is to abate the cause until the impediment is removed. Piper v. Estate of Thompson, 546 S.W.2d 341, 343 (Tex.Civ.App.--Dallas 1976, no writ) (although designated a plea in bar, the plea was a plea in abatement because it pertained to the capacity in which the defendants were sued). A plaintiff may amend his petition so as to perfect it against a defendant's plea in abatement. Gomillion v. Lingold, 209 S.W.2d 205, 207 (Tex.Civ.App.--Galveston 1948, no writ) (nothing in the 1907 legislation regulating pleas of privilege deprived a plaintiff of his pre-existing right to amend his petition to make it non-vulnerable to a plea in abatement by a defendant); see also Atkinson v. Reid, 625 S.W.2d 64, 66 (Tex.App.--San Antonio 1981, no writ); Bryce v. Corpus Christi Area Convention & Tourist Bureau, 569 S.W.2d 496, 499 (Tex.Civ.App.--Corpus Christi 1978, writ ref'd n.r.e.); Harold v. Houston Yacht Club, 380 S.W.2d 184, 186 (Tex.Civ.App.--Houston 1964, no writ).

Under the application of rule 37 and rule 41 (parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action before the time of submission to the court, on such terms as are just), as well as the holdings in International Shelters Inc., 474 S.W.2d at 499, and Gomillion, 209 S.W.2d at 207, we hold that Mercure was properly added as the plaintiff in the plaintiff's third and fourth amended petitions.

Assuming that Mercure was properly substituted as the plaintiff, the next question is whether Mercure may appeal the trial court's order of dismissal in which only Century was named but not Mercure. Generally, remedy by appeal in usual form, or by writ of error, is available only to parties of record. Gunn v. Cavanaugh, 391 S.W.2d 723, 724 (Tex.1965). At the time the trial court ordered dismissal of the case, Century had been dropped from the plaintiff's fourth amended petition and therefore, was effectively dismissed from the case, while Mercure had become substituted in place...