Midcon Pipeline Equipment Co. v. Smith

• Decision Date: 22 October 1981
• Docket Number: No. 18496,18496
• Citation: 623 S.W.2d 166
• Parties: MIDCON PIPELINE EQUIPMENT CO., Appellant, v. Dewey SMITH, Independent Executor of the Estate of Carl K. Smith, Deceased, Appellee.
• Court: Texas Court of Appeals

Page 166

623 S.W.2d 166

MIDCON PIPELINE EQUIPMENT CO., Appellant, v. Dewey SMITH, Independent Executor of the Estate of Carl K Smith, Deceased, Appellee.

No. 18496.

Court of Appeals of Texas, Fort Worth.

Oct. 22, 1981.

Rehearing Denied Nov. 12, 1981.

Cantey, Hanger, Gooch, Munn & Collins, and Mark C. Hill, Mark D. Beatty, Fort Worth, for appellant.

Lynn Cooksey, Texarkana, for appellee.

Before MASSEY, C. J., and SPURLOCK and HOLMAN, JJ.

OPINION

HOLMAN, Justice.

This is an appeal from an order sustaining defendant's plea of privilege. Appellant seeks to maintain venue in Tarrant County by virtue of Tex.Rev.Civ.Stat.Ann., art. 1995, subd. 5(a) (Supp. 1980-81).

We affirm.

Appellant filed suit for declaratory judgment to construe a written agreement between it and appellee. The agreement contains the terms of a transaction in which appellant purchased certain assets from the appellee.

Subsequent to signing the agreement, appellant signed a promissory note payable to appellee for a portion of the purchase price.

Uniform Declaratory Judgments Act, Tex.Rev.Civ.Stat.Ann. art. 2524-1 (1965) makes no provision for venue in such suits. Therefore the general venue rules apply. H. Molsen & Co., Inc. v. Harp and Lovelace, 516 S.W.2d 433 (Tex.Civ.App. Amarillo 1974, no writ); Gulf Coast Business Forms, Inc. v. Texas Employment Commission, 493 S.W.2d 260 (Tex.Civ.App. Beaumont 1973), writ ref'd n. r. e., per curiam at 498 S.W.2d 154 (Tex.1973).

Appellant seeks a declaration that the contract which underlies the note entitles appellant to certain indemnity by appellee. Appellant would offset the indemnity against its duty to pay the note.

Appellee filed a plea of privilege, alleging his residence in San Patricio County, Texas, and asked to have the cause transferred.

Appellant's controverting plea relies upon subd. 5(a) of the general venue statute.

The plea of privilege was sustained, and appellant seeks reversal in a single point of error. It reasons that the note plus the testimony at the venue hearing establish that the note is payable in Fort Worth; and since the note is part of the contract appellant seeks to have construed by declaratory judgment, venue will lie in Tarrant County as a matter of law.

We cannot agree.

The pertinent portion of subd. 5(a) (1980-81) states:

"5. Contract in writing. (a) ... if a person has contracted in writing to perform an obligation in a particular county, expressly naming such county, or a definite place therein, by such writing, sued upon or by reason of such obligation may be brought against him, either in such county or where the defendant has his domicile."

To overcome appellee's right to be sued in his own county and sustain venue under subd. 5(a), appellant must establish the following facts:

(1) the defendant is a party reached by the statute; (2) the claim is upon a written contract; (3) the contract was entered into by the defendant or one authorized to bind him; and (4) the contract by its terms provides for performance of the obligation sued upon in Tarrant County. Levy v. Lamar Savings Leasing Corp., 584 S.W.2d 581 (Tex.Civ.App. Beaumont 1979, no writ); Brazos Valley Harvestore Systems, Inc. v. Beavers, 535 S.W.2d 797, 800 (Tex.Civ.App. Tyler 1976, writ dism'd).

We agree that appellant has established the first three venue facts. Appellant failed to establish the fourth fact, namely that the contract by its terms provides for performance of the obligation sued upon in Tarrant County.

The contract in this case is dated April 16, 1974, and consists of four pages. Attached and incorporated by reference are three pages of exhibits. None of the seven pages specify a place of payment or performance of the agreement.

We are not permitted to imply from the contract that it obligates performance in a particular place. Saigh v. Monteith, 147 Tex. 341, 215 S.W.2d 610 (1948); Conner v. Prescon Corporation, 500 S.W.2d 713 (Tex.Civ.App. Corpus Christi 1973, no writ); Helms v. Home Improvement Loan Co., 294 S.W.2d 165 (Tex.Civ.App. Dallas 1956, writ dism'd).

For us to apply the exception of subd. 5, the written agreement must expressly name the county of performance or a definite place therein. Harkness v. Employers National Insurance Co., 502 S.W.2d 670 (Tex.1973).

If there is equal doubt between the exception and the rule requiring suit in the defendant's own county, then the rule must prevail. Goodrich v. Superior Oil Co., 150 Tex. 159, 237 S.W.2d 969 (1951); Briarcliff, Inc. v. Texas Automatic Sprinklers, Inc., 472 S.W.2d 860 (Tex.Civ.App. Dallas 1971, no writ).

In its petition for declaratory judgment, appellant alleges that, pursuant to the contract, it executed and delivered to appellee a $303,592.40 promissory note dated May 1, 1974. The note is the basis for appellant's reliance on subd. 5 to establish venue in Tarrant County, but this is not a suit to enforce payment of a note. Instead, we have the payor suing the payee, seeking interpretation of a contract related to the note.

In part, the note states that "For value received (appellant) ... promise to pay to the order of (appellee) ..." the sum indicated. The note does not expressly name a place where it is to be payable.

The only mention of a geographic location is in the upper right portion of the note's heading, where the following words appear:

"Fort Worth, Texas

May 1, 1974"

The note was signed in Fort Worth. W. E. Strittmatter, who signed the note for appellant, testified that he regarded the note as being payable in Fort Worth. On cross-examination, however, he conceded that the note does not name a place where it is payable.

Appellant urges us to accept Mr. Strittmatter's testimony as proof that the note is payable in Tarrant County. To determine venue under subd. 5, however, we may look only at the written agreement and may not consider parol evidence. Owens v. Sherrard Motor Company, Inc., 496 S.W.2d 113 (Tex.Civ.App. Tyler 1973, no writ); Laughlin v. Nordyke, 215 S.W.2d 424 (Tex.Civ.App. Eastland 1948, no writ).

The promissory note before us contains no terminology of trade usage and custom relating to the place where the note is payable. Indeed, evidence of custom is admissible only to explain an ambiguous contract or to add to it an element that does not contravene its terms. Miller v. Gray, 136 Tex. 196, 149 S.W.2d 582 (1941); Fox v. Gallo, 428 S.W.2d 127 (Tex.Civ.App. Amarillo 1968, writ ref'd n. r. e.).

For us to permit parol evidence of custom as proof of the place of payment of a promissory note that is otherwise silent on the subject would contravene the statutory requirement that the contract must expressly name the county of performance. Art. 1995, subd. 5(a); Harkness v. Employers National Insurance Co., supra.

Contending that we should rely on parol evidence, appellant cites Burdette v. Cook Industries, Inc., 544 S.W.2d 495 (Tex.Civ.App. Corpus Christi 1976, writ ref'd n. r. e.). There the court allowed the defendant's parol testimony as an admission that certain trade terminology in the contract did obligate him to deliver grain to Corpus Christi. He was being sued for breach of that obligation.

Burdette is distinguishable from the case at bar, however, because it simply held that when a written contract includes terminology of trade usage and custom, the defendant's parol testimony is admissible to establish venue under subd. 5 by showing that both the defendant and the plaintiff gave identical meaning to that terminology when the contract was signed.

The heading of appellant's promissory note is plain and unambiguous.

We think it evident that the words "Fort...