Mobile Homes of America, Inc. v. Easy Living, Inc., 17663

• Decision Date: 19 September 1975
• Docket Number: No. 17663,17663
• Citation: 527 S.W.2d 847
• Parties: MOBILE HOMES OF AMERICA, INC., Appellant, v. EASY LIVING, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 847

527 S.W.2d 847

MOBILE HOMES OF AMERICA, INC., Appellant, v. EASY LIVING, INC., et al., Appellees.

No. 17663.

Court of Civil Appeals of Texas,

Fort Worth.

Sept. 19, 1975.

Steves & Morgan, Paul C. Cook, Fort Worth, for appellant.

McBryde, Bogle & Green, and John H. McBryde, Fort Worth, for Easy Living, Inc., Enchanted Harbors, Inc., Metro Industries, Inc., Norman Walters Construction & Development Co., Inc., and Modular Enterprises, Inc.

Shannon, Gracey, Ratliff & Miller, and Kleber C. Miller, Fort Worth, for appellee E. W. Bollinger.

McDonald, Sanders, Ginsburg, Phillips, Maddox & Newkirk, and Sam J. Day, Fort Worth, for appellee Walter G. Cook.

OPINION

MASSEY, Chief Justice.

This is a case which in the court below was brought by a purported corporation, Mobile Homes of America, Inc., against numerous defendants. Defendants, some time after date on which they had answered and joined issue upon the merits of plaintiff's suit, filed a Rule 12 Motion, that is a sworn motion stating a belief the suit was instituted against them without authority on the part of those attorneys who had signed the pleadings for plaintiff, Mobile Homes, coupled with demand that these attorneys show sufficient authority from the plaintiff to institute or prosecute the suit filed. T.R.C.P. 12, 'Attorney to Show Authority'.

Following the hearing set upon the Rule 12 Motion the trial court entered an order dismissing the suit. On the face thereof it was written that the court found that because the right to do business and charter of Mobile Homes of America, Inc. had been forfeited for failure to pay franchise taxes before date suit was brought it had no authority to sue in the courts of the State and, consequently, had no authority to hire attorneys for that purpose. Further, the court found that attorneys who initiated and are prosecuting the suit had no legal authority to do so. The order of the court dismissed the suit, including plaintiff's cause of action alleged against the defendant who had not made himself a party to the Rule 12 Motion and had not questioned any attorney's authority.

The purported corporation, Mobile Homes of America, Inc. perfected an appeal.

Interestingly, in the proceedings before this appellate court no defendant in the suit has attacked the propriety of those same plaintiff's attorneys' representation of Mobile Homes on appeal.

A consideration of Rule 12 in the instant case serves only to confuse. Purpose in mind by adoption thereof was to discourage and to cause the dismissal of suits brought without authority. It was intended to aid in protecting defendants from Groundless suits. It was thought that a person who was sued was entitled to know that The named plaintiff had in fact authorized the suit. Angelina County v. McFarland, 374 S.W.2d 417 (Tex.Sup., 1964). See also 7 C.J.S. Attorney and Client § 76, 'Evidence of Authority', p. 886.

Use of a Rule 12 Motion, it seems to us, presupposes acceptance of the fact that there is an identifiable person who could be represented as a party plaintiff; that the movant is in position of acknowledging that such was the fact, but that the attorneys presenting themselves as its agents to file and prosecute the suit in fact had not been employed by it to do so. The briefs in this case make it plain that the question is upon the right of Mobile Homes to bring the suit, not upon the right of any particular attorneys to present themselves as attorneys for Mobile Homes.

From the record brought forward on appeal it is clear that though no such denominated pleading had been filed by defendants they were actually presenting a plea in abatement. Their evidence bore upon matters appropriate to such character of pleading, not upon absence of the fact of employment by a principal, the question appropriate to a Rule 12 Motion. Their evidence was directed upon proving want of Mobile Homes' capacity and authority to bring the suit. By such evidence they discharged the burden of proof incumbent upon one who files such a plea. Furthermore, though no plea in abatement was presented in written form among papers filed in the case, that was what was tried and at no time was tender of defendants' evidence met with any objection by Mobile Homes.

T.R.C.P. 67, 'Amendments to Conform to Issues Tried Without Objection', provides that when issues are on trial by express or implied consent of the parties they shall be treated as if they were raised by pleadings. By force of Rule 67 the parties tried a plea in abatement; by the judgment there is necessary implication that a plea in abatement was sustained (with dismissal of suit); and that propriety of such action by the court is the substance of that upon which the parties present and argue upon the appeal.

Evidence placed before the court was undisputed. Thereby it was shown that November 8, 1971 Mobile Homes' right to do business as a corporation was forfeited by administrative action of the Comptroller of Public Accounts because of the failure of Mobile Homes to pay franchise tax. Authority therefor is found in V.A.T.S. Taxation--General, Ch. 12, 'Franchise Tax', Art. 12.14, 'Failure to Pay Tax and File Reports'. Where the amount of franchise tax owing, plus penalties, be not paid in full on or before the thirtieth day after notice of delinquency is mailed to a corporation such corporation shall for such default forfeit its right to do business in the State of Texas; which forfeiture shall be consummated without judicial ascertainment by the Comptroller of Public Accounts.

Further provision of the aforesaid Art. 12.14, upon the forfeiture by the Comptroller of Public Accounts is: 'Any corporation whose right to do business...