Morrison v. Cotton

• Decision Date: 14 December 1912
• Citation: 152 S.W. 866
• Parties: MORRISON et al. v. COTTON et ux.
• Court: Texas Court of Appeals

152 S.W. 866

MORRISON et al. v. COTTON et ux.

Court of Civil Appeals of Texas. Amarillo.

December 14, 1912.

Rehearing Denied January 18, 1913.

Appeal from District Court, Hemphill County; F. P. Greever, Judge.

Action by W. M. Cotton and wife against T. W. Morrison and others. From judgment for plaintiffs, defendants appeal. Affirmed.

L. W. Dalton and Mathes & Williams, all of Plainview, and Willis & Willis, of Canadian, for appellants. H. E. Hoover, of Canadian, and R. E. Taylor, W. T. Allen, and H. A. Allen, all of Henrietta, for appellees.

HALL, J.

This action was instituted by appellees Cotton and wife against T. W. Morrison, A. T. Patton, and the First National Bank of Plainview for the rescission of a contract for the exchange of lands, and to cancel the deed executed by appellees. The action is one for fraud and deceit; appellees alleging that appellants Morrison and Patton made fraudulent representations as to the value and earning capacity of a certain electric light plant, ice cream factory, and bottling works, which were conveyed to them in exchange for their section of land lying partially in Hemphill county. The defendant bank had taken up some notes made by appellants, and was a party in order that its equities might be adjusted. The cause has been heretofore tried and appealed, and the opinion of the Second Court of Civil Appeals, reversing the judgment, is found in 140 S. W. 114, where a more extended statement of the case may be seen.

In their first assignment of error the appellants insist that the court erred in overruling their objections to the testimony of N. S. Locke, to the effect that the property, consisting of electric light plant and other machinery in Plainview, Tex., and which was exchanged by appellants with appellees, did not pay running expenses during the time witness had charge of the plant. The objections urged were that the evidence was immaterial, irrelevant, and hearsay. There was certainly no error in overruling the objection that the evidence was hearsay. It appears that Locke took charge of the business about the 2d day of August, and continued to run it until the 12th day of October following. He testified that while he was in charge of the plant the business was conducted in the same manner as it had been prior to the time he assumed charge; that he made no change in the manner of handling the business, except to cut off some of the men and reduce the number of employés, which had the effect of lessening the expenses of the business. He further testified that he kept books showing the income and expenditures. It was further shown by the testimony of the witness Collins, who conducted the business for appellees from about the middle of July until witness Locke took charge, that there was no change in the method of handling the business; and he stated positively that it was conducted after appellees assumed ownership as it had been before. His testimony showed that he had worked several months in the plant while appellant Morrison owned it. If there was error in permitting the witness Locke to testify, then the error has been cured by the testimony of Collins, which was admitted without objection. However, we are of the opinion that all of this evidence was admissible upon the question of the falsity of appellants' statements with reference to the net income. In Collins v. Chipman, 41 Tex. Civ. App. 570, 95 S. W. 669, it is said: "By the second, fifth, ninth, and eleventh assignments of error it is contended that certain testimony, most of which was drawn out on cross-examination by the plaintiff of the defendants' witnesses Price, Seligson, and Brown, and of defendant himself, which tended to show the financial condition of the F. F. Collins Manufacturing Company subsequent to January, 1902, and that in 1904 or 1905 practically all of its assets had disappeared, and it had ceased business and was in liquidation, was irrelevant and inadmissible for any purpose. The issue in this case was fraud, and the burden of proving it was upon plaintiff. From its very nature it is usually impossible to prove it by direct and positive evidence, and for this reason large latitude is permitted in the admission of evidence on such an issue. Evidence of facts not themselves directly in issue are admissible, where such facts are relevant to the fact in issue. Such facts may be in time remote from the principal fact, but, when taken together and connected with other facts, they may form links in an unbroken chain of circumstances extending back to the time of the occurrence of the main fact, and establish its existence by showing that each link in the chain of facts extending from it was but the sequence of which it was the parent of proximate cause. If it be shown that in May, 1905, a corporation which was in January, 1902, represented by its president as being in a prosperous condition, paying from its net earnings annual dividends of 20 per cent. upon its capital stock, is found to be out of business and practically without assets, when it is questionable whether any cause has been shown for such an overwhelming disaster, can it not be inferred from such facts, taken in connection with others, that such representations were not true, but that its depleted condition in 1905 was but an index to its condition in 1902? Such testimony sufficiently tends in some degree to show such representations were true. Such tendency authorized its admission as evidence. The degree of its probative force was for the jury to determine, and is a matter of no concern to this court. Men do not gather figs from...