Owen v. King

• Decision Date: 05 January 1938
• Docket Number: No. 2117-6984.,2117-6984.
• Citation: 111 S.W.2d 695
• Parties: OWEN v. KING.
• Court: Texas Supreme Court

111 S.W.2d 695

OWEN v. KING.

No. 2117-6984.

Commission of Appeals of Texas, Section A.

January 5, 1938.

Error to Court of Civil Appeals of Seventh Supreme Judicial District.

Suit by C. L. King against G. C. Owen, as an undisclosed principal, for the balance of the price of an interest in partnership. Judgment for the plaintiff was affirmed

by the Court of Civil Appeals, 84 S. W.2d 743, and the defendant brings error.

Judgments of the trial court and the Court of Civil Appeals reversed, and cause remanded.

Underwood, Johnson, Dooley & Huff and W. M. Sutton, all of Amarillo, for plaintiff in error.

Monning & Akin and Henry D. Akin, all of Amarillo, for defendant in error.

HICKMAN, Commissioner.

G. C. Owen and C. L. King were formerly engaged in the implement business as partners at Keyes, Okl., under the tradename of O. K. Implement Company. On February 17, 1931, King transferred his interest in the property belonging to the partnership to J. W. Jenkins, the total consideration being $3,000, one-half of which was evidenced by two promissory notes executed by Jenkins and payable to King, each in the principal sum of $750, due on or before August 1, 1931, and January 1, 1932, respectively. On April 7, 1934, King instituted this suit upon these notes against Jenkins. He joined Owen as a party defendant in the suit asserting liability against him upon different theories, the only one important to the question for decision being the theory that he was the undisclosed principal of Jenkins in the purchase of the property. At the conclusion of the trial King dismissed his suit against Jenkins and issues were submitted to a jury touching the liability of Owen on the theory of undisclosed principal. Upon the verdict King was awarded judgment against Owen, not upon the notes executed by Jenkins, but for an amount equal to the principal of the notes with 10 per cent. interest and 10 per cent. attorney's fees. The Court of Civil Appeals affirmed the judgment of the trial court. 84 S.W.2d 743.

Of the many questions raised in the Court of Civil Appeals, only two are briefed in this court. One of these relates to the manner and form of the submission of special issue No. 1(a). Six different written objections to the issue are brought forward. None of them appears to be well taken, but since the case is to be remanded on account of the error pointed out below and the record will probably be different upon another trial, we shall not set out these objections or further discuss them.

The controlling question presented is one of limitation as applied to an undisclosed principal. The suit against Owen is not upon the notes, and the two years' statute, Vernon's Ann.Civ.St. art. 5526, is applicable. As to this, there is no disagreement between the parties. The question was raised by a special exception to the alternative count in the petition upon which recovery was had and in which Owen was charged with liability on the ground that he was the undisclosed principal of Jenkins. The amended petition upon which the case was tried discloses on its face that the original petition was filed more than two years after the cause of action arose. Apparently in anticipation of the plea of limitation, King alleged facts designed to meet it and avoid the bar of the statute, and the exact question for decision is the sufficiency of these allegations to serve that purpose. To do so they must allege such wrongful conduct on the part of Owen as prima facie will estop him to invoke the statute. Of course, facts must be alleged which show that King was injured by Owen's wrongful conduct. We quote in full the relevant portions of the petition:

"If for any reason it should be held that said defendant Owen is not liable on said notes, then, in the alternative, plaintiff alleges that on or about the month of December, 1930, the defendants, at the instigation of said Owen conspired together to purchase plaintiff's 1/2 interest in said property, in the name of J. W. Jenkins, but in fact for the benefit of said Owen, with the view of purchasing it much cheaper in the name of said Jenkins then said Owen could otherwise purchase it from plaintiff; that, thereafter, on or about February 17th, 1931, such purchase was completed by the said Jenkins, acting at the request, for the benefit, and as the agent of said G. C. Owen, the plaintiff acting in said transaction by and through his duly authorized attorney in fact Benton King, such sale being made at the agreed price of $3,000.00, $1500.00 of which was paid in cash, less the balance due on a note for $1155.50 which plaintiff had given defendant Owen, which was cancelled, and the balance of $1500.00 was to be paid in two installments of $750.00 each, falling due on August 1st, 1931, and January 1st, 1932, respectively, such deferred payments to bear interest from February 17th, 1931, at the rate of 10% per annum, and the debtor was to pay all costs of collection including 10% on the principal and interest for attorney's fees if placed in the hands of an attorney for collection; that the connection of defen...