Person v. Latham

• Decision Date: 17 May 1979
• Docket Number: No. 8176,8176
• Citation: 582 S.W.2d 246
• Parties: Bill PERSON et al., Appellants, v. Charles G. LATHAM, Appellee.
• Court: Texas Court of Appeals

Page 246

582 S.W.2d 246

Bill PERSON et al., Appellants, v. Charles G. LATHAM, Appellee.

No. 8176.

Court of Civil Appeals of Texas, Beaumont.

May 17, 1979.

Rehearing Denied June 7, 1979.

St. John Garwood, Jr., Houston, for appellants.

Charles A. Moore, Dwight E. Vorpahl, Houston, for appellee.

KEITH, Justice.

Plaintiffs below appeal from a judgment which did not grant them the relief to which they claim to be entitled to receive under the pleadings, evidence, and findings of the jury. Their claims arose out of alleged fraudulent misrepresentations relating to the sale of several lots in two subdivisions. The appeal is upon six points of error raising both factual and legal questions which we must discuss. However, we will condense, as much as possible, the tremendous record presented. ¹

Two brothers, Bill Person and Claude Person, brought suit against several defendants claiming that a salesman for the owners and developers, C. G. Latham, made false and fraudulent representations to induce them to purchase lots in two subdivisions in Montgomery County. We quote in the margin plaintiffs' pleadings describing a part of the scheme used. ²

Our record shows, conclusively, that the defendant Latham, by means of false and fraudulent representations, persuaded the plaintiffs, Bill and Claude Person, to invest in certain lots on Lake Conroe, and the jury so found. Bill Person secured a judgment for his damages as found by the jury, in the amount of.$19,000 plus $20,000 in exemplary damages. Because of a plea of res judicata, to be discussed hereinafter, Claude Person was denied a recovery. ³

As to Bill Person, the question presented is whether his recovery of actual damages should be trebled under the provisions of the Defective Trade Practices-Consumer Protection Act, Tex.Bus. & Comm.Code Ann. §§ 17.41, et seq. (Supp.1978-79), specifically S 17.45(1) and (2), ⁴ and, if so, may he recover exemplary damages in addition to the mandatory trebling of the damages under the Act. We overrule the contentions so advanced for the reasons now to be stated.

It is clear from the reading of the record that Bill Person was a willing and gullible victim of Latham's false representations. He agreed to purchase his lots on the representation that a "Mrs. Gigglia" would pay double his cost before any monthly installments matured. Of course, there was no "Mrs. Gigglia" and the jury so found. It fixed Bill's damages at the amount of the profit he would have realized had there been a Mrs. Gigglia and she had performed as Latham had promised. Bill's argument is to the effect that when he purchased the lots under these circumstances, he purchased Latham's services in selling the lots to Mrs. Gigglia. In so doing, he overlooks the limitation upon the definition of "goods" as defined in the statute. Under Bill's own testimony, he did not purchase such lots for use, but to become a link in a chain designed to fleece the mythical Mrs. Gigglia of her funds.

Texas follows the rule that statutes in derogation of the common law are not strictly construed; but, if the statute creates a liability unknown to the common law, or deprives a person of a common law right, the statute will not be extended beyond its plain meaning or applied to cases not clearly within its purview. And, since the legislature did not specifically define the word "use", its ordinary meaning will be applied. Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex.1969).

Under the clear rules enunciated in Satterfield, supra, we decline to permit one conspirator to recover treble damages against his co-conspirator in a scheme to defraud a third person. Instead, we will apply the usual rules to the present prevailing facts.

Section 2.01 of the Code Construction Act, Tex.Rev.Civ.Stat.Ann. art. 5429b-2 (Supp.1978-79), ⁵ is in accord with the rule enunciated in Satterfield, supra. We turn now to a few of the authorities defining the word "use".

In Southwestern Telegraph & Tel. Co. v. City of Dallas, 174 S.W. 636, 641 (Tex.Civ.App. Dallas 1915, writ ref'd), the court said: " 'Use' means to make use of; to convert to one's own service; to put to a purpose; to hold, occupy, enjoy, or take the benefit of." In a more recent case of solid precedential value, James Stewart & Co. v. Mobley, 282 S.W.2d 290, 294 (Tex.Civ.App. Dallas 1955, writ ref'd), the court said: " 'Use' is to employ for accomplishment of a purpose; to apply to one's services; to avail oneself of."

Black's Law Dictionary (Rev. 4th Ed., 1968) says that in the non-technical sense, the " 'use' of a thing means that one is to enjoy, hold, occupy, or have some manner of benefit thereof." It also means "usefulness, utility, advantage, productive of benefit."

The word was defined by then Chief Justice Barrow, in Beggs v. Texas Dep't. of Mental Health & Mental Ret., 496 S.W.2d 252, 254 (Tex.Civ.App. San Antonio 1973, writ ref'd), as follows: " 'to put or bring into action or service; to employ for or apply to a given purpose.' "

The jury found in Bill Person's favor each of the constituent elements of a cause of action under Tex.Bus. & Comm.Code Ann. § 27.01 (1968), and the jury found that the lots he purchased were worth.$19,000 but that if Latham had performed as he represented, they would have been worth $38,000, so his judgment was for.$19,000 plus exemplary damages in the sum of $20,000. Thus, we review a judgment wherein there has been a recovery under a special statute governing transactions involving real estate sold under false representations.

We note in passing that S 27.01 is derived from Tex.Rev.Civ.Stat.Ann. art. 4004 (1966), which for nearly a half century governed suits involving fraudulent representations with regard to land transactions and in stock of corporations. It is significant that the new Act, S 17.45(1), specifically excludes fraudulent representations as to stock in corporations: " 'Goods' means Tangible chattels. . . ."

Moreover, the legislature did not indicate any intention to repeal or to modify the statute presently found in S 27.01. We have a special statute governing corporate stock and real estate and we find no imperative need to torture this case into one covered by the Deceptive Trade Practices Act.

Bill Person pleaded and proved a cause of action under S 27.01. See and compare, Stanfield v. O'Boyle, 462 S.W.2d 270, 271 (Tex.1971). We affirm his judgment on that cause of action against Latham. In so doing, we overrule and deny his claims to a recovery under S 17.45.

Claude Person was a rancher in Jack County and had no prior experience in buying or selling lots in real estate subdivisions. His brother Bill talked to him about buying some property in Montgomery County. Bill told him that "a lady was, was in the process of buying them, that she wanted them (the lots) to build a beautiful lake home." He, too, was gullible and frankly testified that he purchased a lot so "(t)hat I could resell it and make some money."

He and his wife drove to Lake Conroe and met Latham who showed them the lot that Latham represented as being the one "Mrs. Gigglia" needed to round out her lakefront property acquisition. Latham told them "that Clydean (Mrs. Claude Person) and I would make about five, would make $5,000 off that one particular lot." Subsequently, Latham told him that one "Roy James" was interested in purchasing two other lots for $20,000 each but that Claude could purchase them for $10,000 each. With the glint of large and quick profit, Claude purchased his lots. He soon found out that there was no substance to Latham's representations.

Claude Person filed his suit against the defendants in Montgomery County on October 31, 1975, and, eventually, his suit was consolidated with that of Bill which had been filed several weeks earlier. While Claude's suit was pending in Montgomery County, he and another brother (Richard) filed a suit in Jack County on April 7, 1976, naming Latham as a party defendant. Claude specifically sought a recovery of $4,900 for money he had paid to Latham on the Montgomery County lots forming the basis of this suit then pending in that county.

Latham defaulted on the Jack County litigation and Claude, along with his wife and other brother as plaintiffs in Jack County, recovered judgment against Latham for $20,125, the judgment having been signed on June 19, 1976, based upon testimony heard by the trial...