Shaw v. Allied Finance Company

• Decision Date: 22 June 1960
• Docket Number: No. A-7677,A-7677
• Parties: M. T. SHAW, Petitioner, v. ALLIED FINANCE COMPANY, Respondent.
• Court: Texas Supreme Court

Page 107

337 S.W.2d 107

161 Tex. 88

M. T. SHAW, Petitioner, v. ALLIED FINANCE COMPANY, Respondent.

No. A-7677.

Supreme Court of Texas.

June 22, 1960.

Rehearing Denied July 20, 1960.

Don E. Burdette, Fort Worth, of Walker, Day & Harris, Fort Worth, for petitioner.

J. L. Shook, Dallas, of Locke, Purnell, Boren, Laney & Neely, Dallas, for respondent.

NORVELL, Justice.

(1) This is a venue case. We granted a writ of error because the holding of the Dallas Court of Civil Appeals in this case, 330 S.W.2d 690, is in conflict with that of the Austin Court of Civil Appeals in Linder v. Thomas, 228 S.W.2d 300. ¹ We agree with the holding in Linder and accordingly the judgments of the trial court and the Court of Civil Appeals will be reversed, petitioner's plea of privilege sustained and this cause ordered transferred to the District Court of Tarrant County in accordance with the provisions of Rule 89, Texas Rules of Civil Procedure.

(2) Repondent's motion asserting lack of jurisdiction because of mootness is overruled. Shell Petroleum Corporation v. Grays, 122 Tex. 491, 62 S.W.2d 113; Goolsby v. Bond, 138 Tex. 485, 163 S.W.2d 830. So far as the record discloses, there is still a controversy existing between petitioner and respondent which petitioner is entitled to have tried in the county of his residence.

This is a 5-29a venue case in which respondent sought to hold venue in Dallas County as to petitioner, M. T. Shaw, upon the theory that he was a necessary party to a chattel mortgage foreclosure suit. Article 1995, §§ 5 and 29a, Vernon's Ann.Tex.Stats. Allied Finance Company brought suit against Marvin W. Parker as the maker of a promissory note payable in Dallas County. It also sought to foreclose a lien against a 1958 Cadillac automobile. Shaw was made a party defendant upon the allegation that he was asserting an interest of some kind in the automobile. Shaw filed his plea of privilege to be sued in Tarrant County where he resided. Such plea was overruled by the trial court and its judgment sustained by the Court of Civil Appeals which stated in the course of its opinion that (330 S.W.2d 694):

'While the record before us leaves some doubt as to the exact nature of the interest which appellant asserts, it leaves no doubt that (1) he is claiming an interest of some kind, and (2) that he asserts an interest which is adverse and hostile to appellee's claim of a valid mortgage, and its right to foreclose the mortgage. We believe that appellee cannot get the complete and adequate relief to which it is entitled unless Shaw is a party to the suit.'

Pioneer Building & Loan Ass'n v. Gray, 132 Tex. 509, 125 S.W.2d 284, 287, relied upon by the appellate court as supporting its decision, holds that one to whom a mortgagor has conveyed property subsequent to the execution of the mortgage is a necessary party to a suit to foreclose the mortgage under Article 1995, § 29a. In the Gray case this Court said:

'In the case at bar the plaintiff had the absolute right, as against the mortgagors, under subdivision 5 of Article 1995, to maintain a suit upon its note and to foreclose its lien in McLennan county. In order to secure that right and make fully effective a decree of foreclosure, Gray was a necessary party. Without his presence in the suit no effective decree could be entered enforcing the rights which appellant had under his contract with the mortgagors. Limited relief could be obtained against the executrix alone, but not that character of relief to which appellant was entitled under its contract.' (Italics added.)

(3) Pioneer Building & Loan Ass'n v. Gray does not stand for the proposition that anyone who claims adversely to the mortgagor is a necessary party (under exception 29a) to a foreclosure suit. As pointed out in Linder v. Thomas, Tex.Civ.App., 228 S.W.2d 300, 301, this Court held in Faubion v. Rogers, 1886, 66 Tex. 472, 1 S.W. 166, that:

'The only proper parties to a suit to foreclose a mortgage-and, of course, the rule holds good as to similar liens-are the mortgagor and the mortgagee, and those who have acquired any interest from them subsequently to the mortgage. 2 Jones, Mortg. § 1440. As there is no privity between an adverse claimant who is a stranger to the mortgage and the estate, he cannot be made a party for the purpose of trying his adverse claim in the foreclosure suit.'

It was said in Hampshire v. Greeves, 1912, 104 Tex. 620, 143 S.W.147,150 (also cited in Linder) that:

'An adverse claimant is a stranger to the mortgage and the estate. His interest can in no way be affected by the suit, and he has no interest in it. There being no privity between him and the mortgagee, the latter cannot make him a party defendant for the purpose of trying his adverse claim in the foreclosure suit.'

(4) It follows as a logical proposition that those who are not proper parties cannot be necessary parties.

(5, 6) Under our venue statutes it must be clearly shown that the case comes within some well-defined statutory exception before one may be deprived of his right to defend a suit against him in the county of his residence. Meredith v. McClendon, 130 Tex. 527, 111 S.W.2d 1062; National Life Co. v. Rice, 140 Tex. 315, 167 S.W.2d 1021. The party relying upon exception 29a to hold venue in a county other than the county of the residence of a defendant asserting his statutory privilege must plead and prove that such defendant is a necessary party to the action. Ladner v. Reliance Corporation, 156 Tex. 158, 293 S.W.2d 758; Clark, Venue in Civil Cases, ch. 29a, § 6; McDonald, Texas Civil Practice, § 4.36. Here it was neither pleaded nor proved that Shaw had acquired an interest in or a claim to the automobile from the mortgagor, Parker, subsequent to the date of the mortgage which was January 3, 1958. In fact the evidence indicates that Shaw's claim to the automobile arose from a transaction had with Parker on December 13, 1957, some twenty days before the date of the mortgage. This suit is one between claimants under conflicting titles and the fact that one of them holds under a mortgage does not alter the situation. For example, we may consider two situations. First, A sues B for title and possession of a chattel which he holds under a bill of sale. B is entitled to defend in the county of his residence and there assert the illegality of A's bill of sale and urge the validity of his own title. In the second situation, A has mortgaged the chattel to C. C sues to foreclose his mortgage against A and joins B under an allegation that B is asserting some right or title to the chattel. The venue situation has not changed. As between C, A's mortgagee, and B, there still remains the title dispute which B is entitled to litigate in the county of his residence. It is only in cases where A, the...