Southern Traffic Bureau v. Thompson

• Decision Date: 21 June 1950
• Docket Number: No. 12109,12109
• Parties: SOUTHERN TRAFFIC BUREAU v. THOMPSON. THOMPSON v. SOUTHERN TRAFFIC BUREAU.
• Court: Texas Court of Appeals

Page 742

232 S.W.2d 742

SOUTHERN TRAFFIC BUREAU v. THOMPSON.

THOMPSON v. SOUTHERN TRAFFIC BUREAU.

No. 12109.

Court of Civil Appeals of Texas, San Antonio.

June 21, 1950.

Rehearing Denied Aug. 30, 1950.

Fischer, Wood, Burney & Glass, Corpus Christi, Smith & Oakleaf, McAllen, John C. North, Jr., Corpus Christi, L. Hamilton Lowe, Austin, for appellant.

Strickland, Wilkins, Hall & Mills, Mission, for appellee.

NORVELL, Justice.

This suit involves the legality and validity of a method of operation adopted by Southern Traffic Bureau in presenting and prosecuting claims against rail carriers. A cross appeal is involved, but for convenience we will refer to Southern Traffic Bureau as the appellant and Guy A. Thompson as appellee. Thompson is the trustee for a group of railroads known as the Missouri Pacific Lines, appointed in accordance with Section 77 of the Bankruptcy Act, 11 U.S.C.A. § 205. He filed this suit in behalf of certain carriers and later intervened on behalf of others. The distinction between plaintiffs and interveners is not pertinent here. The Texas and New Orleans Railroad Company also intervened, but its asserted cause of action was severed from the present suit and it is not a party to this appeal. The Southern Traffic Bureau, defendant below, is a partnership composed of W. M. White, W. M. White, Jr., and other members of the White family, and is engaged in the business of preparing and presenting claims against rail carriers arising out of delays in transit, breakage of containers, failure to carry out shipping instructions and similar matters relating to the shipment of fruit and vegetables. The appellee contended that the bureau's operations are violative of the law against barratry, Article 430, Vernon's Ann.Penal Code, and that it unlawfully engages in the practice of law.

Trial below was to the court without a jury. Upon request findings of fact and conclusions of law were prepared and filed. The judgment in the main was favorable to appellee. A perpetual injunction was granted, restraining the bureau from soliciting claims against appellee and from doing other specified acts set out in seven numbered paragraphs of the decree. The court also granted further relief by way of a declaratory judgment. Article 2524-1, Vernon's Ann.Civ.Stats. This portion of the judgment consists of eleven paragraphs lettered a to k, inclusive.

Appellant submits 64 points of error and the appellee presents two cross-points. It is obviously impossible to discuss all of these points seriatim and keep this opinion within reasonable bounds. We believe, however, that the issues of the case naturally divided themselves into certain grand divisions which may be expeditiously discussed and disposed of.

The injunctive portion of the decree provided that, 'Southern Traffic Bureau and W. M. White, Sr., W. M. White, Jr., Cecil White, Bernice White and Jack White, their agents, servants and employees be, and they are hereby perpetually enjoined:

'(1) From in any manner soliciting employment to present, prosecute, settle, collect, adjust or compromise any claim or claims (other than freight rate claims) against Plaintiff or Intervener in which they have no interest, for their own profit, and from procuring others to solicit such employment for them.

'(2) From examining the files or records of any person, firm, association or corporation for the purpose of ascertaining or determining whether such files or records disclose a claim (other than freight rate claims) against Plaintiff or Intervener which is cognizable at law.

'(3) From advising any person, firm, association or corporation that they have a claim (other than freight rate claims) against Plaintiff or Intervener or such a claim which the Courts will enforce.

'(4) From filing any claim (other than freight rate claims) against Plaintiff or Intervener, on behalf of any other person, firm, association or corporation, either in Court or with Plaintiff or Intervener or any servant, agent, employee or other representative of Plaintiff or Intervener.

'(5) From representing any other person, firm, association or corporation in the prosecution of a claim (other than freight rate claims) against plaintiff or Intervener and from representing any other person, firm, association or corporation in any effort or attempt to collect any claim (other than freight rate claims) from Plaintiff or Intervener, or attempting to settle, adjust or compromise any such claim.

'(6) From advising any person, firm, association or corporation asserting a claim against Plaintiff or Intervener as to whether the same should be settled, adjusted or compromised and from advising such claimant whether a suit should be filed in Court on such claim if it be rejected by Plaintiff or Intervener or not compromised, adjusted or settled by them.

'(7) From threatening, on behalf of any other persons, firm, association or corporation, to file suit against Plaintiff or Intervener, in the event any claim filed by or on behalf of such person, firm, association or corporation is not paid, adjusted settled or compromised.'

The obvious basis of the first numbered paragraph of the injunctive portion of the decree is the barratry statute, Art. 430, P. C., which in part provides that: 'Whoever shall, for his own profit or with the intent to distress or harass the defendant therein, wilfully instigate, maintain, excite, prosecute or encourage the bringing, in any court of this State, of a suit at law or equity in which he has no interest; * * * or shall willfully instigate, maintain, excite, prosecute or encourage the bringing or prosecution of any claim in which he has no interest, for his own profit or with the intent to distress or harass the person against whom such claim is brought or prosecuted; or shall seek to obtain employment in any claim to prosecute, defend or collect the same by means of personal solicitation of such employment, or by procuring another to solicit for him employment in such claim; * * * shall be fined not to exceed five hundred dollars, and may in addition thereto be imprisoned in jail not exceeding three months. The penalties herein prescribed shall apply not only to attorneys at law, but to any other person who may be guilty of any of the things set forth in this article. * * *'

In the case of McCloskey v. San Antonio Public Service Co., Tex.Civ.App., 51 S.W.2d 1088, this Court held that when the property rights of an individual or corporation were threatened by the solicitation and prosecution of claims against it in contravention of the barratry law, an injunction would lie to restrain such action. It was held that while, as a general rule, an injunction does not lie to restrain the violation of a penal statute, there is a well recognized exception to the rule. Whenever the commission of acts denounced as wrongful by the penal code results in the invasion of the property rights of another, the injured person may protect himself by injunction. See also, Ex parte Hughes, 133 Tex. 505, 129 S.W.2d 270; Ex parte Allison, 48 Tex.Cr.R. 634, 90 S.W. 492, 13 Ann.Cas. 684, 3 L.R.A.,N.S., 622; Ramon v. Saenz, Tex.Civ.App., 122 S.W. 928; Featherstone v. Independent Service Station Ass'n of Texas, Tex.Civ.App., 10 S.W.2d 124. The holding in the McCloskey case was approved by the Supreme Court, as evidenced by its outright refusal of a writ of error.

The trial court in effect found that appellant had in the past and would in the future, unless restrained, solicit claims against the appellee. These findings fully support the first paragraph of the restraining portion of the decree above quoted. Appellant however asserts that these findings are not supported by the evidence. There was direct evidence of the solicitation of business. Letters written upon the letterhead of Southern Traffic Bureau were introduced in evidence in which persons were advised that the firm was in business, had a good record for settling 'big claims,' and would make a railroad carrier 'pay one way or another.' It was shown that the appellant had placed advertisements seeking business in trade magazines and publications.

Under the Texas authorities it can not be seriously urged that no violation of the barratry law had taken place. At one time the barratry law was applicable only to attorneys at law. This defect was pointed out by this Court in McCloskey v. San Antonio Traction Co., 192 S.W. 1116, and remedied by the Legislature. McCloskey v. San Antonio Public Service Company, Tex.Civ.App., 51 S.W.2d 1088. In Pelton v. McClaren Rubber Co., Tex.Civ.App., 120 S.W.2d 516, 517, wr. ref., Mr. Justice Alexander (later Chief Justice of the Supreme Court) made the following clear and unequivocal statement in regard to the barratry statute: 'By the plain provisions of the above statute (Art. 430 P.C.) it is made illegal for anyone, be he either lawyer or layman, to seek by personal solicitation to obtain employment to collect a claim. McCloskey v. Tobin, 252 U.S. 107, 40 S.Ct. 306, 64 L.Ed. 481.'

As to injury to appellee, we are also of the opinion that the evidence was sufficient to raise an issue for the trial court's determination. There was testimony to the effect that appellant had presented claims to the carriers which had no factual basis for liability and others for excessive amounts.

In the recent case of Thompson v. Larry Lightner, Inc., 230 S.W.2d 831, decided by this Court on May 3, 1950, we held that Thompson as trustee for a number of rail carriers was not entitled to an injunction against a claims agency as the trial court found (and the finding was not challenged on appeal) that the property rights of Thompson as trustee had not been invaded nor had be suffered any pecuniary loss or injury because of any acts of the claims agency. Appellant in effect argues that even though solicitation be shown, no invasion of appellee's property rights is disclosed, unless it further appears that as a result of...