Texas Farm Bureau Cotton Ass'n v. Lennox

• Decision Date: 15 January 1924
• Docket Number: (No. 2818.)
• Citation: 257 S.W. 935
• Parties: TEXAS FARM BUREAU COTTON ASS'N v. LENNOX et al.
• Court: Texas Court of Appeals

257 S.W. 935

TEXAS FARM BUREAU COTTON ASS'N v. LENNOX et al.

(No. 2818.)

Court of Civil Appeals of Texas. Texarkana.

January 15, 1924.

Rehearing Denied January 24, 1924.

Appeal from District Court, Red River County; Ben H. Denton, Judge.

Action by H. H. Lennox and another against the Texas Farm Bureau Cotton Association. From an order overruling defendant's plea of privilege to be sued in the county of its residence, defendant appeals. Affirmed.

Long & Wortham, of Paris, C. K. Bullard, of Dallas, Aaron Sapiro, of San Francisco, Cal., and Birkhead & Lang and F. Stevens, all of San Antonio, for appellant.

Lennox & Lennox, of Clarksville, for appellees.

HODGES, J.

In October, 1921, the appellees, H. H. and C. D. Lennox, filed this suit against the Texas Farm Bureau Cotton Association, a private corporation organized under the laws of Texas, with its domicile and place of business at Dallas, in Dallas county, Tex. The plaintiffs in their original petition allege, in substance, that on or about June 30, 1921, they as joint tenants in the name of Lennox & Lennox signed a written agreement to organize a nonprofit association without capital, under the laws of the state of Texas, for the purpose of promoting, fostering, and encouraging the business of producing and marketing cotton co-operatively. Among other things, it was agreed:

"(1) That they would become members of the Texas Farm Bureau Cotton Growers Cooperative Marketing Association, a nonprofit association without capital stock to be organized under the laws of the state of Texas.

"(2) All officers and employees of the association who handle funds to be adequately bonded.

"(3) Every member to pay an entrance or organization fee of $10, except members of the Texas Farm Bureau Fraternity.

"(4) The association to confine itself to the problems and marketing of cotton and cotton products only, and for its members only.

"(5) The association to be organized by the Texas Farm Bureau Federation acting by and through an organization committee, which was therein named."

Other averments referred to the number of signatures of cotton growers required to make a membership sufficient to complete the organization, after which incorporation was to take place. It was further alleged that the subscriber to this agreement was to execute, when requested by the association, a marketing contract in terms substantially as set forth in the agreement signed, or at the option of the board of directors to be bound by a marketing agreement, the terms of which were set out. It was also provided that for such purposes the signatures to the association contract should be deemed to all effects the same as signatures to the marketing agreement and as an acceptance of each and every agreement therein stated as of the date of the exercise of such option by the board of directors. It was further stipulated that notice of the exercise of such option by the board of directors should be mailed to each subscriber, etc. Then follows a copy of the marketing contract referred to above. After the required number of signatures was secured upon satisfactory conditions, the appellant corporation was organized. Soon after its incorporation, its board of directors assembled at Dallas and confirmed the marketing contract herein above referred to and adopted it as the contract with its members for handling and marketing their cotton. Notice, however, was never communicated to the plaintiffs as required in a subdivision of the agreement, but they continued as members of the organization.

The marketing agreement above referred to prescribed the terms and conditions on which the cotton produced by the members was to be handled and sold. It stipulated, in substance, that after the prospective corporation, which is the appellant in this instance, had been organized, its board of directors should have the option to treat the contract embraced in the agreement circulated by the promoters of the corporation as the marketing contract under which it would operate, or it would require the subscribers to execute another contract in substantially the same form. The plaintiffs further alleged that their signatures to this entire agreement were secured by fraudulent representations as to the manner and terms on which the cotton of members would be handled; that the substance of the agreement had been violated by the company. They ask that the marketing agreement be canceled as to them, and that they be relieved from further compliance with its terms and obligations.

For another and distinct cause of action the plaintiffs allege that in January, 1922, they were the owners of 1,095 bales of cotton, most of which was grown under conditions which did not bring it within the provisions of the marketing contract above described. This lot of cotton was delivered to the appellant for sale under a special parol contract, the terms of which are set out in the plaintiffs' petition. They charge a breach of that contract by the appellant, which, they assert, resulted in a loss to them of $39,248.57. They ask for judgment for that sum in damages.

The appellant filed its plea of privilege, claiming the right to be sued in Dallas county, the place of its residence. The appellees replied to that plea, alleging that the appellant had an agency in Red River county; that in securing their signatures to the...