Vahlsing, Inc. v. Missouri Pac. R. Co.

• Citation: 563 S.W.2d 669
• Decision Date: 28 February 1978
• Docket Number: No. 1248,1248
• Parties: VAHLSING, INC., Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellee.
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 669

563 S.W.2d 669

VAHLSING, INC., Appellant, v. MISSOURI PACIFIC RAILROAD COMPANY, Appellee.

No. 1248.

Court of Civil Appeals of Texas, Corpus Christi.

Feb. 28, 1978.

Rehearing Denied March 31, 1978.

Ted R. Cackowski, Austin, for appellant.

Harry L. Hall, McAllen, for appellee.

OPINION

NYE, Chief Justice.

This is a plea of privilege case. Plaintiff, Missouri Pacific Railroad Company, filed suit against defendants, Vahlsing, Inc., and Xonu Intercontinental Industries, Inc., to recover on a $20,000 note executed by Vahlsing and on a security agreement executed by Xonu. Only Vahlsing filed a plea of privilege which was overruled by the trial court. Vahlsing has perfected its appeal to this Court.

Plaintiff Railroad Company alleged that the note and the security agreement were executed and delivered to plaintiff in partial settlement of a certain case then pending in the 139th Judicial District Court of Hidalgo County, Texas, styled Missouri Pacific v. Vahlsing, Inc. (Cause No. C-11494). In order to secure the payment on the note, the security agreement gave to the Railroad Company a security interest in crops Xonu promised to grow on land it owned in Cameron County. Copies of the note, the security agreement, financing statement and a resolution of Xonu's Board of Directors authorizing its President to execute and deliver the security agreement to plaintiff were attached to plaintiff's petition. Plaintiff alleged that Vahlsing had defaulted on its obligation under the note; that there was no collateral upon which to foreclose because Xonu had breached its promise (to plant certain crops) under the security agreement; and that in any event Xonu had rendered compliance with the security agreement impossible because it had sold its land to a third party. Plaintiff prayed for the court to enter judgment against both defendants, to determine any subrogation rights of Xonu and to issue execution against Xonu.

Defendant Xonu answered but did not file a plea of privilege to be sued in San Patricio County, the county of its registered office. Defendant Vahlsing filed a general denial subject to a plea of privilege which alleged venue to be in Dallas County, the county of its registered office. Plaintiff Railroad Company controverted Vahlsing's plea of privilege and alleged that venue was proper against Xonu under either Subdivision 5 or 23, and since Vahlsing was a necessary party, venue was in turn proper as to Vahlsing under Subdivision 29a of Article 1995. Although Xonu received notice of the venue hearing, Xonu did not attend. The trial court overruled Vahlsing's plea of privilege without filing findings of fact or conclusions of law.

Prior to the institution of this suit in Cameron County, Texas, Vahlsing, Inc., on July 14, 1974, had filed its Original Chapter XI proceeding in the United States District Court for the Southern District of Texas. Accordingly, all proceedings in State Court against Vahlsing, Inc., were automatically stayed during the pendency of the bankruptcy. On December 29, 1976, plaintiff Railroad Company received leave of the Bankruptcy Court to proceed against Vahlsing, Inc., in this suit "but with the provision that no execution could be issued on any Judgment rendered against Vahlsing, Inc." Regardless of the outcome of this suit, the liability of Vahlsing, Inc., to Missouri Pacific Railroad Company, appellee herein, will be discharged in accordance with the plan of arrangement of Vahlsing, Inc., in the Bankruptcy Court which has been accepted by the requisite number of creditors.

Vahlsing in three points of error, complains that the trial court erred: (1) in admitting into evidence the security agreement of defendant Xonu, (2) in overruling its plea of privilege because there was no evidence that the plaintiff Railroad Company had a cause of action or part thereof arising in Cameron County against defendant Xonu (Subdivision 23), and, (3) there was no evidence that Vahlsing was a necessary party to any cause of action asserted against defendant Xonu (Subdivision 29a).

At the hearing on Vahlsing's plea of privilege, the security agreement of Xonu was admitted into evidence without proof of execution. Vahlsing objected to the introduction of the security documents on the ground that Xonu's interests were not in issue at the plea of privilege hearing. The plaintiff Railroad Company introduced into evidence Xonu's first amended answer which did not deny that Xonu had executed the security agreement. Even if it had denied execution of the agreement, Xonu would have had to deny it under oath.

A denial of the execution of a written instrument must be verified or the written instrument shall be received in evidence as though fully proved, Rule 93 T.R.C.P. ¹ We recognized the general rule that a private writing must be proved to be genuine and executed by the party to be charged with its execution before it can be admitted into evidence. Borak v. Bridge, 524 S.W.2d 773, 777 (Tex.Civ.App. Corpus Christi 1975, writ ref'd n. r. e.); Morris v. Ratliff, 291 S.W.2d 418, 422 (Tex.Civ.App. Dallas 1956, writ ref'd n. r. e.); Bliss v. City of Fort Worth, 288 S.W.2d 558 (Tex.Civ.App. Fort Worth 1956, writ ref'd n. r. e.). This general rule has particular force when the written instrument is offered against a person not a party to the writing.

However, where a venue fact is one which can be put in issue only by a verified pleading and the defendant does not interpose such a plea, the plaintiff is not required to prove the same. Ladner v. Reliance Corp., 156 Tex. 158, 293 S.W.2d 758, 763 (1956); Wallace v. Income Properties/Equity Trust of Santa Ana, California, 538 S.W.2d 17, 19 (Tex.Civ.App. Austin 1976, writ dism'd); International Shelters v. Pinehurst Inc., 474 S.W.2d 497, 500 (Tex.Civ.App. Corpus Christi 1971, writ dism'd). Vahlsing argues here that since the security agreement was not "charged to have been executed by" Vahlsing, Vahlsing was not required to deny its execution under Rule 93(h) and, therefore, it was error for the trial court to admit the document without proof of execution. We do not agree. The purpose of introducing the security agreement was to show proper venue in Cameron County against Xonu. Subdivision 29a of Article 1995, supra, provides:

"29a. Two or more defendants. Whenever there are two or more defendants in any suit brought in any county in this State and such suit is lawfully maintainable therein under the provisions of Article 1995 as to any such defendants, then such suit may be maintained in any such county against any and all necessary parties thereto."

Exception 29a must always be considered in conjunction with some other subdivision of Article 1995. Under Subdivision 29a plaintiffs had the burden to prove venue facts that show venue was maintainable against Xonu under another exception to the venue statute, in this case Subdivision 5 and/or Subdivision 23.

In order to maintain venue under Subdivision 5 of Article 1995, Tex.Rev.Civ.Stat.Ann., the plaintiff must prove: (1) an obligation in writing; (2) the execution by the defendant; and (3) that it is performable in the county of the suit. Macpet v. Oil Field Maintenance Co., 538 S.W.2d 240 (Tex.Civ.App. Corpus Christi 1976, no writ); Public Service Life Insurance Company v. Copus, 494 S.W.2d 200 (Tex.Civ.App. Tyler 1973, no writ); Pitt Grill, Inc. v. Albert, 432 S.W.2d 160 (Tex.Civ.App. Dallas 1968, no writ); Hess v. Young, 160 S.W.2d 574 (Tex.Civ.App. Waco 1942, no writ). Plaintiff only indirectly, if at all, introduced the security instrument into evidence against defendant Vahlsing. The security agreement showed that the plaintiff Railroad Company had a cause of action against Xonu in Cameron County. Therefore, absent a verified denial of the execution of the security agreement by Xonu, its execution was not in issue at the plea of privilege even though Xonu did not file a plea of privilege. Wallace v. Income Properties/Equity Trust of Santa Ana, California, supra 538 S.W.2d at 19; cf. Key v. Mineral Wells Inc. Co., 96 S.W.2d 804, 805 (Tex.Civ.App. Eastland 1936, no writ); Radford v. Hutto, 113 S.W.2d 563, 564-65 (Tex.Civ.App. Amarillo 1938, no writ). Defendant's point of error one is overruled.

To invoke the provisions of Subdivision 23 in this case, plaintiff had to prove (1) that defendant was a corporation; (2) that plaintiff has a cause of action against defendant; and (3) that cause of action, or part thereof, arose in Cameron County. See Kunz Construction Co. v. Debus, 459 S.W.2d 661 (Tex.Civ.App. Corpus Christi 1970, no writ); Appell Petroleum Corp. v. Townsend Lease Serv., 375 S.W.2d 547 (Tex.Civ.App. Corpus Christi 1964, no writ). A "cause of action" is established by facts which show plaintiff's primary right and defendant's act or omission which violates that right. Socony Mobil Co., Inc. v. Southwestern Bell Tel. Co., 518 S.W.2d 257, 267 (Tex.Civ.App. Corpus Christi 1974, no writ); 1 McDonald, Texas Civil Practice, § 4.30.2 (1965).

In point of error two, defendant contends there is no evidence in the record of a cause of action, or part thereof, arising in Cameron County against Xonu, and, therefore, venue under Subdivision 23 must fail.

Having determined that the security agreement was properly admitted into evidence, we find that such agreement granted plaintiff a security interest in the following collateral:

"all grain to be grown during 1974, 1975 and 1976 on Tract Z, containing 640 acres, out of La Feria Grant (Balli unsubdivided), and Lot 10, containing 29.73 acres, all out of the La Feria Grant in Cameron County, Texas, and more fully described in . . . "

The security agreement also contained the following:

"Debtor (Xonu) warrants, covenants, represents and agrees as follows:

(6) Approximately 400 acres of grain will be planted and raised on the above described property during 1974, and approximately the same amount will be planted during each of the years 1975 and 1976,...