Commercial Credit Co. v. Moore , 288 S.W. 508 ( 1926 )

The Commercial Credit Company, a corporation, by an amended petition, sought to recover in this action against J. L. Moore upon a promissory note, payable in installments, for the sum of $460, less certain payments set out in the petition.

I agree that the judgment should be reversed, but not on the grounds and for the reasons stated by Judge RANDOLPH in the original opinion.

The note was made payable to L. P. Barker Company, or order, and the acceleration clause provides that, in case of default in the payment of any monthly installment, at maturity, the holder of the note, at his option, may declare the whole debt due. The note provides for interest, "after maturity at the highest legal contract rate." The note provides for attorney's fees as follows:

"In the event an attorney be employed to collect this note or any installment thereof, by suit or otherwise, or to preserve or protect the property described in the aforesaid mortgage, the parties hereto agree to pay all costs incurred, including a reasonable attorney's fee, which shall not be less than 15 per cent. of the amount then due."

The petition fails to allege that the note has been transferred to plaintiff by the original payee, or that plaintiff is the legal owner and holder thereof. A petition upon a note which fails to allege ownership in the plaintiff is bad as against a general demurrer and presents fundamental error. Malone v. Craig, 22 Tex. 609; Thigpen v. Mundine,24 Tex. 282: Fortune v. Kerr, 25 Tex.Supp. 309; Frazier v. Todd,4 Tex. 461; Colbertson v. Beeson, 30 Tex. 76.

The Negotiable Instrument Law (Vernon's Ann.Civ.St. 1925, art. 5932, § 2) provides as one of the requisites of a negotiable instrument that the sum payable shall be certain. The recitals in the note as to interest and attorney's fee do not comply with this requirement of the statute, and plaintiff has failed to allege what the highest contract rate is or what would constitute a reasonable attorney's fee. These facts must be alleged and proved to entitle plaintiff to recover.

The original petition alleges that the defendant, Moore, defaulted in the payment of the August installment, and the plaintiff had exercised its option and matured the debt, without alleging the date upon which the option was exercised, and therefore fails to show a compliance with the acceleration clause entitling it to sue at the time the petition was filed.

It is further alleged that, at the time of the execution of the note, and as part of the same transaction, the defendant executed a chattel mortgage upon a Ford truck to secure the payment of the note, and that said truck was then in the hands of the sheriff of Lubbock county by virtue of a writ of sequestration issued in the case. The value of the truck is alleged to be $250. Certain payments are alleged to have been made, and it is alleged that a check for the August installments was refused payment by the drawee bank because of insufficient funds to defendant's credit.

The defendant, Moore, answered by general denial and further specifically alleged that, when plaintiff's amended petition was filed, defendant had previously paid the entire debt, and that nothing was due plaintiff at that time. He denied that he had defaulted in the payment of any installment and set up the facts of the issuance and levy of the writ of sequestration; that the sheriff had taken the truck into possession, under the writ, and had left it exposed to the weather, resulting In damage and deterioration to the truck in the sum of $75; that the sheriff kept the truck in his possession for 40 days, during which time defendant would have earned $12 a day by the use of the same, that being its rental value; and he claimed $480 total damages for the wrongful sequestration.

The petition further claims exemplary damages, by reason of the levy of the writ, in the sum of $400. The prayer is that defendant have Judgment canceling the note and mortgage, for actual damages in the sum of $555 and exemplary damages in the sum of $400, and for possession of the truck.

Before the trial, the defendant filed an amended answer and cross-action in which he again alleged that the debt had been paid prior to the time plaintiff filed its firstamended petition. The facts with reference to the issuance and levy of the sequestration upon the truck are set out substantially as in the original answer, except that he alleges that the sheriff retained possession of his truck "30 days or more" to his damage at the rate of $12 per day, aggregating the sum of $360. The prayer of this pleading is that the defendant have judgment canceling the note and mortgage; that he recover from plaintiff and the Globe Indemnity Company, the surety on the sequestration bond, actual damages in the sum of $435; and that he have possession of the truck.

The filing of this amendment, which reduces the amount claimed in defendant's cross-action, is made the principal basis of complaint on this appeal. I cannot assent to the holding of Judge RANDOLPH that the defendant did not have the right to amend his pleading and abandon his action for $400 exemplary damages, nor do I assent to the holding that, because he prayed for cancellation of the note and mortgage in his second-amended petition, he asked for an amount beyond the jurisdiction of the county court. That a party may, by amendment, abandon a part of his cause of action and reduce his claim, when this is not fraudulently done, and when the amount claimed in the original pleading is not a fixed sum, is settled by the Supreme Court. Fuller v. El Paso Times (Tex.Com.App.) 236 S.W. 455; State v. Snyder, 66 Tex. 687, 18 S.W. 106; Bigham v. Talbot, 63 Tex. 271.

District and county court rule No. 12 provides:

"An amendment may be made by either party, upon leave of the court for that purpose, or in vacation as prescribed by statute-the object of an amendment as contradistinguished from a supplemental petition or answer being to add something to or withdraw something from that which has been previously pleaded, so as to perfect that which is or may be deficient, or to correct that which has been incorrectly stated by the party making the amendment."

We are not informed by the record why the defendant abandoned his claim for exemplary damages, but it is certainly a matter of which the plaintiff has no right to complain. If either plaintiff or defendant had declared upon a cause of action in an amount greater or less than the jurisdiction of the court, he certainly had the right to bring his case within the jurisdictional amount where the original pleading is not based upon a fixed sum. Ward v. Lathrop, 11 Tex. 287; McDannell v. Cherry, 64 Tex. 178; Wood County v. Cate. 75 Tex. 215.12 S.W. 535: Puckett v. Richardson Drug Co. (Greer v. Richardson Drug Co.) 1 Tex. Civ. App. 634, 20 S.W. 1127; Miller v. Newbauer (Tex.Civ.App.) 61 S.W. 974. If the amount is uncertain or unliquidated, he has the right to change the amount in his pleading or to abandon it altogether, and it is not a fraud upon the jurisdiction of the court for him to do so. Western Union Telegraph Co. v. Durham, 17 Tex. Civ. App. 310,42 S.W. 792.

As sustaining the plaintiff's contention that the defendant cannot eliminate any part of his damages by amending his pleading so as to bring the amount of his claim within the jurisdiction of the county court, Judge RANDOLPH says:

"If the pleading seeking cancellation of the note and for actual and exemplary damages, as set out in the original cross-action, be considered, then it will clearly be seen that the defendant's cause of action is for a total amount beyond the jurisdiction of the county court. This being true, has the defendant the right to amend his pleading and by elimination vest the court with jurisdiction?"

In approving this contention, Judge RANDOLPH cites the case of Gimbel Son v. Gomprecht Co., 89 Tex. 497, 35 S.W. 470. That was a case in which the defendant, by a plea in reconvention, sued for $1,763.21 actual and exemplary damages, and in his plea admitted that he was due the plaintiff the amount claimed in the petition, and asked that he have judgment for the full amount of his damages, and that said sum be credited with the full amount of plaintiff's claim, which, if done, would have reduced the defendant's recovery to a sum within the jurisdiction of the county court. The Supreme Court held that the two classes of claims were not such as of themselves would have the effect to extinguish each other until ascertained by the court and by its judgment thus applied.

The other case cited by Judge RANDOLPH is Times Publishing Co. v. Hill,36 Tex. Civ. App. 389, 81 S.W. 806, which was originally filed in the justice court for an amount not within the jurisdiction of that court, and in which the defendant, by cross-action, was suing for a sum which exceeded the jurisdiction of both the justice and county court. The holding in the Hill Case is based upon the decision in the Gimbel Case, supra, but neither of these cases have any application whatever to the instant case. If the defendant had the right to amend and abandon his claim for exemplary damages, thereby bringing his claim in amount within the jurisdiction of the county court, the fact that he had previously claimed more in the original pleading is not a matter to be considered. The amendment, as a matter of law, superseded the original answer, and the latter was no longer a part of the record.

I also dissent from that part of the opinion of Judge RANDOLPH in which he attempts to overrule the holding of this court in Knoohuizen v. Nicholl (Tex.Civ.App.) 257 S.W. 972. That case was decided correctly upon the record before us and is supported by the authorities therein cited. Nicholl alleged, as Moore does in this case, that he was entitled to certain credits upon the note, on which he had been sued, and that said credits should have been applied to the note as of the date they were paid. He did not ask judgment against the plaintiff for the amount he had paid, but simply pleaded payment and a failure of the plaintiff to enter the credit. We held in that case that it was a plea of payment, and there was no prayer against the plaintiff for any judgment by reason thereof, except the extinguishment of the debt to the extent of the payment. The issue raised by the plea was whether the payments had been made. If he proved payment, as a matter of law, the debt was extinguished to that extent. So in this case. Moore pleads that the debt was paid before the amended petition was filed and prays, by reason of that fact, that both the note and the mortgage be canceled. That part of his prayer is surplusage. If he could show that the debt had been paid, then the law cancels the note and the mortgage, which is an incident to it, without any affirmative action on the part of the court. Moore did not ask for judgment against the plaintiff in the instant case, either for the amount of the note which he sued to have canceled, or for the sums which he had paid. This case and the Knoohuizen Case are clearly distinguishable upon that ground from the Gimbel and Hill Cases cited by Judge RANDOLPH.

Nor does the fact that he prays for the possession of the truck make that a part of the amount in controversy. If his debt is paid, the payment ipso facto cancels the note and the mortgage, and his truck is automatically released from the sequestration, and the sheriff is bound to deliver it to him without a writ of possession.

Because the prayer of the amended answer is for an amount within the jurisdiction of the county court, I respectfully dissent from the holding in the original opinion by Judge RANDOLPH.

In view of another trial, it is suggested that the judgment dispose of the plaintiff's cause of action by express terms. The judgment, as entered, denies the plaintiff the right to recover upon the note. In fact, the plaintiff's claim is not mentioned in the judgment. Whether the plaintiff is not allowed to recover because the suit was prematurely filed as found by the jury, or because the note had been paid in full at the time of the trial, we are not informed.

Even if the balance of the note was paid after it was placed in the hands of plaintiff's attorney, plaintiff would still be entitled to recover a reasonable amount due as attorney's fees, upon the sum shown to be due at the time it was placed in the hands of the attorney. Walker v. Tomlinson, 44 Tex. Civ, App. 446, 98 S.W. 906; Sinclair v. Weekes (Tex.Civ.App.) 41 S.W. 107; McIlhenny v. Bank (Tex.Civ.App.) 46 S.W. 282.

For the reasons stated above, I am of the opinion that the judgment should be reversed and the cause remanded.