Farmers' Mill & Elevator Co. v. Hodges , 248 S.W. 72 ( 1923 )

This is an action by C. D. Hodges, B. W. Hodges, and J. N. Hodges, against appellant company, in which the appellees alleged that, on or about the 15th day of September, 1920, they sold about 3,000 bushels of maize, which was not then threshed, to the appellant, through its manager, R. C. Lawyer. That the plaintiffs, acting through C. D. Hodges, executed the following written evidence of the sale.

"White Deer, Texas, September 13, 1920.

"This confirms purchase of crop of maize, estimated to be around 3,000 bu., 400 bu. to be retained for feed from C. D. Hodges B. W. Hodges J. N. Hodges, at $1.50 per hundred, to be delivered as soon as can be threshed in good shape. [Signed] R. C. Lawyer.

"C. D. Hodges."

It is further alleged that the grain was threshed about the 20th of November, 1920, and that plaintiffs offered to deliver to defendant 2,600 bushels, and that defendant, through its said manager, stated that it did not desire to accept the grain, but would later notify plaintiffs when to deliver it; that plaintiffs were not notified, and about the 14th day of January, 1921, they called upon the defendant, and were advised by Lawyer that it would not take the grain and carry out its contract. They sue for the difference between the contract price and the market value, which is alleged to be 60 cents per hundred. In addition to a general demurrer and special exceptions the defendant filed a plea in abatement and of misjoinder, and further answered by general denial and a denial of the authority of Lawyer to make the contract. The substance of the plea in abatement is that between the date of the filing of the original petition and the date upon which the defendant answered the company was duly and legally dissolved, and at the time of the trial was not a corporation and had no assets. They prayed that the suit be abated or prosecuted against the officers and members of the board of directors at the time of dissolution, naming such directors.

The court sustained plaintiff's general demurrer to the plea in abatement, and this action is made the basis of the first assignment of error and first proposition. In support of its contention the appellant cites the case of White et al. v. Texas Motor Car Supply Co. (Tex. Civ. App.) 203 S.W. 441; Orange Lumber Co. v. Toole (Tex. Civ. App.)181 S.W. 825, and in reply to the proposition the appellees cite Butcher v. J. I. Case Threshing Machine Co. (Tex. Civ. App.) 207 S.W. 980; Pease v. Rathbun-Jones Eng. Co., 243 U.S. 273, 37 S. Ct. 283, 61 L. Ed. 715, Ann.Cas. 1918C, 1147. Other authorities were cited which are prior in point of time to the cases mentioned. The decision of the proposition must rest upon the construction. V. S. C. S. 1922, art. 1206, which is an amendment of the original article in Revised Statutes 1911 and V. S. C. S. 1914. The article was amended in 1919 by Act 36th Leg.2d C. S. c. 56, and with reference to the contention now under consideration the article as amended has not been construed so far as we are able to ascertain. The Butcher Case refers to the article as it appears in the Statutes of 1914. The other cases mentioned, as shown by the opinions in each, were based upon the statute as it existed in 1911, in which form it was brought forward in V. S. C. S. as article 1206 of the Statutes of 1914. The amendment of 1919 added the following language to the original article:

"Provided that the dissolution of a corporation shall not operate to abate nor be construed as abating any pending suit in which such corporation is a defendant, but such suit shall continue against such corporation and judgment shall be rendered as though the same was not dissolved, and in case no receiver has been appointed for said corporation, suit may be instituted on any claim against said corporation, as though the same had not been dissolved, and service of process may be obtained on the president, directors, general manager, trustee, assignee, or other person, in charge of the affairs of the corporation at the time it was dissolved by whatever name they may be known in law, and judgment may be rendered as though the corporation had not been dissolved and the assets of said corporation shall be liable for the payment of such judgment just as if said corporation had not been dissolved."

Reference to the caption of the act shows that the purpose of the amendment was to provide against the very thing which the appellant sought to effect by its plea in abatement, and the language of the act is so clear that further comment is unnecessary. The facts being stated, the plea in abatement could be attacked by general demurrer, and the court did not err in sustaining it That the effect of the amendment to article 1206 is to prevent the abatement of the action by a subsequent dissolution of the corporation is in accord with many decisions in other jurisdictions where the language of the statute in such states is not as clear and positive as it is in the above-quoted amendment. Tuskaloosa Scientific Art Association v. Green, 48 Ala. 346; Crawford v. Planters' Merchants' Bank of Mobile, 6 Ala. 289; Board of Counselmen of Frankfort v. Deposit Bank of Frankfort, 124 F. 18, 59 Cow. C. A. 538; Schmitt Bros. Co. v. Mahoney, CO Neb. 20, 82 N.W. 99; Worcester Color Co. v. Henry Wood's Sons Co., 209 Mass. 105, 95 N.E. 392; Ramsey v. Peoria M. F. Insurance Company, 55 Ill. 311. In the last-named case it is also held that suit should be prosecuted by the trustees of the defunct corporation in its name, even though the statute does not, as in this state, so provide.

The second proposition is based upon the action of the court in overruling appellant's plea of misjoinder of parties and causes of action. The suit being one for damages for a breach of contract of sale, and it being shown that the damages resulted because of the failure of appellant to receive the grain and pay for it, we think the court correctly overruled the plea. The sale was made by C. D. Hedges for himself and the other two plaintiffs, and bound each of the plaintiffs to deliver, as soon as it could be threshed in good shape, the crop estimated at 3,000 bushels, less 400 bushels out of the crop to be retained by the sellers. The contract is entire, and the plaintiffs are jointly interested in the amount of the recovery. Their rights accrued at the same time and in virtue of the same contract, and, while if delivery had been accepted, each of the plaintiffs might have been entitled to recover in proportion to the amount of grain furnished by him in performance of the contract, they are, to say the least, proper parties to a suit for its breach. It is the policy of the Texas courts to avoid a multiplicity of suits and to favor a joinder of parties and causes of action when injury will not likely result. No injury is shown by appellant as the result, but, as said by this court in Western Union Telegraph Co. v. Morrow (Tex. Civ. App.) 208 S.W. 689, we may presume that it has been saved the costs of two suits by the joint action. Plaintiffs' rights accrued under the same contract. The same evidence was required to sustain or defeat the action, and the fact that they have recovered different amounts is an immaterial consideration. It was not pleaded that the actions were joined in a fraudulent attempt to confer jurisdiction upon the court. The fact that the judgment apportions to each plaintiff the amount due him is not a matter of which appellant has the right to complain. The authorities sustain the ruling of the trial court. J. E. Dunn Co. v. Smith (Tex. Civ. App.) 74 S.W. 576; Flanders v. Wood, 83 Tex. 277, 18 S.W. 572; Western Union Telegraph Co. v. Morrow (Tex. Civ. App.) 208 S.W. 689; Texas, etc., Railway Co. v. Andrews (Tex. Civ. App.) 80 S.W. 390, Civ.App. Court Rule 62a (149 S.W. x).

Under the third proposition it is insisted that the court erred in permitting Lawyer to testify that he executed the contract for the elevator company, that he was in the company's office when it was executed, and that he acted in behalf of the company as manager in its execution. The appellees alleged that Lawyer was the company's manager, in active charge of its business when the contract was made; that he was its agent, and as such executed the contract. The action was based in part upon the writing referred to. V. S. C. S. art. 1906, subd. 8, provides that when a pleading is founded in part or in whole upon any instrument in writing, charged to have been executed by the opposite party, or by his authority, a denial of the facts charged must be verified by the parties sought to be charged. Appellant's pleading, denying the authority of Lawyer to execute the writing set out above, was not verified. Under the pleadings of the plaintiff the instrument itself, with the testimony of Lawyer objected to, was admissible. City Waterworks v. White, 61 Tex. 536; G., C, S. F. Ry. Co. v. Edloff, 89 Tex. 454,34 S.W. 414, 35 S.W. 144; Pullman Palace-Car Co. v. Booth (Tex. Civ. App.)28 S.W. 719. Under the pleadings parol evidence was admissible to show the real parties to the contract and the authority of Lawyer to execute it for the appellant. Butler v. Merchant (Tex. Civ. App.) 27 S.W. 193.

Under the fourth proposition it is insisted that the writing signed by Lawyer and Hodges, supra, was not admissible because the contract does not purport to be executed on behalf of the appellant. This part of the objection is disposed of by what has been previously said. The further objection was made that plaintiff alleged the date of the writing to be the 15th of September, and that the true date thereof was September 13th. This is not such a variance as would surprise appellant, and the error is harmless. We do not construe the writing exactly as counsel for both parties evidently construe it, and as it is treated in their briefs. The language of the instrument is, "this confirms purchase of crop of maize," etc., indicating that the sale was previously made, and that the writing itself was a confirmation of such sale, setting out the terms and stipulations thereof. The effect of the recital is that the appellant has already purchased the crop, amounting to about 2,600 bushels at $1.50 per hundred, and which plaintiffs had agreed to deliver as soon as it could be threshed. In any event, if executed by the authority of appellant and B. W. and J. M. Hodges, it is competent evidence of the fact of the sale, and under the pleadings is admissible as such.

By its fifth proposition the appellant complains of the admission of the evidence as to market value from the witness Lawyer. The objections urged are: (1) Because such evidence is not the proper way to prove market value; (2) because his evidence shows that he was not qualified to testify as to market value of maize on January 14 or 15, 1921; and (3) especially to that portion of his testimony as to what he told the plaintiffs as to the market price because by impeaching the witness by the plaintiffs or proving by the plaintiffs that he told them what the market price was is not proof of market value. It was shown that Lawyer was the manager of the appellant at this time, buying grain for his employer, and, if he had been qualified to testify as to market value there upon that date, appellees adopted the proper method of proving it. We think the second objection should have been sustained. That part of his testimony upon this point is:

"I was buying and selling grain at White Deer, but there were certain grains not being marketed at that time and I was not in touch with the market at that time. There was very little maize being marketed at that time. I don't suppose there was a carload of maize shipped out of White Deer in January, and I could not say whether there was any bought there in January or not. I don't know that I was acquainted with the market value of maize there on January 14, 1921, because there was not any being marketed to speak of at that time, and I don't remember just what the price was then — we never handled any maize and there was not but very little being offered at that time. I never handled any maize along in January at all, nor did I handle any in December. I don't exactly know right now the market value of maize in January at White Deer. I think I did know the market value at that time, but I have forgotten at this present time, and don't remember it to be a fact that the market value of maize from September, 1920, to January, 1921, declined a great deal."

The general rule is, before a witness can testify as to market value of personal property, he must have knowledge of the subject and of the market value, if there is one, at the time and place in question. 2 Jones on Evidence, p. 960; T. P. Ry. Co. v. Sherrod, 99 Tex. 382, 89 S.W. 956. The answer of the witness in so far as it attempts to state the market value is as follows:

"From September 13, 1920, to the middle of January, 1921, it declined very little, possibly 30 or 40 cents a hundred at least. No; I don't mean it declined 30 or 40 cents a bushel, but possibly as much as 50 cents a hundred."

It is clear that this statement is simply a guess, and having previously stated that the market value declined a great deal during that period, his further statement that it declined very little shows that he did net really know the market value at that time in White Deer. As to the third objection he stated:

"I don't remember whether or not I told these gentlemen here that the market value of maize at that time, about the 14th or 15th of January, 1921, in the town of White Deer, was 60 cents per hundred, and if I did tell them that the market price of maize at that time in the town of White Deer, was 60 cents per hundred, I could not say whether that was a fact or not, because I don't remember what the market value was at that time. I have no record here that I could look at and tell what the market value of maize was at that time."

This testimony is merely negative, and tends to sustain the appellant's contention that he was not qualified to testify upon the issue of market value.

The sixth proposition is without merit. Under the pleadings, C. D. Hodges was properly permitted to testify that he executed the writing in behalf of his father, brother, and himself. It was not the expression of an opinion, but the statement of a fact, which is proven by other evidence in the record.

Under the seventh, eighth, and ninth propositions it is insisted that the court erred in permitting the plaintiffs to testify, over objections, to a conversation between Lawyer and plaintiffs about the 14th of January, 1921. The evidence objected to is that, while they were at plaintiff's office on that date one of them asked Lawyer what the market value of maize was at that time, and Lawyer said it was 60 cents per hundred.

The objection to this testimony is that it is "incompetent, irrelevant, and immaterial, and was not the proper way to prove market value, and was an attempt to prove market value, based upon the hearsay statement of one witness, whose evidence shows that he was not qualified to give an opinion upon the market value of maize at that date." Such a statement by Lawyer, if admissible otherwise, would be relevant and material, but a repetition of the statement by plaintiffs in their testimony is not competent. "Incompetency" is a general objection which can appropriately be urged only to a witness because of insanity, infancy, senility, conviction of crime, insensibility to the obligation of an oath, and relation to a decedent, or other status rendering him incompetent, and also to certain written evidence declared incompetent by statute, and, as a general rule, does not apply to oral testimony. Atkins v. Elwell, 45 N.Y. 753; Shandrew v. Chicago, etc., Ry., 142 F. 320, 73 Cow. C. A. 430. However, our Supreme Court in Texas Pacific Railway Co. v. Gay, 88 Tex. 111, 30 S.W. 543, held that the objection that certain evidence "was not competent" was sufficiently specific to require the exclusion of the testimony. See Texas Brewing Co. v. Dickey (Tex. Civ. App.) 43 S.W. 577. We think the objections should have been sustained to the testimony of each of the plaintiffs because it was incompetent as hearsay. Lawyer's statement to them at that time was not under oath, and, like all testimony with reference to values, was largely the expression of an opinion. Ft. Worth R. G. R. Co. v. Chisholm (Tex. Civ. App.) 146 S.W. 988, 22 C.J. 214.

Furthermore, it does not appear that Lawyer at that time actually knew the market value of maize at White Deer. On January 14, 1921, he was the general manager of the appellants' elevator at White Deer, and it is not shown that he was authorized to give information, either generally or specially, to third parties upon the question of market value of grain. Admitting that he made the statement to plaintiffs that 60 cents per hundred was the market value on that day, under the record it does not bind the appellants. To make the declarations of a servant, agent, or officer of a corporation binding upon such corporation, the declarations must be made by virtue of express authority, or be required by the due and ordinary prosecution of the business. The mere circumstances of such declarations having been made of and concerning matters not directly connected with the business, or even concerning the business itself in which he was employed, does not make them admissible and binding upon his employer or principal. They cannot have that effect, unless he has been instructed to make them, or unless they were so connected with the service that they became necessary in the due and effective discharge of it. Mechem on Agency, § 1783, states the rule, thus:

"In order, therefore, to bind the principal by statements or admissions under the rule, it is essential: (1) That the making of statements or admissions of the class of those in question, can fairly be regarded as incident to the act authorized to be done. If there was no occasion to say anything or anything of the sort in question there can be no foundation for their admissibility. (2) They must be made by an agent authorized to act wth reference to the subject-matter. The term ``authority' as here used has the same significance which it has in reference to the agent's act or contract; if, therefore, the statements, representations, or admissions offered in evidence were made by one who either had no authority at all or had no authority to represent the principal at the time or the place or respecting the matters concerning which they were made, they are not admissible against the principal. (3) The statements, representations, or admissions must have some inherent and rational relation to the said matter of his agency. If admissible at all, it is because they are incident to or a part of the act which he was authorized to do."

The rule is stated thus in 22 C. J 387:

"A private corporation will be affected by the relevant declarations of its proper officers of general or limited authority if made in the line of the declarant's official duty, but not by admissions made when the declarant was not engaged in the discharge of his duties, or which are beyond the scope of his authority."

The duty resting upon Lawver at the time of the alleged statement was to accept or reject the tender of the grain, and in order to perform this duty is was unnecessary for him to make any statement to plaintiffs as to its market value. It is not shown that it was either his duty or within the scope of his authority to give any of appellant's customers any information with reference to the market value of the produce which he was employed to purchase. This rule has been frequently followed in this state. Cannel Co. v. Luna (Tex. Civ. App.) 144 S.W. 721, 722(5); East Line, etc., Ry. v. Garrett, 52 Tex. 133; 3 Fletcher, Cyc, Corp. pars. 2160-2161.

The appellant offered in evidence a resolution of the board of directors entered upon the minute book, the effect of which was an instruction to the manager not to advance any money on grain or make future contracts without first consulting the directors. The court did not err in excluding this testimony. Lawver was not a special agent, and the appellees were not required to inquire as to the extent of his powers before selling him their grain. He was the general manager of appellant's business there, and it was not only within the scope of his authority to buy grain, but the record shows that that was a part of his duties. This being true, the appellees were not bound by the special limitation placed upon his authority by the resolution offered in evidence, and of which appellees had no notice, Canadian Long Distance Telephone Co. v. Seiber (Tex. Civ. App.) 159 S.W. 897, and authorities there cited.

The court did not err in refusing to direct a verdict for the appellant. What has been said disposes of all the contentions urged in the brief, and which have been separately discussed.

Because of the errors pointed out, the judgment is reversed, and the cause remanded.