Parlin Orendorff Co. v. Glover , 203 S.W. 1174 ( 1918 )

Plaintiffs in error, Parlin Orendorff Company, a corporation, filed this suit against Frank D. Glover and Cullen Crews, defendants in error, to recover a carload of Bain wagons, alleged to have been obtained by McMeans from plaintiffs in error through fraud. Plaintiffs in error had the property sequestered while possession was claimed by defendants in error, Glover and Crews. A jury was impaneled to try the cause, and special issues requested by plaintiffs in error to be submitted to the jury. Upon the conclusion of the testimony, the court instructed a verdict for the defendants in error, and rendered judgment thereupon that defendants in error recover against plaintiffs in error and the sureties on the replevin bond, E. O. Tennison and Guy Simpson, the sum of $1,140. Parlin Orendorff Company and the two sureties prosecute this appeal.

The issues indicated by the following facts were sufficiently made by the pleadings: From the evidence it appears that F. D. Glover and Cullen Crews launched A. H. McMeans in the mercantile business in San Marcos in February, 1897, by furnishing him with $7,500 in cash. Before the store was opened for business, McMeans ordered the wagons, here involved. Upon receipt of the order, plaintiffs in error required a written statement by McMeans of his financial condition. In compliance with the demand, McMeans, in a writing signed by him, stated that he was the sole owner of the business, and that his assets exceeded his liabilities as follows: Assets: Stock of merchandise. $8,500; cash in bank, $2,000; home, $3,000. Total assets, $13,500. Liabilities: Current accounts for merchandise, $3,000; surety on note secured by mortgage, $150. Net assets subject to execution, $7,350. Believing this statement to be true, and relying thereon, plaintiffs in error sold the wagons on credit. Had McMeans' statement not shown that the liabilities were only 40 per cent, or less, of the assets, plaintiffs in error would not have sold the wagons on credit. This financial statement made by McMeans was false. There is no conflict in the testimony concerning any of the facts so far stated. The conflict in the testimony renders it uncertain which particular fact in the financial statement is falsely stated. There is testimony that McMeans did not owe Glover and Crews anything, but that they were partners in the business to be conducted in the name of H. A. MeMeans. They contributed the cash capital of $7,500, and McMeans contributed his services. The profits were to be divided equally between the three.

If the jury determined from this testimony that there was a partnership of the three doing business under the name of H. A. McMeans, then the financial statement, made by McMeans to procure the wagons, was not false as to the liabilities and assets, but was false because it failed to truly state the partnership. If the statement did truly state the ownership of the business, then it falsely stated the liabilities. In either event, the fact is, the statement was false, and plaintiffs in error were deceived thereby, and title to the wagons, because of this false statement, never passed into MeMeans.

Then again there is conflict in the testimony relative to the fact asserted by defendants in error that they were innocent purchasers, for value, of the wagons from McMeans; for there is testimony that defendants in error were partners of McMeans, and testimony that they were not. If they were partners, they were not innocent purchasers from McMeans. Further, upon the issue of innocent purchasers, there is this other material conflict in the evidence: There is evidence that the bill of sale was executed to defendants in error by McMeans for the sole consideration of using all the assets to pay all the indebtedness incurred in the said mercantile business. Parlin Orendorff Company's claim was a part of the indebtedness, and was never paid.

The fourth and fifth assignments complain of the court's peremptory instruction to find for defendants in error and refusal to submit the issues made by the foregoing facts, based upon appropriate pleadings, to the jury for determination. In our opinion the evidence is conflicting upon material issues pleaded, and it was the duty of the trial court to submit such issues to the consideration of the jury. The court's direction of a verdict under the circumstances of this case was error. Ater v. Rotan Grocery Co., 189 S.W. 1106; G., H. S. A. Ry. Co. v. Cody, 92 Tex. 632,51 S.W. 329. The fourth and fifth assignments are sustained.

The first three assignments contend that the trial court committed error in its order overruling three special exceptions to allegations in the third amended answer of defendants in error.

After consideration, we conclude that there is no merit in either of the first three assignments, all of which are overruled.

The judgment is reversed, and the cause is remanded.

FLY, C.J., entered his disqualification, and did not sit in this case.