Case ID: sw_191/html/0573-01.html
Source: Caselaw Access Project
Author: {"author": "RICE, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

TEXAS AUTO & SUPPLY CO. et al. v. MAGNOLIA PETROLEUM CO.
    (No. 5723.)
    (Court of Civil Appeals of Texas.
    Jan. 17, 1917.)
    1. Sales <&wkey;G8 — Bill oe Sale — Buying Accounts.
    The mere taking by transfer and bill of sale of the business and accounts of a person, without any assumption of indebtedness, will not make the transferee liable for antecedent debts growing out of the business.
    [Ed. Note. — Eor other cases, see Sales, Cent. Dig. §§ 184-186; Dec. Dig. <&wkey;68.]
    2. Pleading <&wkey;8(6) — Conclusion oe Pleader.
    An allegation that a party “sold and transferred said business and accounts in violation of the bulk sales law” is a conclusion of the pleader.
    [Ed. Note. — For other cases, see Pleading, Cent. Dig. § 17; Dee. Dig. &wkey;j8(6).]
    3. Judgment <&wkey;101(l) — By Default — Petition — Insufficient Allegation.
    A petition which fails to state a cause of action will not support a judgment by default.
    [Ed. Note. — For other cases, see Judgment, Cent. Dig. §§ 168, 170; Dec. Dig. &wkey;101(l).]
    Error from Travis County Court; Wm. Von Rosenberg, Judge.
    Action by the Magnolia Petroleum Company against the Texas Auto & Supply Company, H. B. Lyne, and others. From a judgment for plaintiff, the defendants named bring error.
    Reversed.'
    E. H. Ratcliff, of Ft. Worth, for plaintiffs in error. John W. Hornsby, of Austin, for defendant in error.
   RICE, J.

On December 20, 1915, the Magnolia Petroleum Company, a private corporation, brought this suit in the county court of Travis county, against the Austin Tire & Supply Company, H. E. Shepherd, W. E. Clark, J. J. Milstead, the Texas Auto & Supply Company of Ft. Worth, Tex., H. B. Lyne president, and H. B. Lyne individually, alleging: First, that during the months of August and September, 1915, as per itemized attached account, duly verified, it sold and delivered to the Austin Tire & Supply Company gasoline, etc., to the amount of $278.90, which account is still due and unpaid. Second, that on or about the 19th of September, 1915, said Shepherd and Clark, who were doing business under the firm name and style of the Austin Tire & Supply Company, sold and transferred the business of said company to J. J. Mil-stead, who thereupon assumed the payment of the accounts due by said Shepherd and Clark and the Austin Tire & Supply Company, and that said Milstead was accepted as successor to said business by said Texas Auto & Supply Company and H. B. Lyne individually. Third, that on or about the 18th of October, 1915, said Lyne, acting for himself and said Texas Auto & Supply Company, took a transfer and bill of sale of the business and accounts of said Austin Tire & Supply Company from said Milstead, thereby making himself and said Texas Auto & Supply Company liable for the debt of plaintiff, and, within a short time after said Lyne had secured said business and accounts from said Milstead, he, acting for the Texas Auto & Supply Company and himself individually, sold and transferred said business and accounts in violation of the bulk sales law of the state of Texas, etc., praying for citation and judgment for the debt, interest, and costs of suit. On January 4, 1916, after service, judgment for the amount claimed with interest was rendered by default against Lyne and the Texas Auto & Supply Company, and the case dismissed as to the other parties, from which judgment this writ of error is sued out; plaintiffs in error relying for reversal, as shown by their first two assignments and propositions thereunder, upon the insufficiency of plaintiff’s petition to support the judgment by default.

It will be observed from the allegations of the petition that liability is predicated against plaintiffs in error: First, on the ground that they had taken a transfer and bill of sale to the business and accounts of the Austin Tire & Supply Company from said Milstead; and, second, because within a short time after procuring said business and accounts, Lyne and the Texas Auto & Supply Company had sold and transferred said business in violation of the bulk sales law of the state of Texas. The petition fails to allege any assumption of said indebtedness by plaintiffs #n error, and fails to state any fact or circumstance from which such assumption can be inferred. The mere taking of a transfer or bill of sale by them is not enough upon which to predicate liability. Second, nor can liability be based on the mere statement that said business was sold and transferred in violation of the bulk sales law. The facts and circumstances upon which this claim is predicated are not set out, but the allegation in this respect is only the conclusion of the pleader. We think the petition is bad on general demurrer, for which reason no judgment-by default could be taken thereon. It is the well-settled law in this state that a petition which fails to state a cause of action will not support a judgment by default, and such judgment may be set aside on writ of error. See Wood v. City of Galveston, 76 Tex. 126, 13 S. W. 227; Ishmel v. Potts, 44 S. W. 616; American Bonding & Trust Co. v. Garrett, 61 Tex. Civ. App. 454, 129 S. W. 398; Interstate Ass’n v. Bryan, 21 Tex. Civ. App. 563, 54 S. W. 378; El Paso & S. W. Ry. Co. v. Kelly, 83 S. W. 855.

Numerous other errors are assigned, which it is unnecessary for us to consider, in view of our holding as to the insufficiency of the petition.

For the error indicated, the judgment of the trial court is reversed, and the cause remanded.

Reversed and remanded. 
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