Case ID: sw_192/html/0611-01.html
Source: Caselaw Access Project
Author: {"author": "BOYCE, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

COMMONWEALTH BONDING & CASUALTY INS. CO. et al. v. BOWLES.
    (No. 1097.)
    (Court of Civil Appeals of Texas. Amarillo.
    Jan. 24, 1917.
    On Motion for Rehearing, Feb. 28, 1917.)
    1. Statutes <&wkey;227 — Construction—‘ ‘May. ’ ’
    Ordinarily the word “may,” as used in legislative enactments, denotes permission, and will not be construed as having a mandatory effect, though it will be given such meaning if such appears to have been the intention of the Legislature, to be ascertained from an examination of the whole of the enactment on the subject under regular rules of construction (citing Words and Phrases, First and Second Series, May).
    [Ed. Note. — For other cases, see Statutes, Cent. Dig. §§ 308, 309.}
    2. Receivers <&wkey;173 — Suit Against — Leave of Court.
    In the absence of statutory law, a receiver could be sued only with the permission of the court appointing him.
    [Ed. Note. — For other cases, see Receivers, Cent. Dig. §§ 327-332.]
    3. Receivers <&wkey;177 — Suit Against — Yenue —Statutes.
    By Rev. St. 1911, arts. 2146, 2147, providing that receivers may sue or be sued in any court of the state having jurisdiction of the cause of action without first having obtained leave of the court appointing them, and that actions may be brought against receivers of a corporation in the county where its principal office may be located, it was the intention of the Legislature, in granting permission to sue, to permit suits only in the venue prescribed, article 2146 being intended to grant general permission to bring suit without obtaining an order of the court appointing the receiver, and article 2147 being intended to fix the venue.
    [Ed. Note — For other cases, see Receivers, Cent. Big. § 346.]
    4. Receivers <&wkey;177 — Suit Against — Venue —Statutes.
    Suits against receivers, venue for which is prescribed by Rev. St. 1911, art. 2147, come within the terms of article 1830,_ § 30, providing that whenever in any law authorizing or regulating any particular character of action the venue is expressly stated, the suit shall be commenced in the county to which such jurisdiction may be so expressly given, and the particular provision of article 2147 for venue controls when m conflict with the terms of the general venue article.
    [Ed. Note — For other cases, see Receivers, Cent. Dig. § 346.]
    On Motion for Rehearing.
    5. Receivers <&wkey;177 — Suit Against — Venue —Statutes—“Principal Office.”
    Where all the officers of an Arizona corporation resided in Ft. Worth, TaiTant county, Tex., and out of the company’s office at Ft. Worth proceeded all of the company’s business, that county was the seat of the “principal office” of the company in Texas within the meaning of the general venue statute (Rev. St. 1911, art. 1830), and also the special statutes applicable to_ re-ceiverships for corporations and suits against receivers (articles 2146, 2147, 2160).
    [Ed. Note. — For other cases, see Receivers, Cent. Dig. § 345.
    For other definitions, see Words and Phrases, First and Second Series, Principal Office.]
    6. Venue &wkey;5(l) — Suits to Recover Land-Privilege — Statute.
    The provision of Rev. St. 1911, art. 1830, subd. 14, that suits to recover land, etc., must be brought in the county in which the land is situated, does not affect the jurisdiction of other courts in such suits, furnishing only a venue privilege of which a party may avail himself like any other plea of privilege as to venue.
    [Ed. Note. — For other cases, see Venue, Cent. Dig. §§ 4, 6, 10, 11.]
    Appeal from District Court, Lubbock County; W. R. Spencer, Judge.
    Suit by J. O. Bowles against the Commonwealth Bonding & Casualty Insurance Company and others. From a judgment for plaintiff, defendants appeals.
    Judgment reversed, and defendants’ plea of privilege ordered to be sustained, and the venue changed.
    Ocie Speer and Marvin H, Brown, both of Ft. Worth, for appellants. Bean & Klett and W. F. Schenck, all of Lubbock, for appellee.
   BOYCE, J.

This suit was brought by the appellee, J. C. Bowles, in the district court of Lubbock county, against the Commonwealth Bonding & Casualty Insurance Company, J. W. Mitchell, and O. D. Hill, receivers of said corporation, and certain individuals residing in Tarrant county, Tex., for the purpose of recovering money and canceling a note and deed of trust paid and given in payment for stock in said company. The plaintiff alleged that his subscription for the stock in said company was procured by certain false representations, the fraud being perpetrated in Lubbock county; that the note was invalid for such reason, and for the further reason that it was given in violation of the law prohibiting a corporation from issuing stock except for money paid, etc. The receiver, in due time and in proper order of pleading, filed' a plea of privilege, claiming the right to be sued in Tarrant county. The defendants answered, denying the allegations of plaintiff’s petition, and the receivers in a cross-action asked for judgment on said note executed by the plaintiff. It was alleged and shown upon the trial of the plea of privilege filed by the receivers that the principal office of the defendant corporation was at Ft. Worth, in Tarrant county, Tex.; that said corporation was created under the laws of the state of Arizona, for the purpose of doing a bonding, fidelity, and casualty insurance business; and that J. W. Mitchell and C. D. Hill were acting as receivers of the affairs and property of said corporation, under appointment of the district court of Tarrant county. The court overruled the plea of privilege, and, proceeding with the trial of the case, judgment was entered for the plaintiff on the merits.

O. D. Hill, one of the receivers, was discharged by order of the district court of Tar-rant county, Tex., and he was dismissed from this suit, and the suit proceeded against J. W. Mitchell, as receiver.

The first assignment questions the action of the court below in overruling the plea of privilege filed by the receivers. The decision of this question depends on the construction to be placed on article 2147 of the Revised Statutes, which provides that:

“Actions may be brought against receivers of a corporation in the county where the principal office of said corporation may be located,” etc.

Ordinarily, the word “may,” as used in legislative enactments, denotes permission, and will not be construed as having a mandatory effect, though it will be given such meaning if such appears to have been the intention of the Legislature, to be ascertained from an examination of the whole of the enactment on the subject under regular rules of construction. Rains v. Herring, 68 Tex. 468, 6 S. W. 370; San Angelo National Bank v. Fitzpatrick, 88 Tex. 213, 30 S. W. 1063; People v. City of Syracuse, 59 Hun, 258, 12 N. Y. Supp. 890; Bass v. Doughty, 5 Ga. App. 458, 63 S. E. 516; In re Chadbourne’s Est., 15 Cal. App. 363, 114 Pac. 1012; Words and Phrases, 1st Series, vol. 5, pages 4421, 4446; 2d Series, vol. 3, pp. 335, 337, 345; Minor v. Mechanics’ Bank, 1 Pet. 46, 7 L. Ed. 55.

In the absence of statutory law, a receiver could only be sued with the permission of the court appointing him. The Legislature, by an act of 1887, providing for the appointment of receivers and regulating proceedings under such appointment, provided by section 8 of such act that such receivers might “sue or be sued in any court of this state having jurisdiction of the cause of action, without first having obtained leave of the court appointing such receivers to bring said suit.” Gammels Laws, vol. 9, p. 918. Section 9 of said act contains the provision of article 2147, Bevised Statutes, as above quoted. These two sections of the act of 1887 appear on our statutes as sections 2146 and 2147, respectively.

Under these circumstances we think it was the intention of the Legislature in granting the permission to sue, which had not theretofore existed, to permit suits only in the venue prescribed. As we construe the law, article 2146 was intended to grant general permission to bring the suits without obtaining order of the court appointing the receiver, and article 2147 was intended to fix the venue of such suits; the filing of the suit itself is not a matter of right except under the permission granted by the statutes, and this permission should not be extended beyond the terms of the statute granting it. This construction of the statute has been adopted by the Court of Civil Appeals for the Fourth District, in the case of Kirby Lumber Co. v. McLendon, 56 Tex. Civ. App. 279, 120 S. W. 227.

As this suit is to remove cloud from title to land in Lubbock county, and plaintiff alleges that he was induced to execute the contract which is sought to be canceled by fraud alleged to have been committed in Lubbock county, the question then arises as to whether the respective provisions of the statute, with reference to venue in such cases (B. S. art. 1830, subds. 7, 14), will control, or the provision with reference to suits against receivers as we have construed it. The two provisions referred to are subdivisions of article' 1830, and such article is styled by the statute, “Venue, General Buie.” Subdivision 30 of this same article provides that:

“Whenever, in any law authorizing or regulating any particular character of action, the venue is expressly prescribed, the suit shall be commenced in the county to which such jurisdiction may be so expressly given.”

We are of the opinion that suits against receivers come within the terms of this section, and its particular provision for venue will control when in conflict with the terms of the general venue article, and this would perhaps be true, even in the absence of said subdivision 30. Little v. Griffin, 33 Tex. Civ. App. 515, 77 S. W. 635; Dickson v. Scharff, 142 S. W. 980; Neill v. Owen, 3 Tex. 145.

We are therefore of the opinion that the trial court should have sustained the plea .of privilege. The judgment of the district court is reversed, and it is ordered that the receivers’ plea of privilege to be sued in Tar-rant county be sustained, and that the venue be changed to that county, in accordance with the provisions of article 1832 of the Be-vised gtatutes.

On Motion for Behearing.

It is true that the principal office of a corporation does often mean the place of the location of the office from which its principal business is to be transacted as designated in its charter, and such office constitutes the place of domicile of the corporation. If this is the only meaning to be attached to the term, a foreign corporation might not have a principal office in Texas. However, our statutes seem to contemplate that a foreign corporation may have such an office in Texas. Article 1314, Bevised gtatutes, contains a provision with reference to a foreign corporation establishing “a general office * * * in this state.” Subdivision 28, art. 1830, Bevised gtatutes, provides that a foreign corporation may be sued in a county “in which the principal office of such company may be situated,” meaning evidently thereby the office from which its business in the state is directed. The evidence here shows that all of the officers of this corporation resided in Ft. Worth, Tarrant county, Tex., and “out of the office at Ft. Worth proceeded all of the business of the corporation."

We think that Tarrant county can be said to be the principal office of the company in Texas, within the meaning of the general venue statute, and also the special statutes applicable to receiverships for corporations and suits against receivers.

Article 2150, Bevised gtatutes, provides that receivership suits against a corporation “shall be brought in this state in the county where the principal office of said corporation is located.” Article 2146 grants general permission to sue receivers without permission of the court appointing them, and article 2147, as we have construed it, fixes the venue of suits against the receivers of such corporations in the county in which the corporation has its principal office. Perhaps a similar reason that prompted the enactment that an administrator must be sued in the county where the administration proceedings are pending was in the mind of the Legislature in passing this law. The property in each instance is in the custody of the court, being administered for the benefit of creditors and others interested in it, and it is obvious that it might be advantageous in the administration of the estates that suits against the officer of the court administering them should be brought in the county where the property is being administered. We have concluded, as did the court, in the case of Kirby Lumber Co., Receiver v. McClendon, 56 Tex. Civ. App. 279, 120 S. W. 227, that it was the purpose of the Legislature “to restrict suits against receivers of such corporations (that is, corporations other than railway corporations) to the counties in which their principal offices may be situated.”

While subdivision 14, art. 1830, provides that suits to recover land, etc., must be brought in the county in which the land is situated, said provision does not affect the' jurisdiction of other courts in such suits. It furnishes only a venue privilege, of which a party may avail himself like any other plea of privilege as to venue. State v. Patterson, 40 S. W. 224, and authorities there cited; Wolfe v. Willingham, 43 Tex. Civ. App. 167, 94 S. W. 362. So that said subdivision 14, art. 1830, is not different from the other imperatives of the venue statute. Subdivision 19, art. 1830, provides that suits against a county shall be brought “in some court * * * within such county.” This provision was made to yield to the special provisions for venue in the statutes regulating injunction proceedings. Little v. Griffin, 33 Tex. Civ. App. 515, 77 S. W. 635. In Neill v. Owen, 3 Tex. 145, this very provision as to suits affecting land was subordinated- to the provision for suits against administrators under the statutory enactments in force at that time. So we think that when it be ascertained that it was the intention of the legislature to restrict suits against receivers of corporations to the counties in which the principal office of such corporation maj'1 be situated, it follows, under principles which we have announced, that the venue thus fixed by the laws governing this particular character of suits will control over the provisions of the general venue statute.

The motion for rehearing will be overruled. 
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