Court Opinion

ID: 9831866
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:26:20.096189+00
Date Added: 2024-06-11T07:43:38.707166
License: Public Domain

On Motion for Rehearing.
The able counsel for appellee again stress their view of the effect to be given to appellant’s admission for the purpose of being allowed to open and conclude the argument. The substance of appellee’s contention in this respect is that appellant was without any pleading in the nature of a confession and avoidance of appellee’s cause of action as presented in his petition, and that therefore under the authorities the court, regardless of the evidence, was authorized to give the peremptory instruction for appellee as was later requested. If it be assumed that appellant was without a maintainable defensive plea, as appellee insists, the orderly procedure would have been for him to at once present his request and the court to at once give the peremptory instruction instead of waiting until after going through a tedious trial.
The admission was filed on the 18th day of May, 1931, at the beginning of the trial. In so far as disclosed by the record, no request was made in behalf of appellee at this time for a judgment in his favor on the strength of the admission. On the contrary, the record shows that the appellant was permitted, and in fact did proceed, to open the case with evidence in its behalf, to which due reply was made in behalf of appellee, and both parties closed their case. It was at this point, to wit, on May 20, 1931, that attorneys for appellee in his behalf presented a request for a peremptory instruction in his favor. And it was then at this point in the proceedings, and not before, that the court, as indicated by the recitals in the judgment, adopted the- view of the effect of appellant’s admission now stressed in behalf of appellee.
Counsel for appellant evidently had no such view of the effect of his admission as finally insisted upon and adopted by the court. It cannot be assumed that such counsel would deliberately and intentionally admit every fact necessary for appellee’s recovery, regardless of the defenses set up by him and the evidence offered in support of such defenses. And it seems to us that the delayed ruling of the court, which in effect adopted appellee’s construction of the admission, placed appellant in a disadvantageous position. Had an earlier opinion or ruling by the court been given, appellant could and perhaps would have withdrawn the admission and thus avoided the effect finally given to it. Under appellant’s pleas and the circumstances, we originally felt and continue to feel unwilling to give appellant’s admission the effect that appellee now insists should be given to it. This is especially true, in view of .appellant’s pleas, including the plea of payment, and of the fact, as we view the evidence, that the proof is altogether insufficient to show that the note sued upon by appellee was either au.thorized or ratified by the appellant corporation as such.
The language of rule 31, by virtue of which appellant asserted its right to open and conclude, is not absolute. It provides that the plaintiff shall have the. right to open and conclude, both in adducing his evidence and in the argument, if he admits before the trial begins “that the plaintiff has a good cause of action as set forth in the petition, except so far as it may be defeated, in whole or in part, by the facts of the answer constituting a good defense, which may be established on the trial. * * * ” In terms the rule apparently excepts from the conclusive effect of the admission all facts pleaded in defense which will legally defeat in whole or in part the plaintiff’s case. Giving the term “except,” as used in the rule, its ordinary, plain meaning, it is at least not unreasonable to conclude that any state of. facts which under our laws will constitute “a good defense,” that “may be established on the trial,” takes from the admission the final and conclusive effect appellee insists upon, thus leaving the burden of proof on the whole case upon the party making the admission as contemplated by article 2183, Rev. Statutes, which in part declares that “the party having the burden of proof on the whole case shall be entitled to open and conclude the argument. * * * ”
In this connection we wish to call attention to the case of Smith v. Traders’ National Bank, 74 Tex. 541, 12 S. W. 221, 222. In that case Smith was sued on a promissory note executed by him which the bank alleged had been assigned to it in due course of trade for a valuable consideration. Smith in answer impeached the validity and enforceability of the note on the ground that the consideration therefor had failed and that the plaintiff received the transfer of the same with notice of his defense. There, as here, the - defendant made the admission provided for in rule 31 for the purpose of being permitted to open and conclude in presenting his evidence and argument. There, as here, the plaintiff insisted that the ad*343mission precluded the defense,, and requested a peremptory instruction in its favor which the court gave. On appeal, in disposing of the assignment of error directed to the action of the court in giving the instruction, our Supreme Court, in an opinion written hy Judge Gaines, one of our ablest law writers, held that there was some evidence in support of Smith’s defense, and that the trial court erred in giving the peremptory instruction. We quote from that opinion the following references to rule 31:
“We think the court below erred in his conclusion as to the scope and effect of the admission. It is a general rule of the common law that a party who has the affirmative of the issue has the .right to open and conclude. The admission in this case is in the language of rule 31 of rules of practice for the district courts. The manifest purpose of this rule was to secure to a defendant the right to open and conclude when upon the real issues in the case the burden, of proof rests upon him; that is to say, when his defense is in the nature of a confession and avoidance of the plaintiff’s action, he is permitted to admit the prima facie case of the plaintiff although it is denied hy his pleadings, and to open the ease by introducing evidence to establish the affirmative defense he has set up. The rule is intended to secure a valuable right and is just, and it should have a reasonable and practicable 'application. To construe it so as to accomplish in a reasonable and practical manner its object, an admission made in the very language of the rule must be construed to mean that the defendant admits every fact alleged in the petition which it is necessary for the plaintiff to establish in the first instance to enable him to recover; but does not admit allegations in the petition which merely deny new matter alleged in the answer, the burden of proof of which is upon the defendant. Any other construction would enable the plaintiff to deny the defendant the right to open and conclude upon his affirmative defense by simply amending the petition, as was done in this case, and alleging the contrary of the defenses set up in the answer.
“The answer in this case set up a defense in confession and avoidance of the action. 1 Chit. PI. 515. The plaintiff was not bound to allege in its petition that it became the holder of the note for a valuable consideration without notice. It was incumbent upon the defendant, in order to make his defense, to show the contrary. He was bound to allege and prove the want of consideration, and that the plaintiff had notice when it became the holder of the note. In admitting the plaintiff’s cause of action, ‘except in so far as it may be defeated by the facts of the answer,’ etc., he does not purport to admit the allegations of the petition, but merely to admit that the plaintiff has a prima facie case, and expressly declines to admit any fact inconsistent with the new matter alleged in his answer.”
Appellee assumes that appellant’s pleas are not in nature such as to prevent or avoid the conclusive effect of his admission. In other words, that they are none in the nature of pleas in confession and avoidance. By reference to our original opinion, it will be seen that appellant pleaded that the note had been executed without authority, or that, if the corporation had ever been indebted to the plaintiff as evidenced by the note declared on, it had been paid and discharged. To these pleas appellee replied that, if the note had been executed without authority, it had been ratified by the corporation, or, if in fact the note was not that of the corporation, it represented moneys loaned to the corporation for which he prayed for judgment. It is to be remembered that, under established rules of pleading in this state, a defendant may plead as many lawful defenses as he chooses, even though such pleas be inconsistent, and that the language of the rule excludes from an admission thereunder any and all defenses well pleaded and established by evidence that will defeat the plaintiff’s cause of action. We take the following from 49 C. J. p. 294, § 361:
“Any fact, which avoids the action and which plaintiff is not. bound to prove in the first instance in support of his cause of action is matter that may be pleaded in confession and avoidance at common law, or as new matter under the code practice. It means matter extrinsic to the matter which is set up in the complaint as the basis of the cause of action, and must consist of affirmative matter such as, if true, would defeat the cause of action set up in the complaint. New matter is matter for the defense not provable under a denial, that is, facts outside of an issue raised or that could have been raised by denial, and, hence, any matter embraced in an issue raised, or in any issue which defendant might thus have raised, is not new matter, although the fact that a fact may also be proved under a general denial may not for that reason preclude its being pleaded as a defense. Where facts are alleged in the complaint which are not germane to the relief asked, they are not thereby divested of their character as new matter should defendant wish to use them as a defense. Matters, among others, that have been considered proper to be made available as defenses under a plea in confession and avoidance or as new matter are: Account stated, act of God, alteration of instrument, assignment of cause of action, assumption of risk, bad faith on part of agent, breach of contract or warranty, conditional liability, contributory negligence, discharge, dual or secret employment of *344agent or broker, election of remedy, estoppel, exception or proviso of statute, failure, illegality, or want of consideration, forfeiture, fraud or deceit, illegality of contract sued on, infancy, justification, mistake, no joint liability, non-performance of condition precedent, novation, performance or part performance ; res judicata, son assault demesne, laches, of statute of limitations, usury and waiver.”
The quotation is supported by numerous decisions cited in the footnotes, and seems to be in harmony with the more liberal construction of rule 31 that- we are disposed to adopt.
Moreover, in addition to what we have said, we yet have in this case appellant’s plea of “payment” of' the note upon which appellee declares. This, in the most circumscribed view of the subject, is one of confession and avoidance. There was testimony on the part of Mrs. Kelley, as we view it, tending to show that she mistakably signed the note declared upon thinking it was for certain drilling material received from the Strauss-Alien Company and Mr. Kelley testified that the material referred to was paid for by the Strauss-Alien Company taking the necessary funds out of the funds of 'the Easter Oil Company. This evidence we think was sufficient to raise the issue, and hence the court erred in his peremptory instruction. It is insisted, however, in behalf of appellee, that the court sustained appel-lee’s special exception to that section of the appellant’s answér which set up the plea of payment, and that no assignment of error has been presented to this ruling. The record does disclose a ruling of the court sustaining the special exception referred to, but it seems to have been waived or abandoned in that, as already stated, the parties were permitted without objections, so far as we recall, to introduce evidence pro and con in support of and against the issue of the payment, and appellant is in no position to assign error to the court’s action in sustaining the exception.
We will further add that we think the undisputed evidence shows that appellee was not a creditor of the corporation in the capacity in which he sues, but on the contrary was a mere coadventurer with Clark, Allen, and others in the drilling enterprise developed in the evidence, and conclude that the court committed fundamental error in giving the peremptory instruction and in rendering the judgment that was rendered. In support of the conclusion last expressed, we wish to quote the following from volume 2 of Rowley’s “Modern Law of Partnership,” § 975, not available to the writer when writing the original opinion in this case, to wit:
“A joint adventure may be defined as an association of two or more persons to carry out a single business enterprise for profits It is said a ‘venture’ is an undertaking attended with risk, a business speculation.. And a ‘coadventurer’ is one who takes part, with others in a venture or adventure. In. its general nature a joint adventure is similar to a partnership, and it is governed by practically the same rules of law, although it is held not to be identical with partnership. It has been held that a joint adventure is merely a partnership of limited scope and duration. ‘A joint adventure is a limited partnership, not limited in a statutory sense as to liability, but as to its scope and duration, and under our law joint adventures and partnerships are governed by the same rules.” It has been said that one difference between a partnership and joint adventure is that ‘a dissolution for proper cause may be effected by his coadventurers against a defaulting-associate without a judicial decree,’ but in. many jurisdictions this same rule applies to-partnerships. It is said that the distinctions between a partnership and joint adventure are that a joint adventure relates to a single transaction, and a partnership to a general business of some particular kind,, that a corporation may become a party to eu joint adventure, though not a partner; that, a party to a joint adventure may maintain an action at law to recover profits or advances, or enforce contributions or for breach of contract. However, the .Uniform Partnership Act, where adopted, has removed the first distinction by permitting a corporation to become a partner, and one-partner may sue another at law on matters, connected with partnership affairs as to-which an accounting is not necessary, or as-to a single unadjusted item, so that it seems, there is no real distinction between a joint, adventure and what is termed a partnership, for a single transaction. Though a joint adventure is confined to one transaction, yet this may extend over a term of years.”
We finally conclude that the motion for rehearing should be overruled, and it is so. ordered.