Court Opinion

ID: 3909465
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:38:24.915223+00
Date Added: 2024-06-11T07:42:34.103612
License: Public Domain

This suit was instituted by appellant, Commercial Credit Company, as plaintiff, in the county court of Hale county against J. L. Moore, as defendant, seeking recovery upon an installment note in the sum of $460, payable to the order of L. P. Barker Company, interest, and attorney's fees, which note had been transferred to the plaintiff. The plaintiff admitted the payment of seven installments of $38.35 each, aggregating the sum of $268.45, leaving a balance of $191.55 owing on the principal, plus attorney's fees and interest. Plaintiff alleges the failure of the defendant to make payment of one installment and seeks to declare the balance of the note due and to foreclose the mortgage given to secure it upon a Ford truck. Plaintiff also prayed for writ of sequestration to issue, which was levied by the sheriff upon the truck.
Defendant, by his original answer and cross-action, denies that he owed the plaintiff anything and alleges damages as follows: First, the exposure of the truck to the weather in the sun and rain, alleging that the sheriff had placed it in plowed ground where it took the rain and sunshine, whereby it was damaged $75. Second, that defendant was deprived of the use of the truck for a period of 40 days and prevented from carrying out a hauling contract that he had in the streets of Lubbock, by which he would have earned $12 per day, aggregating $480, which amount was the rental value of the truck. Third, that the said truck was taken from his possession through malice and without probable cause, and with the intent to Injure and damage him, and did damage him in the sum of $400 by way of exemplary damages.
By his amended cross-action, defendant reduces the item of actual damages caused by the detention of the truck from 40 days to 30 days, and the aggregate of that item of damage from $480 to $360, and wholly eliminates his allegation as to exemplary damages. Otherwise, the pleading is practically the same as that of the original cross-action. In both pleadings the defendant prays that he have judgment canceling the note and mortgage — in the original cross-action that he recover of and from the plaintiff (and the Globe Indemnity Company, surety of sequestration bond) his actual damages in the sum of $555 and exemplary damages of $400, and, in the amended cross-action, he prays for cancellation of the note and for his actual damages.
Plaintiff alleges that the trial court erred in refusing to sustain his general demurrer because of lack of jurisdiction of the county court to dispose of the matters and claims for damages set up in the defendant's original answer and cross-action, and, further, that the defendant cannot eliminate his damages by amending his pleadings so as to bring the amount of his claim within the jurisdiction of the county court.
If the pleading seeking cancellation of the note and for actual and exemplary damages, as set out in the original cross-action, be considered, then it will clearly be seen that the defendant's cause of action is for a total amount beyond the jurisdiction of the county court. This being true, has the defendant the right to amend his pleading and by elimination vest the court with jurisdiction?
In the case of Gimbel  Son v. Gomprecht  Co., 89 Tex. 497,35 S.W. 470, it was held that the county court had no jurisdiction to try a civil cause in which the matter in controversy exceeded $1,000, and that court, in discussing the matters that go to make up the cause of action, says:
"The plea in reconvention filed by the defendants in this case, was, in effect, a suit by them against the plaintiffs, and the amount in controversy was the damages claimed in that plea; that is, the actual damages, $797.21, and exemplary damages, $966, aggregating $1,763.21. The fact that the debt of the plaintiffs was admitted to be due and agreed to be taken as a credit upon the claim set up by the defendants did not lessen the amount which was put in controversy by that plea. Under their plea, the defendants must establish their damages before they were entitled to have the amount of the plaintiffs' debt satisfied by their damages so recovered. By the proceedings here sought to be maintained, the court inquired into the plaintiffs' liability for the damages to the amount of $1,763.21, upon the ground that, when established, that amount would liquidate the indebtedness of the defendants to the plaintiffs. The defendants' claim for damages did not operate as an extinguishment of the plaintiffs' debt, nor did the plaintiffs' debt operate as an extinguishment pro tanto of the defendants' claims for damages. The two classes of claims were not such as of themselves would have the effect to extinguish each other until ascertained by the court and by its judgment thus applied."
The case of Times Publishing Co. v. Hill, 36 Tex. Civ. App. 389,81 S.W. 806, is a well-considered case by Judge Eidson of the Austin Court of Civil Appeals, in which he considers numerous cases involving the *Page 512 
question of jurisdiction here being considered and holds that the Gimbel Case, supra, lays down the proper rule. In the Times Publishing Company Case, the suit was one filed in justice court by Hill against the Publishing Company to recover a balance due on open account. The company set up in its answer certain counterclaims, alleging damages for breach of contract of guarantee claimed to have been made for the benefit of said company between B. J. McKie and F. C. Hand on the one part, and J. S. Hill and S. Quay on the other part; it being alleged that said McKie and Hand bought from said Hill and Quay a majority of stock in appellant corporation, and, as an inducement to said sale, said Hill and Quay represented and guaranteed to said McKie and Hand that there were owing to said corporation outstanding debts, collectable by ordinary diligence, sufficient to satisfy all the debts owed by said corporation, but there still remained uncollected the sum of $1,618.49, and that said amount was uncollectable, and that the amount collected lacked $200 of paying the debts outstanding against said corporation when said guarantee was made, whereby said company had been damaged in the sum of $200. The company further pleaded by way of counterclaim that, at the time of purchase of said stock, Hill warranted and guaranteed, for the benefit of said appellant, that the type and stock of material of said company was of the total value of $1,800, which representation was wholly relied upon by said McKie and Hand for said appellant, whereas, in fact, the total value of said property was only $900, whereby appellant was damaged by the breach of warranty and guarantee of appellee in the further sum of $900, which appellant pleaded, asking judgment for only $200, total on both claims of damages, to be offset, as aforesaid. The appellee filed in the Court of Civil Appeals his motion to dismiss the appeal on the ground that said court had no jurisdiction thereof. Upon this statement, the Court of Civil Appeals held:
"The suit having been instituted in the justice's court and the amount in controversy, as shown by the plea in reconvention of said appellant, being in excess of the jurisdictional amount of that court, neither the county court nor this Court [of Civil Appeals] could acquire jurisdiction of said cause."
It is also held that the prayer of the petition is no part of the demand or statement of the cause of action, that, in determining the jurisdiction of the amount in controversy in a suit, the plaintiff's demand as set up in his petition is to be considered the matter in controversy, and this demand is the amount shown by the allegations of the petition, and not the amount for which the judgment is prayed, citing Tarbox  Brown v. Kennon, 3 Tex. 7; Bridge v. Ballew, 11 Tex. 270; Graham v. Roder, 5 Tex. 145; Dwyer v. Bassett, 63 Tex. 276; Ratigan v. Holloway, 69 Tex. 468, 6 S.W. 785; Bates v. Van Pelt, 1 Tex. Civ. App. 185,20 S.W. 949; Hoffman v. Cleburne Building  Loan Ass'n, 85 Tex. 410,22 S.W. 154, 155.
That the several amounts put in issue by the defendant's original cross-action, even though the defendant prays for a less sum, exceed the jurisdiction of the county court is fully sustained by the Gimbel Case and the Hill Case, supra, and by the following authorities: Nichols v. Ellis (Tex.Civ.App.) 246 S.W. 713; Russell v. Saffold (Tex.Civ.App.)225 S.W. 281; Bishop v. Mount (Tex.Civ.App.) 152 S.W. 442; Cox v. Overton (Tex.Civ.App.) 240 S.W. 642; Wischkaemper v. Allen (Tex.Civ.App.)221 S.W. 1037: Smith v. Colquitt (Tex.Civ.App.) 144 S.W. 690; Morrison Co. v. Harrell (Tex, Civ. App.) 148 S.W. 1122; Pioneer, etc., v. Wilson (Tex.Civ.App.) 39 S.W. 1095; Rylie v. Elam (Tex.Civ.App.) 79 S.W. 326; Dixon v. Watson, 52 Tex. Civ. App. 412, 115 S.W. 100; Williamson v. Bodan Lumber Co., 36 Tex. Civ. App. 446, 82 S.W. 340, 341; Pennybacker v. Hazelwood, 26 Tex. Civ. App. 183, 61 S.W. 153, Robinson v. Garrett (Tex.Civ.App.) 54 S.W. 269; Smith v. Dye, 21 Tex. Civ. App. 662,52 S.W. 981.
The defendant, having filed his cross-action for an amount beyond the jurisdiction of the county court, cannot, by amending his claim, and eliminating certain claims for damages, vest that court with jurisdiction. Brigman v. Altman-Miller (Tex.Civ.App.) 55 S.W. 509; Times Pub. Co. v. Hill, supra.
This holding is based upon the ground that the plaintiff is entitled to have his liabilities under the defendant's cross-action determined by a court of competent jurisdiction, and he cannot be deprived of this right by permitting the defendant to withdraw his claim for a portion of his damages, as his so doing is a legal fraud upon the Jurisdiction of the court. Pecos  N. T. R. Co. v. Canyon Coal Co., 102 Tex. 478, 481,119 S.W. 294.
In so far as this decision conflicts with our decision in the case of Knoohuizen v. Nicholl (Tex.Civ.App.) 257 S.W. 972, 1 think the case of Knoohuizen v. Nicholl should be hereby overruled.
Since the preparation of the foregoing opinion, Judge HALL has prepared his dissenting opinion, and I desire therefore to state my reason for holding that Knoohuizen Case should be overruled. The following statement of the case is taken from the opinion by Judge HALL:
"Knoohuizen  Byrd sued Nicholl in the county court of Hale county, to recover upon a note dated March 2, 1921, in the principal sum of $685, and providing for interest at 10 per cent. and 10 per cent. attorneys' fees. The *Page 513 
defendant filed his plea of privilege, which was sustained, and the case was transferred to the county court of Swisher county. Nicholl answered, alleging, in substance, that, at the time of the execution of the note and long prior thereto and for several months thereafter, he was in the employ of plaintiffs, engaged in soliciting and writing insurance for them; that about August 1, 1920, they made an oral agreement, under which he was to work for them, soliciting insurance upon a salary of $250 a month, save and except that during the hail insurance season his compensation should be one-half of the commissions allowed by the insurance companies for such hail insurance; that, at the time the note in controversy was executed, plaintiffs were behind in their payments of salary to him in the sum of $382; that he was in urgent need of money, and, when he applied to plaintiffs for payment, they informed him that they did not have any money and were unable to borrow any themselves, and proposed that, if the defendant would execute his note to them for such amount as might be needed, they would be able to borrow the money on his note and would take care of said note themselves with the moneys then due by them to him and with such other amounts as they might thereafter owe him, under the contract, and that they specifically promised and agreed with him that they would forever hold him free and harmless from said note; that relying upon said representations he executed the note sued upon and continued to work for them under the contract, as alleged; that by reason of the contract and his services thereunder plaintiffs are indebted to him in the following amounts: Shortage in pay on March 1, 1921, $382; on half of hail insurance commissions, $464; salary for March and April, $475; salary for two-thirds of June, $166.66, with which plaintiff should have credited the note sued on, and that said note should be credited with the full amount thereof and canceled by reason of the fact that same has been fully paid, as herein explained. The prayer of this part of the pleading is:
"`Wherefore, defendant prays that plaintiffs take nothing by this suit, but that said note be canceled and held for naught, and that he be discharged with his costs and for such other and further relief as he may show himself entitled.'
"The defendant, by his cross-action, claims $950 as exemplary damages for the wrongful levy of an attachment upon his homestead. Upon special issues, submitted by the court, the jury found that Nicholl had worked for the plaintiffs during the months of December, 1920, January, February, March, and two-thirds of June, 1921, upon an agreed salary of $250 per month; that the property involved, upon which the attachment was levied, was the homestead of Nicholl, but that he did not sustain any damages by reason of the levy of the attachment. Upon these findings, the court rendered judgment that the plaintiffs take nothing; that Nicholl have judgment canceling the note, principal, interest, and attorney's fees, and that he take nothing by reason of his cross-action. No motion for new trial was filed in the court below, and the case is before us upon suggestion of fundamental error.
"It is insisted by the appellant that the county court had no jurisdiction to hear and determine the matters set up in the defendant's answer because they consisted of a counterclaim aggregating $1,487.66, and that, together with the damages and salary claimed, as shown by the items, the court was asked to adjudge the aggregate sum in behalf of the defendant of $2,437.66. In the way the contention is presented to this court, we must indulge every reasonable presumption in favor of the sufficiency of the answer. It is shown that, at the time the note was executed, on the 2d day of March, 1921, the plaintiffs in error were indebted to Nicholl in the sum of $382, and that they were not able to pay him such amount. It is further shown, as stated by them, that they could not borrow said sum themselves. Upon their further suggestion that, if he would execute his note to them for such amount as he needed, they would be able to borrow money upon it, the note in suit was executed. According to this allegation, there is a failure of consideration to the extent of $382. He further alleges that they agreed, at that time, to take care of the balance of the note themselves out of all money that might thereafter become due from them to him, under the contract of employment, and further agreed that they would hold him free and harmless upon said note."
From this statement we held:
"This is, in effect, a plea of payment. Rahe v. Yett (Tex.Civ.App.)164 S.W. 30. Under this agreement, it became the duty of the plaintiffs to credit the note with any and all amounts which might subsequently be due Nicholl as soon as any such sums came into their hands. Under the equitable maxim, that equity decrees that to be done which should have been done, it was the duty of the court to apply any sums which came into the plaintiffs' hands toward the extinguishment of the note as soon as said amounts were acquired by the plaintiffs. The application of this rule would result in the payment of the entire amount. The appellee did not plead the several sums due him by way of set-off or counterclaim, and did not pray for judgment for said sums or any amount over against plaintiffs. He simply set up the facts showing what was due him under the contract, alleging that plaintiffs had agreed to use said amounts in extinguishment of the note and prayed that the court make the application which the plaintiffs had failed to do. Eule v. Dorn, 41 Tex. Civ. App. 520,92 S.W. 828; Dalby v. Murphy, 25 Tex. 354.
"It is true that the several items pleaded as payment aggregate $1,487. The amount of the note and attorneys' fees deducted from this sum leaves a balance of approximately $600 in appellee's favor, but he did not specifically pray for judgment against appellants for that sum. He could, at his option, waive his right to a judgment for that part of his claim. Ft. Worth  Rio Grande Ry. Co. v. Matthews, 108 Tex. 228, 191 S.W. 559. In so far as the record discloses, he made no effort to obtain a judgment over against appellants for the excess pleaded by way of payment of the note. As stated above, his prayer in that part of his answer and cross-action was for cancellation of the note and general relief. The rule is that, after indulging all intendments in favor of the pleading, unless it then plainly appears from the allegations that the court is without jurisdiction of the amount, it should retain *Page 514 
jurisdiction, and the prayer for general relief should not be given a construction which will defeat the jurisdiction. This is the rule applied by the Supreme Court and by this court in cases appealed from county courts. Pecos  N. T. R. Co. v. Rayzor, 106 Tex. 544, 172 S.W. 1103; Merchants Reciprocal Underwriters v. First National Bank (Tex.Civ.App.)192 S.W. 1098.
"If the excess of the several sums pleaded as payment of the note should not be considered as part of the amount in controversy, then the $950 set up as damages for the wrongful levy of the attachment is the amount which the answer puts in controversy, and the county court has jurisdiction."
Believing that these holdings are in conflict with the law as set out in the decisions above cited, I am of the opinion that the Knoohuizen Case should be overruled and this case reversed and remanded, with instruction to the trial court to dismiss defendant's cross-action.
The judgment of the trial court is reversed and the case remanded to that court for a new trial.