Court Opinion

ID: 9832704
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:07:32.855917+00
Date Added: 2024-06-11T07:43:50.472894
License: Public Domain

On Rehearing.
On his motion for rehearing, appellee ■“questions the correctness of the opinion in this case on the ground that a mere general denial was not sufficient to raise any issue as to the validity of the assignment.” In support of his proposition, he cites the following statement from 4 Am. Jur. 331: “Likewise, in an action by .the assignee the capacity of an assignor cannot be tried under a general denial but must be raised by a plea in abatement before the hearing on the merits.”
The text cites Multorpor Co. v. Reed, 122 Or. 605, 260 P. 203, 205, 55 A.L.R. 504, where the court said: “There was no want of capacity in plaintiff to sue.” Ap-pellee’s “capacity” to sue was not in issue in the case at bar; the point decided by the original opinion was that he failed by his evidence to maintain his title. We quote the following proposition from 4 Am.Jur. 331 — part of the same paragraph cited by appellee: “A general denial will, however, under the practice in most states, put in issue all of the facts necessary to make out the plaintiff’s alleged cause of action. Thus, a general denial puts the -averment of assignment in issue, that being an essential element .of the plaintiff’s case.”
Johnson v. Vickers, 139 Wis. 145, 120 N.W. 837, 838, 21 L.R.A.,N.S., 359, 131 Am.St.Rep. 1046, is .cited in support of the text; in that case the court said: “It is urged that the question of assignment is not before the court because it is not put in issue by the pleadings. The -complaint alleged the assignment of the contract sued upon. This -was a necessary allegation because the plaintiffs depended on such assignment for their right to recover. The answer put this allegation in issue by a general denial. Since the plaintiffs relied upon the fact of assignment to prove any cause of action at all, the general denial put the averment of assignment in issue.”
■ In our judgment, these authorities fully support our conclusion that, having plead an assignment, as against appellee’s general denial the burden rested upon appellee to prove title under his assignment.
We note the following additional authorities cited by appellee in support of his proposition:
(a) 6 C.J.S., Assignments, § 138: “In order for defendant to rely on-a defense, his pleadings must put in issue the fact or facts relied' on. If the plea or answer does not raise the defense it is waived. Accordingly, a defect in plaintiff’s title must be taken advantage of by a proper pleading and in proper time:”
The text cites in support of this proposition Chalfont v. Johnston, 3 Yéates, Pa., 16. The following quotation from that authority illustrates the point made by the text:
“Mr. Hemphill for the defendant insist1 ed, that the present suit could not be supported by the plaintiff as assignee, Caleb Johnston one of the executors' of the obligee not having joined in the assign*118ment. It was the folly of Mrs. Goodwin to .nominate him her executor, who was one of the executors of her obligor, and known by her to be such.
“Per Cur. The testatrix might not have known this fact, but at any rate, if this technical nicety was intended to be insisted on, it should have been pleaded in abatement, like the case of part owners not sued. [Rice v. Shute] 2 Bl. Wm. [695] 696; [Abbot v. Smith, 2 Bl. Wm.] 947. [Rice v. Shute] 5 Burr. [2611] 2613. [Mitchell v. Tarbutt] 5 Term Rep. [649] 651. Perhaps it wduld be difficult, if not impracticable, to have given the plaintiff á better writ. Caleb Johnston was not com-pellable to join in the assignment, nor could he be reasonably expected to join in a suit against himself. Under such circumstances, a bill would certainly be supportable in Chancery against the now defendant. Courts in this state adopt the rules of equity, which form a part of our law. We are not necessarily called on to say in the present instance, how far we should feel ourselves obliged to follow the practice of a Court of Chancery, to prevent injustice, if even a plea in abatement had been put in to the form of the assignment.”
Thus, an examination of the authority relied upon by appellee demonstrates that it is not in point.
(b) Appellee cites Cunningham v. Buel, Tex.Civ.App., 287 S.W. 683, 685, where the Court said: “The authority by which the substituted parties came into the case, the capacity in which they appeared, and their apparent right to recover, were fully shown in their first pleadings, and we are of the opinion that due and orderly procedure required the complaining party to raise his objection by verified pleadings, setting out the specific grounds of his objection and by prayer- to abate the suit as to the. substitute parties. Article 2010, R. S.1925. . By failing to do so plaintiff in error waived his right to question the capacity of those parties.” (Italics ours.)
This case is not in point; we have before us no point on the capacity of appelr lee to maintain the suit.
(c) Appellee also .cites Lesh v. Meyer, 63 Kan. 524, 66 P. 245, 246, where the court said: “The execution of the written assignment of the several accounts to Meyer was admitted. Under this state of the pleading, the defense that Meyer was not the real party in interest, that the assignment was only colorable, and that he had no such beneficial interest as would entitle him to maintain the action, was new matter, and should have been pleaded, before evidence is admissible tending to prove such defense.”
The case is not in point; the assignment in issue in that case, on its face, conveyed title. The court simply held that the issue that the assignment was only colorable should have been plead. In the case at bar, the assignment, with its supporting evidence, did not establish title.
Appellee’s second point in his motion for rehearing is to the effect that under the evidence he established title to the cause of action in issue. On that point we take the following statement from his motion for rehearing:
“Appellee contends in his motion for rehearing that the findings made by the court in its. opinion, page 2, as follows : ‘The assignment was executed by the receiver without authority from the court which appointed him receiver, and without authority from any other court. The order appointing him authorized him only to collect and adjust the claim, and in no way to sell and assign it. On this- statement the written assignment by the receiver to appellee was void and vested him with no justiciable interest in the claim asserted by the receiver against appellant.’ — are wholly unsupported by the record in- this case and contrary thereto. -Out of fairness to the parties the court is respectfully urged to review the record and to correct such finding, and as shown hereinafter, the orders of the court in the receivership proceedings when taken in connection with the language in the -assignment, were fully sufficient to transfer the cause of action to C. P. Bordages and to justify the judgment which was entered in his favor.
“The entire evidence on'this point is as follows: First, there appears the order appointing Wright Morrow receiver, in which he is given authority ‘to do and to perform all things necessary with reference to-the affairs of the company pending the further orders of the court.’ There is a forther order in the record in the receivership proceedings wherein the court recites-that the powers gjven Wright Morrow,. Receiver, should be enlarged and extended, and, ‘It is now therefore Ordered, Adjudged and Decreed that the said Wright Morrow, Receiver, and Trustee aforesaid, be *119and lie is hereby fully authorized to take possession, control and custody of all of the said property, assets and effects of the Lumbermen’s Reciprocal Association, and to do all and anything and enter into any and all agreements, as may be deemed by him necessary or advisable to preserve said property, assets and effects of the said Lumbermen’s Reciprocal Association.’ Such order concludes, ‘It is further Ordered, Adjudged and Decreed that said Receiver shall have leave to apply for such other and further orders of this court as may to him from time to time seem advisable or necessary in the administration of this estate.’
“Such orders gave the receiver a wide range of powers to do any and all things necessary in his discretion with reference to the assets of said corporation.
“As directly authorized by the order of the court, he had instituted this suit. Having made an assignment of the cause of action to Bordages, the said Bordages, with leave of the court, became plaintiff therein, and Marrs McLean, defendant’below and here appellant, made no objection. Upon trial of the case the assignment was introduced in evidence. This assignment has been quoted in part by the court in its opinion. Out of fairness to the parties, certainly the full language thereof should have been set forth and particularly the following portion appearing in the Statement of Facts, pages 227-228:
“ ‘Now, therefore, I, Wright Morrow, as Receiver of said Lumbermen’s Reciprocal Association by virtue of the powers in me vested by law in such case made and provided, for and in consideration of the premises and the sum of Ten Dollars ($10.00) and other good and valuable consideration to me in hand' paid by C. P. Bordages, the receipt of which are hereby acknowledged, under and by virtue of the orders of said court, have bargained, sold, transferred and assigned, and by these presents do bargain, sell, transfer and assign unto C. P. Bordages, of- Jefferson County, Texas, his heirs and assigns forever, all the estate, title- and interest of the Lumbermen’s Reciprocal Association in and to the following described property, to-wit * * * ’
“Thereafter follows a description of the cause of action asserted in this case, and such assignment is duly signed by Wright Morrow as receiver and bears the usual Notary certificate. The above sets forth in full the record on this point.”
On his statement, appellee contends that he established title to the cause of action on the following grounds:
(I) Because the receiver recited in the assignment that it was executed “under and by virtue of the orders of said court.” Appellee introduced in evidence the orders of the appointing court .relied upon to establish his title. These orders show affirmatively that the receiver did not have the power to execute the assignment; on the contrary the court gave him leave “to apply for such order and further orders of this court as may to him from time to time seem advisable or necessary in the administration of this estate.” Since, under the authorities cited in the original opinion, the receiver could not divest himself of title to the cause of action • without authority from the court, and since, under the showing made by the,record the court did not give him that authority, it conclusively appears that appellee did not acquire title to the cause of action by his assignment from the receiver.
(2) But appellee contends that our conclusion “disregards the well recognized law in this state pertaining to the presumption of regularity of official acts and proceedings.” Appellee .cites in support of this proposition 17 Tex.Jur. 277; Stoker v. Stoker, Tex.Civ.App., 254 S.W. 398; Slaughter v. Cooper, 56 Tex.Civ.App. 169, 121 S.W. 173. The presumption invoked by appellee can be invoked only where the officer acts within the apparent scope of his authority; the presumption has no applicatipn where the officer is one with limited authority and can act only within the limits of his authority. So, where the evidence affirmatively shows that his limited authority did not extend to the act in issue, he could not act, and no presumption can be indulged to support his act. The receiver had no power from the appointing court “to sell”; it follows that there is no basis to presume the regularity of his sale.
A third point of law is involved: we quote the last sentence of Sec. 199, 53 C.J. 159: .'“When the receiver’s act is manifestly for the benefit of the estate, it will be presumed, until the contrary appears, to have- been done with the consent Of the court.”
*120It cannot be said, ón the record in this case, that it was manifestly for the benefit of the estate to assign the cause of action to appellee on the recited consideration “of the premises and the sum of $10.00 and other good and valid consideration." So, on that ground the presumption invoked by appellee cannot be indulged.
On the whole record, we cannot say affirmatively that the receiver did not have power to execute the assignment; we can only say that appellee did not establish title by the evidence introduced. For this reason, the motion for rehearing should be granted and the cause remanded for a new trial. On this conclusion, it is neces•sary that we discuss certain other points made by appellant in his brief.
On the 31st day of July, 1930, Wright Morrow was appointed receiver of the Lumbermen’s Reciprocal Association, hereinafter referred to as Association. Appellant, Marrs McLean, became a member of the Association by written contract signed by him on the 8th day of July, 1927, which contained the following stipulation: “There shall be no joint funds, but a separate individual account shall be kept by our Attorney for us and for each subscriber. Our liability under this agreement shall be our pro rata proportion of the indemnity granted by subscribers at the Association including all expenses incurred, but shall not exceed one additional annual premium deposit provided for in indemnity contracts issued under this authority, which amount we hereby subscribe subject to call by the Advisory Committee.”
Under the written contract of membership, appellant carried policies of insurance with the Association on which he paid the following premiums:

As a “class” suit, acting under orders of the appointing court for the purpose of fixing the assessment liability of all the policyholders — all of them had signed the same written contract of membership — the receiver instituted suit against the Trinity Portland Cement Company, a policyholder of the Association, and 27 other policyholders. Appellant was not named one of the defendants, was not served with notice of the pending suit, and did not know that it was pending until after the entry of the final order of the court in the “class” suit on the 1st day of May, 1933. By the final order, the court levied an assessment of 33% of the amount of the booked and earned premiums on all policies in force from the 1st day of July, 1929, to the 1st day of July, 1930, inclusive. The order was made by the 126th district court of Travis county, to which the “class” suit had been regularly transferred. The suit at bar was instituted by the receiver against appellant to recover the sum of $1,652.60, 33% of $5,007.88, the earned premiums carried by him with the Association. It was this cause of action the receiver purported to transfer to appellee.
Appellant presents the point that the judgment or order entered by the court in the “class” suit was not binding on him. The very point presented by appellant— that he was not bound by the order of assessment entered in the 126th district court of Travis county — was before the court in Southern Ornamental Iron Works v. Morrow, Tex.Civ.App., 101 S.W.2d 336, writ refused, and there decided against his contentions. So, under the order of assessment appellant was made liable to the receiver" for the sum of $1,652.60.
Appellant presents the second point that his assessment liability on the policies issued to him from the 15th day of July, 1928, to the 7th day of July, 1931, inclusive, under the quoted sections of his membership contract set out above, was barred by limitation when this suit was filed on the 10th day of June, 1936. The contention is denied. Limitation did not begin to run in appellant’s favor against his liability for assessment on his policies until the court entered the order of assessment on the 1st day of May, 1931, less than four years before the institution of this suit. Couch on Insurance, Vol. 7, page 5764, Sec. 668; Tardy’s Smith on Receivers, 2d Ed., Vol. 2, p. 1495, Sec. 507; Shaw, Banking Commissioner, et al. v. Bush, Tex.Civ.App., 61 S.W.2d 526; Geyer v. Jones, Tex.Civ.App., 93 S.W.2d 1192, 1193.
The cause of action was based upon the written contract signed by appellant by which he became a member of the *121Association, and, therefore, was within the statute of four years, and not the statute of limitation of two years.
Motion for rehearing granted, judgment of the lower court reversed and the cause remanded for a new trial.