Downing v. Laws

419 S.W.2d 217, 1967 Tex. App. LEXIS 2563
CourtCourt of Appeals of Texas
DecidedSeptember 20, 1967
Docket11532
StatusPublished
Cited by11 cases

This text of 419 S.W.2d 217 (Downing v. Laws) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Downing v. Laws, 419 S.W.2d 217, 1967 Tex. App. LEXIS 2563 (Tex. Ct. App. 1967).

Opinions

PHILLIPS, Chief Justice.

This suit is before us on a plea of privilege.

Appellee Laws, the plaintiff below, filed suit in the District Court of Travis County, Texas naming appellant Downing, Natalie M. Collins and other persons1 as defendants and, claiming the right of interpleader, deposited $15,000 in the registry of the court. The $15,000 had been given to ap-pellee by appellant as earnest money as part of a contract to convey realty, said amount to be considered as liquidated damages in case of seller’s default under the terms of the contract.

Appellant filed a plea of privilege to the abovementioned suit, appellee filed a controverting plea, while Natalie M. Collins and the other defendants filed a cross-action against appellant claiming that they are entitled to 67% of the earnest money and alleging that appellee Laws is entitled to 33%. Thereupon, appellant filed a plea of privilege to the cross-action. Appellant resides in Williamson County and in each of said pleas of privilege he asserted his right to be sued in that county.

The trial court overruled each of the pleas of privilege, hence this appeal.

We affirm.

Appellant is before this Court on four points of error, briefed together, which are that the trial court erred in overruling appellant’s plea of privilege as to the action by the appellee Laws and as to the action against him by the appeilees other than Laws because “brushing away matters of form and looking only to the substance of things, this suit is really one by appellee Laws and the other appellees against appellant to recover the earnest money deposited by him with appellee Laws;” the error of the trial court in overruling appellant’s plea of privilege as to the action against him by appellee Laws and the action against him by the appellees other than Laws, because the pleadings and evidence show, as a matter of law, appellant is entitled to have [219]*219the earnest money deposited by him returned.

We overrule these points.

The original suit filed by appellee Laws was for the purpose of obtaining a judicial resolution of competing claims to earnest money deposited with him as an escrow agent under the terms of a realty sales contract. Laws filed his suit against appellant Downing who had signed the contract as purchaser. At this time Downing, who had delivered the abovementioned earnest money to Laws, was demanding the return of the money.

In this same suit against Downing, Laws also sued Natalie M. Collins and the above-mentioned defendants as owners and sellers of the land described in the contract who also were asserting a right to the earnest money Downing had placed with Laws.

Consequently, the abovementioned suit was filed against all such parties in the District Court of Travis County where several of the defendants then resided.

We hold that the trial court correctly overruled both of appellant’s pleas of privilege because Laws filed his interpleader suit in good faith while subjected to competing claims over the ownership of the earnest money he was holding, which claims exposed him to double liability and placed him in a position of real doubt or hazard. That the venue to this suit lay in Travis County where several of the defendants resided at the time. Tex.Rev.Civ.Stat.Ann. art. 1995, sec. 4. McDonald, Tex.Civil Practice, sec. 3.41.

Appellee Laws is not a wholly disinterested stakeholder with respect to the earnest money deposited with him under the terms of the realty sales contract as under certain conditions of the contract he is entitled to a portion thereof. Consequently, this suit might better be described as a suit in the nature of interpleader. At the same time however he has been beset by two wholly opposing and conflicting claims concerning the ownership and proper disposition of the earnest money. It might also be pointed out here that at the time of filing of ap-pellees’ suit, the sellers, before electing to sue for damages for the breach of the contract, had the option of suing for specific performance thereof.

A summary of the positions of the parties hereto at the time Laws filed his suit is as follows: he was holding earnest money as an escrow agent about which opposing parties were making competing and conflicting claims; the claimants competing for the earnest money were all represented by counsel ; the realty sales contract governing the disposition of the earnest money expressly calls for the forfeiture of the earnest money as liquidated damages in the event of the purchaser’s default; the purchaser’s attorneys were asserting a defective title; the purchaser’s attorneys were also, as indicated in their title opinion, asserting a misrepresentation about irrigation rights to the land; in addition, the purchaser claimed that the contract was unenforceable under the Statute of Frauds.

Tex.R.Civ.P. 43 2 which governs in-terpleader was not intended to limit an action in interpleader to one wholly disinter[220]*220ested in the suit: “It is not ground for objection * * * that the plaintiff avers that he is not liable in whole or in part to any or all of the claimants.” Citizens National Bank of Emporia v. Socony Mobil Oil Co., 372 S.W.2d 718 (Tex.Civ.App. Amarillo 1963, writ ref’d n.r.e.); Franklin Life Insurance Co. v. Greer, 219 S.W.2d 137 (Tex.Civ.App.Texarkana 1949, aff’d in part rev. in part 148 Tex. 166, 221 S.W.2d 857, 1949).

Rule 43 was taken from Federal Rule 22 with minor textual changes. There can be little doubt that Federal Rule 22 was intended to dispense with many of the crippling restraints on interpleader that had developed in equity and to liberalize the practice that, among other things, an interested and hostile party could file an action in interpleader and avoid a multiplicity of lawsuits. John Hancock Mutual Life Insurance Company v. Kegan, 22 F.Supp. 326 (D.C.Md.1938); Barron and Holtzoff, Federal Practice SS 551.

The adoption of Rule 43 in Texas also extended and liberalized the equitable remedy of interpleader. Security State Bank v. Shanley, 182 S.W.2d 136 (Tex.Civ.App. San Antonio, 1944, no writ).

As authority for his proposition that venue does not lie in Travis County, appellant has relied on Noble v. Texacon Industries, Inc., 367 S.W.2d 872 (Tex.Civ.App. San Antonio 1963, no writ). This suit was brought in interpleader and the trial court placed the venue in the county where one of the defendants resided just as was done here. The Court of Civil Appeals reversed the trial court and changed the venue holding that the plaintiff and the defendant (in whose county venue was sustained) were in fact co-plaintiffs. Thus venue was changed to the county of the true defendants. This case can be distinguished from the case at bar in that in the former there was no liquidated damage clause, the contract had been repudiated and the escrow agent’s interest in the earnest money arose out of an entirely separate agreement between the agent and the seller whereby they agreed to split any sum recovered from the purchaser.

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Downing v. Laws
419 S.W.2d 217 (Court of Appeals of Texas, 1967)

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Bluebook (online)
419 S.W.2d 217, 1967 Tex. App. LEXIS 2563, Counsel Stack Legal Research, https://law.counselstack.com/opinion/downing-v-laws-texapp-1967.