James v. Drye

320 S.W.2d 319, 159 Tex. 321, 2 Tex. Sup. Ct. J. 144, 1959 Tex. LEXIS 546

• Court: Texas Supreme Court
• Decided: January 14, 1959
• Docket: A-6941
• Status: Published

Opinions

Mr. Justice Griffin

delivered the opinion of the Court.

This cause is an appeal from an order of the trial court overruling a plea of privilege, and which action was affirmed by the Court of Civil Appeals. 314 S.W. 2d 417.

The parties will be referred to as they were in the trial court. Plaintiffs, Drye et ux and nine other husbands and wives, filed a suit in the District Court of Hays County, Texas, against petitioners, Edward C. James, Conso Realty Company, a corporation, residents of Harris County, Texas and Eagle Rock Corporation, alleged to be a dissolved corporation, but which was a resident of Hays County, Texas; and against C. B. Smith, a resident of Travis County, Texas, and Eagle Rock Ranch, succeeded by Eagle Rock Ranch, Inc., a corporation residing in Hays County, Texas. James, Conso Realty Company and Eagle Rock Corporation will be called “James-defendants” and C. B. Smith and Eagle Rock Ranch, Inc. the “Smith-defendants.”

This writ of error was granted because the holding of the Court of Civil Appeals that the suit was a suit for “the recovery of land” or “damages to land” under Section 14 of Article 1995; Revised Civil Statutes, is in conflict with the holding of the Courts of Civil Appeals in the following cases: Smith v. Rampy, 1946, 198 S.W. 2d 592; Morris Plan Bank of Fort Worth v. Ogden, Texas Civ. App., 1940, 144 S.W. 2d 998, and other similar cases. We approve the holding of the earlier cases that suits against former owners of land who have parted with all title prior to the filing of suit are not suits for “the recovery of land,” or “damages to land” within the meaning of Section 14, Article 1995, Revised Civil Statutes, 1925. We have determined that Section 4 of Article 1995 is applicable to this cause and will sustain venue in Hays County, Texas.

Plaintiffs filed their suit for declaratory judgment against the James and Smith-defendants to remove cloud from title to their “easements,” and, in the alternative, for damages against all defendants for the denial of the use of these easements in, on and over the Eagle-Rock Ranch.

Plaintiffs alleged that in 1949 James individually owned the Eagle Rock Ranch, and pursuant to a plan and scheme of development organized and controlled Conso Realty Company and and Eagle Rock Corporation and Eagle Rock Club; that James conveyed and caused to be conveyed to Eagle Rock Corporation a portion of Eagle Rock Ranch; that Eagle Rock Corporation subdivided its land into Eagle Rock Ranchitos, Subdivisions 1, 2 and 3; that maps dedicating these “ranchitos” and the lots and blocks therein were filed for record in Hays County, Texas, and the properties were sold with reference to these maps and each deed incorporated by reference certain restrictions regarding the dedicated properties. These restrictions were contained in instruments executed by James as president of Eagle Rock Corporation in 1949 and in 1953 and duly recorded in Hays County, Texas; that one among the restrictions was that no person could become an owner of any part of the “ranchitos” without also becoming a member of Eagle Rock Club until 1974; that further restrictions provided that all owners of lots in the “ranchitos” should pay in to a maintenance fund $5.00 per lot per month. This fund was to go to Eagle Rock Corporation and after sale to the Smith-defendants was to be paid to Eagle Rock Ranch, Inc., and was to be administered by it for the benefit of the lot owners. They alleged such maintenance payment was a vendor’s lien against the lot. They alleged further that in pursuance of such development plan each and all of the James-defendants caused to be published and circulated to prospective buyers of lots in the “ranchitos” certain literature, excerpts of the language of which read as follows:

“While the property outside your own Ranchito is owned by a separate corporation, Eagle Rock Ranch members have an easement over the entire ranch. In other words, members of the club have all the pleasure rights over the entire ranch property. These rights are legally binding against any owner of the property for 25 years, and are subject to renewal after that time.”

“The most pertinent fact concerning Eagle Rock is it’s unique philosophy of operation. Eagle Rock was founded upon the premise that countless numbers of average income families want an above average home in the hills — as a summer place, as a weekend holiday home or for general escapism whenever that need arises. Certainly the million dollar Eagle Rock Ranch is an above average investment; yet all of Eagle Rock actually becomes a part of your easement when you buy one of the existing ranch homes or buy a lot for construction of the home of your choice. That seems unbelievable until you have had an opportunity to study the facts and perhaps talk to some of the wonderful people who have already bought or built on Eagle Rock. As a part of this million dollar investment and yours to enjoy is a magnificent airconditioned clubhouse with game room, lounge, beauty shop, snack fountain, dining room, and 21 air-conditioned guest rooms each with private bath for those occasions when your guest problems become run-away. There is a modern paddock, swimming pool heated the year around, a nine hole pitch and putt golf course, tennis courts, a sweeping stream lined with tall shady pecan and walnut trees in which has been stocked literally thousands of blue-gill, bass and crappie.”

Plaintiffs alleged that prior to the purchase of their properties in the “ranchitos” oral representations to the same effect were made by the agent in charge of the sales of the properties and that such agent took the prospective purchaser over a portion of the Ranch pointing out these various features to corroborate his representations. Plaintiff further alleged that after the purchase of lots and the erection of their respective homes on purchased properties, they and their families used, exercised and enjoyed free access to the Ranch and clubhouse and grounds and the facilities thereof all in accordance with the printed literature shown them and the representations made to them. In June, 1957 the Smith-demendants closed the clubhouse and denied plaintiffs the right to use their so-called appurtenant easements in the Ranch. Plaintiffs alleged that the James-defendants sold the unsold portion of the Ranch and “ranchitos” to the Smith-defendants in April, 1955, and that the Smith-defendants had actual and constructive knowledge of the plaintiffs’ easements and plaintiffs’ actual use and enjoyment of such easements in, on and over the Ranch. Suit was brought against all defendants for an accounting of the sum of $13,000.00 alleged to have been collected as the maintenance fund. Plaintiffs further alleged that the James-defendant owed them the duty to inform the Smith-defendants of plaintiffs’ rights and easements in the Ranch at the time of sale, but that the James-defendants failed to inform the Smith-defendants of plaintiffs’ right and had specifically contracted with the Smith-defendants that no one other than the James-defendants had a lienholder had any right, title or claims in and on the Ranch, and that in the contract of sale, Edward C. James joined in the contract and individually guaranteed the performance of each and every covenant and condition of such contract.

Plaintiffs sued for themselves and as representatives of a class having similar rights and who, as a practical matter, were too numerous to name and make parties. Plaintiffs alleged that after the Smith-defendants succeeded to the title of the James-defendants, the Smith-defendants continued to distribute the James literature and to make similar representations to prospective purchasers. In the alternative, plaintiffs alleged that the action on the part of the Smith-defendants in denying plaintiffs their easements, and the action of the James-defendants in attempting to convey the Ranch and “ranchitos” and the Club to the Smith-defendants free and clear of plaintiffs’ use of the Ranch and Club had lessened the value of the plaintiffs’ properties in the “ranchitos” in an amount of $500,000.00 and sought damages for such amount against all defendants.

Each of the James-defendants filed pleas of privilege as to plaintiffs’ suit and also as to the cross-action brought by the Smith-defendants. These pleas of privilege were amended and were duly controverted and a hearing had. Plaintiffs Drye et al filed their controverting affidavits to each of the pleas of privilege filed by the James-defendants. In each of these controverting pleas plaintiffs adopted their petition and incorporated the same in the controverting affidavits “by reference for all purposes as though fully set forth therein.” They alleged, by separate paragraphs, that exceptions 4, 14 and 29a of Article 1995, Revised Civil Statutes, applied and permitted the cause to be tried in Hays County, Texas. Under 4, plaintiffs alleged that they had a valid and bonafide cause of action against the defendants who resided in Hays County, Texas, and that their cause of action against the nonresident defendants grew “out of a series of closely related transactions which are so intimately connected that they should be joined in order to avoid a multiplicity of suits.” They alleged the facts showing the nonresident defendants to be proper parties to their suit against the resident defendants. All parties and the trial court proceeded on the theory that the evidence introduced at the hearing was to be considered by the court in ruling upon all pleas of privilege.

Eagle Rock Ranch, Inc. filed its answer to plaintiffs’ petition and urged certain pleas in abatement, and voluminous exceptions to each and every paragraph of plaintiffs’ petition, general and special denials and other pleadings on the merits. Then Eagle Rock Ranch, Inc., becoming cross-plaintiffs, filed a cross-action against all of the plaintiffs and against Edward C. James, Conso Realty Company and Eagle Rock Corporation. As to the original plaintiffs the cross-action alleged they were claiming certain easements, restrictions, and other alleged rights in and to Eagle Rock Ranch properties; that some of the plaintiffs had filed for record in Hays County, Texas, an affidavit setting forth their claims so as to constitute a cloud upon, and a slander of, the title of the Smith-defendants; that sales of the ranch properties were prevented and caused depreciation of the value of the ranch properties in a sum of $350,000.00. The cross-action seeks recovery against the J ames-def endants for failure to give notice to the Smith-defendants at the time of the purchase by the Smith-defendants that plaintiffs were claiming the rights and easements in and to the ranch property; recovery is sought against the J ames-def endants for all damages suffered by the Smith-defendants in the event plaintiffs are successful in burdening the ranch properties with their claimed rights and easements. Prayer is for judgment cancelling and annulling the claims and easements of plaintiffs in the ranch properties, for removal of all clouds to the title of the Smith cross-plaintiffs to the ranch properties, and that their title be quieted, and for recovery of damages against all cross-defendants, for costs, etc.

We have carefully studied the record and without setting out in detail the evidence found in the 588-page Statement of Facts, we hold there is evidence to support the allegations of plaintiffs as set out.

As to the James-defendants there is evidence that all of the James-defendants acted through Edward C. James; that all contracts and earnest moneys were submitted to him for approval and the cash payments on all sales sent to him; that James prepared in his own plant the literature delivered to prospective purchasers of lots in the “ranchitos;” that all three James-defendants acted in concert in carrying out the sale of properties either on the Ranch, or in the “ranchitos;” that James had sent to some prospective purchasers a portion of the literature; that he urged the sales agent to use the literature; and that he had knowledge of and encouraged the plaintiffs in the use of their so-called easements in, on and over the Ranch at the times he and his co-defendants owned same.

There is evidence to show that the Smith-defendants knew prior to their purchase of the properties in 1955 that plaintiffs were claiming the rights and privileges in the Ranch and club by virtue of the so-called easements; that after the Smith-defendants purchased the properties they permitted plaintiffs to use and enjoy their claimed easements in, on and over the Ranch and club until June 1957. The Ranch fences and gates were closed and locked by the Smith-defendants; the clubhouse padlocked, the swimming pool drained, the stables and airstrip closed to plaintiffs and plaintiffs’ asserted rights were thus denied.

The dedicatory map to Eagle Rock Ranchitos No. 1 filed by James as president of Eagle Rock Corporation in 1949 shows a part of the facilities, use of which is claimed by plaintiffs located on the Ranch and clubhouse grounds. The plat shows three of the dams across Cypress Creek which are located on the Ranch. There were six dams across the Creek forming six pools, or lakes, use of which lakes was had by plaintiff prior to closing off access thereto in 1957.

On appeal from an order overruling a plea of privilege every reasonable intendment must be resolved in favor of the trial court’s judgment. First. Nat. Bank of Millsap v. Ervin, Texas Civ. App., 1928, 12 S.W. 2d 269, no writ history; Porter v. Cluck, Texas Civ. App., 1929, 13 S.W. 2d 130, dism, w.o.j.; Read v. Luttrell, Texas Civ. App., 1949, 217 S.W. 2d 457, no writ history.

In Stockyards Nat. Bank v. Maples, 127 Texas 633, 95 S.W. 2d 1300, this Court, in answer to certified questions inquiring as to the allegations and proof necessary to sustain venue under Sec. 4, Art. 1995, said:

“The first of these two venue facts, that one of the defendants resides in the county where the suit is pending, must be proven by affirmative evidence upon the hearing. Proof of it is not made by, or by the introduction of the allegations of the petition or of the controverting affidavit. The other of the two-venue facts named by the terms of exception 4, that is, that the suit is brought against two or more defendants, pertains to the nature of the suit. The reasonable inference is that a proper suit against two or more defendants is meant, that is, a suit in which the defendants are properly joined. It is essential that a plaintiff seeking to obtain the benefit of exception 4 allege in his petition a joint cause of action against the resident and nonresident defendants, or a cause of action against the resident defendant so intimately connected with the cause of action alleged against the nonresident defendant that the two may be joined under the rules intended to avoid a multiplicity of suits * * *” (Emphasis added.)

In the case at bar it is alleged and was proved that the defendants Eagle Rock Corporation and Eagle Rock Ranch, Inc. were each corporations whose principal place of business was in Hays County, Texas. The allegations and proof were sufficient to allege and establish a cause of action on behalf of plaintiffs against Eagle Rock Ranch, Inc. and also Eagle Rock Corporation and the other James-defendants for an accounting and also damages. The petition alleged a cause of action against resident defendants so intimately connected with the cause of action alleged against the nonresident defendants that it requires the two to be tried at one and the same trial in order to avoid a multiplicity of suits. McDonald, Texas Civil Practice, Vol. I, Sec. 4.10, pp. 339-341.

What has been said above has been in discussion of the hearing on the plea of privilege, and, of course, is no decision of any issues which may arise on the trials on the merits.

Judgment of the Court of Civil Appeals is affirmed.

Associate Justice Hamilton not sitting.

Opinion delivered January 14, 1959.