Ross v. W. D. Cleveland & Sons

133 S.W. 315, 1910 Tex. App. LEXIS 979
CourtCourt of Appeals of Texas
DecidedNovember 2, 1910
StatusPublished
Cited by6 cases

This text of 133 S.W. 315 (Ross v. W. D. Cleveland & Sons) 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
Ross v. W. D. Cleveland & Sons, 133 S.W. 315, 1910 Tex. App. LEXIS 979 (Tex. Ct. App. 1910).

Opinions

NEILL, J.

On March 25, 1907, Jr H. Brightwell being indebted to W. D. Cleveland & Sons in an amount then estimated to be about $700, executed as security for such indebtedness the following instrument: “Houston, Texas, March 25th, 1907. Mr. J. O. Ross — City: You will please pay to W. D. Cleveland & Sons the amount of my indebtedness to them of about $700.00 after using the collateral you have on hand towards paying and satisfying my indebtedness to you; by that I mean whatever excess you have on hand of collateral over and above my indebtedness to W. D. Cleveland & Sons, amounting, as stated above, to about $700.00. Yours truly, J. H. Brightwell.” This instrument was on the same day presented by the drawers’to Ross, and duly accepted by him. The appellees who were then urgent in their demands upon Brightwell for the payment of their debt, were moved and induced to accept the writing as security therefor and to fore-go proceedings to collect the same, by reason of the representations and promises, made to them at the time the instrument was drawn by the appellant, that he (Ross) was also a creditor of Brightwell, and that his debt was secured by property of the latter amply sufficient, o'ver and above the amount of such debt, in value to pay theirs after the payment and satisfaction of his own; and promised them that if they would procure ap order on him from Brightwell, in the terms of the one recited, for the amount he owed them, he (Ross) would accept the same.

Brightwell having failed to pay Cleveland & Sons said indebtedness, they instituted this suit against him, as well as against Ross therefor. After alleging in their petition the foregoing matters of fact, they averred, as their cause of action against Ross, that, at the time he accepted the order drawn on him by Brightwell in their favor for such indebtedness, the collateral security for such indebtedness was ample in value, if managed and disposed of by him with ordinary care, to raise a sufficient sum of money to pay Brightwell’s debt to them with the surplus, after the satisfaction of the latter’s indebtedness to him; that the defendant Ross had negligently failed to manage and dispose of said collateral, so as to realize its value. But he had, in violation of his duty to plaintiffs, dissipated, wasted, and permitted the same to be lost to them as security for their debt; that Brightwell, some time after making the assignment of the surplus security, became, and is now, insolvent The petition also alleged that Rossj at the time said order on him by Brightwell was made, falsely and fraudulently represented to plaintiffs that he held enough property of the latter, given him as collateral security for his debt, to pay it off and to discharge theirs with what would remain on hand after paying his; that relying upon said representations and believing them to be true, they were induced thereby, at the suggestion of Ross, to take said writing as security for their debt, and to forbear taking any further steps to secure or collect the same from Brightwell, which they could and would have done, he being then solvent, had it not been for such false and fraudulent representations; that Brightwell has since become wholly insolvent and that they [317]*317are unable to collect or enforce, the payment of their debt from him; and that by reason of their being deceived by such false and fraudulent representations made by Ross, and being induced thereby to forbear from taking steps against Brightwell to collect the same when he was solvent, Ross became liable to them for the payment thereof.

The answer of Ross consisted of a general demurrer, special exceptions to pláintiffs’ petition, a general denial, a special denial that he entered into any conspiracy to defraud plaintiffs or had defrauded or wronged them; and a special answer in which he alleged that Brightwell was still indebted to him in the sum o‘f about $2,500, after applying to his debt all the collateral held by him at the time the written order on him was given, and that such sum was due him by Bright-well at that time. The answer then contains an alleged statement of the different securities that came into his hands, and purports to account for the disposition of the same. No answer was filed by Brightwell. As to Ross, the case was tried before a jury who returned a verdict against him in favor of plaintiffs 'for the sum of $383.84, upon which judgment was entered, as well as against Brightwell, by default, for said amount, with interest from date of judgment at the rate of 6 per cent, per annum. Ross alone has appealed.

We deem it unnecessary to recite or discuss the evidence on the conflicting issues. Suffice to say that it reasonably tends to prove that, at the time the written order was given by Brightwell to plaintiffs on Ross, the collateral security held by the latter was amply sufficient, had it been preserved, utilized, and its proceeds appropriated to that purpose, to have paid off and discharged the entire indebtedness of Bright-well to Ross which it was given to secure, and, in addition thereto, to have paid the debt sued on b'y the plaintiffs; that Ross negligently failed to exercise ordinary care to preserve, utilize, and appropriate the proceeds of said collateral security to the payment of the debts due either himself or the ■plaintiffs; that after the order above recited was given by Brightwell he became insolvent, and, for that reason, they could not collect their debt from him, except through the said Ross on said order.

As the finding that the collateral security held by Ross was sufficient in value to pay both his and plaintiffs’ debt, is logically inconsistent with the theory that it was not, and that Ross falsely and fraudulently represented it was, etc., we need not further notice it in so far as the evidence is concerned as a ground of recovery. But will, however, observe that we do not think plaintiffs’ petition, in presenting both theories, was subject to the special exception urged against it on the ground of misjoinder of actions. It is, of course, a general rule that actions ex contractu and ex delicto may not be joined. But the rule is not without its exceptions under our system of pleading. An exception to the rule is, when the two actions grow directly out of or are immediately connected with the same matter. Towne on Pleading, 151; Hooks v. Fitzenrieter, 76 Tex. 277, 13 S. W. 230; Thomas v. Ellison, 110 S. W. 934. In the case last cited it was directly held that a cause of action for a breach of a contract of warranty may be joined with a cause of action for deceit which resulted in the execution of the deed containing the warranty. Though a writ of error was granted in the case, the holding of the Court of Civil Appeals upon this point was affirmed by the Supreme Court, 116 S. W. 1141. But it occurs to us that on neither theory does plaintiffs’ petition present an action purely for a breach of contract. They do not sue. for any surplus that Ross realized from the collateral security he held, but for his negligence in dissipating the security or allowing it to be dissipated, so that no surplus was realized on it which could be paid on plaintiffs’ debt in accordance with the order held by them. This, though it might in one sense be regarded as a breach of contract, may at the same time be viewed as a tort. For it shows that Ross was negligent in failing to discharge a duty, arising from his acceptance of the order, which duty he owed plaintiffs, and that by reason of such negligence they ■ were unable, on account . of Brightwell’s subsequent insolvency, to collect their demand against him. In this view of the matter, a suit based upon either theory would be an action ex delicto.

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Bluebook (online)
133 S.W. 315, 1910 Tex. App. LEXIS 979, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ross-v-w-d-cleveland-sons-texapp-1910.