Summary
In Mullin v. Nash-El Paso Motor Co. (Tex.Civ.App.) 250 S.W. 472, 475 (writ denied), the court at El Paso holds: "The rule of pleading is that, if a plaintiff, in order to make out his cause of action, is required to show that the contract sued upon is, for any reason, illegal, the court will not enforce it, whether pleaded as a defense or not.
Summary of this case from Blackwell v. Gen. Motors Acceptance Corp.Opinion
Writ of error refused May 23, 1923.
March 1, 1923. Rehearing Denied March 22, 1923.
Appeal from District Court, El Paso County; B. Coldwell, Judge.
Action by the Nash-El Paso Motor Company against J. F. Mullin, Paul V. Broyles, and others, in which defendants Broyles and another brought a cross-action against defendant Mullin. From a judgment for plaintiff against all defendants and for defendants Broyles and others against defendant Mullin, the latter appeals. Reformed and affirmed.
F. C. Knollenberg and R. J. Channell, both of El Paso, for appellant.
Paul D. Thomas and Steve Lattner, both of El Paso, for appellees.
Statement of Case.
The Nash-El Paso Motor Company brought this suit against Paul V. and Simmie Lee Broyles, R. L. Eaton, and J. F. Mullin, alleging the execution and delivery of certain notes by the first three named defendants in favor of the plaintiff, given in part payment for an automobile and secured by chattel mortgage on the automobile, and that Mullin was claiming some interest in the car and had the same in his custody, having either purchased the same from the makers of said notes or taken possession under contract with said parties.
Judgment was prayed against all defendants for the amount of the notes with foreclosure of lien.
Paul V. and Simmie Lee Broyles and Eaton answered by general demurrer and general denial, and the said Paul V. and Simmie Lee Broyles set up a cross-action against Mullin alleging that said automobile had been sold by them to Mullin for $600 cash and the assumption and agreement by Mullin to pay the notes sued upon by the plaintiff, and they prayed for judgment over against Mullin for whatever amount they might be compelled to pay upon said notes.
Mullin answered the petition of the plaintiff with general denial and plea of disclaimer of any interest in the automobile. To the cross-action of Paul V. and Simmie Lee Broyles he likewise answered by general demurrer and general denial.
The case was submitted to a jury upon special issues which, with the answers, are as follows:
"Question No. 1: Do you find from a preponderance of the evidence that the defendant J. F. Mullin agreed with the defendant Broyles that he, J. F. Mullin, would assume or pay off and satisfy the notes sued upon by the plaintiff? Answer: Yes.
"Question No. 2: (a) Do you find from a preponderance of the evidence that J. T. Grainey, for J. F. Mullin, agreed that J. F. Mullin would assume or pay off and satisfy the notes sued upon by the plaintiff? Answer: Yes.
"(b) Did J. T. Grainey have actual authority from J. F. Mullin to make such agreement, if any? Answer: Yes.
"(c) Was it within the apparent scope of the authority of J. T. Grainey to make such agreement, if any? Answer: Yes."
Upon the verdict judgment was rendered as follows: In favor of the Nash-El Paso Motor Company against Paul V. Broyles, Simmie Lee Broyles, R. L. Eaton and Mullin for the amount due upon the notes sued upon, with foreclosure of lien upon the automobile; in favor of Paul V. Broyles, Simmie Lee Broyles, and R. L. Eaton against Mullin for like amount. From this judgment Mullin appeals.
Opinion.
There is no pleading to support any judgment in favor of Nash-El Paso Motor Company against Mullin except for foreclosure. Nor is there any pleading to support the judgment in favor of Eaton against Mullin. This is conceded by Eaton. The judgment will be corrected in these two particulars.
According to the testimony of Paul V. Broyles, he and Mullin agreed upon the terms of sale, and Mullin, in payment for the car, agreed to assume the payment of the notes sued upon by the plaintiff and to allow Broyles a credit of $600 upon a house which Broyles was to buy from Mullin. Mullin denied that he agreed to assume the payment of the notes, but this issue was resolved against him by the first finding.
When the exchange of the house and car was consummated, Mullin was not present, but was represented by his agent, J. T. Grainey. The third and fourth propositions question the sufficiency of the evidence to support the finding that Grainey was authorized by Mullin to agree or did agree that the latter would assume the payment of the notes. The seventh proposition complains of the form in which question 2 is submitted. A sufficient reply to these propositions is that, Mullin himself having agreed with Broyles to assume the payment of the notes as found in reply to the first question, all issues submitted in question 2 became immaterial.
The fifth proposition asserts that the assumption by Mullin is unenforceable because it was a promise to answer for the debt of another and was not in writing. Article 3965 R.S. This is untenable. Spann v. Cochran Ewing, 63 Tex. 240.
The sixth proposition is without merit. The cases cited in support thereof are inapplicable for reasons which are obvious.
It is asserted that the evidence shows that the car sold by Broyles to Mullin was a secondhand motor vehicle, and that in making the sale Broyles failed to comply with the provisions of chapter 138, Acts 36th Leg. Sections 3a, 3b, 3c, and 4 of that law (Vernon's Ann.Pen. Code Supp. 1922, Arts. 161794 3/4c-1617 3/4f) make it unlawful and a misdemeanor for any person:
3a: To sell or trade such a vehicle without having in his actual physical possession the tax collector's receipt for the license fee for the current year that the vehicle is offered for sale.
3b: To sell or trade such vehicle without transferring by indorsement such receipt.
3c: to buy or trade for such a vehicle without demanding and receiving such receipt.
4: To sell, trade or otherwise transfer such a vehicle without delivering to the purchaser a bill of sale in duplicate in a prescribed form.
Upon the trial Broyles offered in evidence a bill of sale in substantial compliance with the fourth section of the act, and it was shown that the same was executed in duplicate and delivered to Grainey for Mullin.
The record is silent as to whether at the time the Broyleses had in their actual physical possession the license fee receipt for the current year and transferred the same by indorsement to Mullin.
The act in question has been considered by the courts, and it has been held that an attempted sale without compliance with the law passed no title, and recovery cannot be had upon unpaid purchase-money notes in such cases. Overland Sales Co. v. Pierce (Tex. Civ. App.) 225 S.W. 284; Foster v. Beall (Tex Civ. App.) 242 S.W. 1117; Goode v. Martinez (Tex. Civ. App.) 237 S.W. 576.
In the first two cited cases the defense was specially pleaded. From the report of Goode v. Martinez the state of the pleading cannot be ascertained.
In the case at bar no such defense is set up. Notwithstanding failure to plead a violation of the act, the defense would have been available had evidence been offered by appellant and admitted without objection affirmatively showing a violation by the Broyleses of sections 3a and 3b. Keith v. Fountain, 3 Tex. Civ App. 391, 22 S.W. 191; Osage O. G. Co. v. Caulk (Tex. Civ. App.) 243 S.W. 551.
It is also true that the Broyleses could not have recovered had it been necessary to prove as a part of their cause of action that the contract itself was illegal or had been consummated in violation of the act in question Beer v. Landman, 88 Tex. 450, 31 S.W. 805; Bishop v. Japhet (Tex. Civ. App.) 171 S.W. 499.
The rule of pleading is that, if a plaintiff, in order to make out his cause of action, is required to show that the contract sued upon is, for any reason, illegal, the court will not enforce it, whether pleaded as a defense or not. But when the illegality does not appear from the contract itself or for the evidence necessary to prove it, but depends upon extraneous facts, the defense is new matter, and, to be available, it must be pleaded.
If the Broyleses had taken the notes of Mullin in payment for the car, it is quite clear that in a suit brought thereon the defense here urged would not be available unless pleaded.
The sale of a secondhand motor vehicle is a perfectly legitimate transaction. It is only by virtue of the fourth section of the act of the Thirty-Sixth Legislature that the sale shall be evidenced in writing and by prescribed form.
In our opinion a plaintiff suing to recover the purchase price of a secondhand motor vehicle, the unpaid purchase money obligation not being evidenced in writing, is required only to prove the execution and delivery to the vendee of a bill of sale in duplicate in the form prescribed by the fourth section of the act and the agreed unpaid consideration. This was done by the Broyleses and was sufficient prima facie to support the recovery upon their cross-action. It will not be presumed that they were guilty of a criminal offense at the time of the sale by not having in their possession the license receipt or that they failed to transfer the same by indorsement to Mullin.
We regard these matters as extraneous and incidental to the contract of sale, and in order to defeat recovery it was incumbent upon Mullin to plead and prove that in making the sale the Broyleses violated sections 3a and 3b of the act.
Appellant further contends that to permit evidence of his assumption of the notes sued upon by the plaintiff was in violation of the rule forbidding the introduction of parol evidence to vary the terms of a written instrument. The bill of sale recites that the consideration for the car was "$600 and other good and valuable considerations." This is the form prescribed by the act. It shows upon its face that there was a consideration additional to the $600, and we fail to see how the proof of his assumption of the notes as an additional consideration could be considered as contravening the parol evidence rule.
Another proposition advanced is:
"The notes offered in evidence being negotiable instruments, which did not bear the signature of appellant in any form, and it further not appearing from the evidence that any one authorized by appellant had ever signed said notes or any other instrument in writing by which he had agreed to pay them, judgment should have been for him upon that issue."
In support of this proposition appellant invokes section 18 of the Negotiable Instruments Act (Acts 36th Leg. [1919], c. 123 [Vernon's Ann.Civ.St.Supp. 1922, art. 6001-18]), as follows:
"No person is liable on the instrument whose signature does not appear thereon, except as herein otherwise expressly provided."
This provision in the Negotiable Instruments Act is wholly inapplicable. The liabiiity of Mullin is not on the notes, but on an independent assumption to pay same.
The judgment of the lower court will be reformed and affirmed as follows:
In favor of Nash-El Paso Motor Company against Paul V. Broyles, Simmie Lee Broyles, and R. L. Eaton for the amount due upon the notes sued upon together with foreclosure of lien upon the car against them and Mullin; and in favor of Paul V. and Simmie Lee Broyles upon their cross-action against Mullin.
Reformed and affirmed.