Opinion
No. 3968.
March 16, 1931. Rehearing Denied April 9, 1931.
Appeal from District Court, Red River County; R. J. Williams, Judge.
Action by H. H. Lennox and another against the Texas Cotton Co-operative Association, which filed a cross-action. Judgment for plaintiffs, and defendant appeals.
Affirmed in part, reversed in part, and judgment rendered for defendant on its cross-action.
This case has heretofore been before this court — once on an appeal by appellant from an order overruling its plea asserting a right it claimed it had to be sued in Dallas county instead of in Red River county, 257 S.W. 935; again on an appeal by appellees from an order refusing to dissolve an injunction granted to appellant, 283 S.W. 619; again on an appeal by appellant from an order granting appellees a new trial and setting aside a judgment against them in appellant's favor after a trial on the merits of the cause, 296 S.W. 328; and again on an appeal by appellees from a judgment also in appellant's favor after a trial on the merits, 16 S.W.2d 413.
The trial resulting in the judgment from which the instant appeal was prosecuted was on appellees' second amended original petition filed May 22, 1930, appellant's fifth amended original answer and cross-bill filed said May 22, 1930, appellees' second amended first supplemental petition filed May 23, 1930, and appellant's first amended third supplemental answer fled said May 23, 1930.
It appeared from allegations in appellees' Said amended petition that their cause of action was on an oral contract entered into between them and appellant on or about January 7, 1922, whereby appellant undertook to sell for appellees 1,095 bales of cotton, aggregating 559,402 pounds in weight, grown upon appellees' farms in Red River county during the years 1919, 1920, and 1921. The contract was alleged to be as follows:
"The possession of said cotton was to be surrendered to the defendant (appellant) at Clarksville, Texas, where the same was then located, and was to be stored and held by the defendant at Clarksville until a sale thereof was effected by it; the defendant was to have the cotton properly graded, classed, and stapled by an expert grader and classer of cotton, at once, and was to furnish the plaintiffs (appellees) with an invoice showing the grade, staple and classification thereof, and, as soon as such cotton was graded, stapled and classified, the defendant was to advance or loan the plaintiffs the sum of sixty ($60.00) dollars on each and every bale of such cotton, and on the sums so loaned or advanced the plaintiffs were to pay the defendant interest at the rate of six (6%) per cent per annum until a sale of such cotton had been effected; the cotton was to be insured at the expense of the plaintiffs. And it was further in said contract specially agreed that said cotton should be sold separately, or in a separate pool in and to itself, and as Red River County cotton, and that no sale thereof should be made by the defendant without consulting the plaintiffs as to the price for which the same should be offered or accepted by it; that when a sale of such cotton should finally be made the defendant was to account to and report to plaintiff at once the full price at which each and every bale was sold, it being fully explained to the defendant and the defendant agreeing that it was necessary that plaintiffs should have this information for the reason that plaintiffs had various and sundry tenants who were interested in such cotton, or parts of it, and that it was necessary that such data should be kept and furnished so that plaintiffs could make proper and just settlements with their tenants; that soon after the making of said contract the defendant claimed and represented that said cotton could be carried in a triple `A' warehouse at Houston, Texas, under an insurance rate of eighteen (18¢) cents per annum on a hundred-dollar valuation, and requested the plaintiffs to consign the same to it at Houston, to which change in the terms of the contract the plaintiffs assented and agreed that defendant might ship same to Houston; and that defendant agreed to handle and sell the aforesaid 1095 bales of cotton at and for a charge by it of not exceeding one and 25/100 ($1.25) dollars per bale, which services were to include unloading, weighing (incoming and outgoing), sampling, selling and delivering."
In said petition appellees alleged that appellant, "in a pretended effort to carry out said contract, was guilty of gross and fraudulent breaches thereof," in that it (1) "failed properly or accurately to grade, staple and classify such cotton as it had contracted to do"; (2) "failed and neglected, before selling or offering said cotton for sale," to segregate it from other cotton and offer it for sale as Red River county cotton; (3) made a sale of the cotton without first consulting appellees "as to the time of making such sale, or as to the price at which such cotton was to be sold"; (4) "failed and refused to report the price at which each bale of the cotton was sold by it"; and (5) "through negligence, inattention and failure to properly carry out the terms and obligations of said contract" sold the cotton for an average gross price of 18.07 cents per pound, when by the exercise of proper care and diligence in carrying out the contract it could have sold the cotton for 23 cents per pound, "and in fact could have sold it for a greater price." Appellees then alleged that "by breaching the said contract as alleged and selling the cotton without their knowledge or consent, and (quoting) in utter disregard of the terms and conditions of said contract, the defendant was guilty of a willful conversion of the said cotton," and became liable to appellees for the highest price it could have sold same for, alleged to be 35.5 cents per pound, and amounting to the sum of $197,687.71. Appellees then alleged that, if they were not entitled to recover such highest price, they were entitled to recover the difference between 18.07 cents, the price per pound the cotton sold for, and 23.8 cents, the price it would have sold for (amounting to $32,052.73), had appellant exercised proper care in selling it. Appellees alleged, further, that, in violation of its agreement, appellant, for handling and selling the cotton, charged and retained out of the proceeds of the sale $8.52 for each bale thereof, amounting to $9,329.40 more than it was entitled to charge for handling and selling the same. In their said petition appellees admitted appellant had paid them $90,399.39 on account of the cotton. Their prayer was for the recovery of said sum of $197,687.71, less said sum of $90,399.39, or, in the alternative, said sum of $32,052.65, and in addition thereto said sum of $9,329.40.
In appellant's said fifth amended original answer it alleged it was a nonprofit co-operative marketing association existing under and by virtue of chapter 8 of title 93 of the Revised Civil Statutes of 1925, and that it and its officers were without power to make the oral contract appellees sued upon. In its said answer, appellant alleged further that the cotton owned by appellees, or upon which they had liens, grown upon their farms during the years 1919, 1920, and 1921, was delivered by them to appellant and by it sold pursuant to a written contract and marketing agreement between it and appellees as member of its association, and that, to permit appellees to prove the contract pleaded by them and to recover thereon would be to violate the rule denying a party to a written contract a right to contradict or vary same by oral evidence; that any such oral agreement as that pleaded by appellees would be unauthorized and void, in that "said written contract and marketing agreement (quoting) covers the cotton in controversy and is one of a series identical in terms, signed by other cotton growers who are members of defendant corporation, and with all such similar agreements, comprises one single contract between defendant corporation and all said growers of cotton who have signed a like contract, and the right of such signers to have these contracts carried out by members as executed can not be destroyed by another contract respecting the same subject matter." In said answer, appellant in a cross-action alleged that on June 30, 1921, appellees were cotton growers in Texas; that "as co-partners trading as Lennox Lennox" they executed, "in the name of Lennox Lennox," a certain association agreement in writing, in which was embodied a marketing agreement whereby they (Lennox Lennox) agreed to sell to appellant and it agreed to purchase "all of the cotton produced or acquired by or for them in Texas, during the years 1921, 1922, 1923, 1924 and 1925, upon the terms and conditions in said certain agreement set forth"; "that notwithstanding the words `joint tenants' were added to the name Lennox Lennox signed to said association agreement, they were, at the time of the execution of said agreement in truth and in fact partners in the management, operation and cultivation of the farming lands owned by them jointly and in undivided interests in Red River County, Texas, and in the growing of cotton and other crops thereon through tenants and otherwise, and in the financing of said crops and tenants, and in the marketing of the crops of cotton produced on said lands, and in the purchase of the interest of their tenants in said crops, and in the division, distribution and sharing of the proceeds from said crops"; and that said appellees "were then and are now bound on said association agreement and on said marketing agreement embodied therein, as partners, and that the affixing of the words `joint tenants' after their name to said agreement did not change or destroy their liability as such partners." Appellant alleged, further, that, if it was mistaken in charging that appellees were partners and as such executed said agreement and marketing contract and "became bound thereon as such partners," appellees at the time they executed the agreement and contract "were the joint owners in undivided interests of farms and farming lands in Red River County, Texas, upon which they were growing cotton and by their execution of said association agreement and marketing agreement, agreed and became bound and obligated to defendant (appellant), for handling under the terms of said marketing agreement, all cotton produced or acquired by or for plaintiffs (appellees) on their said farming lands in Red River County, during the years 1921, 1922, 1923, 1924 and 1925." Appellant attached a copy of the association contract, which included the marketing agreement, to its said answer, and alleged that same was "one of a series identical in terms, signed by individual growers, members of defendant corporation and with all such agreements comprising one single contract between defendant corporation and all the said growers of cotton; that the value of said agreements lies in their co-operative character, and that each agreement is a part of a general scheme for the co-operative processing, packing, marketing and distribution of the cotton produced by all of the growers who have become parties thereto; that the operations of the defendant corporation and the said collective marketing were dependent upon the performance of agreements similar to said agreement `exhibit A' (the copy attached to the answer) by many growers of cotton in the State of Texas; that failure to perform said agreement on the part of the growers and failure to sell and deliver the cotton therein covered to defendant corporation would defeat and destroy the very purpose for which said corporation was formed." Appellant alleged, further, that during the years 1922, 1923, and 1924, appellees "produced and acquired, (quoting) jointly and severally, in Texas, many pounds of cotton, the exact amount of which is not known to defendant (appellant); that said plaintiff (appellees) had agreed and obligated themselves, jointly and severally, to sell and deliver all of said cotton produced or acquired by or for them to the defendant"; that they did not do so, but sold and delivered 1,200,000 pounds (2,400 bales) to other persons in violation of the terms of said marketing agreement, whereby appellant "has suffered damages in an amount that is impracticable and extremely difficult to fix and determine," and therefore was fixed by the terms of said marketing agreement at 5 cents per pound, "middling basis," amounting to $60,000, which sum, appellant alleged, appellees became liable and bound to pay them as liquidated damages. Appellant alleged, further, that, because the remedy at law for a breach of the agreement would be inadequate, the parties stipulated in said agreement as follows:
"The grower agrees that in the event of a breach by him of any provision regarding delivery of cotton, the association shall be entitled to an injunction to prevent breach or further breach thereof and to a decree of specific performance hereof; and the parties agree that this is a contract for the purchase and sale of personal property under special circumstances and conditions and that the buyer cannot go to the open markets and buy cotton to replace any which the grower may fail to deliver. That plaintiffs and each of them agreed in said marketing agreement that if the defendant should bring any action by reason of a breach or threatened breach of said agreement they would pay to defendant all traveling expenses and a reasonable attorney's fees which may be expended or incurred by defendant in any such proceeding. A reasonable attorney's fees for commencing and prosecuting this action is the sum of $7,500.00 and defendant has incurred such obligation to its attorneys, and the reasonable amount of traveling and other necessary expenses incurred by reason of the breach of said contract and of the filing of said suit is the sum of $3,500.00."
The prayer of appellants' said answer and cross-action was for judgment (1) requiring appellees to specifically perform the marketing agreement, and (2) awarding appellant a recovery of $60,000 as liquidated damages it was entitled to, $7,500 as attorney's fees, and $3,500 on account of expenses incurred as alleged.
In appellees' said second amended first supplemental petition they alleged that, in procuring the issuance of described writs of injunction restraining them from August 31, 1925, to October 23, 1929, from disposing of cotton they owned, appellant executed certain bonds, that, in procuring the issuance, etc., of Said writs, appellant acted wrongfully and to appellees' damage as specified, and that appellant and the sureties on said bonds became liable to appellee the amount of such damages, aggregating the sum of $250,000.
In appellant's said first amended supplemental answer it questioned by exceptions duly urged a right in appellees to recover the damages claimed on account of the writs of injunction on allegations in a supplemental petition, and alleged that, by the terms of the contract between it and appellees it was entitled to the writs granted to it; that, after said writs were issued, appellees, by fixing liens on their rent cotton and delivering warehouse receipts to the lienholders, placed their cotton beyond their control, and in that way rendered themselves unable to deliver their cotton for the year 1925; that the writ of injunction "did not restrain the sale of any specifically described cotton"; that the mortgagees and holders of the warehouse receipts were not parties to the suit, and were not restrained from selling the cotton; and that appellees therefore were not entitled to complain of the issuance of the writ nor to recover damages because of the issuance thereof.
The court instructed the jury to return a verdict in appellant's favor on its cross-action for $37,783.15 as liquidated damages it was entitled to recover by force of the written marketing contract, for $782.99 as expenses it had incurred and was entitled to recover, and for $7,500 as attorney's fees it was entitled to recover by force of said marketing agreement; further instructed the jury to find against appellant so far as its cross-action was for a specific performance of the contract; and then submitted to them special issues in response to which the jury made findings as follows: (1) That the oral contract was made as alleged by appellees. (2) That appellant violated the provisions of said contract when it sold the 1,095 bales of cotton as it did. (3) That the $101,107.54 for which appellant claimed it sold the 1,095 bales was a less sum than it would have received therefor if it had exercised proper care and complied with the terms of the contract in selling the cotton. (4) That, by exercising such care, appellant could have sold the cotton for $21,960.90 more than the $101,107.54 it reported it sold same for. (5) That, in accounting to appellees, appellant was entitled to deduct $9,407.05 from the amount the cotton sold for. (6) That appellees were restrained from selling 877,032 pounds of cotton from August 31, 1925, when the writ of injunction was issued out of the district court, to March 28, 1929, when said writ was dissolved. (7) That appellees were restrained from selling 818,863 pounds of cotton from September 18, 1929, when the writ of injunction was issued out of the Supreme Court, to October 23, 1929, when said writ was dissolved. (8) That the price of cotton was lower March 28, 1929, than it was August 31, 1925. (9) The cotton appellees were restrained from selling had declined 7 1/2 cents a pound March 28, 1929, from the highest price obtainable after the writ of injunction was issued August 31, 1925. (10) The market price of cotton declined 2 cents per pound from September 19, 1929, to October 23, 1929. (11) Appellees were damaged in the sum of $82,154.66 by reason of the decline in the market price of cotton August 31, 1925, and the market price thereof October 23, 1929. (12) Appellees exercised proper care in the preservation of the cotton they were restrained from selling. (13) In exercising such care appellees expended $11,823.65 for storage of the cotton. (14) Such expenditure was reasonable in amount. (15) Appellees exercised due care in having the cotton insured. (16) They expended $23,961.10 for such insurance. (17) And the amount so expended was reasonable. (18) But for the injunction appellees could have sold the cotton they were enjoined from selling on the market at Clarksville during the gathering season of 1925-26 for $219,258. (19) While stored in the warehouse at Clarksville, the cotton lost 5 pounds per bale. (20) The average price per pound of cotton appellees were enjoined from selling on the Clarksville market March 28, 1929, was 17.5 cents. (21) Appellees were damaged by being deprived of the use of the cotton by the issuance of the writs of injunction. (22) Such damage amounted to $43,851.60. (23) There was a decline in the price of the cotton appellees were enjoined by the Supreme Court from selling between September 18, 1929, and October 23, 1929. (24) The 1,095 bales of the 1919, 1920, and 1921 crops were sold by appellant on actual samples taken from the bales. (25) The 1,095 bales when sold by appellant did not bring their reasonable cash market value. (26) The 1,095 bales were stored, Segregated, classed and graded separate and apart from all other cotton of the defendant association. (27) And same was sold in pools separate and apart to themselves. (28) The contract between appellant and appellees required the former to consult the latter and obtain their consent before selling the 1,095 bales of cotton. (29) The freight per bale on the 1,095 bales from Clarksville to Houston in 1922 was $3.89. (30) The reasonable and customary insurance charge at Houston "per $60.00 valuation on such cotton (the 1,095 bales) was 18 cents." (31) The "reasonable and customary storage charge, per bale, on such cotton during the year 1922" was "251/2 per month." (32) The First National Bank of Clarksville "had a verbal mortgage or verbal lien" on appellees' "cotton of the 1925 year crop before the issuance of the injunction herein on August 31, 1925." (33) Warehouse receipts against appellees "cotton of the 1925 year crop were in the hands of the First National Bank and being held by it as security for the indebtedness of the plaintiffs (appellees) at the time of the issuance of the writ of injunction herein on August 31, 1925." (34) Of the cotton held under warehouse receipts 35,000 pounds had been sold. (35) The amount appellant sold the 1,095 bales for, less the freight, insurance, Storage, and interest on money it had advanced to appellees, was paid to them by appellant.
On said findings of the jury and findings made by the court himself "on undisputed facts," he said, the court rendered judgment in appellees' favor for $160,845.11, the difference, the court determined, between the amounts found in their favor and the amounts found in appellant's favor.
C. K. Bullard, of Dallas, Long Wortham, of Paris, and Robbins Bailey, of Clarksville, for appellant.
Lennox Lennox, of Clarksville, and King, Mahaffey, Wheeler Bryson, of Texarkana, for appellees.
In opinions heretofore handed down by this court, 283 S.W. 619, 16 S.W.2d 413, it was directly held that appellees H. H. Lennox and C. D. Lennox by force of the written contract dated June 30, 1921, referred to in the statement above, became members of the appellant association. In the same opinions, it was held in effect that appellees as such members became bound by the terms of said contract as executed, unless such terms were thereafter effectually modified by the alleged oral agreement, in which event they became bound by the terms as modified. The holdings specified are believed to be so obviously correct as to not need any further discussion than they have already received in the opinions referred to. Contentions of the parties based on the view that appellees never became members of said association and that the oral agreement did not become a part of the written contract are therefore overruled.
A term of the written agreement required appellant to buy and appellees to sell and deliver to appellant "all of the cotton produced or acquired by or for him (them) in Texas during the years 1921, 1922, 1923, 1924 and 1925"; and another term thereof (paragraph 17) required appellees, if they had on hand on July 1, 1921, "any cotton of the 1920 or previous crops free of liens and capable of delivery," to deliver such cotton to appellant as it might direct, to be graded and marketed by it "in pools wholly separate from all other deliveries" appellees were to make.
It will be noted, on referring to the statement above, that appellees' suit, according to the allegations in their second amended petition, was for damages for breach of an alleged oral contract entered into between them and appellant January 7, 1922, whereby appellant undertook to sell for appellees 1,095 bales (559,402 pounds) of cotton of which "they were (quoting) the owners and lienholders in actual possession," and which "had been grown (quoting further) upon their farms in Red River County, Texas, during the years 1919, 1920 and 1921."
It will be noted, further, that appellant's cross-action against appellees was for damages for breach of the written contract referred to.
As we view the matter, the oral agreement set up by appellees should be treated as a modification of the written agreement and not as a contract independent of it. In that view, the rights and liabilities of the parties were determinable by the stipulations in the written contract as modified (if they were) by the oral agreement.
Waiving a question which arose, it might plausibly have been contended (Mt. Vernon Car Mfg. Co. v. Hirsch Rolling Mill Co., 285 Mo. 669, 227 S.W. 67; Ostrander v. Messmer (Mo.App.) 223 S.W. 438; Ross-Saskatoon Lumber Co. v. Turner, Dennis Lowry Lumber Co. (Mo.App.) 253 S.W. 119; Koons v. St. Louis Car Co., 203 Mo. 227, 101 S.W. 49; Gifford v. Willman, 187 Mo. App. 29, 173 S.W. 53), as to whether appellees' suit should not have been on the written contract as modified, instead of on the modification, we will look to the record and from it undertake to determine, first, whether it appeared appellees were entitled to recover anything of appellant on account of the 1,095 bales of cotton because of a breach by it of the written contract as modified by the alleged oral agreement.
The provision numbered 17 in the written contract, heretofore referred to, required appellees to deliver to appellant any cotton they had on hand July 1, 1921, of the 1920 or previous crops, "to be graded (quoting) by the association (appellant) and marketed by it in pools wholly separate from all other deliveries here made, but generally in the manner hereinabove set forth." The manner so set forth was as follows:
"5a. The Association shall pool or mingle the cotton of the grower with cotton of a like variety, grade and staple delivered by other growers. The Association shall classify the cotton and its classification shall be conclusive. Each pool shall be for a full season.
"5b. The Association will endeavor to sell the cotton gradually as the spinning industry requires it at the best possible price before another crop is produced, but in case prices are not satisfactory or production is greater than consumption, or there are abnormal trade or financial conditions, the Association will, in its discretion, hold such part of the cotton as may not be sold at a satisfactory price, until there is a fair demand for it.
"6. The Association agrees to resell such cotton, together with cotton of like variety, grade and staple, delivered by other growers under similar contracts, at the best prices obtainable by it under market conditions; and to pay over the net amount received therefrom, (less freight, insurance and interest) as payment in full to the grower and growers named in contracts similar hereto, according to the cotton delivered by each of them, after deducting therefrom, within the discretion of the Association, the costs of maintaining the Association, organization fee and annual membership dues to the Texas Farm Bureau Federation (unless otherwise paid), and costs of handling, grading and marketing such cotton; and of reserves for credits and other general purposes (said reserves not to exceed one per cent of the gross resale price). The annual surplus from such deductions must be prorated among the growers delivering cotton in that year on the basis of deliveries.
"7. The grower agrees that the Association may handle, in its discretion, some of the cotton in one way and some in another; but the net proceeds of all cotton of like quality, grade and staple, less charge, cost and advances, shall be divided ratably among the growers in proportion to their deliveries to each pool, payments to be made from time to time until all the accounts of each pool are settled.
"8. The Association may sell the said cotton, within or without this State, directly to spinners or exporters, or otherwise, at such times and upon such conditions and terms as it may deem profitable, fair and advantageous to the growers; and it may sell all or any part of the cotton to or through any agency, now established or to be hereafter established, for the co-operative marketing of the cotton of growers in other states throughout the United States, under such conditions as will serve the joint interest of the growers and the public; and any proportionate expense connected therewith shall be deemed marketing costs under Paragraph 6."
The oral contract as alleged, and as proven at the trial, is set out in the quotation in the statement above from appellees' second amended original petition. It will be noted that the terms thereof were not materially different from the terms set out in paragraphs 5a, 5b, 6, 7, and 8 of the written contract, copied above, except that by the terms of the oral contract appellant was not to sell the 1,095 bales of cotton without first consulting appellees as to the price to be paid therefor. It was undisputed in the evidence that appellant did not so consult appellees, but, instead, sold the cotton without first consulting them.
As we view the matter, if appellees were entitled to recover anything of appellant on account of its breach of the contract as modified, it was damages that accrued to them because of appellant's failure to consult them before selling the 1,095 bales of cotton. The trial court concluded, "in keeping with findings of the jury," he said, that the damages to appellees from such failure amounted to $32,623.20, and in the judgment awarded appellees a recovery of that amount against appellant. We think the evidence warranted such finding and award, and overrule appellant's contention to the contrary.
The questions which will be considered next relate to the judgment so far as it was in appellees' favor for damages on account of the matters set up in their second amended first supplemental petition.
It will be seen on referring to the statement above that the matters referred to were acts of appellant in procuring the issuance and service on appellees of certain writs of injunction restraining them from selling cotton appellant claimed was within the terms of the written contract. Appellant insists that such damages, if recoverable at all, were not recoverable when not claimed otherwise than in a supplemental petition.
As we view it, the record discloses no reason why Rules 5 and 15 for the government of district and county courts, invoked by appellant, should not be applied to the case. Said Rule 5 is as follows:
"The plaintiff's supplemental petitions may contain exceptions, general denials, and the allegations of new facts not before alleged by him, in reply to those which have been alleged by the defendant."
Rule 15 is as follows:
"When either party may have occasion to plead new facts, additional to those formerly pleaded by him, which constitute an additional cause of action or defense permissible in the suit, he shall present it as an amendment to the original petition, or original answer (unless it is in its nature a response to some pleading of the opposite party), by substitution, with proper number, name and indorsement, in the same manner as other amendments."
The allegations in said second amended first supplemental petition, setting up appellees' claim for damages because of the restraint imposed by the writs of injunction, were not in reply to any allegations in appellant's fifth amended original answer and cross-bill, but were about matters which, giving effect to Rule 15, appellees were not entitled to set up in a supplemental petition, but were required to present by an amendment of their original petition. Crescent Insurance Co. v. Camp, 64 Tex. 521; May v. Anthony (Tex.Civ.App.) 151 S.W. 602; Gossett v. Vaughan (Tex.Civ.App.) 173 S.W. 933; Paving Co. v. McKay (Tex.Civ.App.) 234 S.W. 587; Sparkman v. Bank (Tex.Civ.App.) 246 S.W. 724; Bank v. Rice (Tex.Civ.App.) 251 S.W. 284; Schaff v. Perdue (Tex.Civ.App.) 254 S.W. 151; Kiehn v. Willmann (Tex.Civ.App.) 218 S.W. 15; Mann v. Trinity Farm Co. (Tex.Civ.App.) 270 S.W. 923; Oak Cliff Ice Delivery Co. v. Peterson (Tex.Civ.App.) 300 S.W. 107; Henderson v. Jones (Tex.Civ.App.) 227 S.W. 736; Ry. Co. v. Larkin (Tex.Civ.App.) 34 S.W.2d 693; 49 C.J. 571 et seq. As the claim for such damages must have been and was not otherwise set up than in a supplemental petition, as stated, it follows that under the rules and authorities cited, such damages were not recoverable by appellee, and that the judgment was erroneous so far as it awarded a recovery thereof.
But we think the damages awarded appellees on account of the writ of injunction granted by the district judge August 31, 1925, would not have been recoverable had they been claimed in appellees' original petition or an amendment thereof duly filed by appellees.
By the terms of the contract appellees undertook to sell and deliver to appellant all of the cotton produced or acquired by or for them in Texas during the years 1921, 1922, 1923, 1924, and 1925, and agreed appellant should be entitled to an injunction to prevent a breach of said undertaking by them. The writ granted August 31, 1925, as stated, did no more than to restrain appellees "from selling, consigning or otherwise disposing of (quoting) all or any part of the cotton produced or acquired" by or for appellees during the year 1925, to any one except appellant. As the cotton the writ was to operate on was not otherwise described than as stated, it is plain, we think, appellees were not restrained from selling or otherwise disposing of any cotton they may have had not "produced or acquired" by them during said year 1925. If they had such cotton and could have disposed of it without violating the command in the writ, but did not, certainly they were not entitled to look to appellant for damages they may have suffered because of their failure to dispose of same. As certainly, we think, if the cotton was cotton they were bound to sell and deliver to appellant, appellees were not entitled to recover damages of appellant for procuring the issuance and service of the writ they in that event had agreed appellant might procure.
Whether appellees, if they had properly pleaded same, would have been entitled to recover damages of appellant because of the injunction granted by the Supreme Court September 16, 1929, is another question. It appeared that injunction restrained appellees "from selling, consigning, mortgaging or otherwise disposing" of 1,664 bales of cotton, then "in storage (appellant alleged in its application for the writ) in a warehouse at Clarksville, Red River County, Texas." It appeared from the evidence heard at the trial that there were 1,559 bales, weighing 818,423 pounds, belonging to appellees, instead of 1,664 bales, in the warehouse.
If the 1,559 bales was cotton produced or acquired by appellees jointly, it was cotton they were bound by their contract to sell and deliver to appellant, and they were not entitled to recover damages because of the injunction granted by the Supreme Court restraining them from otherwise disposing of same.
It appeared that appellees were indebted to a bank in a sum in excess of $188,000, and that the indebtedness was secured by a verbal lien and by warehouse receipts or certificates issued on the cotton and delivered to the bank. It was not claimed that appellees had "produced" the cotton, and, according to the holding of the majority of this court when the cause was last before it, 16 S.W.2d 413, appellees, because of said liens, had not "acquired" the cotton within the meaning of the marketing agreement. There was testimony that the 818,423 pounds of cotton was worth 2 cents a pound more on the market September 16, 1929, when the Supreme Court granted the writ of injunction than it was worth October 23, 1929, when the writ was dissolved. Hence, conforming to the ruling referred to, which the members of this court other than the writer still think is correct, it would be held, if the claim therefor had been pleaded as required by the rules, that appellees were entitled to recover said difference of 2 cents a pound and storage and insurance as damages suffered by them as a result of the restraint imposed upon them by said writ granted by the Supreme Court. Such a recovery, however, must be denied because of the way the claim therefor was pleaded.
On the last appeal of the cause, this court, while remanding same for a new trial, held, 16 S.W.2d 413, that the judgment was not erroneous so far as it was in appellant's favor for $37,783.15 as liquidated damages, and refused to disturb same in that respect. On the trial from which this appeal is prosecuted, the court below instructed the jury to find for appellant said sum ($37,783.15) as such damages. In so instructing the jury and in awarding appellant a recovery of the $37,783.15 and of $7,500 as attorney's fees and $782.99 on account of other expenses it incurred, provided for in the marketing contract, a total of $46,066.14, we think said court did not err.
Contentions of the parties not in effect disposed of by what has been said are overruled.
As we understand the record, the judgment should have been in appellant's favor against appellees for $13,442.94, the difference between $32,623.20, the amount awarded appellees on account of appellant's breach of the contract as stated, and $46,066.14, the amount awarded appellant as liquidated damages it was entitled to and on account of attorney's fees and other expenses it incurred. The judgment will not be disturbed so far as it denied appellant specific performance of the contract sued upon, but it will be reversed so far as it was in appellees' favor for a sum of money, and judgment will be here rendered in appellant's favor on its cross-action against appellees for said sum of $13,442.94.
The plaintiff's supplemental pleadings in this case do not purport to supply omissions or defects in the original petition or to introduce facts, as grounds for additional affirmative recovery, which occurred prior to the filing of the original petition. It set up the issuance of injunctions and their subsequent dissolution, and asked for judgment for resulting damages. Technically and in strict accordance with the prescribed court rules of this state governing pleadings, it is not permissible for a supplemental pleading to be filed and considered which sets up material facts, as grounds for additional recovery or additional cause of action, or as supplying defects which strengthen or reinforce the cause of action, and omitted in the preparation of the original pleading. That end must be attained and accomplished by an amendment of the original petition. The distinction here stated, however, cannot, as I see it, be insisted upon and regarded, where, without abandoning his original cause of action, the plaintiff, by supplemental pleading, seeks to set up matters as distinct grounds for recovery which have occurred since the filing of his original petition. Pleading of such character is not included within the terms and intendment of Rule 15. As regard such new facts, the court, as within its authority and not in violation of the court rules, can properly treat such supplemental petition as pleading of a character sufficient to form the basis and support of a judgment for affirmative relief. The supplemental petition here is not absolutely a void irregularity against the prescribed court rules governing pleading. Brooks v. Kennedy (Tex.Civ.App.) 28 S.W.2d 214. Quoting, as applicable here, from Barnes v. Patrick, 105 Tex. 146, 146 S.W. 154, 155: "No technical rules of pleading can be allowed to defeat a right substantially alleged."
The terms of the two injunctions were broad enough to support a claim for damages as set up in the supplemental pleadings, and therefore the evidence in the case would have to be looked to to determine extent of damages.