New Nueces Hotel Co. v. Weil Bros.

• Decision Date: 01 June 1922
• Docket Number: (No. 6776.)
• Parties: NEW NUECES HOTEL CO. v. WEIL BROS.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

243 S.W. 731

NEW NUECES HOTEL CO. v. WEIL BROS.^*

(No. 6776.)

Court of Civil Appeals of Texas. San Antonio.

June 1, 1922.

Rehearing Denied June 28, 1922.

Appeal from District Court, Nueces County; W. C. Douglas, Special Judge.

Action by the New Nueces Hotel Company against A. Well and another, partners doing business under the name of Weil Bros. Judgment for defendants, and plaintiff appeals. Affirmed.

Boone, Pope & Savage, of Corpus Christi, for appellant.

Kleberg, Stayton & North, of Corpus Christi, for appellees.

FLY, C. J.

This suit was instituted by the Nueces Hotel Company, a corporation, against A. Weil and M. Well, partners engaged in business under the firm name of Weil Bros., to recover the sum of $1,000, alleged to have been subscribed by them to the capital stock of the Nueces Hotel Company, then in process of organization for the purpose of purchasing a site and building a commercial hotel on the beach portion of the city of Corpus Christi, Nueces county, Tex., and which appellees had failed and refused to pay. Appellees pleaded general denial, non est factum, failure of consideration, forfeiture of its charter by the Nueces Hotel Company on July 2, 1919, and that the subscription had been made conditionally, and that the condition had not been complied with. The New Nueces Hotel Company intervened in the suit, claiming to own the debt against appellees, which was answered by appellees substantially as in the former answer. The intervener was substituted for the Nueces Hotel Company, and upon a hearing of the cause, without a jury, judgment was rendered that appellant take nothing by its suit.

There is no statement of facts, and consequently the facts found by the trial judge must be taken by this court as true and correct. Citizens of Corpus Christi, desiring a commercial hotel, sought subscriptions to that end. Appellees signed a subscription paper for $1,000 upon the condition that if the "hotel is leased that the lessee be bound for as long a time as to retire any bonds that are issued." This condition was not in the printed subscription, but was written thereon and made a part thereof by one of the appellees. Appellees told the promoters of the hotel that they could not afford to subscribe anything if they stood a chance to lose it, and were told that there was no chance of losing the money; that they were to get a bond to guarantee rental for 10 years which would be sufficient to retire the indebtedness against the hotel property. At the preliminary meeting of the proposed hotel company held on March 6, 1911, $150,000 having been subscribed, it was determined to incorporate the Nueces Hotel Company, and at a subsequent meeting the treasurer was directed to collect one-half of the subscriptions, and a notice to that effect was sent to each subscriber. To that call no response was made by appellees. They were approached by G. R. Scott, the chief promoter, and he told them that the organization must have one-half of the subscription in order to get a charter, and he told them that, if they would send a check for one-half of their subscription, he would guarantee in writing that it would be all right. He afterwards tried to get appellees to waive the written condition on their subscription, but they refused. Scott did not send the guaranty, and the check for the subscription was not given. This suit was filed on December 9, 1912, by the Nueces Hotel Company, and it remained as the plaintiff until the intervention was filed by the New Nueces Hotel Company on November 16, 1921. The claim was assigned by the original plaintiff to the intervener on February 4, 1919.

On November 1, 1911, the hotel property was mortgaged to Robert Driscoll to secure a debt of $210,000 borrowed from him by the hotel company. The hotel was leased to H. H. Franks and J. M. Nix for 10 years from February 3, 1913, the date of its completion, for $31,254.95 per annum. No bond was given to guarantee payment of the rent. Other notes were given by the company amounting to $43,260, and another mortgage on the property given to secure them. No bonds were issued by the company. The charter of the Nueces Hotel Company, according to the records of the Secretary of State of Texas, was forfeited for nonpayment of franchise tax on May 1, 1920. The hotel cost about $450,000, and was a large, commodious, modern building.

The findings of fact are not assailed; the criticisms of the three assignments of error being aimed at certain conclusions of law of the trial judge. The first and second assignments are that the court erred in holding that the subscription made by appellees was a conditional one, as shown by the language of the subscription paper. The conclusion is referred to as "in the second paragraph of the conclusions of law prepared and filed by the court." The court found that the language added by one of the appellees as hereinbefore quoted "operated to make the subscription a conditional one," and, being made before the charter was granted, rendered the subscription inoperative and void. The facts show that the negotiations as to the subscription were had before the charter was obtained, and that the condition was added at the time of the negotiations. The facts undoubtedly sustain the finding of fact, and it only remains to determine whether the language used in the condition was such as to render the subscription void if it was not complied with.

The court in the second paragraph first mentioned that the words "any bonds that are issued," which are used in the condition, would not include "the usual mortgage indebtedness covered by ordinary promissory notes," and yet as a complete non sequitur holds, "However, the language thus used operated to make the subscription a conditional one," and, not being complied with before the charter was...