Butcher v. J. I. Case Threshing Mach. Co.

• Decision Date: 05 December 1918
• Docket Number: (No. 2032.)
• Citation: 207 S.W. 980
• Parties: BUTCHER et al. v. J. I. CASE THRESHING MACH. CO.
• Court: Texas Court of Appeals

207 S.W. 980

BUTCHER et al. v. J. I. CASE THRESHING MACH. CO.

(No. 2032.)

Court of Civil Appeals of Texas. Texarkana.

December 5, 1918.

Rehearing Denied December 12, 1918.

Appeal from District Court, Lamar County; A. P. Dohoney, Judge.

Suit by the J. I. Case Threshing Machine Company against John F. Butcher and others. Judgment for plaintiff, and defendants appeal. Affirmed.

September 22, 1914, the Mineola Box Manufacturing Company, a corporation under the laws of Texas, made and delivered its five promissory notes for sums aggregating $1,920 to appellee. The notes were not paid when they matured. After they had matured, to wit, on August 22, 1914, appellant commenced suit on the notes against the box manufacturing company in a district court of Dallas county. Before the cause was tried, to wit, on January 28, 1916, the box manufacturing company was by action of its stockholders, as provided in article 1205, Vernon's Statutes, dissolved as a corporation. No receiver for it was ever appointed. After the box manufacturing company was so dissolved, to wit, on March 8, 1917, judgment was rendered against it in appellee's favor for the amount of said notes by said district court of Dallas county. Executions issued on said judgment to Dallas and Lamar counties were returned unsatisfied. At the time the notes referred to were executed, and ever afterwards until it was dissolved as stated, appellant Butcher was the box manufacturing company's president, and appellant Wheeler was its secretary. They were its principal stockholders and its active directors, and exercised exclusive charge and control of its affairs. Before the dissolution of said box company, and during the pendency of said suit in Dallas county, said Butcher and Wheeler disposed of all the assets of the company, in value largely in excess of the amount of appellee's judgment, to another corporation, to wit, the Cummer Manufacturing Company, receiving therefor stock of said Cummer Manufacturing Company of the par value of $70,000, which they applied to their own use and benefit. Said Butcher and Wheeler after the dissolution of the box manufacturing company in its name defended the suit pending against it in Dallas county, and at no time before the entry of judgment therein pleaded or in any way suggested to the court that the box manufacturing company had been dissolved. But it was proven at the trial that the box manufacturing company had theretofore been dissolved. The suit resulting in the judgment from which this appeal is prosecuted was commenced by appellee September 24, 1917. It was on the judgment appellee had obtained against the box manufacturing company in the Dallas county district court, which appellee claimed appellants became liable and bound to pay by force of articles 1206, 1207, and 1208, Vernon's Statutes, as follows:

"Art. 1266. Upon the dissolution of any corporation, unless a receiver is appointed by some court of competent jurisdiction, the president and directors or managers of the affairs of the corporation at the time of its dissolution, by whatever name they may be known in law, shall be trustees of the creditors and stockholders of such corporation, with full power to settle the affairs, collect the outstanding debts, and divide the moneys and other property among the stockholders, after paying the debts due and owing by such corporation at the time of its dissolution, as far as such money and property will enable them after paying all just and reasonable expenses; and to this end, and for this purpose, they may, in the name of such corporation, sell, convey and transfer all real and personal property belonging to such company, collect all debts, compromise controversies, maintain or defend judicial proceedings, and exercise the full power and authority of said company over such assets and properties; and the existence of every corporation may be continued for three years after its dissolution from whatever cause for the purpose of enabling those charged with the duty to settle up its affairs; and, in case a receiver is appointed by a court for this purpose, the existence of such corporation may be continued by the court so long as in its discretion it is necessary to suitably settle up the affairs of such corporation.

"Art. 1207. The trustees mentioned in the preceding article shall be severally responsible to the creditors and stockholders of such corporation to the extent of its property and effects that shall have come into their hands.

"Art. 1208. If any corporation created under this title or any general statute of this state, except railway, or charitable or...