Caffall v. Bandera Telephone Co.

• Decision Date: 29 March 1911
• Citation: 136 S.W. 105
• Parties: CAFFALL v. BANDERA TELEPHONE CO. et al.
• Court: Texas Court of Appeals

136 S.W. 105

CAFFALL v. BANDERA TELEPHONE CO. et al.

Court of Civil Appeals of Texas.

March 29, 1911.

Appeal from District Court, Bandera County; R. H. Burney, Judge.

Action by F. R. Caffall against the Bandera Telephone Company and others. From a judgment for defendants, plaintiff appeals. Affirmed.

F. R. Caffall sued the Bandera Telephone Company (hereinafter called the Bandera Company), a domestic corporation, and J. F. Haby, R. L. Blackburn, J. I. Adams, and the San Antonio Northwestern Telephone Company, hereafter called the San Antonio Company, another domestic corporation, alleging in his first amended original petition, as his cause of action, substantially: That on December 3, 1909, he was the owner of 24 shares of the capital stock of the Bandera Company of the face and par value of $50 each which was fully paid up and nonassessable and transferable only on the books of the corporation by the owner. That, in addition to said stock, he owned just and admitted claims of debt, evidenced note, and account against said company for the sum of $200 and of that value. That on said date the San Antonio Company owned and operated a telephone line in Kendall county and elsewhere, and the Bandera Company owned and operated a telephone line in Bandera and other counties. That it was the desire and purpose of the Bandera Company to sell certain portions of its line and property to the San Antonio Company, which desired to purchase the same. That plaintiff and both of said companies desired to have the interest and holdings of plaintiff in the Bandera Company transferred to the San Antonio Company, and it was contemplated and agreed that for a certain consideration paid and to be paid the two divisions of the property of the Bandera Company were to be purchased by and transferred to the San Antonio Company, and that it was to issue and deliver to plaintiff $1,400 worth of shares of paid-up stock therein in lieu of his interest and holdings in the Bandera Company, which was a part of the consideration to be paid, and was to be accepted by the Bandera Company as part of the cash payment therefor, and, when done, plaintiff was to surrender his stock and claims against said company, but that it was understood and expressly agreed that plaintiff's rights and interest were to be in such manner transferred from one company to the other only in the event of the payment of the consideration thus agreed upon, and not to be transferred unless he received stock of that value. Attached to the petition, and made a part thereof as Exhibits A and B, are copies of the two contracts above referred to.

It then alleges:

That plaintiff is unable to tell why said contracts were written as separate instruments, but that they are and constitute only one contract, though only one is signed by him and one by the Bandera Company, yet each and all parties to either was a party to both and entitled to all the rights and privileges thereof as though the instruments constituted one contract between them.

That as a condition precedent to said transfer and contract it was distinctly understood and agreed by all parties thereto that plaintiff was to receive property of the value of $1,400 in paid-up stock of the San Antonio Company, and that such property was to be transferred to and become the property of said company. That said contract was not binding upon plaintiff nor enforceable against him by either of the other parties, unless he accepted the stock to be tendered him, if any was tendered, and gave him the privilege and option of making such exchange, and, unless he did so, his rights were in no manner to be affected or impaired thereby, nor was said deal to be consummated or said property to be transferred, and that all the defendants had full notice and knowledge of such facts and conditions.

That before the time of closing said contract and making such transfer and exchange, to wit, December 31, 1909, R. L. Blackburn, in a pretended compliance with said contract, made a pretended tender to plaintiff of 28 shares of stock in the San Antonio Company of the face value of $50 per share, aggregating $1,400, but that the stock so tendered did not exceed in real value the sum of $500, and was not a compliance with said contract, and plaintiff was not bound to receive the same and refused to do so.

That in addition to the facts alleged, which were all understood and agreed to by the parties, Blackburn made statements and representations to plaintiff that the San Antonio Company was then a solvent and going concern, having assets and property of the value of $15,000, that it was out of debt and paying annual dividends of 12 per cent. on its stock, which representations were ruled upon by plaintiff and he was induced thereby to enter into said contract.

That plaintiff had in the meantime ascertained that the San Antonio Company was then and is now insolvent, and that its stock was not worth exceeding 50 cents on the dollar, and in reality is worth only 30 cents on the dollar, and that tendered him was not worth at the time of the tender exceeding $500. That said company was then embarrassed in not being able to meet matured and maturing financial obligations.

That the representations and statements of Blackburn as to the financial condition of the company and value of its stock was false and fraudulent, and of such open, notorious, and willful character as to render such contract of sale unenforceable, even if it had otherwise been capable of enforcement; but that plaintiff in no way either avers or admits that the same was enforceable as against him unless he elected to accept said stock, which he did not do, wherefore such transfer could not legally be made, and defendants were without right to consummate the contract or transfer said property.

That each of defendants was fully and promptly informed and notified by plaintiff, and had full knowledge of each and all of said facts, and knew that plaintiff had refused to accept the tender of said stock, and his reason for such refusal.

That the San Antonio Company at all times alleged has been influenced, dominated, and controlled by R. L. Blackburn, who has all the time had full and complete management thereof, and the company has in all things adopted and ratified his acts, statements, and representations. That J. F. Haby is and was a stockholder in the Bandera Company, and has at all times influenced, dominated, and controlled its board of directors, and each and all of his acts and statements, as well as his conduct, alleged in the petition have been known to and adopted by and in all things ratified as the acts of said company.

That at the time Blackburn made the pretended tender of said stock the same was not in his possession, nor was it in his power to make a tender thereof, and that no legal tender of the same has in fact been made, Blackburn and Adams having formed a conspiracy, and were in the act of carrying it out to defraud the two companies and plaintiff out of said stock and property to appropriate the same to their use and benefit and Haby's, and that it was not within their power to make a legal tender and delivery of said stock.

That on the day previous thereto, to wit, December 30, 1909, Haby in behalf of the Bandera Company, as well as for himself, and Blackburn and Adams for themselves and the San Antonio Company, with full knowledge of its insolvency, for the purpose of transferring and concealing its property in fraud of creditors, made and delivered a pretended transfer or bill of sale of said two divisions of property from the Bandera Company to Blackburn and Adams individually. That the two divisions of property were transferred for the following consideration: $2,485 cash paid January 15, 1910; 28 shares of stock in the San Antonio Company issued in name of J. F. Haby on December 30, 1909, of the face value of $1,400, the actual value not exceeding $500; one note of that date signed by said company for $2,500, due in two years, unsecured and not worth more than $800; one personal note of R. L. Blackburn to J. F. Haby, unsecured and worthless, for the sum of $585; phone rents collected in advance and returned on the property transferred of the value of $415; the further sum paid C. E. Sommers as a commission on said deal in stock issued by the San Antonio Company of the face value of $100, but really not exceeding in value $40; also cash paid said Sommers as a balance due him for commissions $15, and paid by the Bandera Company — making a total consideration of $7,500, which was the minimum cash value of the property at the time.

That on the day said stock was tendered to plaintiff by Blackburn and Adams they executed a deed of trust upon said property transferred to them to R. W. Taylor, trustee for the Boerne State Bank, to secure a note of said Blackburn and Adams, dated December 30, 1909, in favor of said bank for the sum of $2,650 due June 30, 1910, with interest at 10 per cent., which deed of trust was filed for record in Bandera county on January 17, 1910.

That at the time and since then plaintiff has had no other property or assets, except as alleged in his petition, and was and is financially unable to employ counsel to protect his rights and property, which defendants well knew, and that in furtherance of said conspiracy of Haby, Blackburn, and Adams to obtain the property and usurp the rights of plaintiff, as well as the corporation, especially of the San Antonio Company, which they knew was insolvent, and for the further purpose of forcing plaintiff and compelling him to accept the stock tendered him and which he refused, and for the further purpose of vexing, harassing, intimidating, oppressing, and injuring him and destroying his property rights and values and bankrupting him, said defendants further conspired to levy an assessment upon the stock of the Bandera Company so as to tax plaintiff's stock to such an extent it could not be...