Cherry v. First Texas Chemical Mfg. Co.
| Decision Date | 05 January 1910 |
| Citation | 123 S.W. 689 |
| Parties | CHERRY v. FIRST TEXAS CHEMICAL MFG. CO. et al. |
| Court | Texas Supreme Court |
Action by the First Texas Chemical Manufacturing Company against the Walker Chemical Company and G. P. Cherry. From a judgment of the Court of Civil Appeals (115 S. W. 81) affirming a judgment for plaintiff, defendant Cherry brings error. Reversed and remanded.
N. J. Wade and Pierson & Pierson, for plaintiff in error. Leake & Henry and C. L. Simpson, for defendants in error.
This action was brought by the First Texas Chemical Manufacturing Company, a corporation, against the Walker Chemical Company, also a corporation, upon an account for the sum of $795.80 for goods sold and delivered, and against the plaintiff in error, Cherry, upon a note executed by him to the Walker Chemical Company and by it delivered to plaintiff as collateral security for the account sued on. The note, with stipulated attorney's fee, amounted to more than $1,000, and plaintiff sought judgment upon it against Cherry in its own behalf for enough to satisfy the account, and in behalf of the Walker Chemical Company for the balance. The Walker Chemical Company in its answer admitted its indebtedness to plaintiff and joined in its prayer for judgment on the note. Cherry defended on the ground that the note sued on was given for stock in the Walker Chemical Company, and was procured by misrepresentations and fraud of its president and manager. The plaintiff, in reply, alleged that it acquired the note before maturity and without notice of the defenses alleged. The trial court, after the evidence was in, instructed a verdict in favor of plaintiff as prayed for, and its judgment was affirmed by the Court of Civil Appeals (115 S. W. 81) for the reason that the evidence was insufficient to raise an issue as to the defense of fraud alleged by Cherry in the procurement of the note. It is very clear that Cherry did testify to the making of the material representations by Walker, the president and manager of the Walker Chemical Company, to induce him to buy the stock and give the note for the price of it. Cherry's place of business is in Rhome, Wise county, that of Walker in Bosque county, and that of the Walker Chemical Company is stated in its charter to be in Dallas county, although, according to some of the testimony, it does not seem to have an office anywhere. Walker had been the proprietor of a formula for the compounding of a medicine called "Single Stroke Antiseptic," and had been having it put up by the plaintiff company and selling it until the incorporation of the Walker Chemical Company, which took place November 13, 1905, with himself, Simpson, and Bruckner as corporators. The capital stock of the company was stated at $50,000, divided into 500 shares of $100 each. Three hundred shares were issued to Walker in payment for his formula, five shares were issued to Bruckner, and two shares to Simpson in payment for services rendered by them. No other stock has been sold but that to Cherry. Cherry had bought some of the antiseptic from Walker in October, 1905, and, according to his testimony, about December 18 or 20, 1905, Walker came to his place of business and gave him a prospectus of the company and requested him to look over it, saying that they had organized a company, and were ready to dispose of stock, and would like for him (Cherry) to become a stockholder and vice president. Walker further said the company was already "standing on its feet," that they were already doing business, and it was not like starting a patent remedy from the beginning. Cherry did not read the prospectus; but, after a few days, Walker again came to see him and renewed his solicitations, and, on being told that Cherry did not have money to buy stock, offered to sell it at 50 cents on the dollar and to take Cherry's note in order to get him in. Cherry says that thereupon he asked some questions in regard to it, not having yet looked over the prospectus, and was told that the company was paying a big dividend. "I put the question direct to him if it would pay as much as 35 per cent., and he said it would pay more." Walker further stated the amount of the capital stock, and said it would...
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Cherry v. First Texas Chemical Mfg. Co.
...to plaintiff to the extent of the amount due it by the Walker Chemical Company, being less than the amount of the note. Cherry v. Chem. Mfg. Co., 123 S. W. 689. The judgment is ...