Commonwealth Bonding & Casualty Ins. Co. v. Cator

• Decision Date: 27 March 1915
• Docket Number: (No. 751.)
• Citation: 175 S.W. 1074
• Parties: <SMALL><SUP>*</SUP></SMALL>COMMONWEALTH BONDING & CASUALTY INS. CO. v. CATOR.
• Court: Texas Court of Appeals

175 S.W. 1074

^*

COMMONWEALTH BONDING & CASUALTY INS. CO. v. CATOR.

(No. 751.)

Court of Civil Appeals of Texas. Amarillo.

March 27, 1915.

Rehearing Denied April 24, 1915.

Appeal from District Court, Hemphill County; F. P. Greever, Judge.

Action by L. S. Cator against the Commonwealth Bonding & Casualty Insurance Company and others. From judgment for plaintiff, the defendant named appeals. Reversed and remanded.

F. H. Haddix, of Ft. Worth, and Lumpkin & Harrington, of Amarillo, for appellant. H. E. Hoover, of Canadian, and Jas. A. Stephens, of Benjamin, for appellees.

HALL, J.

This action was brought in the district court of Hansford county against the Bankers' Guaranty Company and certain individuals, as officers and organizers of both companies, to cancel a subscription to the capital stock of appellant and recover $625, paid in cash thereon. The venue was changed to Hemphill county, where, upon a trial before the court without a jury, judgment was rendered against the appellant company and in favor of appellee Cator, canceling the subscription, together with the stock certificate, the note, and deed of trust, and decreeing the recovery of $625. The appellee's original petition stated, in substance, that in the spring of 1910 R. T. Stuart and Coke W. Harkrider undertook, as promoters, to bring about the organization of appellant company. In circulars and a prospectus prepared by them, they represented that the company was to commence business, when in good faith a cash capital of $200,000 had been paid in; that appellee subscribed in good faith and gave his note and mortgage, relying upon the prospectus and statements in the subscription list and representations made by their agent, one C. S. McDonald; that it was expressly understood, agreed, and stipulated in the subscription contract that the company should be incorporated in pursuance of the laws of the state of Texas; that a charter was procured for the company on the 23d of March, 1911, incorporating it under the laws of the state of Arizona, and at that time the company did not have, in cash, exceeding $16,000; that C. S. McDonald, who was the agent and representative, both of the organization company and of appellant company, which was afterwards organized, stated, in substance, that the object of the organization was to procure cheap money for its members; that they had a paid-up capital stock at the time of the subscription of at least $200,000, and had capital stock already paid in to furnish stockholders money at 6 per cent. interest, by approved real estate, and that, under these representations, plaintiff subscribed for 125 shares of the stock at the agreed price of $5,000; that the corporation had not, as represented by McDonald, made arrangements whereby it could loan plaintiff money at 6 per cent. on approved real estate; that, upon ascertaining the falsity of the representations made by defendant, plaintiff rescinded the contract and tendered the appellant the certificate of stock, demanded a return of the money, note, etc.

Without setting out the allegations in detail, the petition alleges, with great particularity, the fraudulent representations, the condition of the company, and the facts entitling appellee to the relief sought; that, after the execution of the note and mortgage, the defendants fraudulently combined together for the purpose of inducing the plaintiff to so act as to estop himself from setting up the invalidity of the contract and the fraud perpetrated upon him. These acts consisted of sending him proxies to vote his stock at meetings and inducing him to exchange his stock in appellant company for stock in the Bankers' Guaranty Company, organized by the same parties.

Appellee, by preliminary motion, objects to the consideration by this court of any of the errors assigned by appellant, because the record discloses that the case was tried before the court without a jury, and judgment rendered in favor of appellee; and the appellant failing to make a motion for new trial, and further failing to have the court file his findings of fact and conclusions of law, is here without any exceptions to the judgment and cannot be heard to complain. We find from the record that the appellant excepted to the judgment and has filed in this court, in due time, a statement of facts. Article 1991, Vernon's Sayles' Civil Statutes, which is a part of article 1333, Sayles' Civil Statutes, is:

"It shall be sufficient for the party, excepting to the conclusions of law or judgment of the court, to cause it to be noted on the record in the judgment entry that he excepts thereto; and such party may thereupon take his appeal or writ of error without a statement of facts or further exceptions in the transcript; but the transcript shall in such cases contain the special verdict or conclusions of fact and law aforesaid, and the judgment rendered thereon."

We conclude from this article that one appealing from a judgment rendered by the court without a jury need not file a motion for new trial, and it has been frequently so held (Frenzell v. Lexington, L. A. & I. Co., 126 S. W. 907; Luther v. Western Union Telegraph Co., 25 Tex. Civ. App. 31, 60 S. W. 1029; Griffin v. McKinney, 25 Tex. Civ. App. 432, 62 S. W. 82; Akes v. Sanford, 39 S. W. 952; G., C. & S. F. Ry. v. Gaedecke, 39 S. W. 312; Maverick v. Routh, 7 Tex. Civ. App. 669, 26 S. W. 1011; Bell County v. Alexander, 22 Tex. 350, 73 Am. Dec. 268); but, when no such motion is filed, the party appealing must except to the judgment and have the trial judge file findings of fact and conclusions of law (Pollard v. Allen & Sims, 171 S. W. 302, and authorities cited), or bring up a statement of facts in the record (Cornelius v. Harris, 163 S. W. 346; Greer v. Featherston, 95 Tex. 654, 69 S. W. 69). Failing in this, none but fundamental errors can be considered.

Under the fifth, sixth, and seventh assignments of error appellant insists that appellee has waived his right to recover by participating in the stockholders' meeting, which decided to incorporate under the laws of Arizona, instead of under the laws of Texas, and by exchanging his stock in appellant company for stock in the Bankers' Guaranty Company, and that such acts constituted a waiver of the alleged fraud practiced upon him.

The record does not show that appellee's stock was voted at the meeting, or that it was even present at the meeting in which it was decided to incorporate under the laws of Arizona. The burden was upon appellant to establish this fact. Failing in this, appellee would not be estopped upon that ground. Cattlemen's Trust Co. v. Beck, 167 S. W. 754; Kampman v. Tarver, 87 Tex. 491, 29 S. W. 768.

It is further contended by appellee that the statement in the letter received by him that the meeting was called to decide under what state laws they should incorporate was itself a fraud in that it did not notify him and other subscribers that the condition of the company was such that it could not be incorporated under the stringent laws of the state of Texas. This contention seems to have been sustained by the court. The witness Branham testified that the officers knew, long before the letter was written, that they could not incorporate in Texas. The question of waiver is raised under the sixth assignment by a general demurrer. The plaintiff's original petition showing that the plaintiff, prior to the time of filing said suit, exchanged and transferred his stock in the Bonding Company for stock in the Bankers' Company, it is insisted that plaintiff is in no position to request a cancellation. Plaintiff alleged that on or about July, 1911, at the request of the officers of the Commonwealth Company, he transferred this stock to the Bankers' Guaranty Company, upon their representation that the Bankers' Company would carry out the original purposes of the Commonwealth Company, and that the same was made upon the request of that company; that the Bankers' Company never carried out the objects of its incorporation, and it has ceased to make any effort to do so, and in fact has never been organized; that the purpose and consideration of said transfer has wholly failed, and that the Bankers' Company...