Frazier Jelke & Co. v. Chapman Minerals Corporation

• Decision Date: 27 March 1941
• Docket Number: No. 11131.,11131.
• Citation: 149 S.W.2d 1101
• Parties: FRAZIER JELKE & CO. v. CHAPMAN MINERALS CORPORATION.
• Court: Texas Court of Appeals

Page 1101

149 S.W.2d 1101

FRAZIER JELKE & CO. v. CHAPMAN MINERALS CORPORATION.

No. 11131.

Court of Civil Appeals of Texas. Galveston.

March 27, 1941.

Rehearing Denied April 17, 1941.

Appeal from District Court, Harris County; Roy F. Campbell, Judge.

Garnishment proceeding by Frazier Jelke & Company, a partnership, against the Chapman Minerals Corporation on a judgment for plaintiff against O. R. Seagraves. From a judgment discharging the garnishee, plaintiff appeals.

Affirmed.

Sears, Blades, Moore & Kennerly and Fred W. Moore, all of Houston, for appellant.

Vinson, Elkins, Weems & Francis and Fred R. Switzer, all of Houston, for appellee.

GRAVES, Justice.

This appeal is from a judgment of the 80th District Court of Harris County, entered solely upon a jury's verdict in response to special issues submitted—the court itself not having made any additional findings from the evidence—discharging the garnishee, the appellee here, upon its answer in such garnishment, and taxing a $2500.00 attorney's fee in its favor against the appellant.

Appellant is a partnership composed of Frazier Jelke, Alexander M. Main, J. Hallam Boyd, John J. Moore, Charles L. Stacy, and F. Bartholomay Jelke, doing business under the firm name of Frazier Jelke & Company, while the appellee is a private corporation, with its principal office in Houston, Harris County, Texas; the writ of garnishment, pursuant to Title 68, art. 4076 et seq., Vernon's Texas Civil Statutes, had been issued on a $67,463.38 judgment theretofore rendered in cause No. 251,806 in the 61st District Court of Harris County, in favor of the appellant here, Frazier Jelke & Company, against O. R. Seagraves. In so suing out the writ of garnishment in this cause on its cited judgment against Seagraves, the appellant made the statutory allegations against the appellee herein, with the objective of requiring it to answer these three things:

(1) Was the garnishee indebted to O. R. Seagraves?

(2) Did it have effects in its hands belonging to Seagraves?

(3) Did O. R. Seagraves own any stock in the appellee corporation?

The garnishee having answered all of the questions propounded to it under the writ in the negative, appellant duly controverted that answer, and a jury trial of the issues thereby joined was had, as indicated supra, the jury's findings in material substance having been these:

1. That Chapman Minerals Corporation was not indebted to O. R. Seagraves at the time the writ of garnishment was served, or at the time of the answer.

2. That O. R. Seagraves was not the owner of any shares of stock in Chapman Minerals Corporation at the time the writ of garnishment was served, or the answer made.

3. That Chapman Minerals Corporation was not organized as a mere tool of O. R. Seagraves, with a fraudulent intent of hindering his creditors.

4. That O. R. Seagraves was, on May 8, 1936, when the Chapman Minerals Corporation was organized, insolvent.

5. That Chapman Minerals Corporation, at the time the writ of garnishment was served upon it, was not holding one-half interest in the Morgan-Clark leases for the benefit of O. R. Seagraves.

6. That the 500 shares of stock of the Chapman Minerals Corporation, issued to Mrs. Florence Seagraves (wife of O. R. Seagraves) was not community property at the time the writ of garnishment was served.

7. That the stock issued to Florence E. Seagraves by Floboots Corporation was a gift from her daughter, Marguerite Seagraves Davis.

8. That the stock issued to Florence E. Seagraves by the Barnsdall Oil Company was issued to her in exchange of stock held by her in the Greta Oil Corporation.

9. That the $217,429.75 recorded on the books of W. W. Chapman, Trustee, to be due Florence E. Seagraves, was due her on account of sale of stock issued to her by the Barnsdall Company.

10. That the $217,429.75 recorded on the books of W. W. Chapman, Trustee, as indebtedness payable to Florence E. Seagraves, was her separate property.

11. That W. F. Morgan gave Florence E. Seagraves royalties in the Refugio area in the year 1937.

12. That Florence E. Seagraves used $3,000 of the proceeds of the royalty so given her by Morgan, to purchase royalties in East Texas conveyed to her by instruments dated April 9, 1931.

13. That Floboots Corporation paid to Florence E. Seagraves, as the proceeds of such royalty in the East Texas area, a sum in excess of $8,000.

14. That the 500 shares of capital stock —issued by the Chapman Minerals Corporation to Florence E. Seagraves—was paid for by her with the proceeds of the East Texas royalties.

15. That this 500 shares of capital stock of Chapman Minerals Corporation, issued to Florence E. Seagraves, evidenced by certificate No. 1, was her separate property.

16. That the 500 shares of capital stock, for which Chapman Minerals Corporation issued certificate No. 2 to Marguerite Davis, was her property.

17. That the $203,985.90 recorded on the books of W. W. Chapman, Trustee, as payable to Mrs. Marguerite Seagraves Davis, belonged to her

Inveighing on appeal against the judgment so adverse to it below, the appellant thus in its brief summarizes what it conceives to be the controlling issues presented to this court:

"I. There is no evidence to support the jury's finding, that Chapman Minerals Corporation was not indebted to O. R. Seagraves at the time the writ was served upon garnishee, and at the time it answered.

"II. Garnishee asserted in its answer that Mrs. Seagraves (wife of O. R. Seagraves) acquired her 500-share block of its stock with the sum of $6,000.00 paid her by Floboots Corporation, on account of her allowing Floboots Corporation to use the proceeds of a royalty, or part thereof, given her by William F. Morgan.

"III. There is no issue as to the fact of the payment of the $40,000.00-proceeds from the sale of O. R. Seagraves' homestead in Kerr County, Texas, into Chapman Minerals Corporation in June, 1937, at which time Seagraves was insolvent, in the sense that he was unable to meet his obligations as they matured. That insolvency continued, there being no evidence of a change in his financial condition. In the absence of further evidence, it will be presumed that his insolvent condition did not change, even though his specific funds or obligations levied upon by appellant's garnishment were sufficient to pay appellant's debt.

"It is in evidence that the Morgan-Clark Lease in Nueces County, Texas, was paid for by Chapman, Trustee. At that time Chapman had in his account as Trustee $40,000.00 from the Seagraves homestead, and $53,050.00 cash secured from undisclosed sources, except one item of $750.00 which was a repayment from William F. Morgan.

"Since this $40,000.00 was intermingled with and placed in the fund, at that time in Chapman's possession, of $93,050.00, there being no method of disassociating same from the other moneys, said fund of $93,050.00 was charged to the trust in favor of Seagraves' creditors, including appellants, he being insolvent at that time. Said properties constitute part of the community estate held by Chapman Minerals Corporation.

"IV. The evidence as to whether or not the garnishee, Chapman Minerals Corporation, was a mere instrumentality, cloak, device, or blind, through which Seagraves was operating, showed conclusively that it was a mere alter ego or instrumentality of O. R. Seagraves, and did not carry on its operations as an oil company, but on the contrary, was operated merely as a cache or fund for the benefit of the Seagraves family. Consequently, appellants were entitled to judgment against said corporation as a matter of law."

These four generic issues, as so in substance quoted from the appellant's brief, are by it further developed into an enlarged number of species, through twenty propositions of law; these will be here disposed of by grouping such of them as seem to deal with like, or at least properly groupable, subsidiary contentions.

Preliminarily, it may be noted that appellant's only attack upon any of the given findings of the jury is that there was no evidence to support them—not that any one was so against the overwhelming weight of the evidence as to be clearly wrong, thereby invoking the power of this court to set it aside; so that, the only question it raises concerning the sufficiency of the evidence to support any part of the verdict is one of law only, arising from its assertion that all the findings attacked were without any evidence to support them. That being so, this court has carefully examined the statement of facts as to each detailed attack so made upon the verdict, with the conclusion that it cannot agree with the appellant that any one of them is so wholly lacking in support; to the contrary, it finds from an extensive review of the statement of facts that each finding of the jury—epitomized supra—had behind it not only enough evidence to make of it a question of fact, but also to support the findings made thereon. So much for the jury's findings in toto, when considered as properly being those of fact.

The detailed propositions will now be reviewed seriatim.

The first one in substance asserts, rather flatly, that the moneys, royalties, and shares of stock shown to have been issued or delivered to Mrs. Florence Seagraves (wife of O. R. Seagraves), together with all the rights, titles, and interest held for her in the name of W. W. Chapman, Trustee, were community properties of herself and husband, O. R. Seagraves, since all were shown to have been acquired after their marriage. This is a non sequitur, when applied to the unchallenged applicable findings of fact by the jury, as already given on this specific subject; that is, all moneys, royalties, and shares of stock that were here involved, were found to be her separate property, "because the stock was paid for by her separate property and the indebtedness was due her on account of the sale of her separate property"; the principal items of these were...