Ft. Worth Pub. Co. v. Hitson.

• Decision Date: 02 December 1890
• Court: Texas Supreme Court
• Parties: FT. WORTH PUB. CO. v. HITSON <I>et al.</I>

14 S.W. 843

FT. WORTH PUB. CO. v. HITSON et al.

Supreme Court of Texas.

December 2, 1890.

Commissioners' decision. Appeal from district court, Tarrant county; J. A. HOLLAND, Judge.

Hogsett & Greene, for appellant. A. M. Carter, for appellees.

HOBBY, J.

This action of the trial of the right of property grows out of the following proceedings: Appellees, Hitson & Reed, a firm composed of Jesse Hitson and J. W. Reed, the National Bank of Jefferson, E. G. Thurmond, A. B. Smith, and T. P. Martin, who were plaintiffs in the lower court, caused attachments, respectively, in their favor, to be levied in August, 1884, on the printing-presses, type, engine, and other material used in a printing and publishing business, as the property of the Texas Investment Company, Limited. The writs levied aggregated the sum of about $26,241. On the 24th August, 1884, the appellant, through its president, A. M. Britton, filed affidavit and claimant's bond, under the statute, claiming the property as belonging to the Ft. Worth Publishing Company. The cause was tried upon issues tendered, on the one hand, by the appellees, (plaintiffs below,) alleging, in substance, that the property at the time of the levy was subject thereto, and was the property of the Texas Investment Company, Limited, and that the claim of the Ft. Worth Publishing Company was fictitious and fraudulent, and made to hinder and delay creditors; that the Texas Investment Company, Limited, and claimant were one and the same, the latter having no distinct existence from that of the former. These issues were tendered separately by the several plaintiffs. The claimant filed demurrers to the issues above tendered, and a plea of estoppel as to the National Bank of Jefferson; and alleged that it was formerly known as the "Loving Publishing Company," incorporated in April, 1883, and by its amended charter in June, 1884, its name was changed to the "Ft. Worth Publishing Company;" that it was the owner of the property, and in possession, when levied on; that it had contracted several large debts, — one to the City National Bank for $9,000, and one to Snider & Homes for $4,500, and to other persons, amounting to about $30,000; that the property was not worth over $10,000, and its rental value did not exceed $500 per annum. Plaintiffs denied that the claimant was insolvent; that at the date of the levy, the subscriptions to its capital stock, which was $100,000, were unpaid, and were still unpaid, and could be collected. The cause was tried at the same time between all the plaintiffs and the claimant in the lower court, the plaintiffs assuming the burden of proof. The result was, the jury found a verdict in favor of plaintiffs; that the property was subject to the levy; and its value was estimated at $20,000. Upon this verdict, judgment was rendered by the court jointly in favor of all the plaintiffs, against the claimant and A. M. Britton, J. H. Brown, H. C. Edrington, and Sidney Martin, sureties on the claimant's bond, for the sum of $25,462, which included the value of the property as found by the jury, ($20,000,) and $2,000 damages, and $3,462 interest. The claimant appeals.

The second assignment has reference to the court's ruling in sustaining the demurrer of the National Bank of Jefferson, one of the plaintiffs, to the claimant's special plea to said bank's issue tendered in the case. This special plea set up that the bank had seized the property by virtue of three writs of attachment, as the property of the Investment Company, Limited, one of which writs was issued against the claimant; that, when the affidavit and bond was filed in this cause, the bank caused the sheriff to change the return on the last writ, and hold the property as that of the claimant; that the claimant replevied, and the bank afterwards prosecuted its claim to judgment, and was estopped from now claiming the property as that of the Investment Company, Limited. To this plea, an exception by the bank was sustained, and this is assigned as error. We perceive no error in the ruling. The issue between the parties was as to the ownership of the property at the time of the levy, and this could not be affected by an indorsement on the writ subsequent thereto. There were none of the elements of an estoppel in this. The claimant was not deceived or misled thereby. The most important question in the case is raised by the third, fourth, fifth, seventh, and eighth assignments, which may be considered properly in the same connection, and which relate to the admission of evidence offered by the plaintiffs, over the claimant's objections. The bills of exceptions referred to under these assignments, and numbered from 1 to 6, show that the plaintiffs below, in support of their allegations that the property belonged to the Texas Investment Company, Limited, the defendant in the attachment suits, and that it was therefore subject to the levy, and the further averments that the Ft. Worth Publishing Company was and is, in fact, the Texas Investment Company, Limited, and that the name of the Ft. Worth Publishing Company is but another name for the former company, and that its claim is colorable and made to delay creditors, etc., introduced in evidence the following: The charter of the Texas Investment Company, Limited, and a written agreement between certain persons to form said company, and a transfer called "Big Heap Transfer," it being a written conveyance of a large amount of property by the Texas Investment Company to the Texas Investment Company, Limited, the defendant in attachment. The charter was filed in the office of the secretary of state on November 10, 1883, and was subscribed by J. D. Reed, Sidney Martin, George Loving, W. J. Boaz, J. P. Smith, J. F. Evans, and W. J. Morphy. A capital stock of $100,000 was provided for by it, and it was incorporated for general business purposes, but none of them specified a publishing business. The agreement referred to was signed by the parties above named and others. It provided for the amount of stock each subscriber would take in the company. It further provided that "the subscribers hereto, upon such payments being made, shall be entitled to receive and have issued to them their stock in this company at par, to the amount of this subscription; and, further, upon such payment being made as aforesaid, and as a part of the consideration of this agreement and for such payment, each subscriber shall be entitled to receive, and there shall be transferred or issued to him, stock of the Loving Publishing Co. at par, to the amount of his said subscription; and it is further agreed that no organization of said proposed corporation shall be had until subscriptions to the full amount of one hundred thousand dollars shall have been obtained hereto." The transfer termed the "Big Heap Transfer" consisted of a resolution of the board of directors of the Texas Investment Company, Limited, dated November 28, 1883, reciting that said company assumed the following debts of the Texas Investment Company, among which was a debt of the Loving Publishing Company for $5,600.12, and a debt due Fore, Morphy & Henderson of $80,000, evidenced by nine notes, described therein, and provided that a conveyance to the Investment Company, Limited, be made by the old Investment Company. This is followed by a conveyance from the latter to the former company of certain property, including 1,000 shares of capital stock in the Publishing Company. The property in controversy is not named in the conveyance. The plaintiffs introduced the stockbook of the Publishing Company for the purpose of showing who owned the same. It appears from this book that certificates from No. 1 to 10, for about 500 shares, were returned, pasted back in the book, and the word "Canceled" written across the face of each. Nos. 10 and 11 were accounted for by an affidavit of their loss by George B. Loving, to whom they were issued. The remaining certificates seem to have been marked, "Erroneously issued," or "Canceled." The certificates which were by order of the Investment Company, Limited, to be issued to five of its members to qualify them as directors of the Publishing Company were in the book. Neither they nor the 995 shares which were to be issued to the Investment Company, Limited, were delivered. One share issued to A. M. Britton was not accounted for. With reference to this stock, W. L. Malone testified that he was a stockholder in the Publishing Company by courtesy. He received the stock from Loving, and gave it up when asked for it. Knew of no money having been paid for stock, except some paid by Paddock. Paddock testified that he was an original stockholder in the Publishing Company. He conveyed his stock to Loving, who paid him for it between $5,300 and $5,700. This was the purchase price. A part of this was paid by Loving. The Texas Investment Company, Limited, paid him $2,000 for his interest in the Publishing Company. He did not know of any money being paid for stock in that company. It was a transfer from one company to another, — a change of name. He stated that Loving and himself owned nearly all the stock in the Investment Company, (old.) A few shares were probably held by others to make the corporation intact. "Mr. A. may have owned a few shares, but we owned it all at that time." It was in August, 1883, when he sold to Loving. In connection with the documentary testimony introduced by plaintiffs over the claimant's objection, it appears that the following was also objected to: Plaintiffs' counsel asked the witness J. P. Smith the following: "Tell the circumstances that brought about the arrangement between the new and old investment companies." In response to this the witness stated substantially that he was vice-president and one of the directors of the Investment Company, Limited. Mr. Britton, the claimant, was appointed by that company a director in the Publishing Company, (claimant company.) Loving,...