Hackney v. York
| Decision Date | 06 June 1929 |
| Docket Number | (No. 1839.) |
| Citation | 18 S.W.2d 923 |
| Parties | HACKNEY v. YORK. |
| Court | Texas Court of Appeals |
Appeal from District Court, Harris County; Chas. E. Ashe, Judge.
Proceeding by Mrs. Maggie Hackney against John B. York. From a judgment unsatisfactory in amount, plaintiff appeals. Affirmed in part, and in part reversed and rendered.
Ross, Wood, Lawler & Wood, of Houston, for appellant.
John B. York, of Houston, for appellee.
The propositions involved in this appeal are: (a) The power of a corporation, after its charter has been granted, to employ an attorney to represent it in matters connected with its business and to agree with the attorney that the value of his services are to be credited against his stock subscription account; (b) where such a contract has been made and the service rendered and accepted, but the corporation becomes insolvent before the value of the service has been adjusted, and suit is filed against the attorney, after the insolvency of the corporation, for his unpaid subscription, his right to have the value of his service set off against the subscription account; and (c) the right of an attorney to recover against a corporation the value of his legal services for preparing its charter and other incorporation papers and for legal advice in connection therewith, where the statute casts no such burden upon the corporation and there is no provision in its charter authorizing it to pay such expense.
The facts, briefly stated, are as follows:
Appellee was a practicing lawyer at the bar of Harris county. He, together with F. P. Goff, S. D. Simpson, and A. L. Jacobs, formed and subscribed for all the stock in the Mutual Construction Company, Inc., domiciled in Houston. No other person ever owned any stock in this company. Goff, Simpson, and appellee were named directors when the company was chartered, and no other directors were ever named. Goff was made president and general manager, and appellee was named secretary. Appellee subscribed for $1,900 of the stock of the company prior to organization and paid 50 per cent. of his subscription in cash. At the time the charter was granted, or immediately thereafter Goff, as president and general manager, and Simpson, as one of the directors, in conference with each other, with the knowledge and consent of A. L. Jacobs, the other stockholder, entered into a contract with appellee, whereby he was to attend to the legal business of the corporation and the value of his legal services was to be credited upon his unpaid stock subscription account, which amounted to $950. He was to be paid no money until the value of his services discharged in full the subscription account. The charter purpose of the corporation was real estate investments, and the services of an attorney were absolutely essential to the proper conduct of its business. When this contract was made the directors were not in session as directors; that is, they had not called a meeting of the board of directors, and the contract was never called formally to the attention of the board of directors when sitting as such. The business of the corporation was not successful. Goff resigned as president and general manager after a few months service, and his place was not filled on the board of directors. The business was then operated by appellee and Simpson, as the remaining directors. They did not operate it very long until it became wholly and notoriously insolvent. Appellant brought suit against the corporation and secured judgment for $6,227. Execution upon this judgment was returned nulla bona. Appellant then instituted this proceeding under the statute to recover judgment against each of the stockholders for their unpaid stock subscriptions. Simpson was dismissed from the suit, and judgment by default was taken against Goff and Jacobs for the amount sued for. Appellee answered by general denial and specially pleaded his contract of employment as above set out, itemizing the several sums due him, and pleaded an amount in excess of his unpaid stock subscriptions. On trial to the court his defense was sustained, the reasonable value of his services fixed at $864.50, which was credited upon his subscription account, and judgment awarded appellant for the difference between $864.50 and $950. ...
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