Home Inv. Co. v. Strange

• Decision Date: 04 December 1912
• Parties: HOME INV. CO. et al. v. STRANGE.
• Court: Texas Court of Appeals

Page 510

152 S.W. 510

HOME INV. CO. et al. v. STRANGE.

Court of Civil Appeals of Texas. San Antonio.

December 4, 1912.

Rehearing Denied January 8, 1913.

Appeal from District Court, Dallas County; E. B. Muse, Judge.

Trespass to try title by H. B. Strange against the Home Investment Company and others. From the judgment, defendants appeal. Affirmed.

W. J. Moroney, N. L. Lindsley, and Leake & Henry, all of Dallas, for appellants. L. C. McBride, of Dallas, for appellee.

FLY, C. J.

This suit was tried upon a fifth amended petition, in which appellee sued the Home Investment Company, W. J. Moroney, Emma G. Kendall, and W. B. Kendall, representing that the Investment Company "is a corporation duly incorporated, or, if not duly incorporated, pretending to be so." The suit is a statutory action of trespass to try title to lots 1 to 18, inclusive, Huffman's subdivision, of lots 1 and 4, block A., Bowser & Lemon's Oak Lawn addition to the city of Dallas, followed by allegations that Moroney, a practicing attorney at law, was employed by appellee to perfect appellee's title to the lands described, and to clear appellee's title, and acquire for him all outstanding titles, but Moroney, "instead of representing plaintiff's interests as aforesaid, has in truth and in fact undertaken to `clear' plaintiff's title in such manner as to acquire the benefits for himself, the said Moroney, or for the benefit of the defendant corporation, the Home Investment Company, the said outstanding titles to said lands," and the manner in which this was attempted is set out in detail. It was alleged that deeds were obtained to the lands from different parties, and that nothing was paid for them; that, while the deeds were executed to the corporation, they were for the benefit of Moroney, who was "the dominating spirit and factor of said corporation, dictating its entire policy and transactions." It was averred that Kendall and wife were asserting some right to the land. A personal judgment was asked against Moroney. The Investment Company disclaimed any right, title, or interest in lots 1, 2, 9, 10, and 11, demurred to the petition, pleaded not guilty, and stale demand, and limitations of two years. Moroney filed a disclaimer as to all the lots, demurred to the claim for a personal judgment against him, and pleaded two years' limitation. Kendall and wife disclaimed as to all the land except lots 17 and 18, and adopted the answer of the corporation.

The cause was submitted to the jury on the following issues, which were answered as indicated:

"(1) Did the defendant Moroney agree or undertake to represent plaintiff as attorney, and to endeavor to clear or acquire for plaintiff title to the lands in controversy?" Answer: "Yes."

"(2) Did the defendant Moroney, for himself or Home Investment Company (and which), pay out, in connection with said lands, any money with the object and purpose upon his part of benefiting the plaintiff, wholly or partially, and not with the sole object and purpose of benefiting himself or Home Investment Company? If he did so, then state the amount. If not, simply say so by the answer, `No.' In answering this question, consider only such expenditures, if any, as were shown by the evidence to have been reasonably necessary and reasonable in amount." Answer: "No."

"(3) What is the reasonable market value now of lots 3 to 8, inclusive, and lots 12 to 18, inclusive, involved? State separately the present value of each lot." Answer: "Lot 3, $1100.00. Lot 4, $1100.00. Lot 5, $1100.00. Lot 6, $1100.00. Lot 7, $1100.00. Lot 8, $1100.00. Lot 12, $800.00. Lot 13, $400.00. Lot 14, $400.00. Lot 15, $400.00. Lot 16, $400.00. Lot 17, $1000.00. Lot 18, $1000.00." Upon those answers the court rendered judgment that appellee recover of appellants lots 1, 2, 9, 10, 11, 12, 13, 14, 15 16, 17, and 18 in Huffman's subdivision as described hereinbefore, the recovery of the two lots last named being conditioned on the payment of $438, with 6 per cent. interest from date of judgment, to Mrs. Emma G. Kendall; that appellee recover of Moroney and the corporation the sum of $6,600, said sum being the value of lots 3 to 8, inclusive, said amount being in lieu of said lots; that Kendall and wife recover their costs from appellee, and appellee recover his costs from Moroney and the corporation.

As peculiarly appropriate to the facts and issues fully developed in the course of this opinion, we quote the following from Pomeroy's Equity Jurisprudence, § 1052: "The doctrine may be stated in its most general form that whenever a trustee or person clothed with any fiduciary character takes advantage of the relation, and by means of it acquires the title or use of the trust property, or makes a profit or advantage to himself out of the trust and confidence, then a constructive trust is impressed upon such property, profits, or proceeds in his hands in favor of the original beneficiary." And, as bearing upon the contention that it was not shown that appellee had a legal title to the land, we adopt the following language from the same author (section 1053): "In general, whenever the legal title to property, real or personal, has been obtained through actual fraud, misrepresentations, concealments, or through undue influence, duress, taking advantage of one's weakness or necessities, or through any other similar means or under any other similar circumstances which render it unconscientious for the holder of the legal title to retain and enjoy the beneficial interest, equity impresses a constructive trust on the property thus acquired in favor of the one who is truly and equitably entitled to the same, although he may never perhaps have had any legal estate therein; and a court of equity has jurisdiction to reach the property either in the hands of the original wrongdoer, or in the hands of any subsequent holder, until a purchaser of it in good faith and without notice acquires a higher right, and takes the property relieved from the trust." Keeping in view these cardinal principles which prevail in courts where conscience is enthroned and justice, right, and fair dealing are strictly enforced, we proceed to the consideration of the issues arising in this case, under the facts as disclosed by the record, and as presented by the different assignments found in the brief of appellants.

The first assignment of error assails the action of the court in refusing to direct the jury to return a verdict for the Home Investment Company, except as to lots concerning which there was a disclaimer by such corporation. The evidence clearly showed that Moroney had absolute control of the corporation in all of its dealings, and to all intents and purposes was the corporation. He has been its president since its creation. He, under a resolution passed by the board of directors, was given "full authority to buy and sell and handle the affairs of the company." He absolutely controlled the corporation, although he stated that "in the main" he owned only one share of stock. He received its money and paid it out on his individual check. The corporation in its corporate capacity had no bank account, because, as stated by its president, "it was not an active corporation." The testimony justifies the conclusion that it was used merely as a medium of operation for its president. It was his instrument, and was operated for his benefit. In the propositions under the assignment, this fact seems to be assumed, for matters relating to the corporation are mentioned only once, while those relating to the attorney and president are related five or six times. It follows that, if there was evidence binding the attorney, there was evidence binding his instrument, the corporation, which was not active except as an adjunct to the activity of the president.

The assignment should not be considered because its complaint is that a special charge was requested and denied, and yet the charge is not copied in the statement, which covers 60 pages or more of the brief.

The second assignment of error assails the action of the court "in failing and refusing to make any allowance for moneys expended by the Home Investment Company for purchase price of the property, fencing, taxes, abstracts of title, recording fees, and other proper and necessary expenses as shown by the evidence." The statement contains no reference to any pleading upon which the recovery sought could be based, and a reference to the answers of the corporation and W. J. Moroney, which this court might have refused to make, discloses that no claim was made in such answers for reimbursement of the amounts set forth in the assignment of error. Those matters were equities which should have been pleaded in order to have been recovered. It was alleged in the petition that no sums were really paid out by the Investment Company on the land, but appellants failed to set up and claim any sums expended by them, and there is no basis for a recovery of any disbursements made by them. Lippincott v. Taylor, 135 S. W. 1070.

In this case the facts indicating that the corporation was a mere tool in the hands of its president, the acts of one were the acts of the other, and the same rules as to reimbursement of money, under the circumstances of this case, would apply to both. Those rules are clearly set forth by this court in the case of Henyan v. Trevino, 137 S. W. 458, and approved by the Supreme Court of Texas. The following vigorous language was used by Justice Neill, who wrote the learned and well-considered opinion in that case: "The uncontroverted evidence shows that, while he occupied the relation of attorney towards appellees, in his endeavor to overreach and defraud them of their interest in the land which it was his sacred duty to protect, he paid the taxes, not for them, but sought, through the medium of such payment, to acquire title to all their interest in the land, and to hold it adversely to them. Convicted of this fraud by...