John Church Co. v. Martinez

• Citation: 204 S.W. 486
• Decision Date: 30 March 1918
• Docket Number: (No. 7904.)
• Parties: JOHN CHURCH CO. et al. v. MARTINEZ.
• Court: Court of Appeals of Texas

204 S.W. 486

JOHN CHURCH CO. et al. v. MARTINEZ.

(No. 7904.)

Court of Civil Appeals of Texas. Dallas.

March 30, 1918.

On Motion for Rehearing, June 22, 1918.

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

Proceeding by P. P. Martinez commenced by suing out a distress warrant before a justice of the peace against the John Church Company of Texas, for an indebtedness for rents, which warrant was levied on certain personal property situated in the building and returned to the district court, whereupon the John Church Company filed a claimant's oath and bond and took possession of such property, and plaintiff filed his petition in the district court against the John Church Company of Texas and the John Church Company of Ohio, and the Western Indemnity Company, as surety on the claimant's bond. Judgment for plaintiff and for the foreclosure of his lien and against the Indemnity Company, and defendants appeal. Reformed and affirmed.

George Sergeant, E. B. Perkins, and W. B. Hamilton, all of Dallas, for appellants. Spence, Haven & Smithdeal, of Dallas, for appellee.

RAINEY, C. J.

Appellee commenced this proceeding by suing out a distress warrant before a justice of the peace, precinct No. 1, Dallas county, against the John Church Company of Texas, for an indebtedness for rents of a building amounting to $15,000, which warrant was levied on certain pianos situated in said building and returned to the district court. The John Church Company filed a claimant's oath and bond and took possession of said property. Appellee as plaintiff filed his petition in the district court against the John Church Company of Texas, incorporated under the laws of Texas, and the John Church Company, a corporation incorporated under the laws of Ohio, and the Western Indemnity Company as surety on the John Church Company's claimant's bond, alleging default in the payment of rents of said building by virtue of a lease contract in writing made between appellee and the John Church Company, said contract being signed by the "John Church Co. of Texas, Lessee, C. R. Schermerhorn, Gen. Mngr.," who were the agents of the John Church Company, that said building had been vacated, and that the rents were due and unpaid, and that the John Church Company had secreted the property or moved it out of the state and same had been converted by the John Church Company. The John Church Company answered by general and special exceptions, general denial, and specially denying that the John Church Company of Texas and C. R. Schermerhorn was its agent. That the two corporations are separate, one being incorporated under the laws of Ohio and the other under the Texas laws; that they are distinct, neither owning stock in the other, and are under separate management and control, etc.; that said pianos were held by the Texas company which were shipped to it under consignment, and the property levied on, except one piano, was not the property of the John Church Company of Texas. The indemnity company answered by general exception; that it was only surety on the claimant's bond for $5,300, and asked relief as such. Appellee filed a supplemental petition, containing general and special exceptions and general denial, and specially pleaded that the John Church Company was the undisclosed principal of the John Church Company of Texas and of C. R. Schermerhorn in the conduct of the piano business in Dallas, and also pleaded estoppel against the John Church Company. A trial resulted in a judgment in favor of appellee against the John Church Company for the foreclosure of its lien, and against the indemnity company on its bond for $2,205, from which this appeal is taken.

Conclusions of Fact.

The John Church Company is incorporated under the laws of Ohio and located at Cincinnati. In 1906, in order to avoid the franchise tax of this state and to do business in Dallas it procured the organization and charter of the John Church Company of Texas under the laws of Texas, with a capital stock of $5,000, which was divided into 50 shares, which were issued to persons principally in its employ, 44 shares to Frank A. Lee and to six others, three living in Cincinnati, Ohio, and three living in Dallas, Tex. The stock was issued to said parties as trustees of the John Church Company, and for which neither party ever paid a cent. The John Church Company paid the said $5,000, and it owned and now owns all the stock in the said the John Church Company of Texas. Said Frank A. Lee is the president of appellant, and also president of the Texas concern. The record fails to show any stockholders' or directors' meeting after 1909. In 1906, the appellant made a written contract with the John Church Company of Texas and with one Chapman in Cincinnati, Ohio (who signed as secretary), to come to Dallas and to receive and sell pianos on consignment. Chapman resigned and a Mrs. Walker was placed in charge of the business. The John Church Company of Texas having no officer, director, or stockholder in the state of Texas, Mrs. Walker was in charge of all the property when in 1913 C. R. Schermerhorn came to Dallas and received all the property from her, and taking charge of the business, he having been employed by appellant to come to Texas and look after its business, appellant paying his salary and the expenses of his salesmen. He was in charge for about three years. When he first came to Dallas he entered into a contract with appellee for the lease of a building, as follows:

"The State of Texas, County of Dallas: This agreement of lease made this the 3d day of June, 1913, by and between P. P. Martinez, lessor, and the John Church Company, lessee, witnesseth: That the said P. P. Martinez do * * * by these presents lease and demise unto the said the John Church Company, the following described property, to wit, lying and being situated in the city and county of Dallas, state of Texas, and being the two-story brick building No. 1818 Main street, for the term of ten (10) years from the 1st day of July, 1913, to be occupied by pianos, and not otherwise, paying therefor the sum of thirty-three thousand ($33,000.00) dollars, payable two hundred and fifty dollars ($250.00) the 1st of each month for the first five years, and three hundred dollars ($300.00) the 1st of each month for the other five years, in advance, upon the conditions and covenants following:

"First. That the lessee shall pay the rent each month in advance as aforesaid, as the same shall fall due.

"Second. That the lessees shall take good care of the property and its fixtures, and suffer no waste; and shall at their own expense and cost, keep said premises in good repair; keep the plumbing work, closets, pipes and fixtures belonging thereto in repair; and keep the water pipes and connections free from ice and other obstructions, to the satisfaction of the municipal and police authorities during the hereby granted term of ten years, and at the end or other expiration of the term, shall deliver up the demised premises in good order and condition, natural wear and tear and damages by fire and the elements only excepted. That the lessees shall pay the water tax imposed on the hereby leased premises in each and every quarter as the same shall become due, during the hereby leased term of ten years. That no improvements or alterations shall be made in or to the hereby demised premises without the consent of the lessor in writing. All improvements made by the lessees to belong to the lessor at the expiration of the hereby granted lease of ten years.

"Third. That the lessees shall promptly execute and fulfill all the ordinances of the city corporation, applicable to said premises, and all orders and requirements imposed by the board of health and police departments, for the correction, prevention and abatement of nuisances in, upon and connected during the said term at their own expense.

"Fourth. That the lessees reserve the right to assign this agreement or underlet the premises, or any part thereof (except to negroes or for business...