Kinkler v. Jurica

• Decision Date: 22 March 1892
• Citation: 19 S.W. 359
• Parties: KINKLER <I>et al.</I> v. JURICA.
• Court: Texas Supreme Court

19 S.W. 359

KINKLER et al. v. JURICA.

Supreme Court of Texas.

March 22, 1892.

Commissioners' decision. Section B. Appeal from district court, Fayette county; H. TEICHMUELLER, Judge.

Action by Frank Jurica against E. J. Kinkler and others to recover certain deposits of money. Plaintiff obtained judgment

against four of the defendants, and they appeal. Affirmed.

J. Lane, for appellants. W. S. Robson and J. T. Duncan, for appellee.

GARRETT, P. J.

Frank Jurica brought this suit against appellants and others as directors of the Fayette County Alliance Co-operative Association, formed under the general incorporation law of the state, for personal recovery of them for certain deposits of money, which he alleged he had been induced to make with said association by the false and fraudulent statements and representations of the defendants as to its solvency, and which had been lost by reason of the insolvency of said association. Defendants pleaded a general demurrer, general denial, and specially denied that they had ever in any manner deceived the plaintiff, or made any representations as to the solvency of said corporation, either to him or to the public, and that they had ever solicited loans or deposits from plaintiff or the public. They averred that at the date of the alleged deposits, and for a long time prior thereto, plaintiff was a member of the association, and had the right to inspect all the books in which its true condition could have been discovered. On December 4, 1890, the case was tried by a jury, and resulted in a verdict and judgment against four of the defendants, who have appealed. The association was incorporated December 10, 1887, "for the purchase and sale of agricultural and farm products, goods, wares, and merchandise, and owning and managing a mercantile establishment upon a co-operative plan of buying and selling such real estate and other property as may be necessary to promote the object of its creation, and of transacting any and all kinds of business incident or appertaining thereto, for the mutual profit and benefit of its stockholders, who are members of the Farmers' Alliance." The by-laws gave the directors "charge of all the property of the association, and the general supervision of the business," with power to appoint a manager and to employ salesmen, subject to approval of the association. They provided that the directors should, as often as they deemed necessary, examine all the books, accounts, and papers of the association, or those connected with the same, its officers, agents, and employes, and report to the association at its regular meeting. The directors were authorized "to receive on deposit such sums of money as may be offered to the association for its use by members of the alliance, not to exceed five hundred dollars from one depositor, nor for a shorter time than one year, on such terms as may be agreed upon, provided a higher rate of interest than 10 per cent. shall not be given." Plaintiff deposited with the association $1,100, evidenced by its three deposit receipts as follows: (1) $400, September 26, 1888, payable December 1, 1888, with 10 per cent. interest; (2) $150, of the same date, and to the same effect; (3) $550, September 28, 1888, and to the same effect. All of said receipts were signed by A. J. May as manager. Plaintiff was a stockholder in the association. On November 28, 1888, the association made an assignment for the benefit of its creditors, and this suit was filed April 10, 1889. Among other things, plaintiff alleged in his petition that the false representations as to the solvency of the association were made to enable certain of the defendants to save themselves with respect to debts of the association for which they were sureties; and it was shown by the evidence that the money received from plaintiff was used in the purchase of cotton, which was shipped to J. S. Rogers & Co., of Galveston, and the proceeds went towards the payment of a note for $2,500 on which the directors were sureties. Appellants urge that because the directors had no authority under the by-laws of the association to borrow more than $500 from one person, or for a shorter time than one year, they should not be held individually liable for the deposits made by the appellee, although they were induced by false statements made by the directors, if such false statements were not knowingly made by the directors, or by either of them, with intent to defraud. A special instruction to this effect, requested by the defendants, was refused by the court. Defendants having...