McCord v. Bass, (No. 113-2968.)

• Decision Date: 16 June 1920
• Docket Number: (No. 113-2968.)
• Citation: 223 S.W. 192
• Parties: McCORD et al. v. BASS et al.
• Court: Texas Supreme Court

223 S.W. 192

McCORD et al. v. BASS et al.

(No. 113-2968.)

Commission of Appeals of Texas, Section B.

June 16, 1920.

Error to Court of Civil Appeals of Fifth Supreme Judicial District.

Suit by Anna F. Bass and others against A. P. McCord and others. Judgment dismissing the petition was reversed by the Court of Civil Appeals (178 S. W. 998), and defendants bring error. Judgment of Court of Civil Appeals reversed, and judgment of trial court affirmed.

T. S. Henderson, of Cameron, Wear & Frazier, of Hillsboro, and Crane & Crane and Etheridge, McCormick & Bromberg, all of Dallas, for plaintiffs in error.

Sleeper, Boynton & Kendall, of Waco, for defendants in error.

SADLER, P. J.

On March 16, 1896, Wilbur F. and Frank M. Crawford, who had theretofore been engaged in business under the firm name of Crawford & Crawford, executed a statutory general assignment of all their property and assets to A. P. McCord and T. S. Henderson as assignees, for the benefit of accepting creditors. McCord and Henderson accepted the trust, and qualified as assignees.

Wilbur F. Crawford died intestate on the 30th day of March, 1902, and Frank M. Crawford died intestate in the month of December, 1902.

This suit was brought on October 13, 1913, by the surviving wives and children of Wilbur F. Crawford and Frank M. Crawford to recover from said assignees and from the Milam County Oil Mill Company, Cameron Cotton Oil Company, and R. L. Batte an alleged surplus claimed to have remained in the hands of the assignees after the payment of all the debts of Crawford & Crawford.

The trial court sustained various exceptions to plaintiffs' petition, and, plaintiffs declining to amend, dismissed the suit.

On appeal the Court of Civil Appeals reversed the judgment of the trial court, and remanded the cause for a new trial. 178 S. W. 998.

The sufficiency of the petition is the only question for decision. It will be necessary to set out the substance of the petition and the exceptions thereto which are to be considered by us.

The plaintiffs, after alleging the death of Wilbur F. and Frank M. Crawford, the necessary facts to show their heirship, the execution of the assignment above referred to, the acceptance and qualification by the assignees, alleged substantially the following facts: That on the 5th day of May, 1897, the assignees, McCord & Henderson, made a simulated and apparent sale to one C. W. Lawrence of portions of said assigned estate, to wit, 242 shares of the Milam County Oil Mill Company stock, of the par value of $24,200; second, an undivided two-thirds interest in 2,000 acres of land out of the W. B. Burton survey in Jefferson county, Tex.; third, 1,000 acres of land in Milam county, Tex., known as the Yankee tract; fourth, one-half interest in five notes executed by one Preston Steele, of the face value of $5,743.75, bearing 10 per cent. interest from January 8, 1896, secured by a vendor's lien on 510 acres of land out of the Samuel Jones league in Milam county, Tex.; that the sale was made for the alleged consideration of $22,500, $8,500 of which was payable on June 1, 1897, and $14,000 payable October 15, 1897, the assignees to retain possession of the property and to surrender the different items to Lawrence upon payment of the agreed price; that the sale was in fact made for the use and benefit of McCord and Henderson, the assignees, under an agreement with Lawrence that McCord would guarantee and pay the purchase price and consideration for said property and receive the benefit of such purchase, and that Lawrence in fact held all of said property for the use and benefit of McCord, who by the means and methods alleged sought and attempted to acquire title to said trust estate.

It was alleged that the attempted acquisition of the property by McCord was a fraud upon the creditors of the assignors and upon the assignors; that same was without the consent of the creditors and the beneficiaries under said assignment, and that McCord by acquiring the property in the manner stated acquired the same in fact and in law for the benefit of the assignors and their creditors, and held the same in trust for them; that on the 23d day of June, 1900, McCord and Henderson had paid to the accepting creditors $30,753, and that the total amount of the claims of the unsecured and accepting creditors amounted to $76,624, leaving unpaid 59 per cent. of the debts of said estate.

It was alleged that on January 1, 1898, Lawrence transferred and conveyed to one of the assignees, McCord, the various items of the property above named; that subsequent to the matters above alleged, and on the 4th day of January, 1898, Preston Steele and wife conveyed to McCord an undivided one-half interest in the 510 acres of land out of the Samuel Jones league, in payment and satisfaction of the one-half interest of the assigned estate in the vendor's lien notes executed by Steele, and that subsequent to said deed from Steele McCord conveyed to the defendant T. S. Henderson the undivided one-half interest in said 510 acres of land; that Henderson is now asserting title to all of said land, and that the land at the time of the institution of this suit was of the value of $25,000; that the two-thirds undivided interest in the 2,000 acres of land out of the Burton survey in Jefferson county, Tex., was soon after the 1st day of January, 1898, conveyed by McCord to an innocent purchaser for value, and that said two-thirds interest in said land at the time of the filing of the suit was of the market value of $5,000; that, after acquiring from Lawrence the 242 shares of stock of the Milam County Oil Mill Company, McCord collected and received in dividends on said stock, between June 1, 1900, and September 1, 1913, the sum of $31,000, and that the 242 shares of stock was at the time the suit was filed of the market value of $50,000; that McCord and Henderson appropriated the moneys received by McCord as dividends or otherwise, on the Milam County Oil Mill Company's stock, to their own use and benefit, and same was not applied to the payment of the claims of accepting creditors under their assignments.

The petition then alleges that on the 10th day of July, 1900, W. A. Nabours and a number of other creditors of Crawford & Crawford instituted suit in the district court of Milam county against the defendants McCord and Henderson, and against the Milam County Oil Mill Company, setting forth the facts as hereinbefore alleged, and seeking a judicial declaration and determination that the assets so acquired by McCord and Henderson be held to remain the property of the assigned estate, to have the same appropriated to the payment of their debts and to the debts of other existing creditors, and sought the appointment of a receiver; that the trial resulted in a verdict for defendants, from which an appeal was taken to the Court of Civil Appeals of the Third District (36 Tex. Civ. App. 504, 75 S. W. 827), and to the Supreme Court (97 Tex. 526, 80 S. W. 595); that it was adjudicated on said appeal that the plaintiffs recover from defendants McCord and the Milam County Oil Mill Company as prayed for in their pleadings, and the cause was remanded, and the trial court was directed to appoint assignees or receivers to execute the trust; that after the decision in the case of Nabours et al. v. A. P. McCord et al., above referred to, and after the case was remanded to the district court of Milam county, the plaintiffs and defendants in said suit entered into a compromise by which the plaintiffs were paid the sum of $50,000 by McCord and the Milam County Oil Mill Company in full satisfaction of their claims against the assigned estate; that, while said case was still pending in the district court of Milam county, W. M. Sprinkel and others, creditors not included in name among the original plaintiffs, filed a petition of intervention therein, by which they sought the same relief as the original plaintiffs; the trial court sustained a demurrer to said intervention, and dismissed it, from which W. M. Sprinkel and others appealed; that on appeal the judgment was reversed by the Court of Civil Appeals (129 S. W. 379), and a writ of error was thereafter granted, and a judgment and decree rendered by the Supreme Court in said cause on December 13, 1911 (105 Tex. 150, 141 S. W. 945, 145 S. W. 903), wherein it was held that the conveyance by McCord and Henderson to Lawrence and the conveyances from Lawrence to McCord constituted a fraud in law and were void, and that the property still belonged to the estate of assignors, Crawford & Crawford, and directed the appointment of a receiver to take charge of all of said property; that on rehearing said opinion was so modified as to leave the matter of the appointment of the receiver to the discretion of the trial court and to proceed to settle the estate in accordance with the opinion of the Supreme Court; that, after the proceedings above set out, the assignees settled and paid off the claims of all the creditors, except the claim asserted by C. W. Lawrence, which claim was rejected by the decision of the Supreme Court because Lawrence had participated in the fraud.

It was further alleged that on June 1, 1896, A. P. McCord was president of the Milam County Oil Mill Company, and so remained for many years thereafter, and up to the year 1906; that the Milam County Oil Mill Company had full knowledge of all the facts with reference to the 242 shares of stock above referred to, and that same were trust property in the hands of said McCord, and knew that the dividends paid to said McCord were trust funds of said estate, and that the Oil Mill Company colluded with and assisted McCord in fraud of the rights of the creditors and in the conversion by said McCord of the dividends of said stock to his own use and benefit; that by reason of such facts the Milam County Oil Mill Company became indebted to the estate of Crawford & Crawford in the amount and for...