R. B. Godley Lumber Co. v. Teagarden

• Decision Date: 18 February 1911
• Citation: 135 S.W. 1109
• Parties: R. B. GODLEY LUMBER CO. et al. v. TEAGARDEN.<SMALL><SUP>†</SUP></SMALL>
• Court: Texas Court of Appeals

135 S.W. 1109

R. B. GODLEY LUMBER CO. et al. v. TEAGARDEN.^†

Court of Civil Appeals of Texas.

February 18, 1911.

Rehearing Denied March 25, 1911.

Error from District Court, Wood County; R. W. Simpson, Judge.

Trespass to try title by W. B. Teagarden against the R. B. Godley Lumber Company and others. From a judgment for plaintiff, defendants bring error. Reversed and rendered.

K. R. Craig, H. C. Geddie, and W. H. Allen, for plaintiffs in error. M. D. Carlock and Teagarden & Teagarden, for defendant in error.

BOOKHOUT, J.

This was a suit in the nature of trespass to try title brought by defendant in error, W. B. Teagarden, against plaintiff in error and others in the district court of Wood county. By amended petition filed November 25, 1908, the plaintiff pleaded his title specially, which consisted, in substance, of the allegation that the land sued for, namely, a one-sixth interest in a tract of 2,222 acres of land in Wood county, Tex., was acquired by himself, R. B. Godley, and J. K. Rucker in the following way: That the said Teagarden, Godley, and Rucker agreed among themselves to buy up pine timbered lands from the owners thereof, the said plaintiff undertaking to look up the owners and investigate the titles, he being a lawyer, and the defendant Godley agreeing to find some person who would advance the money to pay for the lands, said lands to be purchased in large quantities and then sold to some large milling company which it was thought could be induced to locate in the vicinity of the lands, the proceeds to be applied, first, to the repayment of the purchase money to whomsoever might be induced to advance the money, and the profit of the transaction to be divided equally between plaintiff, Rucker, and Godley. Plaintiff alleged that, pursuant to this plan, he purchased the land in controversy from the owners thereof, and that defendant Godley procured one Wroten, who advanced the purchase money to take the title in his own name for his protection, and this was done; the lands being paid for by Wroten, and the deeds being made to said Wroten. But afterwards the defendant Godley, without the knowledge and consent of plaintiff, procured from said Wroten a deed to himself of said 1,111 acres of land for a consideration of $6,666. Plaintiff charging that this transaction was the result of a conspiracy between Wroten and Godley against his interest, and that Wroten received as profit over and above what he had paid for the land the sum of $3,600, and prayed for judgment against Wroten for said profit. Plaintiff further charged that on the 31st day of December, 1906, defendant Godley conveyed the land to the Coleman Lumber Company, and on the same day the Coleman Lumber Company conveyed the land to the R. B. Godley Lumber Company, charging that at that time Godley was president of the Coleman Lumber Company, that one of the defendants, C. C. Slaughter, Jr., was its secretary, and that said Godley, C. C. Slaughter, Jr., C. C. Slaughter, Sr., and G. G. Wright, all of whom were defendants in this suit, were officers, stockholders, and directors of the Coleman Lumber Company, and that they were also officers, stockholders, and directors of the Godley Lumber Company. And plaintiff charged that each of the above-named defendants had actual and constructive notice of plaintiff's rights and his ownership of a one-third interest in said 1,111 acres of land at the time the same was so transferred and long prior thereto. Plaintiff charged the defendants with cutting the timber off the land, damages for cutting the timber off the land, and prayed for damages, title, and possession and for general relief. By his amended petition plaintiff dismissed as to the defendant Wroten, alleged an agreement for the acquirement of this land and other lands in the vicinity between himself, Godley, and Rucker, alleging the agreement to be a partnership in which each was equally interested with the other, by the terms of which agreement they were to jointly acquire the lands and equally own them, subject to Godley's right to have the purchase price of the land paid by the firm refunded to him first out of the proceeds of the lands when they should finally sell them. Setting out also, as in the original petition, the purchase of the land, conveyance of it to Wroten, the conveyance by Wroten to Godley, by Godley to the Coleman Lumber Company and by the Coleman Lumber Company to the R. B. Godley Lumber Company, alleging the value of the land at $40,000, praying for title and possession to a one-sixth interest. In the alternative, that he recover the value of his interest in the land against the defendant, or, in the event that he is entitled not to recover against the Godley Lumber Company, a judgment against defendants Godley, Rucker, Slaughter, Sr., Slaughter, Jr., and G. G. Wright for the value of his interest in the land.

The defendants C. C. Slaughter, Sr., C. C. Slaughter, Jr., G. G. Wright, and the Godley Lumber Company, by their first amended answer, excepted to plaintiff's petition on various grounds, answered by general denial and in behalf of the Godley Lumber Company, the defendants C. C. Slaughter, Sr., and C. C. Slaughter, Jr., who alleged that they are interested both as stockholders in good faith and creditors in good faith of said company in protecting it against any cause of action which plaintiff might have individually against Godley, Rucker, or Wroten, alleged that the said R. B. Godley Lumber Company acquired the legal title to said land in good faith for a valuable consideration paid without notice of plaintiff's claim or alleged equities therein; that the said R. B. Godley Lumber Company, or its predecessor in title, the Coleman Lumber Company, purchased said land from R. B. Godley in good faith for a valuable consideration paid, without any notice of plaintiff's alleged equity; that in such transaction R. B. Godley was acting in his individual interest and behalf, and not as the representative of the vendee, but adversely thereto. Wherefore defendant company says that it should not be charged with notice which R. B. Godley may have had of plaintiff's rights, which, if any, were not communicated to said company or to any officer or stockholder interested in said purchase adverse to the vendor; that the defendant Godley Lumber Company should not be charged with any notice of the alleged knowledge of R. B. Godley of plaintiff's claim by reason of his being a stockholder and officer of the defendant company when the conveyance was made to it by the Coleman Lumber Company, for the reason that the Coleman Lumber Company was a purchaser in good faith, without notice, and because adverse interest in the original transaction between R. B. Godley and the Coleman Lumber Company continued and applied as between said Godley and this defendant, the vendee of the Coleman Lumber Company.

The defendant G. G. Wright denied that he was ever at any time a stockholder of the R. B. Godley Lumber Company or otherwise personally interested in the matter in controversy.

The defendants Godley, Rucker, the Coleman Lumber Company, and the R. B. Godley Lumber Company by separate answer set up special exceptions to plaintiff's petition, and the defendants Rucker and Godley, answering specially, allege that there was at one time an agreement between plaintiff and themselves to promote the acquisition of a large body of pine timber lands sufficient to justify the erection of a large sawmill and railroad and promote at the same time the erection of such mill and railroad; that the land in controversy would have constituted a very small fraction of the amount of land necessary for the purposes contemplated; that plaintiff was to devote his time and attention and services to hunting up the owners, investigating the titles and negotiating the purchase of such lands, while the defendants were to inspect and select lands and defendant Godley was to look after financing the enterprise, all of them to act together in the promotion of the enterprise. Defendant Godley denied that there was any representation on his part that he had the money or any guaranty that he could obtain it. They charged that plaintiff shortly thereafter abandoned said enterprise and removed from Wood county to San Antonio, Bexar county, where he has ever since resided, and where his time has been devoted to the active practice of his profession as a lawyer; that since then plaintiff had done nothing in the promotion of the enterprise other than the procurement of the land in controversy, and that this land was a mere incident in the enterprise, and, as to the same, plaintiff was not and is not entitled to any interest therein or to demand the profit from the sale thereof, for the reason that plaintiff was at the time of and before the conveyance thereof to Wroten and in the negotiation of said conveyance the agent and attorney for the owners of said land and advised with and procured the execution of said conveyance by said owners as their attorney and agent, and so represented the fact to these defendants; that, by reason of plaintiff's abandonment of said enterprise, the venture fell through, and these defendants were thereby deprived of the ability to earn the contemplated profit therefrom which they estimated and had reason to believe would be and which they charge would have been in the sum of between $300,000 and $500,000; that the title to the land was placed in the name of Wroten, and Wroten accepted the trust upon the consideration of the guaranty of defendant Godley that the said Wroten should have returned to him the purchase money therefor whenever demanded by said Wroten, and that said Wroten would convey the title when demanded of him upon the repayment to him of the purchase money and agreed compensation assented to by plaintiff of $1,000; that thereafter, to wit, on the 25th day of October, 1905, the said Wroten, being in bad health and desirous of...