Rich v. Park

• Decision Date: 17 February 1915
• Docket Number: (No. 5315.)<SMALL><SUP>†</SUP></SMALL&gt
• Citation: 177 S.W. 184
• Parties: RICH et al. v. PARK.
• Court: Texas Court of Appeals

177 S.W. 184

RICH et al. v. PARK.

(No. 5315.)^†

Court of Civil Appeals of Texas. Austin.

February 17, 1915.

On Motion for Rehearing, May 26, 1915.

Appeal from District Court, McLennan County; Tom L. McCullough, Judge.

Action by M. C. H. Park, as trustee, against B. T. Rich and others. From a judgment for plaintiff, defendants appeal. Reversed and remanded.

Spann & Spann, of Temple, and Sleeper, Boynton & Kendall, of Waco, for appellants. J. D. Williamson, of Waco, for appellee.

Statement of the Case.

RICE, J.

The Rich Dry Goods Company was duly incorporated October 21, 1909, with B. T. Rich, S. D. Stitt, Frank Leahy, and J. S. Thompson as original stockholders therein, Rich for 50 shares at $100 per share, Stitt for 64 shares at $100 per share, and Leahy and Thompson jointly for 36 shares at $100 per share — amounting in the aggregate to $15,000. They constituted the board of directors of said corporation, and claimed to have transferred to said corporation, in full payment for such shares a stock of goods, wares, and merchandise, mercantile notes and accounts, furniture and fixtures, valued at $15,000; whereupon said corporation issued said shares of stock to them, showing on their face to be fully paid and nonassessable. A dry goods business was thereafter conducted by said corporation until about the 31st day of January, 1910, when appellants sold all of their shares of stock therein to one Hallenbeck, who paid them full value therefor, and Hallenbeck & Sons, as stockholders in said corporation, continued to operate said business for about a month thereafter, when they sold their entire interest therein to one Cordell, who operated the same until the 17th of February, 1911, at which time said corporation was adjudged a bankrupt by the United States District Court at Waco, and appellee M. C. H. Park was on the 20th of March, 1911, duly elected trustee of said bankrupt estate, who, after having qualified as such, took possession of the effects of said concern and reduced all of its assets to cash, reporting to the referee in bankruptcy that they were not sufficient to discharge the debts of said estate, and made an application to said referee, stating said facts, and further stating that although stock in said corporation had been issued to said Rich, Stitt, Leahy, and Thompson in the amounts above named as fully paid and nonassessable, they had not in fact paid said amounts therefor, but Stitt had only paid $1,220.66, Rich had only paid $983.33, and that Leahy and Thompson had only paid $708, leaving said stockholders still indebted to said corporation in the following amounts, Stitt for $5,179.34, Rich for $4,016.67, and Leahy and Thompson jointly in the sum of $2,892; and prayed that a call be made upon said stockholders requiring them to pay the balance due on said stock. Whereupon, said referee, after a hearing, entered an order finding the amounts due to be as stated by the trustee, and granting said application and directing said parties to pay within three days said balances so found to be due on their stock; and, in the event of failure so to do, the trustee was directed to bring suit against each of them for the respective amounts due by them. But it was further recited therein that said order should not be construed to prevent the trustee or any of the parties sued by him pursuant to the provisions thereof, from showing payment for said stock, nor from asserting or from offering evidence to establish, or from proving, if the facts so justified, any cause of action or defense such trustee or other party may have to assert or make in such suit or suits, action or actions. Said parties having failed to pay said amounts as directed, the trustee brought this action on the 12th day of March, 1913, to enforce payment thereof, alleging the foregoing facts.

After a plea of privilege by Stitt to be sued in Bell, the county of his residence, all of the parties answered by general denial and two special defenses, to wit: First, admitting that they were original subscribers for the capital stock of said bankrupt corporation, but alleging, however, that they had fully paid therefor by delivering to said corporation goods, wares, and merchandise, fixtures, and mercantile notes and accounts of the value equal to the par value of said capital stock. Second, that, irrespective of whether said stock was fully paid or not, each of them had, in good faith, while said corporation was solvent and a going concern, transferred all of their stock in said corporation to Hallenbeck, by reason of which they were absolved from further liability thereon to said corporation or to said trustee for any unpaid portion of their subscription to said capital stock.

Appellee interposed a general denial of all of the allegations in appellants' special answers, and specially denied that said stock of goods, wares, and merchandise, etc., alleged to have been transferred by appellants to said corporation in payment for said capital stock was of the value stated by appellants, but that said property so transferred by appellants to said corporation in payment for their said stock was only sufficient to pay the sum of $2,860.10 thereon, leaving the balance of said capital stock unpaid. And further answering, alleged that appellants had not transferred their stock in said corporation in good faith, but that the transferee thereof had notice that the same was unpaid, and had not assumed appellants' obligations on said unpaid stock. And further pleaded res adjudicata, in that all matters pleaded in defense by appellants had been adjudicated by the referee in bankruptcy in making a call for said unpaid stock.

A jury trial resulted in a verdict and judgment against each of the appellants for the following amounts, to wit: B. T. Rich, $1,640; S. D. Stitt, $2,160; and Frank Leahy and Joe S. Thompson jointly in the sum of $1,200 — from which this appeal is prosecuted.

Opinion.

Appellants assign as error for review: First. The refusal of the trial court to peremptorily charge a verdict in their favor (a) at the close of plaintiff's testimony, (b) at the close of the case before charging and submitting the issues to the jury, which points are presented under the first and second assignments of error. Second. Incorrect, contradictory, and misleading charges of the court; the specific errors complained of being presented by the third, fourth, fifth, sixth, seventh, and eighth assignments of error. Third. The unwarranted abridgment by the trial court of their right of proper cross-examination, presented under the ninth assignment. Fourth. The denial of appellant Stitt's plea of privilege to be sued in the county of his residence, presented by the tenth assignment. All of which we will consider seriatum.

With reference to the first, it may be stated that the plaintiff introduced the following evidence and rested: First, the order of the bankruptcy court adjudicating the Rich Dry Goods Company a bankrupt; second, order approving the bond of Park, as trustee of said bankrupt estate; third, the application of the trustee for an order of the referee to make a call for unpaid stock subscriptions alleged to be due said bankrupt corporation; fourth, the order of the referee making said call; fifth, a certified copy of the charter of said Rich Dry Goods Company, by the introduction of which evidence we think appellee at least made out a prima facie case, making it incumbent upon appellants to introduce evidence in rebuttal.

Thompson on Corporations, § 3802, is authority for the proposition that proof of a subscription and of a valid call makes a prima facie case for the recovery of the amount embraced in the call; for which reason we think the court did not err in refusing said peremptory charge. Nor did the court err, we think, in likewise refusing, after the close of the evidence, a peremptory instruction in behalf of appellants, on the theory that the evidence showed that the appellants in good faith had transferred to Hallenbeck the stock owned by them in said corporation at such time and under such circumstances as to relieve them from all liability on their subscriptions therefor. It will be recalled that the appellants had urged two defenses; the first that they had paid full value for said stock by transferring to said corporation a stock of merchandise, and outstanding notes, accounts, fixtures, and furniture of the face value of said stock; and, second, that they had transferred their respective shares of stock to Hallenbeck in good faith while said corporation was solvent and a going concern. And, while they have introduced evidence in support of each of these contentions, still appellee offered evidence in rebuttal thereof, thereby raising an issue of fact as to each of said pleas that ought, in our judgment, to have been submitted to the jury, and upon which the jury might or might not have found that said stock was in fact paid for in full, and might or might not have found that the same was transferred to Hallenbeck in good faith while said corporation was solvent and a going concern; and, when such is the case, it is always the duty of the court to submit the issues so raised for the consideration of the jury. Said assignments are therefore overruled.

The third assignment insists that the court erred in giving appellee's special charge No. 5, which was to the effect that if the jury found from the evidence that appellants had subscribed for the respective shares shown by the testimony, and that the same were not fully paid for by them and each of them, and they should further find that appellants caused the books of said corporation to show that such capital stock was fully paid, and represented to Hallenbeck that it was fully paid, then to return a verdict in favor of the appellee against each of them for the amounts unpaid on their subscriptions to said capital stock, except as to defendants Leahy and Thompson, and as to them t...