Staacke v. Routledge

• Decision Date: 03 May 1922
• Docket Number: (No. 2847.)
• Parties: STAACKE et al. v. ROUTLEDGE.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Supreme Court

Page 994

241 S.W. 994

STAACKE et al. v. ROUTLEDGE.^*

(No. 2847.)

Supreme Court of Texas.

May 3, 1922.

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

Action by James Routledge against the Rambler Automobile Company, August Ernest Staacke, and Herman George Staacke. From judgment of the Court of Civil Appeals (175 S. W. 444), affirming judgment for plaintiff against the defendants named for damages and against the corporation only for costs of a former appeal, defendants August

Ernest Staacke and Herman George Staacke bring error. Affirmed in part, and reversed in part.

Webb & Goeth, of San Antonio, for plaintiffs in error.

J. R. Norton and James Routledge, of San Antonio, for defendants in error.

CURETON, C. J.

This suit was instituted by the defendant in error against the Rambler Automobile Company, a corporation, to recover damages for personal injuries alleged to have been sustained by him on April 25, 1905, by reason of the negligence of an employee of the corporation in the operation of an automobile owned by it, in which defendant in error was riding. The case was tried and judgment rendered for the company; which judgment, however, was reversed by the Court of Civil Appeals at San Antonio. See 95 S. W. 749.

Defendant in error then amended his petition, and in addition to the original defendant, the Rambler Automobile Company, made F. Kirchhoffer, A. C. Schell, Edward Heusinger, Herman G. Staacke, August E. Staacke, August F. Staacke, Mrs. Adele Staacke, Staacke Bros., a partnership composed of Herman G. Staacke, August E. Staacke, and Mrs. Adele Staacke, and the Rambler Automobile Company of San Antonio, Tex., as a partnership composed of Staacke Bros. and the individuals above named, defendants. He alleged that on the date of the injury the defendants named were engaged in the business of owning, operating, renting, and controlling automobiles for hire, as common carriers of passengers in San Antonio; that he became a passenger in a car owned and operated by said defendants; and that their agent, Street, who was in charge of the car, negligently operated the same in such manner as to cause the injuries to him. It is unnecessary for the purposes of this opinion to state the acts of negligence alleged. He further alleged that the parties, for the purpose of preventing him from collecting his damages, in February, 1904, organized "a bogus, fictitious and dummy corporation" for the purchase, sale, and renting of automobiles, parts of and accessories of automobiles, with a capital stock of $5,000; that the charter was signed and filed by A. Staacke, F. Kirchhoffer, and A. C. Schell, who were named as directors, but that all the parties named as defendants were stockholders in the corporation, and all actively engaged in the management of the business carried on by it; that the real purpose of the corporation was to act as a common carrier of passengers, and that it engaged in such business in violation of law. He alleged that all the parties named as defendants in his amended pleading were partners in the Rambler Automobile Company and liable to him as such, because: (a) They, as a pretended corporation, but in fact a partnership, transacted and carried on a business not allowed by law to be carried on by corporations, but which was prohibited; (b) transacted and carried on a business not allowed or permitted by the charter of said automobile company; (c) transacted and carried on a business for which no charter could be given under the law; (d) transacted and carried on a business with less capital stock than the law permitted and before the lawful amount of capital stock was subscribed; (e) and transacted and carried on a business before the amount of cash was paid in that the law required. Defendant in error, however, pleaded that prior to the time he was injured he did not know that the Rambler Automobile Company was a corporation. He finally pleaded that, if he should be mistaken as to his allegations that the Rambler Automobile Company was not a legal corporation, then that he have judgment on the cause of action alleged against the company as a corporation.

The pleadings are voluminous, and it is unnecessary to state them in detail. Issue was joined upon all material allegations, except that defendant in error became a passenger in an automobile owned and operated by the Rambler Automobile Company; that this company was a corporation; and an item of costs paid in the Court of Civil Appeals. The defendants in the court below denied the partnership allegations, and that they were then, or ever had been, engaged in the renting or hiring of automobiles, or in the transportation of passengers, either as individuals or as partners with the Rambler Automobile Company. General and special exceptions were filed by defendants, which were overruled. The defendants pleaded that the Rambler Automobile Company was a corporation, chartered in 1904, prior to defendant in error's injury, and that the company conducted its business as a corporation under the powers granted it. They also alleged that defendant in error was injured by his own contributory negligence.

Before argument in the case, defendant in error dismissed as against August F. Staacke, F. Kirchhoffer, A. C. Schell, Edward Heusinger, Mrs. Adele Staacke, and Staacke Bros. as a partnership, but retained as defendants August E. Staacke, Herman G. Staacke, the Rambler Automobile Company as a partnership, and the Rambler Automobile Company as a corporation.

The case was submitted upon special issues as to whether or not the driver of the car was guilty of negligence, and whether or not the defendant in error was guilty of contributory negligence. No other issues were submitted. The jury found the driver of the car was guilty of negligence, acquitted the occupants of the car of contributory negligence, and assessed defendant in error's damages at $2,000. Judgment was rendered upon this verdict against August Ernest Staacke and Herman G. Staacke, jointly and severally, and against the Rambler Automobile Company as a corporation. Judgment was denied as against the Rambler Automobile Company as a partnership. August Ernest Staacke and Herman G. Staacke appealed, and the case was affirmed by the Court of Civil Appeals at San Antonio (175 S. W. 444), from which affirmance a writ of error was granted by this court.

The trial court filed his reasons for rendering judgment against plaintiffs in error, in which he stated:

"In the case at bar, the managing officers and the directors of the corporation were engaged in a business in the name of the corporation which they knew the laws of Texas did not permit the corporation to engage in. They were not innocent, nonassenting stockholders, but were knowingly and actively engaged in the conduct of a business which the statutes did not authorize a corporation to engage in, and in direct violation of article 1164 of the Revised Statutes of this state, which prohibits a corporation from directly or indirectly using its property or assets for any purpose whatever than to accomplish the legitimate objects of its creation or those permitted by law; and by carrying on this business in the name of the corporation, they cannot be heard to say that what they cause to be done, was not done by them, but by their corporation, when the corporation could not engage in that business. * * * I therefore will render judgment in favor of the plaintiff against the Rambler Automobile Company and its managing officers and directors, A. E. Staacke, and H. G. Staacke, for the sum of $2,000."

The Court of Civil Appeals in its opinion affirming the case made findings of fact in part as follows:

"(1) The automobile in which Routledge was riding when injured belonged to the Rambler Automobile Company, a corporation, and was in charge of its employee, Street, who hired or rented the car to persons, including his services, at $2.50 per hour, and was allowed by his employer as compensation 20 per cent. of his receipts. The car had been hired by one Adams, who invited Routledge to enter the same and take a ride with him and his companions. The appellants were not present and did not participate in any way in the negligent act of Street which caused appellee's injuries.

"(2) Before the accident occurred Street informed Routledge that he was operating the machine for the Rambler Automobile Company, and that Adams had hired the machine from said company by the hour.

"(3) The Rambler Automobile Company was granted a charter by the State of Texas on February 12, 1904. The incorporators were A. Staacke, F. Kirchhoffer, and A. C. Schell. The purpose for which it was incorporated was stated as follows in the charter: `The purchase, sale and renting of automobiles, parts of and accessories to automobiles.'

"(4) The capital stock was $5,000 divided into 50 shares, of which only 25 were ever issued. Of these 22 were issued to A. Staacke, the father of appellants, 1 to appellant H. G. Staacke, 1 to Kirchhoffer, appellants' brother-in-law, and the other to Schell, theretofore an employee of Staacke Bros. A. Staacke was elected president of the corporation; Kirchhoffer, vice president; Schell, secretary; appellant H. G. Staacke, treasurer; and appellant A. E. Staacke, general manager.

"(5) On December 23, 1904, appellant A. E. Staacke became the owner of the 23 shares which had been issued to A. Staacke and Kirchhoffer, and he was then elected president of the corporation, and H. G. Staacke, vice president, Schell remaining the secretary. The stock and offices were thus held at the time appellee was injured. * * *

"(8) The Rambler Automobile Company began business right after its organization. Its business consisted principally in hiring out the cars owned by it and those rented by it at first from Staacke Bros. and afterwards from A. E. Staacke, such hiring being carried on in the same manner as the transaction between...