Staacke v. Routledge

Decision Date17 March 1915
Docket Number(No. 5441.)<SMALL><SUP>†</SUP></SMALL>
PartiesSTAACKE et al. v. ROUTLEDGE.
CourtTexas Court of Appeals

Appeal from District Court, Bexar County; W. F. Ezell, Judge.

Action by James Routledge against the Rambler Automobile Company, August Ernest Staacke, and Herman George Staacke, and others. Judgment for plaintiff against the corporation and defendants August Ernest Staacke and Herman George Staacke for damages and against the corporation only for the costs of a former appeal, and defendants August Ernest Staacke and Herman George Staacke appeal, and plaintiff files a cross-assignment of error complaining of the failure of the court to render judgment against the individuals for the costs. Affirmed on appeal and cross-assignment.

Webb & Goeth, of San Antonio, for appellants. J. R. Norton and James Routledge, both of San Antonio, for appellee.

MOURSUND, J.

This suit was instituted by appellee Routledge against Rambler Automobile Company, a corporation, to recover damages for injuries alleged to have been sustained by him on April 25, 1905, by reason of the negligence of an employé of said corporation in the operation of an automobile, owned by said corporation, in which Routledge was riding. The case was tried and the judgment reversed by this court. See 95 S. W. 749.

Routledge amended and, in addition to suing the corporation, sued F. Kirchhoffer, A. C. Shell, 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. He alleged that, on April 25, 1905, said parties, and each of them, were engaged in the business of owning, operating, renting, and controlling automobiles for hire, and in the business of carrying and transporting passengers for hire, and acting as a common carrier of passengers for hire with automobiles in San Antonio, and that he became a passenger in one of the automobiles owned and operated by the parties, and that their agent, Street, who was in charge of the car, negligently operated the same, thereby causing plaintiff to be injured. The acts alleged to constitute negligence need not be stated. Plaintiff alleged that the parties, for the purpose of preventing him from collecting his damages, in February 1904, organized a bogus, fictitious, or 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. Shell, who were named as directors, but that all the parties were stockholders in the corporation and in the management of the business carried on by the corporation, and that the real purpose of the corporation was to act as a common carrier of passengers, and that it engaged in such business and continued therein, but that such business was in violation of law; that prior to the time he was injured he did not know that the Rambler Company was a corporation. He alleged further that the company gave A. E. Staacke a chattel mortgage on all of its property and effects on December 23, 1904, which had been foreclosed and the property sold and bought in by defendant A. E. Staacke for $800; that said debt was fictitious, and the mortgage was given solely for the purpose of defrauding creditors of the corporation, and to hinder and delay them in recovering their debts; that plaintiff has an equitable lien upon said property, which is of the value of more than $1,000; and that said property should be applied to the payment of his debt. He alleged that all the defendants are partners in said Rambler Automobile Company and liable to plaintiff as such because they carried on a business not allowed by law to be carried on by corporations, nor permitted by the charter of the company, and for the transaction of which no charter could be given under the law; also, because they carried on business with less capital stock than the law permitted and before the lawful amount was subscribed, and before the amount of cash was paid in that the law required. Plaintiff finally alleged that if he was mistaken in regard to the company not being a legal corporation, and in regard to the right to recover against the parties other than the corporation, then that he asserts his rights as against the corporation. He prayed for $15,000 damages, and for $120.85, the amount of costs paid by him in order to get the mandate issued upon the former appeal, for cancellation of the Staacke note and mortgage, as well as the sheriff's deed conveying the property to A. E. Staacke.

August Ernest Staacke and Herman G. Staacke filed a general exception, and various special exceptions, all of which were overruled. They joined issue upon all material allegations except that plaintiff became a passenger in an automobile owned and operated by the Rambler Automobile Company, and that the item of costs paid in the Court of Civil Appeals was correct, and admitted that said Rambler Automobile Company was a corporation. They specially denied the partnership, and that they were then or ever had been engaged in the hiring or renting of automobiles, or that they or either of them were engaged in the transportation of passengers as individuals, or as partners or with the Rambler Automobile Company. They also alleged that in 1904 they obtained a charter from the state, and had carried on the business of a corporation under the powers granted by the state; also, that the corporation became indebted to A. E. Staacke in the sum of $4,500, and the note was secured by a chattel mortgage prior to the time that Routledge was injured; and that the note was sued upon, the mortgage foreclosed, and the property bought in at the sale for the sum of $800. They also alleged that Routledge was injured by his contributory negligence.

Before the argument to the jury, Routledge dismissed his case against August F. Staacke, F. Kirchhoffer, A. C. Shell, Edward Heusinger, Mrs. Adele Staacke, and Staacke Bros., as a partnership, but retained as defendants August E. Staacke, Herman G. Staacke, and Rambler Automobile Company, as a partnership, and Rambler Automobile Company, as a corporation.

The case was submitted upon special issues, and the jury found that the driver of the car, Street, was guilty of negligence in operating the car at the rate of speed he did at the time of the accident, acquitted the other occupants of the car of contributory negligence, and assessed plaintiff's damages at $2,000. Judgment was rendered upon such verdict for $2,000 against August Ernest Staacke and Herman G. Staacke, jointly and severally, and the Rambler Automobile Company, as a corporation; also, against such corporation for $120.85 costs of the previous appeal, at the same time adjudging that he take nothing as against the Rambler Automobile Company as a partnership. This appeal is by August Ernest Staacke and Herman G. Staacke.

Findings of Fact.

(1) The automobile in which Routledge was riding when injured belonged to the Rambler Automobile Company, a corporation, and was in charge of its employé, 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. Shell. 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, one to appellant H. G. Staacke, one to Kirchhoffer, appellants' brother-in-law, and the other to Shell, theretofore an employé of Staacke Bros. A. Staacke was elected president of the corporation; Kirchhoffer, vice president; Shell, 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, Shell remaining the secretary. The stock and offices were thus held at the time appellee was injured. The corporation, on December 23, 1904, owed $4,566, which indebtedness had been incurred to Staacke Bros., a firm composed of the two appellants and Mrs. Adele Staacke, but had been transferred to appellant A. E. Staacke. The vice president and secretary, under resolution duly passed, gave said A. E. Staacke a chattel mortgage upon the property of the corporation to secure the payment of the indebtedness and such other indebtedness as might thereafter accrue to him. The minutes show that he had also become the owner of the automobiles theretofore rented by the corporation from Staacke Bros., and that the corporation from then on rented the same from him. The mortgage was foreclosed in 1906 and the property of the corporation purchased by A. E. Staacke for $800. He then secured a charter for another company and turned such property over to it. At the time he...

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