Stevens v. Walker

• Decision Date: 16 October 1926
• Docket Number: (No. 9653.)
• Citation: 288 S.W. 536
• Parties: STEVENS v. WALKER.
• Court: Texas Court of Appeals

288 S.W. 536

STEVENS v. WALKER.

(No. 9653.)

Court of Civil Appeals of Texas. Dallas.

October 16, 1926.

Rehearing Denied November 13, 1926.

Appeal from District Court, Dallas County; T. A. Work, Judge.

Suit by M. E. Stevens, as trustee in bankruptcy of the Walker Consolidated Petroleum Company, against A. W. Walker, W. B. Hamilton intervened. Judgment for defendant and intervener. From the judgment in favor of defendant only, plaintiff appeals. Affirmed.

W. H. Flippen and Cecil L. Simpson, both of Dallas, for appellant.

A. W. Walker, Jr., of Austin, for appellee.

VAUGHAN, J.

This suit was filed January 7, 1924, by appellant, M. E. Stevens, as trustee in bankruptcy of the Walker Consolidated Petroleum Company, a Texas corporation, to recover $272,482.68, paid appellee by the Texhoma Oil & Refining Company, a Texas Corporation, as commission on the sale of certain oil properties owned by it to the Walker Consolidated Petroleum Company, on or about March 5, 1920. By agreement of the parties, $25,000 then due and unpaid appellee as a part of this commission, was placed in the City National Bank of Wichita Falls, Tex., to await the result of this suit.

W. B. Hamilton, an attorney of Dallas, Tex., intervened in this suit, claiming that he was entitled to $8,000, as attorney's fee, out of the $25,000 so held. This claim was not disputed by appellee Walker, but was contested by appellant. The cause was submitted to a jury on special issues and upon its findings thereon judgment was rendered in favor of appellee, Walker, and intervener, Hamilton. This appeal is prosecuted from the judgment only as to the appellee.

Appellant based his right to recover on two theories: (a) That the appellee was a promoter of the Walker Consolidated Petroleum Company and that, by the transaction through which he received the sum of money sued for, same involved a violation of the fiduciary relationship existing by virtue of the position so occupied by said Walker; and (b) that, on account of the fiduciary relation that appellee bore to three of the companies that went into the merger by reason of being an officer of such companies rather than a promoter of the Walker Consolidated Petroleum Company, appellee was not entitled to receive and retain for his use and benefit the money so paid to him as commission for effecting the sale of the properties owned by the Texhoma Company. By appropriate pleadings appellee joined issue with appellant.

The following material facts were either established by uncontroverted evidence or by the findings of the jury on evidence ample to support same, viz.: On December 20, 1919, appellee, then president of the Texhoma Company, was given the exclusive right by its directors to sell certain of its properties, including leases, tank cars, and a refinery, for which he was to receive a 10 per cent. commission, out of which he was to bear all expenses incurred in making the sale of such properties, including attorney's fees. This commission was reasonable for the sale of oil properties and the percentage customarily charged at that time in the locality where such properties were located. The Texhoma Company listed and valued separately the properties to be sold; the total price asked amounting to $3,325,000. At the time appellee entered into said contract, the Walker Consolidated Petroleum Company was not in existence nor even in contemplation, and the appellee had no particular purchaser in mind.

Mr. W. B. Hamilton, an attorney of Dallas, was employed by appellee as his attorney, to attend to all legal matters incident to a sale of the properties, and also to introduce him to certain prospective purchasers in New York City, for which services he was to receive from appellee $60,000, and was to bear all of his expenses incident thereto. Appellee secured D. S. Menasco, of Indianapolis, Ind., to assist him in disposing of said properties, said Menasco being acquainted with certain financiers in New York City, and for which services, if a sale was effected, Menasco was to receive $25,000.

Appellee, Hamilton, and Menasco went to New York City about January 3, 1920, and remained until about February 23, 1920, during which time negotiations were had with various prospective purchasers and finally a contract of sale was made and signed on January 16, 1920, by appellee, for the Texhoma Company, as vendor, and Charles W. Ray, for himself and associates, the Henry L, Dougherty interests, as vendees, for a total consideration of $3,325,000. This sale failed of consummation because of the death of a Mr. Levering and the serious illness of Mr. Ray, two of the principal purchasers.

While appellee was negotiating with other parties for the sale of said properties, he received information from Texas, on or about February 23, 1920, that a deeper and richer oil sand had been discovered on some of the property offered for sale, which had increased the daily production on certain leases from about 750 barrels per day in December, 1919, when the property was listed with appellee for sale, to 2,500 barrels per day. On receipt of this information, Menasco suggested to appellee that it would be a good idea for the four companies in which he and appellee were interested to buy the properties at the bargain price at which appellee was authorized to sell and to use the $200,000 in cash in the treasuries of said companies as the initial payment. The four companies referred to and included in said suggestion were the Dal-Apolis Petroleum Company, of which Menasco was president and the majority stockholder, appellee being a director and owner of $2,300 of the capital stock of $300,000, or less than one per cent. thereof; the Birmingham-Dallas Oil & Gas Company, of which appellee was president and owner of $6,000 of its capital stock of $250,000, or 2 per cent. thereof; the Burk-Electra Petroleum Company, of which appellee was president and owner of $24,325 of its capital stock of $250,000, or 9 per cent. thereof; and the Sherman-Dallas Oil Company, of which appellee was president and the owner of $6,770 of its capital stock of $200,000, or 3 per cent. thereof. Of the capital stock owned by appellee in said four companies, his interest was less than 4 per cent. of their combined capitalization.

In answer to a wire from appellee and Menasco, Hudmon Hopson and Charles R. Reed, of Birmingham, Ala., two of the largest stockholders in said four companies, and also directors in some of them, came to New York, and, after appellee and Menasco discussed with them Menasco's proposition in reference to selling said properties to the above four oil companies, it was decided to submit the...