Travis-Edwards, Inc. v. Texas-Edwards, Inc.

• Decision Date: 01 July 1974
• Docket Number: No. 12362,TEXAS-EDWARD,INC,TRAVIS-EDWARD,12362
• Citation: 299 So.2d 389
• Parties: , Plaintiff-Appellee, v., et al., Defendants-Appellants.
• Court: Court of Appeal of Louisiana — District of US

Page 389

299 So.2d 389

TRAVIS-EDWARDS, INC., Plaintiff-Appellee, v. TEXAS-EDWARDS, INC., et al., Defendants-Appellants.

No. 12362.

Court of Appeal of Louisiana, Second Circuit.

July 1, 1974.

Rehearing Denied en Banc. Sept. 4, 1974.

Writ Refused Oct. 25, 1974.

Lunn, Irion, Switzer, Johnson & Salley by Harry A. Johnson, Jr., Shreveport, for defendants-appellants.

Nelson & Achee, Ltd. by Harry R. Nelson, Roland J. Achee, Shreveport, for plaintiff-appellee.

Before PRICE, HALL and WILLIAMS, JJ.

WILLIAMS, Judge.

Travis-Edwards, Inc. obtained a judgment in the district court against defendants, Texas-Edwards, Inc. and Lomas & Nettleton Financial Corporation, in solido, for $191,250 plus interest and costs. Defendants perfected a suspensive appeal from this judgment.

The facts established that on January 3, 1955 a corporation named 522 Market Street, Inc. was formed under the laws of the state of Delaware with its domicile in Caddo Parish, Louisiana. On November 28, 1958 the corporation's articles were amended to change the name to Texas-Edwards, Inc. The principal asset of this corporation was the Petroleum Tower Building situated on the corner of Texas and Edwards Streets in downtown Shreveport, Louisiana. The lot or land on which the Petroleum Tower was constructed was owned by Julia Levy and others, and was under a long term lease assigned to Texas-Edwards, Inc.

The construction of the Petroleum Tower was financed by a loan obtained by Texas-Edwards from The Travelers Insurance Company for $2,300,000. This loan was made on August 31, 1959 secured by a first mortgage on a lease covering property on which the Petroleum Tower was built. On April 1, 1960 Texas-Edwards obtained a loan of $225,000 from Travis-Edwards, Inc., a Delaware corporation also domiciled in Caddo Parish. This loan was represented by a note of the same date payable to Travis-Edwards, Inc. and secured by a second mortgage on the lease agreement covering the property on which the Petroleum Tower was constructed. This note provided the principal and interest be payable as follows:

'Interest is payable on the first day of April in each year, commencing 1962; installments of principal in the amount of Six Thousand Seven Hundred Fifty and No/100 Dollars ($6,750.00) each are payable on the first day of April in each of the years 1965 to 1974, both inclusive; and installments of principal in the amount of Thirty-one Thousand Five Hundred and No/100 Dollars ($31,500.00) each are payable on the first day of April in the year 1975 and in each year thereafter until this Note is fully paid.'

This note also contained the following acceleration clause:

'If default be made in the payment of any installment of interest or principal under this Note, and if such default is not made good within thirty (30) days after due date thereof, the entire principal sum and accrued interest shall at once become due and payable without notice, at the option of the holder of this Note. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any subsequent default.'

On March 7, 1960 Wallace Properties, Inc. was incorporated under the laws of Delaware and domiciled in Texas. An agreement was entered into on April 2, 1960 between Texas-Edwards, Inc. and its stockholders and others referred to therein as 'contributors' and Wallace Properties, Inc. The purpose of this agreement was in general for Wallace Properties, Inc. to acquire all of the stock from the stockholders of Texas-Edwards, Inc. in exchange for stock in Wallace Properties, Inc. This then made Wallace Properties, Inc. owner of all stock in Texas-Edwards, Inc. Such agreement and exchange was done with the full knowledge of the outstanding indebtedness owed by Texas-Edwards, Inc.

Subsequent to the above agreement and exchange between the stockholders of Texas-Edwards, Inc. and Wallace Properties, Inc., an instrument title Conveyance of Real Estate Lease and Improvements was executed by the two corporate entities. This instrument executed September 6, 1961 effective August 23, 1961 recites that Texas-Edwards, Inc. was represented by its president, E. E. Wallace, Jr. and Wallace Properties, Inc. was represented by its president, E. E. Wallace, Jr. The instrument purports to convey from Texas-Edwards, Inc. to Wallace Properties, Inc. the lease of realty on which the Petroleum Tower was constructed. In turn Wallace Properties, Inc. accepted the act of conveyance subject to the 'special mortgage of date April 1, 1960 executed by Texas Edwards, Inc. in favor of Travis-Edwards, Inc., to secure a promissory note of the same date in the principal sum of $225,000. . . .' This act of conveyance recites 'The consideration herefor is the sum of Ten and 00/100 ($10.00) cash in hand paid and other good and valuable considerations. . . .'

Wallace Properties, Inc., represented by its president, E. E. Wallace, Jr., declaring itself to be the record owner and holder of all outstanding stock of Texas-Edwards, Inc., executed on September 1, 1961 a consent to dissolution of the Texas-Edwards, Inc. This Certificate of Dissolution of Texas-Edwards, Inc. was filed in the office of the Secretary of the state of Delaware September 5, 1961. It is interesting to note the actual signing of the act of conveyance by Texas-Edwards, Inc. to Wallace Properties, Inc. was done on September 6, 1961, one day after the actual recording of the dissolution of Texas Edwards, Inc. as a corporate entity. We also take note of a conveyance by Wallace Properties, Inc. to the Futterman Corporation, dated September 8, 1961, of the Lease of Realty described in the special mortgage to Travis-Edwards, Inc. Since the Futterman Corporation is not a party to this suit this will have no bearing or consideration in the decision of this case.

On September 22, 1961 Wallace Properties, Inc....