Weathersby v. Texas & Ohio Lumber Co.

• Decision Date: 08 February 1912
• Citation: 146 S.W. 243
• Parties: WEATHERSBY v. TEXAS & OHIO LUMBER CO.<SMALL><SUP>†</SUP></SMALL>
• Court: Texas Court of Appeals

146 S.W. 243

WEATHERSBY v. TEXAS & OHIO LUMBER CO.^†

Court of Civil Appeals of Texas. Galveston.

February 8, 1912.

Rehearing Denied March 7, 1912.

Appeal from District Court, Jasper County; W. B. Powell, Judge.

Suit by H. D. Applegate and another against the Texas & Ohio Lumber Company. A receiver was appointed, and R. L. Weathersby intervened. From a decree denying his claim, the intervener appeals. Affirmed.

Crook, Lord & Lawhon, for appellant. W. W. Blake, for appellee.

PLEASANTS, C. J.

In a suit brought by H. D. Applegate and L. J. Hays, stockholders of appellee Lumber Company, a corporation, a receiver for said company was appointed by the district court of Jasper county on May 7, 1908. Appellant intervened in this receivership proceeding, claiming an indebtedness against the defendant company of about $3,600. This claim was referred to J. D. Martin, master in chancery, theretofore appointed by the court to hear testimony and pass upon claims presented against the defendant company. After hearing the evidence, the master in chancery allowed the claim, and so reported to the court. Accompanying said report, there was a transcript of the pleadings of the parties and of all the evidence introduced upon the hearing. The defendant Lumber Company filed exceptions to this report, and upon the hearing of said exceptions they were sustained by the court below, and judgment rendered that the intervener take nothing by his suit. From this judgment, the intervener prosecutes this appeal.

The petition of the intervener alleges: "That he (R. L. Weathersby), together with W. W. Wilson, on or about April 25, 1906, held a contract with George N. Smalley of Boston, Mass., under the terms of which contract the said George N. Smalley had agreed to sell to the intervener, Weathersby, and the said W. W. Wilson 3,743 acres of land in Jasper county, Tex., and that on or about the said date of April 25, 1906, H. D. Applegate, acting for and in behalf of the Texas & Ohio Lumber Company, entered into a written contract with the intervener, intervener being represented in the transaction by John H. Kirby, under the terms of which contract the intervener agreed that the 3,743 acres of land might be sold by the said George N. Smalley to the said H. D. Applegate, for the use and benefit of the Texas & Ohio Lumber Company, instead of conveying the same to the intervener, R. L. Weathersby, and W. W. Wilson; that the consideration for the agreement of the said R. L. Weathersby and W. W. Wilson to waive their right to purchase said land and have the same conveyed to H. D. Applegate was the agreement on the part of said Applegate to purchase from the intervener, R. L. Weathersby, 80 shares of the capital stock of the Jasper Lumber Company of the par value of $8,000, and further agreed, undertook, and bound himself to hold the intervener harmless by reason of being indorser on two promissory notes of $1,396.10 each, bearing date of August 17, 1905, executed by the Jasper Lumber Company, payable to W. W. Wilson, said notice providing for interest at the rate of 8 per cent. per annum from date and 10 per cent. attorney's fees, said notes being also indorsed by H. D. Applegate; that, in pursuance to said contract, the said George N. Smalley did, on the 8th day of June, 1906, convey said land to H. D. Applegate, instead of the intervener, Weathersby, and the said W. W. Wilson; that the tract of land was a valuable tract of timber land, and that the Texas & Ohio Lumber Company was especially desirous of procuring same; that on September 18, 1906, the Texas & Ohio Lumber Company, acting by and through its president, A. P. Laughlin, executed and delivered to this intervener a certain instrument in writing, by the terms of which written instrument it was provided that the Texas & Ohio Lumber Company should carry out and perform the contract made between R. L. Weathersby, by and through his agent, John H. Kirby, with H. D. Applegate on April 25, 1906, and that said contract was made for the purpose of securing title to the said 3,743 acres of land; that said written instrument bound the Texas & Ohio Lumber Company to pay off and satisfy any judgment that might be recovered against intervener by reason of being indorser on the two promissory notes hereinbefore set forth; and that, in the event intervener should be compelled to pay off any judgment or judgments that might be recovered in said notes, he should have a lien on said tract of land; that the said H. D. Applegate had, in compliance with said contract, conveyed the title to the said 3,743 acres of land to the defendant, Texas & Ohio Lumber Company."

Intervener further alleged that suits had been brought on said two notes, one in the district court of Jefferson county, Tex., and one in the district court of Harris county, Tex.; that in the suit in the district court of Jefferson county, Tex., judgment was recovered against the intervener for $1,750.62, with interest at 8 per cent. per annum from its date, to wit, May 17, 1907; that on June 10, 1907, there was recovered against him in the suit in Harris county the sum of $1,752.34, with interest at the rate of 8 per cent. per annum from date, and that the said intervener had been compelled to pay off and satisfy said judgments.

The intervener alleged in the alternative that if it should be shown that H. D. Applegate was not authorized by the Texas & Ohio Lumber Company to enter into the contract of April 25, 1906, and that the said A. P. Laughlin was not authorized by the Texas & Ohio Lumber Company to execute the contract of September 18, 1906, that the said Texas & Ohio Lumber Company was estopped from denying the want of such authority, for the reason that, by virtue of said contracts, the defendant company secured title to the said tract of land, which was a valuable right, and that it could not accept the benefits of such contract without accepting the burdens. Intervener prayed for judgment against the Texas & Ohio Lumber Company for the amount of the two judgments he was compelled to pay by reason of being indorser on said two notes, and for the foreclosure of his lien upon said land.

The receiver filed an answer to the intervention of R. L. Weathersby, in which he alleged that the contract of the Texas & Ohio Lumber Company, agreeing to hold the defendant, Weathersby, harmless on said notes, was without consideration; that the 3,743 acres of land was purchased by Applegate, and the deed was taken in his name as trustee for the Texas & Ohio Lumber Company; that the cash payment was made by promoters of the Texas & Ohio Lumber Company; that the contract to hold the intervener, Weathersby, harmless by reasons of his having to pay off said notes was for the use and benefit of Applegate; that Applegate imposed said conditions upon the company for his own use and benefit; and that said contract was signed without the authority of the board of directors of the Texas & Ohio Lumber Company, and without any knowledge on their part of the conditions of such contract. The defendant, Texas & Ohio Lumber Company, filed a special answer, denying that it executed the contract of September 18, 1906, as alleged by intervener, and denied any contractual relationship between the intervener and the Texas & Ohio Lumber Company.

The following written instruments evidence the agreements upon which intervener bases his right to recover against the defendant corporation:

On April 25, 1906, H. D. Applegate and John H. Kirby entered into the following agreement:

"Know all men by these presents, that this agreement between Jno. H. Kirby, acting for and on behalf of R. L. Weathersby, and H. D. Applegate, acting for himself, witnesseth: Whereas, the said R. L. Weathersby is a stockholder in the Jasper County Lumber Company and is also an indorser upon the notes and obligation of said Jasper County Lumber Company; and whereas, said Weathersby, together with W. W. Wilson, have a contract for the purchase of certain lands from George N. Smalley, which lands are mentioned in a contract of this date between said George N. Smalley, acting through Jno. H. Kirby, and H. D. Applegate; and whereas, at the request of said H. D. Applegate, said R. L. Weathersby and W. W. Wilson have consented that the contract by which said Applegate becomes the purchaser of said lands shall be made directly with said Applegate; and whereas, the consideration moving to said R. L. Weathersby and said W. W. Wilson for their consent to the purchase of said lands by said Applegate was this contract: Now, therefore, the said H. D. Applegate hereby binds and obligates himself to purchase from said R. L. Weathersby eight thousand ($8,000.00) dollars par value of the stock of the Jasper Lumber Company and to pay thereof eight thousand ($8,000.00) dollars in cash, the said cash to be paid as soon as the purchase of said lands from George N. Smalley is consummated and the said Applegate receives a deed therefor; and the said Applegate further obligates himself to protect said R. L. Weathersby as an indorser or guarantor upon any of the...