Wells v. Mackay Telegraph-Cable Co.

• Decision Date: 17 December 1921
• Docket Number: (No. 8082.)<SMALL><SUP>*</SUP></SMALL&gt
• Citation: 239 S.W. 1001
• Parties: WELLS et al. v. MACKAY TELEGRAPH-CABLE CO.
• Court: Texas Court of Appeals

Page 1001

239 S.W. 1001

WELLS et al. v. MACKAY TELEGRAPH-CABLE CO.

(No. 8082.)^*

Court of Civil Appeals of Texas. Galveston.

December 17, 1921.

On Motion for Additional Findings and to Certify, February 23, 1922.

Appeal from Harris County Court; John W. Lewis, Judge.

Suit by the Mackay Telegraph-Cable Company against L. W. Wells and others. Judgment for plaintiff, and defendants appeal. Affirmed. Motion to certify overruled.

Stevens & Stevens, of Houston, Smith & Crawford, of Beaumont, and W. E. Masterson, of New York City, for appellants.

Andrews, Streetman, Logue & Mobley, W. L. Cook, M. E. Kurth, and E. J. Fountain, Jr., all of Houston, for appellee.

PLEASANTS, C. J.

This suit was brought by appellee against L. W. Wells and eight others, all of whom are shareholders in the Noble Oil & Refining Company, to recover the sum of $585 due the appellee by said company for services rendered in the transmission of telegraphic messages for the company.

By its first amended original petition upon which the cause was tried plaintiff alleged in substance that prior to July, 1918, the defendants had associated themselves together in an organization or association known as the Noble Oil & Refining Company, there being a number of other persons in like manner members of said organization or association not made parties to the suit, and that each member of said association received individual certificates issued by the duly authorized agent and representative of the association evidencing their respective memberships therein. The petition further alleged that, having become members of said organization, and under and by virtue of a declaration of trust, defendants, and each of them, jointly and severally, constituted T. J. Noble, W. A. Kuhleman, and F. Hildebrand as each of their agents in the conduct and management of the affairs of said enterprise, as is more fully shown by copies of two declarations of trust attached as exhibits to the petition.

Plaintiff further alleged in the alternative that, if it be mistaken in its allegation that the defendants became members of said organization, and if the defendants were not principals with said agents acting as above alleged, then, and in that event the defendants were partners doing business under the said trade-name above set forth.

Defendants answered by a plea in abatement, the nature of which will be hereinafter shown, and by general denial and special denial under oath of any partnership relation or liability. The plea in abatement was overruled, and upon a trial by a jury the court instructed the jury to return a verdict for the plaintiff, and, such verdict being returned, judgment was rendered accordingly.

The two instruments under which the Noble Oil & Refining Company was organized and its business carried on are attached as exhibits to plaintiff's petition. The first of these instruments, which was executed on the 22d day of May, 1917, by T. J. Noble, W. E. Scott, and W. A. Kuhleman, in its first paragraph recites that T. J. Noble is the owner of oil leases, options, etc., and desires to convey such interests to W. E. Scott, W. A. Kuhleman, and T. J. Noble as trustees, and that they should employ a manager of said properties thereafter acquired, and agrees to divide the beneficial interest therein into shares.

The second paragraph is a declaration that the three named men will hold such property for the benefit of the holders of these shares of stock.

The third paragraph names this association as "The Noble Oil & Refining Company."

The fourth paragraph provides that the trustees named shall hold office until the first annual meeting of the shareholders on June 1, 1918.

Paragraph 5 reads as follows:

"The shareholders shall, at each annual meeting, or adjournment thereof, elect trustees sufficient in number to take the place of those trustees whose terms have expired by limitation, said newly elected trustees to serve for the term of three years next ensuing. In case of the death, resignation, or inability to act of any of said trustees, the remaining trustees shall fill any vacancies for the unexpired term. As soon as any trustees selected by the shareholders or by the remaining trustees to fill a vacancy have accepted this trust, the trust estate shall vest in the new trustees or trustee, together with the continuing trustees, without any further act or conveyance."

Paragraph 6 provides for the acceptance by new trustees of the trust given them by a written instrument.

Paragraph 7 authorizes the trustees to engage in the business of acquiring, buying, selling, and developing oil lands, and refining oil and in any business similar in character thereto which the trustees may deem expedient.

Paragraph 8 gives the trustees the legal title to all property and control thereof.

Paragraph 9 reads as follows:

"The trustees shall have authority to adopt and use a common seal; to make all such contracts as they may deem expedient in the conduct of the business of the trust; from time to time to release, sell, exchange, or otherwise dispose of, at public or private sale, any or all of the trust property, whether real or personal, for such prices either in cash or the stocks, shares or securities of other corporations, trusts or associations, and upon such terms as to credit or otherwise as they may deem expedient; to confer by way of substitution, such power and authority on the president, treasurer, secretary and executive committee, and other officers and agents appointed by them, as they may deem expedient; to acquire, own, sell, or otherwise dispose of such real or personal property as they may deem expedient to in connection with the purposes of the trust; to collect, sue for, receive, and receipt for all sums of money at any time becoming due to said trust; to employ counsel and to begin, prosecute, defend, and settle suits at law, in equity, or otherwise, and to compromise or refer to arbitration any claim in favor of or against the trust; and in general to do all such matters and things as in their judgment will promote or advance the business which they are authorized to carry on, although such matters and things may be neither specifically authorized nor incidental to any matters or things specifically authorized. In addition to the powers herein granted the trustees shall have all powers with reference to the conduct of the business and management of the property of the trust which are possessed by directors of a manufacturing corporation under the laws of the state of Texas."

The tenth paragraph provides that, as far as strangers to the trust are concerned, a resolution of the trustees authorizing a particular act to be done shall be conclusive evidence in favor of strangers that such act is within the power of the trustee.

Paragraph 11 provides for meeting of trustees.

Paragraph 12 gives the trustees power to make, adopt, amend, or repeal such by-laws, rules, and regulations not inconsistent with the terms of the instrument.

Paragraph 13 gives the trustees power to elect annually from their number officers of such association, and then the following:

"The president, treasurer, and secretary shall have the authority and perform the duties usually incident to those officers in the case of corporations, so far as applicable thereto, and shall have such other authority and perform such other duties as may from time to time be determined by the trustees."

The sixteenth and seventeenth paragraphs provide for the acquisition of shares by trustees and the amount of the beneficial interest and number of shares.

The eighteenth and nineteenth paragraphs provide that certificates of stock may be issued and that such shall be transferable.

The twentieth paragraph provides for dividends to be paid.

Paragraphs 22 to 29, inclusive, read as follows:

"(22) Annual meetings for the election of trustees and for the transaction of other business shall be held in Houston, Texas, on the first Tuesday of April in each year, beginning with the year 1917, of which meetings notice shall be given by the secretary by mailing such notice to each shareholder at his registered address at least ten days before said meeting. Special meetings of the shareholders may be called at any time upon seven days notice given as above stated, when ordered by the president or trustee.

"(23) At all meetings of the shareholders, each holder of shares shall be entitled to one vote for each share held by him; and any shareholder may vote by proxy.

"(24) Shares hereunder shall be personal property, giving only the rights of this instrument, and in the certificates thereof, specifically set forth. The death of a shareholder during the continuance of this trust shall not operate to determine this trust, nor shall it entitle the representatives of the deceased shareholder to an accounting or to take any action in the courts or elsewhere against the trustees; but the executors, administrators or assigns of any deceased shareholder shall succeed to the rights of said decedent under this trust, upon the surrender of the certificates of shares owned by them. The ownership of shares hereunder shall not entitle the shareholder to any title in or to the trust property whatsoever or right to call for a partition or division of the same for an accounting, and no shareholder shall have any other or further rights than the rights of a stockholder in a corporation so far as the same may be applicable.

"(25) The trustees shall have no power to bind the shareholders personally, or to call upon them for the payment of any sum of money or any assessment whatever other than such sums as they may at any time personally agree to pay by way of subscription to new shares or otherwise. All persons or corporations extending credit to, contracting with, or having any claim against the trustees shall look only to the funds and property of the trust for the payment of any debt, damage, judgment or decree,...