Baker v. Arnett

106 S.W.2d 849, 1937 Tex. App. LEXIS 623
CourtCourt of Appeals of Texas
DecidedMay 17, 1937
DocketNo. 4762.
StatusPublished
Cited by4 cases

This text of 106 S.W.2d 849 (Baker v. Arnett) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baker v. Arnett, 106 S.W.2d 849, 1937 Tex. App. LEXIS 623 (Tex. Ct. App. 1937).

Opinion

STOKES, Justice.

This suit was filed March 22, 1935, by France Baker and wife, Leo J. Baker, against Sam C. Arnett, individually and as trustee of an alleged trust, and E. P. Ellwood and W. F. Eisenberg,' as joint independent executors of the estate of W. L. Ellwood, deceased, and George E. Benson, W. O. Stevens, S. G. Wilson, and Paul Hardwick. Plaintiffs alleged that prior to September 7, 1931, they were the owners of 750 of the 1,000 shares of capital stock of the Citizens National Bank of Lubbock, and that it was contemplated that the national bank examiner would require $75,000 of the notes and obligations owing to the bank to be taken out of the assets and charged off. They alleged that they made a contract with the defendants whereby plaintiffs assigned to Arnett, as trustee for himself and the other defendants, the capital stock of plaintiffs in the bank, for which the defendants were to pay par value, the purchase money to be deposited in the bank in a special account to be used by Arnett in purchasing from the bank such notes as were uncollectible. Plaintiffs also alleged that they executed to Arnett as trustee their note in the sum of $75,000 and secured same by $100,000 worth of notes, land, and other property, and that the purpose of the note was to secure the defendants against any loss or assessments that may be made against the capital stock. It also was alleged that the note of plaintiffs, then in the bank, in the sum of $7,850, was included in the notes that would be' so purchased from the bank, and that the notes so purchased, together with the notes and other property placed with Arnett by plaintiffs as collateral to their $75,000 note, would be collected or renewed by Arnett and all moneys collected therefrom, as well as the notes and any renewals thereof not applied to losses, would be held by him for the benefit of plaintiffs and returned to them in the final adjustment to be had between them when the matter was finally closed. They alleged that the $75,000 note was to be payable only in the event the bank should fail, and was for the benefit of the defendants in the proportion of $23,000 to Arnett, $25,000 to Ellwood, $7,500 to Stevens, $5,000 to Benson, $5,000 *850 to Norton Baker, $7,000 to Hardwick, and, $2,500 to Wilson. It was also alleged that the capital stock assigned to Arnett was to be divided between the defendants in the same proportion.

Plaintiffs further charged that the purchase price of the capital stock was not deposited in a special account in the bank as provided by the contract, nor was their note of $7,850 paid, but, on the contrary, they alleged that the purchase price of the capital stock was used by Arnett for his and his codefendants’ benefit to purchase notes and accounts from the ■bank, and that the defendants had failed and refused to make an accounting thereof.

Further allegations were to the effect that the consideration for the $75,000 note had failed; that there had been no failure of the bank, and that the defendants had collected some $40,000 of the securities pledged by plaintiffs, for which they had not accounted, and prayed for an accounting and for judgment against the defendants for such an amount as the court may find to be due plaintiffs, and for cancellation of the $75,000 note.

W. O. Stevens, one of the defendants, died on May 22, 1936, and on June. 5, 1936, the plaintiffs filed their second amended original petition, complaining of all of the defendants except W. O. Stevens, alleging his death, and making his surviving wife, Lillian Stevens, and two sons, L. D. and Bill Stevens, parties to the suit. They alleged also that they did not know whether W. O. Stevens died testate or intestate, and prayed that, in the event an executor or administrator of his estate should be appointed, such executor or administrator be cited to appear and answer.

On January 27, 1936, prior to the death of W. O. Stevens, an answer was filed in behalf of Arnett, Benson, Stevens, Wilson, and Hardwick, consisting of demurrers, exceptions and general and special denials, and, after Stevens’ death, the defendants Arnett, Benson, Wilson, and Hardwick, filed their second amended original answer, containing substantially the same allegations, and setting up what they alleged to be the true facts in connection with the transfer of the capital stock and the execution of the $75,000 note.

The defendants E. P. Ellwood and W. F. Eisenberg, as independent executors of the estate of W. L. Ellwood, deceased, also filed their answer, consisting of demurrers, exceptions, and a general denial.

The cause was set to be tried on June 8, 1936, at which time Ellwood and Eisen-berg, executors, filed suggestion of the death of W. O. Stevens, and alleged that, if the cause were postponed to make the heirs or legal representatives of Stevens parties to the suit, material delay in the disposition of the case would result, and alleged that neither Stevens nor his heirs nor the representatives of his estate were necessary parties to the suit, and moved that the cause be dismissed as to Stevens and his estate, and that it proceed to trial as against the other defendants. Plaintiffs thereupon filed a motion to continue the case in order to make the heirs of W. O. Stevens, as well as his executor or administrator, if one should be appointed, parties defendant, and alleged that Stevens died during the term of court at which the case was being called for trial; that he left a will disposing of his property; that before his death he was a necessary and indispensable party, being one of the obligees and beneficiaries in the transaction forming the basis of the suit, and that the defendants were sued jointly and severally for an accounting and for judgment for moneys collected on assets removed from the bank and converted by the defendants.

The defendants Arnett, Benson, Wilson, and Hardwick, filed a motion, praying the court to dismiss the suit, alleging that the Stevens heirs and representatives were not necessary parties to the suit, and the trial court, after hearing the evidence upon the various motions, granted the motion of the defendants Ellwood and Eisenberg to dismiss W. O. Stevens and his surviving wife and children from the case, overruled the plaintiffs’ motion for continuance, and called upon the plaintiffs for an announcement of ready for trial. Plaintiffs’ counsel announced to the court they would not proceed with the trial of the case against the remaining, defendants, and thereupon the defendants’ motion to dismiss the cause was granted, and the cause dismissed for want of prosecution, to which the plaintiffs excepted and gave notice of appeal and have perfected their appeal to this court.

The case is presented here upon three assignments of error which complain of the action of the court in overruling plaintiffs’ motion for continuance and in separating the cause of action against the *851 Stevens heirs and representatives from that against the remaining defendants, and in dismissing the case upon the motion, taking the position that the latter were necessary parties and that the case could not proceed without them.

The law is well settled in this state that all parties to a contract, the validity of which is brought into question, or where specific performance is sought, are necessary parties to the suit, and, unless they are all before the court, no final judgment can be entered and the court has no jurisdiction to consider and determine the issues involved.

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392 S.W.2d 377 (Court of Appeals of Texas, 1965)
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Cite This Page — Counsel Stack

Bluebook (online)
106 S.W.2d 849, 1937 Tex. App. LEXIS 623, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baker-v-arnett-texapp-1937.