Donoho v. Carwile

214 S.W. 553, 1919 Tex. App. LEXIS 918
CourtCourt of Appeals of Texas
DecidedMay 10, 1919
DocketNo. 7886.
StatusPublished
Cited by12 cases

This text of 214 S.W. 553 (Donoho v. Carwile) 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
Donoho v. Carwile, 214 S.W. 553, 1919 Tex. App. LEXIS 918 (Tex. Ct. App. 1919).

Opinion

RASBUKY, J.

The plaintiffs in error, C. D. Donoho, P. K. Thompson, A. S. Laird, and E. G. Senter, filed this suit in the court below against the defendants in error, W. L. Carwile, S. J. McFarland, Edwin Hobby, and the Interurban Land & Development Company, a private corporation. For the sake of brevity, they will be hereinafter alluded to, respectively, as plaintiffs and defendants; that being their positions in the trial court.

The suit was grounded upon eight promissory notes executed by the defendant Interurban Land & Development Company, dated June 13, 1913, each for the principal sum of $1,562.50, bearing 8 per cent, per annum interest, payable semiannually, providing fox-10 per cent, attorney’s fees in case of default in payment of interest or principal, and secured by a secondary vendor’s lien .upon 200 acres of land in Dallas county, conveyed by plaintiffs to the Interurban Land & Development Company, in part payment of which the notes were executed. Liability against defendants, other than the Interurban Land & Development Company, which was alleged to be insolvent, was based on the allegation that they had subscribed to stock in the corporation which they had not paid, and as a consequence were responsible to plaintiffs as creditors of the corporation *555 to the extent of such subscriptions, which in the case of defendant Carwile was $8,000, of defendant Hobby $4,000, and of defendant McFarland $2,500. Liability for the further sum of $1,866 was alleged on the ground that when defendant Interurban Land & Development Company purchased plaintiffs’ land, acting by said Carwile, it withheld from the cash consideration said amount, which represented interest about to mature on the first lien notes and for which plaintiffs were responsible, and which amount it is alleged Carwile, with the assistance of Hobby and McFarland, appropriated to his personal use. Further liability was charged against Carwile personally on the ground that he had converted $3,000 of the funds of the defendant Interurban Land & Development Company to his personal use. On the ground stated, prayer was that defendants be compelled to contribute to the payment of plaintiffs’ debt to the extent in whidh their liability was shown. The foregoing are the general grounds upon which liability for the debt was sought to be charged against defendants. -The facts and circumstances which brought about the alleged liability are particularized in the pleading. They are not stated here, for the reason that they will be included in our statement of the facts. • Defendants generally and specially denied the allegations of plaintiffs’ petition, and further specially averred a compromise and settlement of all differences between the parties.

Trial was by jury to whom special issues of fact were submitted by the court at the request of both parties. Upon the answers of tbe jury thereto, judgment was for the defendants, from which this appeal is prosecuted.

The salient and controlling facts, all conflicts being resolved in support of the verdict of the jury, stated in our language are, in substance, briefly these: W. N. May-field of Dallas conceived the organization of a corporation for the purpose of acquiring two adjoining tracts of land in Dallas county, which he believed could be subdivided and sold in small tracts at a profit. One of the tracts, consisting of 200 acres, was owned in common by the plaintiff who understood Mayfield’s plan. The other tract contained 110 acres and was owned by Ed S. Lauderdale. In time Mayfield commenced negotiations with plaintiff Laird, who, in conjunction with plaintiff Senter, represented the other owners of the 200-acre tract. About the same time Mayfield sought the assistance of the defendant Carwile, advising him of his plan and that he believed plaintiffs’ tract could be bought for $200 per acre, an advance of $10 per acre over what they paid for it, and that the Lauderdale tract could be bought for approximately $9,000 and the two tracts, sold to the proposed corporation for $200 per acre. To induce Car-wile to interest himself in the plan, May-field offered him one-half of whatever profit was realized in the purchase of the Lauder-dale tract and its sale to the corporation, if Carwile would advance the cash payments necessary tp acquire same. Mayfield finally purchased the Lauderdale land for $7,500, taking deed in his name; Carwile, 'however, advancing the cash payment of $1,500. May-field also had -a tentative agreement with plaintiffs to purchase their tract at $200 per acre. At this point Mayfield set about securing subscriptions to the capital stock of the proposed corporation, by securing sub seriptions in the usual way. All money so collected was deposited with Edwin Hobby as trustee. The subscription -lists recited, in substance, that it was the purpose of those signing to organize a corporation capitalized at $27,500 to purchase a tract of 310 acres of land at Fowler station on the Dallas-Fort Worth Interurban Railway, nine miles west of Dallas, the price of the land to be $200 per acre, or a total of $62,000 for the 310 acres; the capital stock of the company to represent the first cash payment thereon.

Ultimately, as a step towards the culmination of the plan, Mayfield, and plaintiffs, conveyed the respective tracts of land to Edwin Hobby;- the deeds reciting that the land was to be held by Hobby in trust pending incorporation of the Interurban Land & Development Company and to be conveyed to that concern upon the consideration recited therein upon proof of its incorporation. Subsequently, those interested conferred for the purpose of preparing and executing articles of incorporation, at which time it developed that sufficient cash subscriptions had not been obtained to authorize incorporation. To overcome the difficulty, all present agreed that Carwile should deliver to Hobby, the trustee, his check for $14,000 in Order that Hobby as trustee could make affidavit that there was deposited with him a sum in excess or amounting to 50 per cent, of the authorized capital stock of the proposed corporation, with the understanding that when the corporation was enfranchised it should repay Carwile the money so paid and assume the Lauderdale mortgage on the tract sold to Mayfield and issue stock for the balance of the purchase price. After the understanding just related, articles of incorporation were prepared under professional direction of plaintiff Senter. Those named as directors were W. L. Carwile, W. N. May-field, E. G-. Senter, Cecil T. Casey, J. C. Everett, J. V. Dupies, and Edwin I-Iobby. Attached to the articles was a list containing the names of the subscribers and the amounts of their respective subscriptions, aggregating $30,000, together with the affidavit of W. N. Mayfield, W. L. Carwile, and *556 E. G. Senter, reciting, in substance, that of the $30,000 of subscriptions $28,000 had been paid, and that the directors named therein all resided in Dallas county, Tex.; also, the affidavit of Edwin Hobby, reciting that there was deposited with Mm as trustee for the proposed corporation in excess of $15,000. On the list of those having subscribed and paid for stock was Edwin Hobby $4,000, S. J. McFarland $3,000, E. G. Senter $1,000, W. D. Carwile $8,000, paid $7,000, W. N. Mayfield $2,000, paid $1,000.. Hobby and Me-Earlandt subscribed at the solicitation of Carwile to stock on condition that Carwile would relieve them from liability at their option.

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Bluebook (online)
214 S.W. 553, 1919 Tex. App. LEXIS 918, Counsel Stack Legal Research, https://law.counselstack.com/opinion/donoho-v-carwile-texapp-1919.