Gates v. Otis

57 So. 371, 129 La. 1063, 1912 La. LEXIS 1046
CourtSupreme Court of Louisiana
DecidedJanuary 15, 1912
DocketNos. 18,775, 18,927
StatusPublished
Cited by3 cases

This text of 57 So. 371 (Gates v. Otis) is published on Counsel Stack Legal Research, covering Supreme Court of Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gates v. Otis, 57 So. 371, 129 La. 1063, 1912 La. LEXIS 1046 (La. 1912).

Opinion

LAND, J.

On December 22, 1910, the plaintiff sued the defendant as a nonresident of the state of Louisiana, and caused a writ of attachment to issue, under which two local banks were garnished.

Defendant moved to dissolve the attachment, with damages, on the ground that he was a resident and citizen of Lake Charles, Calcasieu parish, La.; and that the affidavit that the respondent was a nonresident was false and untrue to the knowledge of the plaintiff. The motion was tried, and judgment was rendered dissolving the writ of attachment, at the cost of the plaintiff', who thereupon appealed.

Prior to January, 1910, the defendant, with his family, had resided for a number of years in the city of Lake Charles, La., where he conducted a nursery business in the name of his wife. In December, 1909, negotiations began between the plaintiff, a well-known capitalist, and the defendant, looking to the establishment of a .large nursery enterprise near Port Arthur, Tex. These negotiations culminated in the formation, in April, 1910, of a Texas corporation, the Port Arthur Nursery Company, capitalized at $40,000, represented by 400 shares of the par value of $100 each. In the meantime, under a verbal understanding with the plaintiff, the defendant proceeded to Port Arthur and went to work as general manager at a salary of $150 per month. On the organization of the company, defendant received 180 shares of stock, which was paid in by the plaintiff, who took the nine notes of the defendant for $2,000 each, dated December 31, 1909, maturing in five years, and bearing 6 per cent, per annum interest from date. These notes were secured by a pledge of the 180 shares of stock issued to the defendant. Defendant was employed by the company as general manager for the year 1910, and his duties as such required him to live nearly all the time on the premises of the nursery company near Port Arthur. Defendant’s family remained during the year at his usual place of residence in Lake Charles. On December 21, 1910, the defendant sold out his stock in the corporation, and dissolved his connection with the company. On the next morning, his property was attached in Lake Charles. It is true that in December, 1909, and through most of the year 1910, the defendant manifested an intention of becoming a resident gf the state of Texas; but this intention was never carried into effect, and was abandoned before the institution [1065]*1065of this suit. On September 29, 1910, the defendant wired the plaintiff that the situation was unbearable, and requested him to purchase his shares of stock. Later the defendant agreed to sell at $90 per share, and the sale was made, and the proceeds were credited on the notes sued on as of date December 21, 1910. Defendant lived on the premises of the nursery company, because he was the manager of that corporation, and his continued sojourn there was dependent on the tenure of his employment. Had the enterprise proved successful, and the defendant had been retained as general manager, he in all probability would have fixed his permanent residence in ' the state of Texas. Defendant, as it was, maintained his home in the city of Lake Charles during the year 1910, and did not dispose of his business or property in the state of Louisiana. He also paid his poll taxes for the years 1909 and 1910 as a resident of the parish of Calcasieu.

Defendant’s residence in Texas was temporary and uncertain in its nature, and lacked the animus manendi necessary to constitute a domicile or habitual residence. C. C. 38. The Code makes a distinction between residence and domicile; the latter being called “principal establishment,” or “habitual residence.” One may have several residences, but can have only one domicile. The Code of Practice provides that a defendant must be sued in the parish of his domicile.

On December 21, 1910, the defendant sold his stock in the nursery company and resigned his office as general manager. He thereupon ceased to have even a business residence in the state of Texas. The attachment was sued out the next day.

We are of opinion that the writ of attachment was properly dissolved.

Defendant excepted to the action as premature, and demurred to the petition. The exceptions were referred to and tried with the merits. The defendant then answered, admitting his signature to the notes, but pleading want of consideration. For further answer, the defendant averred that the plaintiff contributed the whole capital stock-of the Port Arthur Nursery Company, and had certificates issued to dummy stockholders, in violation of the laws of the state of Texas; that defendant subscribed to 180 shares of the capital stock of said corporation, under an agreement with plaintiff, as agent and promoter, that the payment of said notes would not be exacted from defendant, but that the profits of the concern should be applied to the liquidation thereof; that plaintiff fraudulently turned over to said corporation real property at a fictitious and exorbitant valuation, in lieu of cash, and then loaned the corporation $60,000 to erect its buildings, thereby evading the laws of the state of Texas; that, as alleged part payment of the capital stock, the plaintiff charged said nursery company with $600, paid to one of his personal employés whom he had discharged; that said corporation was never legally organized, and therefore the notes given in payment of stock subscriptions to plaintiff, as agent and promoter, are illegal, null and void, and uncollectible for want of consideration; that, should the court hold that said notes were given to the plaintiff personally, then, in the alternative, the defendant pleads want and failure of consideration, for the reason that plaintiff promised, if defendant would assist him in starting the nursery company and subscribe for stock in same, he would employ him as manager for five years at a salary of $1,800 per annum; that plaintiff would buy the defendant’s nursery stock in Lake Charfifs, La., and Winnie, Tex., valued at $2,500, for the use of said nursery company, and that the plaintiff would carry defendant’s stock in said corporation until the same should be paid out of the profits of the concern; that [1067]*1067defendant was induced by said promises of tbe plaintiff! to subscribe to the stock of the nursery company and to give the notes sued on; that when said company was organized the defendant was given only one year’s employment at the salary fixed, his nursery plants were not purchased, and he became manager only in name; that in the summer of 1910, during the absence of plaintiff in Europe, the defendant was forced to pay, under protest, $540 interest on said notes, despite his aforesaid agreement with the plaintiff; that plaintiff and his private secretary ran the nursery to suit themselves, loaning money to said corporation to build costly improvements, unnecessary and ruinous to the small capitalization of the nursery company, without authority from its stockholders or directors, thereby creating a debt of $60,000; that defendant gladly joined with the other alleged stockholders in agreeing to sell their stock for the purpose of liquidating the corporation, and transferring it to other hands; that defendant made no complaint against the failure to keep the promises made to him when he subscribed to the stock of the nursery company — plaintiff having assured him that he would stand the loss personally due to this method of liquidating the corporation. Defendant, in the alternative, pleaded set-offs in the amount of $540, paid as interest under protest, and reconvened for $5,000, as damages for the illegal attachment of his property.

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Cite This Page — Counsel Stack

Bluebook (online)
57 So. 371, 129 La. 1063, 1912 La. LEXIS 1046, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gates-v-otis-la-1912.