Kelly v. W. C. Turnbow Petroleum Corp.

137 S.W.2d 216
CourtCourt of Appeals of Texas
DecidedFebruary 15, 1940
DocketNo. 5760.
StatusPublished
Cited by5 cases

This text of 137 S.W.2d 216 (Kelly v. W. C. Turnbow Petroleum Corp.) 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
Kelly v. W. C. Turnbow Petroleum Corp., 137 S.W.2d 216 (Tex. Ct. App. 1940).

Opinion

WILLIAMS, Justice.

This is an appeal from a judgment wherein the Special District Court of Gregg County sustained a plea in abatement urged by appellees against the prosecution of this suit because of the alleged pendency of a suit in the 124th District Court of Gregg County. After the perfection of this appeal, judgment in a consolidated suit was entered in the 124th District Court. Appellees further urge the matters involved in this appeal have now become moot. For brevity, the instant suit will be referred to hereafter -as the Kelly suit, the second as the Harris suit, and the consolidated action as the Graddy suit.

A. J. Eilers and R. K. Harris are designated plaintiffs with W. C. Linden, Jr., and Clay Cooke as their attorneys in the Harris suit filed on August 21, 1937, in the 124th District Court. W. C. Turnbow Petroleum Corporation, W. C. Turnbow, W. C. Turn-bow doing business as Turnbow Petroleum Trust, and W. C. Turnbow, sole Trustee, are designated defendants. It is unnecessary to set out the petition, except to note that it alleged Turnbow to have organized and sold a large amount of stock in above-named units and to have invested the proceeds of such sales in numerous mineral interests and other properties, taking title in himself. Turnbow was charged with misappropriation of moneys and properties and other fraudulent acts in handling the assets. All allegations are stated in general terms. This petition sought a full and fair accounting; judgment for such sums and interests as shown to be due; for dissolution of the Corporation and the Trust; and pendente lite for the appointment of receiver.

On July 27, 1939, approximately two years after institution of the Harris suit, the first amended original petition in the Kelly suit was filed, the original petition having been filed July 21, 1939. In this first amended original petition S. M. Kelly, A. R. Hamilton, W. L. Zent, Mrs. Sallie Elliott and husband are designated as plaintiffs, and the parties named as defendants in the Harris suit are here named defendants. This pleading charges various specific acts of embezzlement and misappropriation of corporate and trust funds by Turn-bow, namely: (1) Overdrawing in his personal account $85,000 and a $25,000 item and covering with fictitious credits; (2) illegal issuance of a large amount of corporate stock to himself; (3) production of large amounts of “hot- oil” from the corporate leaseholds and his appropriation of same; (4) acquisition of other specified properties in his own name and shifting title to same; (5) depositing corporate funds in various names; and (6) officers and directors of defendant corporation being Turnbow and members of his family, had refused to call a stockholders meeting or to give an accounting of his or the company’s operations. The-prayer for relief was, in effect, substantially the same as in the Harris suit.

Harris and Eilers were made defendants in a second amended original petition filed August 15th. In a third amended original petition filed on October 16th Eilers and Harris were named plaintiffs together with Kelly and others above set out, all of whom are appellants here. In his third amended original petition Turnbow Petroleum Trust *218 and Turnbow, Trustee, were dropped as defendant, and W. C. Linden, Jr., and Edwin Fulton, attorneys, F. E. Mitchell and the Hon. C. E. McGaw, Judge of the 124th District Court, a pipe line company, and a bank were named as additional defendants. Additional charges of misappropriation by Turnbow were included and other charges which were alleged in the first amended original petition were more particularly detailed. It was alleged in addition that the Harris suit was filed at the solicitation of Linden; that as the result of an agreement with Turnbow to keep it pending on the docket to forestall the institution of litigation by any other stockholder, Linden had taken no steps in the prosecution of the Harris suit; and that in pursuance to the alleged collusive agreement he and Turnbow’s other attorney, Fulton, had cooperated in filing the plea of abatement in an effort to forestall prosecution of the Kelly suit. In addition to the prayer for relief, being substantially the same as in the first amended original petition, plaintiff sought to restrain Linden from further proceeding in the Harris suit, and from pretending to represent Harris and Eilers. The original petition in the Harris suit and each amended petition in the Kelly suit alleges that the plaintiffs therein named were suing for themselves and all minor stockholders similarly situated. W. C. Turnbow and Turnbow Petroleum Corporation on September S, 1939, filed the first and only pleading in answer to any pleadings of plaintiffs in the Kelly suit. This answer was directed to the first amended original petition.

On the hearing held November 8, 1939, to show cause why a temporary injunction should not be in all things granted as prayed for in the third amended original petition, these two defendants pleaded and urged as a defense in bar to the granting of such relief and the further prosecution of the Kelly suit that the Harris suit was filed as a class suit for the benefit of all stockhotders similarly situated which included the plaintiffs in the Kelly suit; that the Kelly suit was a similar action; that the allegations and relief sought in each were substantially the same; that the Harris suit was pending in the 124th District Court and that court had acquired jurisdiction of the parties and subject matter. Subject to this plea in abatement they answered with general demurrer and denial. Appellants in their replication, besides a demurrer, asserted that the Harris suit had been filed without the consent- or authority of the plaintiffs therein named, and if ever lawfully pending, it had been dismissed on August 23, 1939.

The issues were thus joined upon the hearing on November 8th. Appellees in support of their position, the burden of proof resting upon them, offered in evidence from the judgment roll in the Harris suit the original petition; defendants' original answer filed on September 4,1937; another pleading styled defendants’ original, answer and cross-action filed September 1, 1939, by Hancock & Fulton, Attorneys; Cooke’s motion to withdraw and the court’s order dated July 21, 1939, authorizing his withdrawal; application of F. E. Mitchell for leave to intervene,-the court’s order authorizing him to intervene, and his plea o.f intervention, all filed September 5, 1939; the decree of the Hon. C. E. McGaw, Judge, entered on September 8, 1939. This decree recites that on that date came on to be heard the written motions of Harris and Eilers to dismiss; being presented to the court by Cooke and Burke and opposed by Linden, attorney of record for plaintiffs; that these motions to dismiss were signed by Eilers and Harris and filed August 23, 1939; that said motions were secured by one Pelton, not an attorney, and Cooke who did not at thé time represent either.

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Bluebook (online)
137 S.W.2d 216, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelly-v-w-c-turnbow-petroleum-corp-texapp-1940.