National Hotel Co. v. Motley

123 S.W.2d 461
CourtCourt of Appeals of Texas
DecidedDecember 9, 1938
DocketNo. 1858.
StatusPublished
Cited by29 cases

This text of 123 S.W.2d 461 (National Hotel Co. v. Motley) 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
National Hotel Co. v. Motley, 123 S.W.2d 461 (Tex. Ct. App. 1938).

Opinion

FUNDERBURK, Justice.

In the trial court, Mecia Motley was plaintiff, and Texas Hotel Company, of Longview, Texas, and National Hotel Company, both corporations, were defendants. The suit is one to recover damages for injuries sustained by plaintiff by jumping from a third story window on the occasion of the burning of the Hotel Longview, on March 29, 1934. The claim of liability was based upon the tort of negligence.

The verdict of the jury upon special', issues submitted, found facts as follows:

That “on or about March 29, 1934, Mecia Motley sustained injury to her body on the occasion, of the fire in question.” That “Texas Hotel Company of Longview on March 29, 1934, was not in good faith running and operating said Hotel. Longview as an independent corporation." That “The Texas Hotel Company of Longview *463 was under the management and control of the National Hotel Company on March 29, 1934.” That “The Texas Hotel Company of Longview was the agent of the National Hotel Company in the operation of the Hotel Longview on March 29, 1934.” That' “the employees of Hotel Longview failed to immediately call the fire department upon discovering that said hotel was afire.” That such failure was negligence. That such negligence was a proximate cause of plaintiff’s injuries. That “upon discovery of the fire by the employees of Hotel Longview that said employees failed to warn the plaintiff.” There was no verdict upon issues submitted calling for findings (1) as to whether such failure to warn was negligence; and (2) whether, if so, such negligence was a proximate cause of plaintiff’s injuries.

It was further found that the “fire originated * * * in the porter’s closet under the stairway on the east side of the lobby.” That “said porter’s closet was under the exclusive control of the Hotel Longview, its agents, servants or employees.” That “there was ^negligence on the part of the management of the Hotel Longview in the operation of said porter’s closet on March 29, 1934.” That such “negligence * * * was a proximate ■cause'of the injuries * * * sustained by Mecia Motley.” That “the management of the Hotel Longview permitted the fire in question to start in the hotel.” That “permitting of the fire to' start, by the management of the Hotel Longview, * * was negligence.” That such negligence was a proximate cause of the injury to plaintiff. That “the starting of the fire on the occasion in question was not the result of an unavoidable accident.” That “the fire in question was sudden and fierce” hut “the suddenness' and fierceness * * * of said fire was” not “the sole proximate cause of the injury * * * to plaintiff * ⅜ *»

Issues of contributory negligence were found in favor of the plaintiff. Damages were found in the sum of $17,680. The appeal is from the judgment, entered upon said verdict.

The first question we find it convenient to consider is whether or not defendant National Hotel Company was entitled to an instructed verdict in its favor, independently of questions affecting alike both the defendants. It was alleged that the National Hotel Company, chartered about May 15, 1933, was the successor to the Southern National Hotel Corporation, the charter of which latter had been forfeited for failure to pay franchise taxes, and that it owned and controlled a majority of the stock of the Texas Hotel Company of Longview. That the directors and incor-porators of the Texas Hotel Company of Longview were officers or directors of the National Hotel Company, or its predecessor, or were employees of the said companies and “the stock of the Texas Hotel Company of Longview is owned and held by the National Hotel Company and that the Texas Hotel Company of Longview was organized and operated as a mere tool or conduit of the Southern National Hotel Corporation originally, and upon its forfeiting its charter rights by its successor The National Hotel Company. That the National Hotel Company and its predecessor, the Southern National Hotel Corporation, received all the revenues derived from the operation of the Hotel Longview, which supposedly was operated by the Texas Hotel Company of Longview, but which in truth and in fact and in reality was operated by the Southern National Hotel Corporation and The National Hotel Company. That the manager, clerks and employees of the Hotel Longview were employed by The National Hotel Company and were assigned to duty at the Hotel Longview. That the Texas Hotel Company of Longview while separately incorporated, was in truth and in fact merely a dummy corporation created and organized by The National Hotel Company and its predecessor for the purpose of holding title to the property known as the Hotel Longview and by the ostensible operation of said hotel, but that in truth and in fact The National Hotel Company and its predecessor actually did control and operate said Hotel Longview through -the medium of its dummy corporation Texas Hotel Company,” etc.

The question at issue involves the applicability to the facts of one or the other of two legal propositions. One is that stated in Davis v. Alexander, 269 U. S. 114, 46 S.Ct. 34, 70 L.Ed. 186, the particular facts there considered involving railway corporations, as follows: “Where one railroad company actually controls another and operates both as a single system, the dominant company will be liable for injuries due to the negligence of the subsidiary company * * A good statement of the other is to be found in the note to Berkey v. Third Avenue Ry. Co., *464 N.Y.; SO A.L.R.' 599, 611, as follows: “It may be stated as a general rule that the fact that a corporation owns the- controlling stock of another does not destroy the identity of the latter as a distinct legal entity, and unless it be shown .that such separate corporate existence is a mere sham, or has been used as an instrument for concealing the truth or perpetrating fraud, or where the organization and control of the subsidiary 'are shown to be such that it is but an instrumentality or adjunct o-f the dominant corporation, no liability may be imposed upon the latter for the torts of the subsidiary corporation.” Without considering the soundness of the first proposition, it is not believed to be applicable here. In order for it to be applicable, it would be necessary for, plaintiff to prove that the National Hotel Company in excess of 'its charter powers was engaged in the business of maintaining or conducting the Hotel Longview. We say, in excess of its charter powers because such, powers were “to subscribe for, purr' chase, invest in; hold, own, assign-, pledge and otherwise deal in, and dispose of, shares of capital sto'ck, bonds, mortgages, debentures-, notes and other securities, obligations, contracts and evidences of indebtedness of foreign or domestic corporations not competing with 'each other in the same line of business.” In other words, its charter powers were limited to those strictly of a holding company. It had no authority to own or conduct a hotel business. If it had had such authority, then facts and circumstances in evidence might' reasonably have been inferred as relating to such ownership or control of the business, which, in the absence thereof, cannot be said to justify any such inference. There was no evidence, we think, to show that National Hotel Company as a corporate entity did own or conduct a hotel business.

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123 S.W.2d 461, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-hotel-co-v-motley-texapp-1938.