World Broadcasting System, Inc. v. Bass

322 S.W.2d 390, 1958 Tex. App. LEXIS 2028
CourtCourt of Appeals of Texas
DecidedNovember 11, 1958
DocketNo. 7069
StatusPublished
Cited by1 cases

This text of 322 S.W.2d 390 (World Broadcasting System, Inc. v. Bass) 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
World Broadcasting System, Inc. v. Bass, 322 S.W.2d 390, 1958 Tex. App. LEXIS 2028 (Tex. Ct. App. 1958).

Opinions

CHADICK, Chief Justice.

This is a suit upon a judgment as for debt, and the trial court judgment denying relief is affirmed.

The World Broadcasting System, Inc., a New York corporation, as plaintiff in the District Court of Fannin County, sued Clark Bass, Mary Jane McPheron and joined her husband, Alan B. McPheron, pro forma, all residents of Oklahoma, as defendants to recover the amount of a money judgment such plaintiff had theretofore recovered in a suit against the Bonham Publishing Company, a Delaware corporation, which was dissolved just after suit against it was commenced and before judgment was entered.

The World Broadcasting System, Inc., alleges “that by virtue of V.A.T.S. Articles 1390 to 1934, these Defendants, jointly and severally, became Trustees of the creditors of the Delaware Corporation as the result of their actions herein enumerated to the extent of the property and effects that have and shall come into their hands.” The remainder of the petition pleads facts which it alleges brings the action within the scope of the articles named. The pleadings and relief sought indicate that the benefit of Article 1388 is also sought. While the petition alleges facts, which the trial judge ruled as sufficient to proceed to trial upon, it is clear that fraud is relied upon in part for recovery as shown by this quotation from appellant’s brief:

“All of these actions were but the puppet manipulations by the appellees for they held, and still hold, the strings, including the purse strings, of the dissolved Delaware Corporation and the newly created Texas Corporation. The appellees directed the entire movement whereby the Delaware Corporation became a dummy, emasculated, bankrupt corporate shell to the detriment of all of its creditors in general, and this appellant in particular. These actions by the appellees constituted, were and are legal fraud and were so intended by appellees. All these acts carried out the implicit, expressed, demanding directions and requirements of appellees themselves. It was the hand of Esau but the voice was Jacob’s.”

The suit being in essence upon the theory that such defendants were in fact, if not in name, the President and Directors or Managers of the affairs of the corporation at the time of its dissolution and as such held the corporate assets as trustees for the benefit of creditors and that as stockholders they had in their hands assets of the dissolved corporation sufficient to pay the judgment sued upon.

All parties agreed in the trial court that the evidence raised no jury issue. The facts, as developed by the testimony, exhibits and stipulations of the parties, are rather involved and will be stated in the progress of the opinion only in sufficient detail to make understandable the disposition here made of the case. The defendants below and another who is not a party [393]*393to the suit, as owners of all the capital stock of the Bonham Publishing Company, a Delaware Corporation, entered into a contract with Paul F. Miller to sell all such stock to him. The body of the agreement reads as follows:

“This agreement made and entered into on this 10th day of November, 1954, by and between Clark Bass, Mary Jane McPheron and James D. Stinson, as parties of the first part, and Paul Miller as party of the second part.
“Witnesseth
“That whereas the parties of the first part are the owners of all of the capital stock of the business and corporation known as the Bonham Publishing Co., Inc., of Bonham, Texas. The said Clark Bass, owning 2,000 shares; Mary Jane McPheron 2,000 shares;, and James D. Stinson 3,920 shares,, and
“Whereas the parties of the first part are desirous of selling said stock, and
“Whereas the party of the second part is desirous of purchasing the same.
“Now, therefore, in consideration of the covenants and agreements to be hereinafter set forth and to be performed by the parties hereto as herein indicated, the parties to this agreement agree as follows:
“1. That the parties of the first part do by these presents sell and agree to convey to the party of the second part, or to a corporate entity to be formed by said second party, all of the capital stock of The Bonham Publishing Company, Inc., of Bonham, Texas.
“2. That the party of the second part agrees to pay to the parties of the first part for said capital stock herein above mentioned the total sum of $87,-500, payable as follows to wit: $5,000 cash in hand, the receipt of which is hereby acknowledged and deposited in escrow in the Durant National Bank of Durant, Oklahoma, to be held by said bank, subject to the terms hereof, and, $15,000 in addition thereto, payable upon the closing of this transaction, and the second party further agrees to deliver to the first parties or their order negotiable promissory note in the. sum of $67,500 executed by the corporate entity to be formed by the second party and secured by first chattel mortgage upon the chattels of said new corporate entity, being the identical chattels now owned by the Bonham Publishing Company, Inc. and by pledge of the corporate stock of the new corporate entity to be so formed by said second party.
“3. The parties of the first part agree to sell, and the second party agrees to purchase local accounts receivable held by said Bonham Publishing Company, Inc., calculated at face value less 25 percent and less reserve now set up by Bonham Publishing Company, Inc., for bad debts.
“4. Second party further agrees to pay to first parties actual costs of newsprint on hand on date of transfer and prepaid insurance.
“5. First parties reserve from accounts receivable national accounts now held by said Bonham Publishing Co., Inc.
“6. It is further agreed that the closing date for this transaction shall be December 31, 1954, and second party shall take complete control and possession of said business and corporation on the first day of January, 1955.
“7. It is further mutually understood by and between the parties that the second party herein shall form a corporate entity either in the State of Oklahoma or the State of Texas, which said corporate entity shall take title to the stock certificates as transferred to second party by the first parties here[394]*394in, and second party shall áesolve the Delaware corporation under which said Bonham Publishing Company, Inc. now operates.
“8. It is further agreed that the first party shall convey said stock certificates to the second party free and clear of any and all liabilities of any nature whatsoever including ad valo-rem tax, income tax, social security, withholding tax, unemployment tax, or other tax items to which said corporation shall be subject.
“9. It is further agreed that an inventory shall be made of the assets of said'corporation, the same to be made by an agent of the first parties and the second party with each party hereto retaining a copy thereof.
“10. * * *

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Related

World Broadcasting System, Inc. v. Bass
328 S.W.2d 863 (Texas Supreme Court, 1959)

Cite This Page — Counsel Stack

Bluebook (online)
322 S.W.2d 390, 1958 Tex. App. LEXIS 2028, Counsel Stack Legal Research, https://law.counselstack.com/opinion/world-broadcasting-system-inc-v-bass-texapp-1958.