Case ID: sw_274/html/0563-01.html
Source: Caselaw Access Project
Author: {"author": "GREENWOOD, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HOWE et al. v. KEYSTONE PIPE & SUPPLY CO., Limited, et al.
    (No. 3858.)
    (Supreme Court of Texas.
    June 24, 1925.)
    1. Joint-stock companies and business trusts <§=>15(1) — 'Trust agreement giving control to shareholders imposed individual liability.
    Under articles of association in form of declaration of trust, shareholders are individually liable for association’s debts, notwithstanding attempted limitation of liability.
    2. Judgment <§=>18(2) — Judgment for interven-ers, without pleadings in their behalf or opportunity to defend, reversed.
    A judgment in favor of interveners cannot be sustained on direct attack on appeal, where seasonably complained of and entered without any pleadings having been filed in behalf of in-terveners, and without plaintiffs in error having been given an opportunity to offer any defense to intervention.
    Error to Court of Civil Appeals -of Second Supreme Judicial District.
    Several actions, consolidated for trial, by the Keystone Pipe & Supply Company, Limited, and others, against J. P. Howe and H. C. Meier and others, wherein numerous additional parties intervened, seeking judgments against defendants. From a judgment of the Court of Civil Appeals (242 S. W. 1091), affirming, as modified, a judgment in favor of plaintiffs and certain interveners, the named defendants bring error.
    Reversed and remanded.
    Melville E. Peters, of Wichita Falls, for plaintiffs in error.
    Bonner, Bonner & Sanford, of Wichita Falls (Albert G. Walker, of Wichita Falls, on the brief), for defendants in error Keystone Pipe & Supply Co.
    W. L. Scott, of Olney, for interveners.
    Kay, Akin & Kenley and Elmer C. de Mon-tel, all of Wichita Falls, for National Steel Co.
   GREENWOOD, J.

Several suits were brought by the Keystone Pipe & Supply Company and others against the New-Tex Refining Company and the New-Tex Pipe Line Company, and against J. P. Howe and H. C. Meier, who were trustees and shareholders in the two companies, to recover the amount of various debts and to enforce liens. The suits were consolidated, and numerous additional parties intervened, seeking judgments against the New-Tex Refining Company and J. P. Howe and H. C. Meier upon indebtedness of the refining company. The trial resulted in a judgment described by the Court of Civil Appeals as “long and intricate,” under which various plaintiffs and numerous interveners recovered judgment against one or the other company and against J. P. Howe and H. C. Meier. From this judgment, Howe and Meier appealed, and the Fort Worth Court of Civil Appeals affirmed the judgment after slightly reforming it. 242 S. W. 1091 to 1098. The writ of error was granted Howe and Meier.

The principal contention of plaintiffs in error, that they should be relieved of personal liability on the contracts of the companies in which they were shareholders, cannot be sustained under the rules announced to-day in the case of Thompson v. Schmitt, 114 Tex. —, 274 S. W. 554, and the opinion in that ease renders unnecessary any further discussion of this contention.

It appears that the judgment complained of by plaintiffs in error awards a recovery to interveners Frances G. Brooks, J. H. Crotty, Eva Mae Womack, Southern Oxygen & Hydrogen Company, Martin’s Book & Stationery Company, and W. P. Pritchard, against plaintiffs in error, on claims aggregating in excess of $2,000, without any pleadings having been filed in behalf of interven-ers when the trial began, and without the plaintiffs, in error having been given opportunity to offer any defense to the intervention. Under these circumstances, the judgment in favor of these interveners cannot be sustained on direct attack on appeal. The error in rendering the judgment for the named interveners was seasonably complained of. Because of such error, the judgments of the District Court and of the Court of Civil Appeals must be reversed, and the cause remanded to the district court.

It is so ordered. 
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