The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1895-05-09

eft of another party is too well settled t
require the citation of authority. 1t fol
lows that if each corporation in this cast
is to be held for more than its proper
| Tomato amount of the debt incurred, i
must be upon the ground that it haC
power to aid in the prosecution of the
business of the other Did the street rail
way company have such power?
To so hold would be to empower any
business corporation not only to carry or
the very business it was created to prose
cute, but also to engage in every enter
prise which would tend to increase the
volume of its principal business and the
revenues to be derived therefrom. This
would leave the scope of its operations
practically without reasonable limits
That such is not the law. the authorities
already cited clearly show.
The same principles apply to the case
of the Fort Worth City company. The
limit must be laid down as to the implied
powers of corporation; and with refer
ence to company chartered for business
purposes we think the proper line of de,
marcation is between the powers which
are reasonably necessary to the business
or which are usually incident to its prose.
| cutiOn, and those which are not. 1t viii
be observed that the above corporations
were chartered under the general law; and
1t may be that the rule laid down should
not be applied to those incorporated under
| special laws.
(2) The constitution provides that mo
| corporation shall issue stock or bonds
except for money paid, labor done or prop
erty actually received. and all fictitious
increase of stock or Indebtedness shall be
void" (See 6, Art. 10, COM
!, While it may be that it was not the
purpose of this section to require that
the corporation should receive a dollar in
money or in value, for every dollar of in
debtedness created, we should be very
reluctant to hold that it is not essential
to the validity of the bonds as to any
excess that the amount received should
bear some reasonable and just approx
nation to the amount of the indebted
ness. In this case the two cOrpo-
rations. executed joint obligations
and sold them at 95 cents and
divided the proceeds. Neither sold
its bonds on their merits, taking what
they would bring upon the market. We
think they are binding Obligations against
each of the corporations. The liability
of each is in proportion to the amount
received by it. For the excess they re-
ceive nothing either in money, labor or
property
Although the bonds are not binding upon
either company for so much of their
amount as was properly chargable in
the first instance upon the other it does
not follow that they are void as a whole.
There is no fraud in the transaction. A
fair equivalent was given for the bonds.
They We're executed under the mistaken
idea, that, by reason of the benefits which
would accrue to each corporation from the
concurrent prosecution of the two enter
prises, each had the power to extend its
credit in aid of the other. The COM
panies bound themselves jointly and sew
orally, and no good reason is seen why
each should not be held liable for so much
of the Indebtedness as it could legally
have bound itself to pay. QO9 U. S.,
1921
Upon another trial the plaintiffs below
should have Judgment against each of the
companies for such PROPORTION sOf the in
debtedneSs evidenced by the bonds held
by him, as the amount actually received
by such company bears to the amount
paid for the bonds, with a foreclosure
of the mortgage upon the property of
said company. The liability on the bonds
held by the intervenors should be appor
toned in the same manner. The electric
should each have judgment against the
street railway company, but not against
the city company. The judgment is re-
versed and the cause remanded. Opinion
by Gaines, c. j.
John +. Swayne VS.. E. +. Chase ct al.
GarniShment suit to subject insurance
money, the products of Improvements
upon homestead, to the payment of the
homesteader's debts; from Tarrant coun-
ty, Second district.
Defendants in error, husband and wife,
owned and occupied homestead in the
city of Fort Worth. which they insured
to the amount of 100000. The property
thereon was issued by the Phoenix In
surance company. Chase was indebted
to Swayne in the sum of $50, 900, and this
debt had been reduced to judgment
Swayne sued out writ of garnishment
against the Phoenix Insurance company
which answered, admitting the indebted
ness to Chase upon the policy and stating
that it was for insurance upon his home
stead. Chase and wife interviewed, claim
ing that the money due upon the policy
was exempt.
To the plea of intervention. Swayne re.
piled that Chase, being indebted in the
Sull VI NOOO,UUU. anu Dbl0S lDSOlVeUI
with intent to defraud his creditors, es.
pecially plaintiffs invested in the
improvements upon his homestead
the sum of $4,000 with the purpose OF
withdrawing and abstracting an unneces-
sary and unreasonable amount from his
assets, thereby placing the same beyond
the reach of his creditors. That after pay
ing plaintiffs debt out of the insurance
money there would remain $4,000 OF
$4,000, and that said sum was more
than sufficient to erect dwelling in the
place of the one destroyed. The trial
court sustained a demurrer to the supple
mental petition of Swayne and gave judg-
ment for the inventors. The court OF
civil appeals reversed this judgment, hold.
ing that all of the insurance money over
and above a reasonable sum for rebuild.
ing the residence. should be subjected tc
the payment of the debts of intervenOrs
a. Did the alleged fraudulent intent on
on the part of Chase deprive his investment
in the homestead of that exemption from
liability for debt guaranteed by the con
sttutiOn!
This question is definitely answered il
the negative by the case of North VS.
Shearn, 10 Tex, 175. The case cited was
stronger one in favor of the creditor
than is the present one. Here it is moi
cOntended that the money invested by
Chase was acquired from plaintiff, or thai
it was acquired from any one in such 9
manner as to show an intent at the time
to put it beyond the reach of creditors