Case Name: BOND-REED HARDWARE CO. et al. v. WALSH
Court: Texas Courts of Civil Appeals
Jurisdiction: Texas
Decision Date: 1917-03-21
Citations: 193 S.W. 1148
Docket Number: No. 5827
Parties: BOND-REED HARDWARE CO. et al. v. WALSH.
Judges: 
Reporter: South Western Reporter
Volume: 193
Pages: 1148–1149

Head Matter:
BOND-REED HARDWARE CO. et al. v. WALSH.
(No. 5827.)
(Court of Civil Appeals of Texas. San Antonio.
March 21, 1917.)
1. Conspiracy <&wkey;9 — Acts Constituting Conspiracy — Fraudulent Formation of Corporations.
Where defendants formed two corporations, one to make contracts for goods and rents, and the other to take possession of the goods and use the rented premises, there was a conspiracy to defraud creditors.
[Ed. Note. — For other cases, see Conspiracy, Cent. Dig. § 12.]
2. Appeal and Error <&wkey;880(3) — Right to Allege Error — Codefendant’s Judgment.
In an action for rent, if defendant corporation did not claim damages, judgment against a codefendant’s cross-action did not injure it.
[E'd. Note. — For other cases, see Appeal and Error, Cent. Dig. § 3588.]
3. Corporations &wkey;>542(l) — Transfer by Corporation.
Where a corporation was sued and a receiver for it sought, the attempted transfer of its property to another corporation, apparently organized to meet the exigencies of the receivership, was fraudulent and void.
[Ed. Note. — For other cases, see Corporations, Cent. Dig. §§ 2154, 2159.]
4. Conspiracy <&wkey;13 — Civil Liability of Conspirator.
A party, who was the active agent of two corporations, owned and controlled by him, and operated pursuant to a conspiracy so as to defraud parties who dealt with them, was properly cast in judgment, since where one has conspired with others to cheat and defraud, he will be held liable.
[Ed. Note. — For other cases, see Conspiracy, Cent. Dig. § 14.]
Appeal from District Court, Bexar County; W. F. Ezell, Judge.
Suit by F. T. Walsh against the Bond-Reed Hardware Company and others. From a judgment for plaintiff, defendants appeal.
Affirmed. .
C. A. Keller and W. S. Anthony, both of San Antonio, for appellants. M. E. Buckley and C. A. Goeth, both of San Antonio, Hunt & Teagle, of Houston, and Ball & Seeligson and C. W. Trueheart, all of San Antonio, for appellee.

Opinion:
FLY, C. J.
This is a suit for rents in the sum of $895.10, instituted by appellee against the Bond-Reed Hardware Company, the Bond-George Hardware Company, John H. Bond, H. W. Fuos, H. S. Taylor, and A. E. Staacke, and afterwards the Central Hardware Company. This is a second appeal of this case. 181 S. W. 248.
There was a full hearing on the appointment of a receiver before the former appeal, and the propriety of the appointment was presented and adjudicated on that appeal. It was held that the receivership was properly granted. This court held that the pleadings and evidence were sufficient to justify the appointment of a receiver. The pleadings of appellee were the same on the former appeal as on this, except that a supplemental petition was filed setting up additional rent that had become due, and making an additional party. The first, second, third and fourth assignments of error seek to question the sufficiency of the petition to sustain the appointment of a receiver. That question has been settled by this court, and we see no reason to disturb our former ruling. The sufficiency of the petition to support the appointment of a receiver is too plain for discussion. The allegations are ample, under the statute, to justify the appointment of a receiver. Bond-Reed Hardware Company v. Walsh and authorities therein cited.
The fifth assignment of error is overruled. The supplemental petition alleged a fraudulent sale between the ingeniously devised system of corporations owned and controlled by the same men, and the allegations brought the suit clearly within the provisions of subdivision 1, art. 2128, Rev. Stats.
The evidence clearly indicated that appellants had organized two corporations, one to make the contracts for goods and rents and the other to take possession of the goods and use the rented premises, and it was clearly a conspiracy to defraud creditors, among the number, appellee. The sixth assignment of error questions the finding of fact as to the existence of such conspiracy. We adopt the findings of fact of the trial judge as the conclusions of fact of this court. The seventh and eighth assignments are also overruled.
The ninth assignment of error is without merit. If the Bond-Reed Hardware Company did not claim damages, the judgment against the cross-action did not injure it. The Bond-George Hardware Company and the Central Hardware Company did not make out any case for damages. No man or set of men can organize such a network of corporations and shift possession of goods from one to another as the occasion may require for any commendable purpose. As said on the former appeal by Judge Carl, for this court:
"J. H. Bond was president of both the Bond-George and the Bond-Reed Companies, and when the stock of merchandise was sold by the Bond-George Company to the Bond-Reed Company, J. I-I. Bond was still in charge, and the proceeds of sales was to go to the Bond-George Company. When the Bond-Reed Company sold the stock to J. C. Timberlake, Bond, as president and principal stockholder of both the hardware companies named, remained in charge of all the receipts as well as the stock of goods for the benefit of the Bond-George Company. Timberlake then sold to the Central Hardware Company, a concern which bond says had been chartered, but its charter had not arrived, and he was still in possession for the same purposes he had been all along, and in the same building."
The goods were removed to another building while the former appeal was pending, and when the receiver sought to take pos session of them he was informed that the Central Hardware Company owned the same. The attempted transfer to the Central Hardware Company was fraudulent and void. It seems to have been organized to meet the exigencies of the receivership. The whole scheme was a marvelous system of business prestidigitation.'
The tenth assignment of error is overruled. The testimony showed that the,corporations were but the outward manifestations of J. H. Bond, owned and controlled by him. He was the inspiration and soul of the corporations, and the court properly rendered judgment against him. He and the Central Hardware Company were among the conspirators who had organized to defeat, their creditors, and, as such, judgment against them was proper. The law is that where a man has conspired with others to cheat and defraud he will be held, liable. Jernigan v. Wainer, 12 Tex. 189; Wells v. Houston, 23 Tex. Civ. App. 629, 57 S. W. 584. J. H. Bond Was the active agent in carrying out the plans of the conspiracy.
The judgment is affirmed.
<&wkey;>For other oases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes