Court Opinion

ID: 9830699
Source: CourtListenerOpinion
Date Created: 2023-09-01 20:24:13.250983+00
Date Added: 2024-06-11T07:43:25.827729
License: Public Domain

On Motion- for Rehearing.
The contention in appellants’ motion for rehearing that the acreage covered by instruments obtained by • defendant, G. ' J. Thomason, from persons other than plaintiffs on the same date aggregated 2,602 acres instead of 1,566 acres, as stated in the original opinion, and that the acreage covered by instruments thereafter 'obtained by the defendant aggregated 673 acres instead of 593 acres, as recited in the opinion, isl not sustained by that portion of the statement of facts cited by appellants. But, in the interest of entire accuracy, we will say that the number of tracts first procured, exclusive of the tract in controversy, was nine instead of six, as recited in the opinion, although there were but six owners of those tracts. >
In our opinion on original hearing it was said that plaintiffs alleged in their petition, in substance, that in order to induce *622them to execute the instrument in controversy the defendant represented that a certain corporation known as the Diamond Coal, Oil & Gas Company had large financial assets sufficient to develop the mineral resources, and especially the coal, which it was believed, existed in the vicinity of plaintiffs’ land. That statement of plaintiffs’ allegations was correct as far as it went, but in addition to those allegations, and in connection therewith, it was further alleged in the alternative as follows:
“Or he represented that such a corporation would he formed, and that when formed the same would have large financial responsibility and great financial assets, sufficient to develop the mineral resources, and especially the coal which he believed to exist in said community.”
And the opinion on original hearing is now corrected to show such additional allegations in plaintiffs’ petition.
The fifth special exception to the petition, found in defendant’s answer thereto, reads as follows:
“Eor his fifth special exception this defendant says that plaintiffs’ said petition is insufficient in that their allegations in reference to the alleged fraud practiced upon them by alleged representations on the part of this defendant concerning the organization of a corporation, because such allegations are indefinite, uncertain, vague, and not understandable, in that the said plaintiffs do allege in one breath that such representations were to the effect that such a corporation had already been organized, and in the next breath the allegation appears that such a corporation was to be organized, and the exception of this defendant to said petition is that he is entitled to notice by said pleadings of which form of the dilemma plaintiff will take in the trial of the case. In other words, he must elect whether he will say upon the trial that the defendant represented that said corporation had already been organized or whether he will say that he represented that it would in the future be organized.’1
The order of the court upon that exception sets out the exception in full and concludes as follows:
“And the court, having heard and duly considered said special exception, is of the opinion that the law is against the same, and therefore the defendant’s fifth special exception to the plaintiff’s second amended original petition is hereby in all things overruled, to which the defendant then and there in open court excepted.”
In their motion for rehearing appellants, after referring to the alternative allegations in the, petition noted above, said that — .
“Said exception was sustained by the trial court, which, however, required and permitted plaintiffs to elect upon which of said alternative allegations they would stand and rely, and plaintiffs thereupon elected to stand, upon the allegations to the effect then represented to plaintiffs that such corporation would be created in the future, and that, when so organized, it would have such large financial assets,” etc-.
The correctness, of the statement just quoted from the motion is refuted by the order of court, copied above, and we are cited to. no other order in the transcript to sustain it, and have found none. Nor have we found-in appellants’ brief any assignment of error to the ruling of the court on the exception-to the petition shown above.
It is also asserted in the motion for rehearing that after the exception to the petition was sustained—
“and in the trial of the case the evidence was accordingly restricted to such representations concerning the future, and the trial court admitted no evidence showing or tending to show that defendant then represented to plaintiffs that such corporation then already was in existence and had large financial assets. In other words, the case was actually tried with "-the view and upon the theory that the allegations of the plaintiffs concerning such representations relative to such large financial assets were prospective and promissory only, and were not representations as to the existing facts and conditions.”
We have found in the transcript and have been cited to nothing indicating any exclusion by the court of evidence to sustain any of those allegations in the petition, in addition to which we find the trial court submits to the jury the following special issue, in which all of plaintiffs’ allegations of fraud were included, and in the charge the jury were told:
“You will have with you for your considera,tion the pleadings in the case, and you will consider the same for a full and complete-statement of all of the issues in this case, but you cannot consider them as evidence.
“Issue 1. Did the defendant, G..I. Thomason, by means of fraudulent representations, induce the plaintiffs to execute and deliver the written mineral lease which was offered in evidence in this case, as alleged by the plaintiffs? Answer ‘Yes’ or ‘No.’ ”
The jury answered the question “Yes.”
The plaintiff S. J. McEntire testified in part as follows:
“I will state to the jury just what Mr. G. J. Thomason stated to me when he came to secure this purported contract, just as near as I can. I had a form of contract drawn up there that he read to me and explained to me about it. He said that he was around getting parties to enlist into a company and wanted to get hold of some lands to operate on and he went on and told us as to what their intentions were. He said that the company wanted the lands to operate on to develop the country, and to work on, and that all that would go in with him, that would really have their lands leased and would go in as part of the company and the lands — the stock that we was to get in the company would be $5, a share in the company to the acre, $5 to the acre, and we would go into them; when it was developed *623each man drew in accordance to what he had invested in the company, the stock that he held in it. * * *
“Relative to what he said about this company as to whether or not it was organized or was going to be organized, it seems like his statement was that it was to be organized, this company, that all that went into it was a part of the company — all that taken stock in with him was a part of the company. He said the -capital stock of the company was $700,000.
“Relative to what he said about what property they would have resources or capital to develop the country, well, there was to be a sum set apart, but Just exactly what that sum was I could not say, that was to be set apart for the development of the country.
“With regard to what he said about these leases that he was securing there about turning over these contracts to this company that was to be organized, he said the stock would be transferred into the company; I mean the leases would be transferred to the compa-4s ♦
“I believed the statements that he made to me about what was going to be done and about the organization of this company. I supposed he would do what he said. The promises that he made and the statements that he made there induced me to sign this purported contract. I hesitated at first. I told him we had our little place and had just got it paid out and we didn’t wish to get entangled into anything at all, and he said more was the reason that I should go in, being in my condition, that in a short time it would enable me to live independently, and I had nothing to risk at all and all to gain. He said I risked nothing at all. That I was putting up what I had against their capital and' means to operate. As to whether or not I called his attention to the fact that I was blind, I never told him anything about that. I hesitated to sign the agreement. I told him I didn’t care to go into anything of the kind, that I did not know anything about it and that I was illiterate, unlearned, and a poor man and I didn’t want to get my little place entangled in anything at all. He knew X was blind. I never told him anything about it that I remember. I was blind, and he knew I was blind before he came.”
The statement of facts fails to show any testimony from G. J. Thomason, or any other witness, contradicting that testimony of S. J. McEntire. Furthermore, appellants’ only assignment of error to the first issue submitted by the court does not present the contention embodied in the special exception above. That assignment reads as follows:
“The court erred in overruling defendant’s objection to the first special issue submitted, the same being found in subdivision 1 of the objections made to the court’s charge, this objection being in words and figures as fodpws: ‘Defendant objects to the first special issue submitted for the reason that there is no evidence to authorize the submission of said issue, and for the further reason that the court does not define nor instruct the jury what fraudulent representations are referred to in said first special issue, and because, further, the answer of said special issue in the affirmative would not justify or support any judgment in favor of the plaintiffs, because it would not show that the plaintiffs relied upon said representation and believed the same to be true, and bécause, further, it is shown by the positive testimony of the- plaintiff that he did not rely upon said representation, but testified only upon insistent examination by his counsel that he supposed the same was true.”
It is insisted that there was no evidence to show that on August 18, 1909, when the instrument in controversy was executed, the Diamond Coal, Oil & Gas Company had then been organized or chartered, and hence there was no proof to sustain the allegation to the effect that it then had no assets. And in this connection the following is said in the motion for rehearing:
“Parenthetically to this assignment, may we not suggest that on August 18, 1909, the Diamond Coal, Oil & Gas Company had not1 been organized or created, and that its articles of incorporation had not been filed, and that said articles of incorporation were filed subsequently, and that tbe charter of said corporation was granted by the state of Arizona at a still later date, to wit, August 24, 1909.”
But the motion contains no reference to any evidence in the statement of facts to support that statement, and we have found none; hence we decline to give it any weight. Moreover, it was immaterial to plaintiffs’ right of recovery that the fraudulent scheme alleged consisted of misrepresentations by the defendant of his intention to organize and charter a corporation which would have large financial assets, to be used in the development of the mineral resources of the land, rather than that such corporation had been already formed and then possessed such assets, if such representations were made with intent to deceive and defraud plaintiffs and with no intent to perform such a promise.
It is insisted further that this court erred in holding that the evidence showed that the stock oi the Diamond Coal, Oil & Gas Company is practically worthless, and that we were in error in the statement that the defendant, G.. J. Thomason, now holds in trust for the Diamond Coal, Oil & Gas Company an undivided one-third interest in the leases obtained by him from plaintiffs and the other landowners in that vicinity. The testimony of plaintiff McEntire was to the effect that the Diamond Coal, Oil & Gas Company had nothing that he could learn of. It was shown without controversy .that none of the leases, or any interest therein, have ever been transferred to that company. Appellant G. W. Thomason, one of the inter-veners herein, testified on the trial as follows:
“So far as I know, there has never been any transfer of these leases to the Diamond Coal, Oil & Gas Company. I have no knowledge of *624that at all. Relative to what the assets of the Diamond Ooal, Oil & Gas Company, it had whatever interest, according as X understand it, that they had this property that went in as part of those assets. I do not know of anything else that it had.”
Portions of the testimony of G. J. Thoma-son given on the former trial as shown in the stenographer’s transcribed notes were read. He testified in part as follows.
“X have never transferred out of my name the leases or mineral rights. They still stand in my name. I have never transferred any of that to the company. * * * I own about 500 — about 640,000 or 625,000 shares of the stock of the Diamond Ooal, Oil & Gas Company. The entire capitalization of the company was $700,000. I paid quite a bit for that 625,000 shares of stock in the company.”
Examined by the court:
“If I understand what you mean, I paid no cash consideration for it.
“Q. What did you pay for that 625,000 shares that you got from the Diamond Ooal, Oil & Gas Company. A. At the time of the organization, right at that time?
“.Q. What did you pay for it at the time you came in possession of it? A. Well, there was development work that was to be one of the means of payment. That was to be paid. That was a part of my obligation. With regard to whom I paid that, I paid that to the development work, the development of this stock.
“Q. Well, who did you pay it to? A. That was the obligation I taken on myself that I was to do that. When we organized, $700,000 was the amount of shares of the capital stock of this corporation. This was the paid up capital stock. X do not know what that 700,000 shares,• capital stock was paid in; I don’t ge't your meaning, Judge. Relative to what we paid to get that charter when we organized this corporation, that was not organized in this state, and under the laws of Arizona we simply pay for the charter and organization. I do not remember how much we paid for the charter. As to whether or not I could give you some idea of what was paid for the charter, I do not remember. About $100, I judge, was the amount. That did not constitute what was paid for the 700,000 shares of stock. Relative to what else I paid for the $700,000— 700,000 shares of stock in the beginning — well, in the beginning the stock was not considered to be worth much. I never considered that the stock amounted to practically nothing. That stock was a representation of each man’s interest in the proposition. * * * As to whether or not I considered the stock worth nothing, well in one sense I did not consider the stock as being worth very much. Of course it was worth something yet at that time we did not consider that it was worth a great deal. With regard to what it was worth, that taken as a representative, I would say between five or ten dollars.”
[7] We have found no other evidence in the record as to the value of the stock, and we think the testimony quoted amply supports the conclusion reached that the stock in the Diamond Goal, Oil & Gas Company, which, plaintiffs received for the lease in controversy, was and.is practically worthless. There was no other evidence to show a single transaction by the officers of the corporation, or that it has kept up its legal existence, or that it in fact owns a single dollar of assets. If the corporation is not defunct, or if it owns any assets whatever, such facts are positively within the knowledge of defendant, who holds practically six-sevenths of the stock, and he should have made proof of such facts, if any, to rebut, to say the least, the prima facie showing of an entire lack of assets, or else defendant should have shown some reason why he could not produce such proof. The defendant, G. J. Thoma-son, further testified as follows:
“Relative to whether or not I own these mineral rights now, they are held, in trust by me.
“Q. Do you own these mineral rights personally? Answer that question ‘Yes’ or ‘No.’ A. I own my interest in it. The interest that I have in the mineral rights of the McEntire land in this one case would be designated by the amount or between that part of the land;would be the pro rata to the whole and to the amount of stock that Mr. McEntire owns as to the whole amount of the stock of the corporation.”
We construed the first statement in connection with the further answer of G. J. Thomason,, quoted, to mean that he now holds the unsold one-third interest in the leases mentioned above in trust for the Diamond Ooal, Oil & Gas Company. However, appellants now insist that that conclusion was incorrect. As to this, it is sufficient to say that, if our construction of that testimony was incorrect, the error was certainly more favorable to the defense urged against the allegations of fraud, which the jury sustained.
Appellants’ motion for rehearing embodies a quotation from briefs filed by McEntire on the former appeal to show error in the recitals in the opinion on this appeal to the effect that plaintiffs’ pleadings upon which the case was first tried contained no allegation of a promise by defendant to convey the lease in controversy to the Diamond Ooal, Oil & Gas Company. Appellants do not quote from the pleadings, a copy of which is on file in this court, and presumably the original one on file in the trial court, but from an assignment of error appearing in the briefs. To copy those pleadings in full in this opinion would unduly lengthen it. We have again examined them, and find that they sustain what we said in our original opinion on this appeal.
Another criticism of the original opinion on this appeal is as follows:
“The Court of Civil Appeals erred in finding and in holding and in declaring in its opinion that the written conveyance of August 18,1909, from plaintiffs to defendant, G. J. Thomason, *625embodied a clause reading: ‘Reserving, however, to the heirs of first party their proportionate part of cash dividends’ — the corresponding clause in said conveyance being in fact as follows: ‘Reserving, however, to the parties of the first part their proportionate part of the cash dividends.’ In other words, instead of the word ‘heirs,’ said conveyance uses the word ‘parties.’ In reply to that criticism, we will say that the instrument in controversy was copied in full in the opinion, and, as copied, shows the exact language: ‘Reserving, however, to the parties of the first part their proportionate part of the cash dividends,’ ” etc.
And in no part of the opinion have we been able to find any statement to the contrary. But, even if there had been, the language of the instrument itself would control.
The statement in the original opinion that the evidence showed that defendant, G. J. Thomason, was a boarder in plaintiffs’ home when the instrument in controversy was executed was erroneous, and it is withdrawn. But plaintiffs both testified without contradiction that he boarded with them when the development work on the Ham lease was in progress, under the defendant’s direction and management. Plaintiffs’ confidence in defendant at that time bore more materially upon the issue of plaintiffs’ failure, sooner to discover the fraud alleged, which was involved in the defense of limitation.
We adhere to the conclusions reached that the evidence amply supports the findings of the jury on the issues heretofore discussed, and are of the opinion that upon those issues the judgment of this court heretofore rendered was correct, irrespective of the further finding by. the jury that the rights originally acquired under and by virtue of the instrument in controversy have been abandoned; and the merits and effect of which finding, under the pleading upon which it was based, therefore, will not be determined, because unnecessary.
The motion for rehearing embodies 93 grounds, in addition to which, appellants have filed two separate .typewritten arguments, one of 28 pages and the other of 14 pages, and in one of the written arguments it is said:
“It is very apparent from the findings, conclusions, statements, and remarks of this court in its opinion in this case that this court has dipped its brush into the wrong coloring and given to the facts in this case a coat of coloring which they do not deserve. We earnestly insist that this court carefully review this case and correct a number of its findings which will hereafter be pointed out in the different parts of the court’s opinion.”
In order to properly answer that criticism, we have been compelled to make these conclusions much longer than is usual in disposing of a motion for rehearing. But the unusual length has been caused chiefly .by a plain violation on the part of appellants’ counsel of rule 31 (142 S. W. viii), governing procedure in the Courts of Civil Appeals, which 'requires that statements of proceedings shown in the record shall bfe made faithfully and upon the professional responsibility of the counsel who makes them; and it is apparent that the violation of that rule was due to the failure of counsel to carefully ■study the record as they should do, before indulging in such criticism of this court.
The motion for rehearing is overruled.