Court Opinion

ID: 5011669
Source: CourtListenerOpinion
Date Created: 2021-10-01 02:51:45.887491+00
Date Added: 2024-06-11T08:17:27.369974
License: Public Domain

On Motion for Rehearing.
Appellants, represented by the Hon. Israel Smith, have filed motion for rehearing in which it is earnestly insisted that the court erred in holding that Bunn’s knowledge of the existence of the oral mortgage in favor of Howell was imputed to the Pyramid Drilling Corporation and as authority therefor they cite Weatherford, etc., Rwy. Co. v. Granger, 86 Tex. 350, 24 S.W. 795, 40 Am.St.Rep. 837, and Godley Lumber Co. v. Teagarden, Tex.Civ.App., 135 S.W. 1109, 1114, affirmed by Supreme Court 105 Tex. 616, 154 S.W. 973.
A careful reading of the above cases will convince one that they are not in point. In the first case the main question involved was the contract made by one of the promoters with Granger whereby Granger was to assist the promoters in securing a bonus for the proposed railway corporation. The question of notice was only incidental. Justice Gaines, speaking for the court [86 Tex. 350, 24 S.W. 797, 40 Am.St.Rep. 837], said:
“Here a proposition was made on behalf of the company, by its promoters, that if a bonus should be subscribed and paid to it, it would build its road between certain points, and would carry coal at a certain stipulated rate. By accepting the bonus, the company became bound to fulfill the stipulations of that contract. That was the burden which it took with the benefit of the agreement. But it also appears that one of the promoters promised the plaintiff that if he would assist in procuring subscribers to the bonus the company would pay him for his services. This was no part of the contract the benefits of which were taken by the defendant. * * *
“ * * * He made his contract before the company had a legal existence as a corporation, with a single promoter; and it is a matter of no moment that the promoter was the general manager of the project, and became the owner of the majority of the stock upon its organization. There were other stockholders. The law requires that there should be 10 at least. Rev.St. art. 4099. The evidence does not disclose that his contract with Anderson was actually known to any other person, nor do we see any other circumstance from which knowledge should necessarily be inferred. Since Anderson had no power to bind the future corporation, but could bind himself, the inference from his assisting Anderson would be that he was acting *254gratuitously, or that Anderson had agreed to pay him. Anderson was interested in shifting his contract upon the company, and it may be doubted whether, although he became a director, notice to him could be deemed notice to the company.”
Thus it is apparent that this case turns on the contract between Anderson and ■Granger. No benefits therefrom accruing to the corporation, it was held not to be bound. And in Godley Lumber Company case cited last above, it appears that while Godley was an officer of the Coleman Lumber Company he sold to said company certain timber lands, an interest in which was claimed by Teagarden. It was held that, “When, however, the officer or agent is personally interested in the transaction adverse to the corporation, as in a sale by himself to the corporation, he is held not to be the representative of the corporation ; and, it being to his personal interest to conceal defects in his title, the presumption that he communicated such defect to the corporation -does not obtain. * * * It is wholly immaterial what official position R. B. Godley held in the Coleman Lumber Company, or how much of the stock he held when he sold the land to the Coleman Lumber Company. His position as vendor was adverse to, and not representative of, the corporation as vendee.” Godley was not the alter ego of the Coleman Lumber Company. “The evidence shows [continues the opinion] that the Coleman Lumber Company was duly organized with a president and secretary and board of directors, and was conducting its business in the usual way, and while so operating its affairs that C. C. Slaughter, Jr., bought $10,000 of stock in that company, and paid that much cash to the company, and became the owner of stock therein equal to the number of shares owned by R. B. Godley.”
The facts in the case at bar show that Bunn alone owned drilling rig No. 3, the total assets of Pyramid Drilling Company, and upon which was issued all its stock. Bunn, of course, knew of his financial arrangements with Howell and of the lien held by Howell against drilling rig No. 3, when he organized the Pyramid Drilling Company and assigned to it drilling rig No. 3. The undisputed evidence in this record establishes that Pyramid Drilling Company was nothing more nor less than the alter ego of Bunn. As before stated, it merely “stepped in his shoes” in all matters respecting drilling rig No. 3. To hold otherwise, in our opinion, would permit one under the circumstances here established to effectively place his property beyond the reach of his creditors.
The motion further asserts that the court erred in holding that the testimony with respect to substitutions, additions, and replacements to drilling rig No. 3 was “in no wise contradicted by any witness.” In reinvestigating this case, we have reread the testimony of both Bunn and Howell with respect to this phase of same, and have concluded that our statement set out above is substantially correct. When all the testimony of these two witnesses is carefully read and considered, no dispute between them arises with respect to replacements, additions and substitutions to said drilling rig so as to keep it intact and in working order.
The other parts of said motion have been considered and are thought to be without merit. Appellants’ motion for rehearing is respectfully overruled.