Court Opinion

ID: 3907876
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:37:04.045347+00
Date Added: 2024-06-11T13:52:21.193298
License: Public Domain

On Motion for Rehearing.
Appellees' able counsel has presented to this court a motion for rehearing, *Page 698 
which has been given careful and earnest consideration, and our conclusions thereon will now be briefly stated.
The motion presents what is termed four assignments of error, the first of which charges that it was error for this court to hold that, unless appellees specifically challenge the several facts set forth in appellant's brief as undisputed facts, this court would accept them as part of its findings of fact. The action of this court in that regard finds support in Rules 40 and 41 (142 S.W. xiv), prescribed by the Supreme Court, regulating procedure in the Courts of Civil Appeals. Besides, with one or two immaterial exceptions, the statement referred to is correct.
The second assignment reads as follows:
"This court erred in holding that the trial court's finding of fact that the Rumely Products Company prosecuted a fictitious appeal from the second judgment in Moss' favor is not supported by legal evidence; and in holding that, as on the second appeal this court refused to award 10 per cent. damages for delay in prosecuting such appeal, such question is now stare decisis, and this court is now precluded from holding differently."
A reading of our former opinion will show that, while reference therein is made to the fact that on the former appeal this court refused to award 10 per cent. damages, upon the ground that that appeal was being prosecuted for delay, we did not hold that the fact referred to made applicable the doctrine of stare decisis. Appellant was not a party to that litigation, and we concede that the ruling referred to, while a circumstance to be considered, should not be construed as precluding appellees from showing that the former appeal was prosecuted by the former appellant for the purpose of defrauding T. H. Moss, under whom the appellees claim.
The motion and argument in support of it do not present any new facts shown by the record to support the claim that the appeal of the Rumely Products Company was fictitious and fraudulent. The point is stressed that the Rumely Products Company, in prosecuting that appeal, used the same briefs they had filed on the former appeal, and that they made no motion for rehearing, and did not make application to the Supreme Court for a writ of error. It is claimed that this shows that the appeal was not prosecuted in good faith. But this does not follow. As to submitting the case upon briefs filed in the former appeal, the record shows that that was done by an agreement of the parties, by which the appellee in that case, as well as the appellant, had the right to use his briefs in the former case.
Other cases have been decided by this court, and no doubt by other intermediate appellate courts, in which no motions for rehearing were filed and no application was made to the Supreme Court for a writ of error, although that court had jurisdiction to revise the judgments rendered by such intermediate courts. Furthermore, appeals are sometimes taken merely for delay, because it is not convenient to pay the debt at that time, and not with any ultimate purpose of defeating such payment. Such an appeal renders the appellant liable for 10 per cent. damages. But such liability, or even a judgment therefor, does not establish the fact that the appeal was prosecuted for the fraudulent purpose of ultimately defeating the plaintiff in the collection of his debt.
The third assignment in the motion assails our holding that there was no evidence in the record to show that appellant participated in or had knowledge of the alleged fraud of Jones, who was formerly the agent of the products company, and subsequently the agent of appellant after it purchased the property of the products company at the sale made by order of the bankruptcy court.
No evidence is pointed out as showing such knowledge by appellant, or participation in the alleged fraud. The supporting argument is based upon the proposition that Jones was state manager of the products company up to the time of the bankruptcy proceedings; that he was subsequently appointed by the bankruptcy court as ancillary receiver of the property in this state belonging to the products company; and thereafter became the Texas manager for appellant, who purchased all the property belonging to the Rumely Thresher Company at the bankruptcy sale referred to; that Jones sought to defraud Moss, by his failure as ancillary receiver to report Moss' claim to the bankruptcy court.
The appeal referred to was perfected on October 22, 1915, which was not only prior to appellant's purchase of the property of the products company, but prior to the action of the bankruptcy court in ordering its sale. While appellant obtained its charter in the state of New York in September, 1915, it did not obtain its permit to do business in Texas until December 20, 1915, and Jones transacted no business as its agent until after that date; and therefore, whatever he may have done, or whatever knowledge he may have acquired prior to that time, cannot be imputed to appellant. In this state, the doctrine of imputed notice by which notice to an agent is imputed to his principal is limited to notice or knowledge acquired by the agent while engaged in the transaction of his principal's business.
Upon that subject, we quote as follows from the opinion of Chief Justice Gaines, in Texas Loan Agency v. Taylor, 88 Tex. 49, 29 S.W. 1058:
"Whether knowledge which an agent has acquired in a business other than that of his principal can be imputed to the principal, is a question upon which there is a conflict of authority. In Kaufman v. Robey, 60 Tex. 308 *Page 699 
[48 Am.Rep. 264], the doctrine is announced that the principal is not chargeable with such knowledge. We think this the correct rule. In Irvine v. Grady, 85 Tex. 120 [19 S.W. 1028], we held that the doctrine that notice to the agent is notice to the principal does not rest upon the theory of the legal identity of the two, but that it should be `placed upon the ground that, when a principal has consummated a transaction * * * through an agent, it is contrary to equity and good conscience that he should be permitted to avail himself of the benefits of his agent's participation without becoming responsible as well for his agent's knowledge as for his agent's act.' Since the principal, if he had conducted the transaction for himself, would in all probability have ascertained the facts which came to the knowledge of the agent in making the transaction, he should not be allowed to avail himself of the circumstance that he acted through an agent, and to say that, although his agent was affected with notice, he acted in good faith. This principle only applies where the agent acquires his knowledge in the transaction of his principal's business; and we therefore think that the doctrine of imputed notice should be limited to cases of that character."
If Jones possessed any knowledge of an attempt to defraud T. H. Moss, under whom appellees claim, the record utterly fails to show that he acquired such knowledge in the transaction of any business on behalf of appellant; and therefore, under the doctrine which prevails in this state, as announced in the case just referred to, such knowledge cannot be imputed to appellant.
The fourth assignment urges the contention that this court erred in holding that appellant took good title to the property under the federal decree as against a lienholder, who was not a party, and who could not intervene in the federal court, because his final judgment in the state court was not obtained until after the receivership was closed.
It is not perceived how it can be successfully claimed that Moss was a lienholder, or held any lien against the property acquired by appellant at receiver's sale. The contention that the property of the products company became a trust fund for general creditors, upon the insolvency of that company and its ceasing to do business, is fully answered in our former opinion.
In argument on motion for rehearing, it is stated that appellant agreed to pay the debts of the products company when it purchased the property, and that this obligation Included the claim of appellees, although it had not beer established in the bankruptcy court. The record contains no evidence justifying the conclusion that appellant agreed to pay appellees' claim. On the contrary, it shows that appellant's agreement to pay claims against the insolvent corporation was limited to such as were presented to and allowed by the bankruptcy court.
In conclusion, we deem it not improper to cite the case of Joske v. Irvine, 91 Tex. 574, 44 S.W. 1059, in which it was held that, in order to justify the submission of an issue or an affirmative finding thereon, there must be more than a mere suspicion or scintilla of evidence, and we think that doctrine applies to this case.
The record is void of testimony tending to show that any of the stock of appellant, the Advance-Rumely Thresher Company, is owned or controlled by any person who occupied a similar relation to the Rumely Products Company, unless it be that the partial identity of names of the two corporations, and the fact that appellant, after purchasing all the property of the Rumely Products Company, retained in its employment some of the employés of the former company, including F. A. Jones, who was branch manager for both companies. These latter facts amount to no more than a mere suspicion or scintilla of evidence, and bring this case within the rule announced and applied in the Joske Case. This being the case, and there being no testimony tending to show that appellant participated in the alleged fraudulent conduct of the Rumely Products Company and F. A. Jones, the ancillary receiver, or that it had knowledge of such facts as would put it upon notice of such alleged fraud prior to its purchase of the property of the Rumely Products Company, we feel compelled to adhere to our former holding that the judgment appealed from is not supported by the testimony.
In the motion for rehearing, appellees frankly state that they cannot prove any additional facts on another trial to make their case any stronger, and, if we adhere to our former holding, request that the case be reversed and rendered; and that request will be complied with. Therefore, the former judgment of this court will be modified so that, instead of reversing and remanding the case for another trial, it will be reversed and here rendered for appellant; and in all other respects the motion will be overruled.
Motion for rehearing overruled, and former judgment modified.
Motion overruled. Judgment modified. *Page 700