Court Opinion

ID: 9828026
Source: CourtListenerOpinion
Date Created: 2023-09-01 18:01:27.478983+00
Date Added: 2024-06-11T07:42:41.713377
License: Public Domain

On Motion for Rehearing.
Appellee has filed a motion for rehearing, consisting of 36 typewritten pages, and appellant’s reply thereto consists of 30 pages. In thei motion for rehearing, appellee challenges the statement made in the opinion on original hearing, to the effect that on January 1, 1926, the date when appellee alleged that his contract with Bunker and the World Oil Company was made, all of the authorized capital stock of the corporation, to wit, $300,000, had been issued and fully paid for. It is pointed out that certain ledger sheets of the corporation appearing as exhibits in the statement of facts show' that at that time there was capital stock of the company in its treasury to the extent of $112,870.
In appellant’s reply to the motion, the point is made that the evidence conclusively shows that the equitable title of that stock was vested in the former stockholders, and that the company merely held same as trustee for them. To say the least, there is considerable force in that contention, but we shall not attempt to determine whether or not it is exactly tr.ue, since the manner in which the corporation was dealing with its stockholders was rather complex; and for the further reason that it is altogether, unimportant and wholly immaterial to the conclusions we’ reached whether or not all the capital stock under the original charter had been issued and paid for.
Plaintiff’s pleadings and his testimony offered in support thereof clearly show that the recovery he sought, and which was awarded to him, was for 10 per cent, of the money collected on the capital stoek-of $1,300,-000, subscribed for under the partial payment plan and authorized by the amended charter, which was procured about May 20, 1926, and not for 10 per cent, on any stock sold by the corporation and owned by it as treasury stock on January 1, 1926, if any such was *614owned and sold. Such was the theory upon which the case was presented and tried, and it is a familiar rule that the appeal must be determined upon that theory. Thomason v. King (Tex. Civ. App.) 1 S.W.(2d) 408; Gates v. Pitts (Tex. Civ. App.) 2 S.W.(2d) 307; Rockhold v. Lucky Tiger Oil Co. (Tex. Civ. App.) 4 S.W.(2d) 1046; Spence v. State National Bank, 5 S.W.(2d) 754, by the Commission of Appeals.
Article 1330, Rev. St. 1925, reads as follows:
“The board of directors, trustees or managers of a corporation may increase its authorized capital when empowered to do so by a two-thirds vote of all its stock, by complying with the provisions of Article 1348 [evidently art. 1308]. Upon such increase of stock being made in accordance with such provisions and certified to the Secretary of State by the directors, and, if the Secretary of State is satisfied that the increase has been made in accordance with law and that the requirements of law have been complied with as to the subscription and payment of stock and in other respects, as on an original application for charter, he shall file such certificate of increase; and thereupon the same shall become a part of the capital stock of such corporation. Such certificate shall be filed and recorded in the same manner as the charter.”
And article 1336 provides for the forfeiture of stock' and all payments made thereon, if the subscriber fails to pay the same, as. required by the board of directors. As pointed out in our former opinion, no evidence of any character was offered to show that on January 1,1926, the date of plaintiff’s alleged contract with the two defendants, there had ever been a stockholders’ meeting of the corporation at which an amended charter to increase the capitalization was authorized or contemplated. And no proof was offered to show that the board of directors had passed any resolution looking to the procurement of an amended charter or authorizing Bunker, the president, to solicit subscriptions for any such prospective increase or to incur any character of indebtedness to that end. And -in that state of the record we are unable to understand how it can be insisted, as appel-lee does in this case, that Bunker had legal authority to bind the corporation by the contract alleged in plaintiff’s petition, and thereby diminish the value of all stock subscribed under the amended charter as well as the stock under the. original charter, to the extent of the amount to be so paid to Hicks; and that, too, in the absence of any notice to the subscribers for the increased capitalization that a deduction of 10 per cent, of the amount paid in by them would be made in favor of Hicks for the advertisements alleged in his petition; in other words, in the absence of any notice to them or former stockholders of the making of said alleged contract.
Appellee further insists that the testimony of Bunker was sufficient to show a definite contract made by the corporation, acting by and through Bunker, its president, to pay him, Hicks, 10 per cent, of all money collected for the stock sold under the amended charter. We adhere to the conclusion reached on original hearing to the contrary of that contention.
In addition to the testimony of Hicks already pointed out in our original opinion, to the effect that Bunker did not tell Hicks whether the stock he was going to sell, and from the sale of which Hicks was to receive 10 per cent, commission for advertising, was stock belonging to the corporation or to Bunker individually, we will quote further from Hicks’ testimony the following, which shows an entire failure on the part of plaintiff to show, and an utter lack of proof sufficient to sustain, the alleged contract of the defendant corporation, and on which a recovery was allowed:
“On or about January 1st, 1926, my occupation was that of a broker. * * * On or about that date I had an agreement, or understanding with the defendant, Chester R. Bunker, in regard to my selling the stock of the World Oil Company * * * a Texas Corporation, with a capital of $300,000.00, and Mr. Bunker was the President.
“The proposition was ten per cent, of the partial payments on World Oil Company stock that was sold. * * * I agreed to do that. * * * I don’t' know whether this stock was the stock of the World Oil Company or Mr. Bunker’s individual stock.
“My contract with Mr. Bunker was that he was to give me ten per cent, on the partial payments when he started selling his stock and he did not tell me what stock he was going to sell, but he did tell me he had enough stock to make! it worth my while. * * *
“The World Oil Company and Chester Bunker were to pay me. It was not stated as to how much each was to pay me. I was to receive ten per cent. I don’t know which one was to pay me.
“When k first started on this campaign for the World Oil Company, the World Oil Company did not then have any stock for sale. It was not contemplated under my agreement With Mr. Bunker that they would offer any stock for sale. They were to put the stock on the market when it got up to a reasonable value. Mr. Bunker told me the World Oil Company was not selling any stock at that time.” •
Even if the testimony last quoted could in any event be construed as proof of an agreement on the part of Bunker to sell stock for the corporation rather than his own stock, *615and pay Hicks 10 per cent, commission thereon for advertisement, then evidently it referred to the stock already issued under the original charter and in the treasury, if there was any such stock in the treasury, and not any stock that might be thereafter issued under any possible future amendment of the charter. At all events, it was too indefinite to prove the alleged contract of employment.
The point is stressed that the evidence showed that the persons who subscribed for the new issue of capital stock under the amended charter were induced to do so by reason of the advertisements published by Hicks and the letters which he mailed to them, and that therefore he showed a right of recovery for the value of his said services. But, as pointed out before, there was not a word of testimony from any witness to support that contention. On the contrary, Hicks himself testified that on January 1, 1926, the stock of the corporation was then worth $3 per share by reason of profits theretofore earned. Those subscribers were all stockholders under the original charter, and no reasonable conclusion can be drawn from the uncontroverted facts in the record than that they made those subscriptions by reason of those profits already earned and knowledge of which they acquired by reason of being such stockholders and their participation In stockholders’ meetings.
There was no basis in either the first or second count in plaintiff’s pleadings for the recovery of the $14,000 he says he expended for publication of his “Market and Curb.” Furthermore, as shown by copies thereof appearing in the record, only a minor portion of the publication was devoted to featuring the World Oil Company’s properties; the balance being devoted to advertising plaintiff’s own properties and.-stock of divers other companies, presumably for compensation paid him therefor.
The motion for rehearing is overruled.