*1 945 re- first time that state He in this evidence.” by circumstantial shown proving sorted early to circumstantial evidence quotes case of Wilson also from the proof special owner, want of State, Tex.App. 481: “this consent 12 v. Joe if Bell. persons themselves should be made not to they are attainable, are and if is affirmed. had, be accounted their absence should re- before the can be allowed to State to circumstantial sort evidence.” by this holding
We are of no aware that the effect
Court that evidence to hospital in an
special owner is ill in the predicate county not sufficient is a
other that proof by evidence circumstantial property taking did he not consent LANGDEAU, C. H. Receiver of General Casualty Company, man he was the from the store of which Appellant, property ager charge and in stolen. v. oc has, on numerous This Court Appellees. al., John DICK L. casions, applied con the rule want of No. 10941. may sent not from other cir be inferred present and cumstances is when the owner Appeals of Court of Civil Texas. not case, but is witness in the theft does Austin. testify property that the taken without 14, March 1962. State, his consent. Tex.Cr. Mitchell v. 286,
R. and cases cited. S.W.2d April Rehearing Denied 1962. Branch’s cites Ann.P.C.2d Judgment Motion to Set Aside Denied holding cases not be will persons person reversed because the May alleged ownership possession whom placed testify
were not stand to on the
directly consent, if in terms to want of exception bill was reserved to prove
circumstantial evidence offered to Among
want consent. cited the cases State, Allen Tex.Cr.App., v. S.W. Taylor State, 109 Tex.Cr.R.
S.W.2d 564.
We hold that the circumstantial evi
dence offered state sufficient jury’s
sustain the finding money taken possession from Bell of Joe consent,
without his and that such evi
dence was purpose, admissible Joe present Bell being at the trial ill hospital county. another
We further hold that appellant, not question by objection court, trial may complain
947 *3 Rotsch, Grace, Cecil C. R. Harold John Austin, Kennedy,
G. appellant. Maverick, Tynan Gochman, & San An- tonio, Smith, Jenkines, Mcllheran & Wes- laco, appellees.
RICHARDS, Justice.
Suit brought was Langdeau H.C. as receiver Casualty of General American Company against L. Dick et ux. to John promissory recover note dated $6,000.00 December 19S2 the sum of Casualty to General American Company in payment $1,000.00 for six Debenture 5% Bonds of General American Com- pany, Series and to foreclose a deed lien trust on certain real estate under a deed trust Dick executed et ux. as security for note. General American placed temporary receivership 126th District County, Texas of Travis June Langdeau H. is its C. receiver. Dick et ux. answered only by denial, Langdeau general filed motion for pleadings based filed pursuant exhibits thereto attached to- 166-A, Rules of Rule Texas Civil Procedure. thereupon filed et Dick first amend- original admitting answer ed execution of alleging ing that date General the note of trust and deed Casualty Company placed in were void receiver- that the note and deed of trust ship note thereof also as of or voidable because execution misrepresentation, and deed trust can- by fraud, were not induced sued celled and the Se- terminated. concealment in violation of Act 15 U.S.C.A. 77a curities § Before either of the motions sum- they had exer- seq. additionally mary judgment were submitted to the Trial contract option cancel the cised their Court Dick et ux. filed a cross-action Bonds Debenture against Langdeau joined as cross-defendant *4 Casualty Com- because General American cross-plaintiffs by therein as R. Gordon re- pany failed and had or its successors ux., Pierce D. et et ux. and H. Zachman on of interest to fused installments in which cross-action each of the cross- days thirty after than the bonds for more plaintiffs sought cancel, rescind re- to and due, thereby permitting the interest became Langdeau cover from and deeds notes option to cancel them to exercise their purchase of given by trust them for the purchase agree- and terminate the Bonds, of the Debenture Series of by ment, pleading controverted Casualty Company the General American petition. Langdeau supplemental in a ux.; in Dick of sixteen the case of et $1,000.00 Debenture Bonds Alamo of 5% original filing first amended After in Company, the case Series answer filed their answer Dick then et ux. ux.; $1,000.00 of Pierce et and ten of 5% summary judg- for Langdeau’s to motion Casualty Com- Alamo Debenture of Bonds ment as follows: pany, Series case of Zachman original “Defendants’ first amended ux., et Alamo herein, fact issues answer, raises filed predecessor merged and into been of fraud, conceal- misrepresentation, Casualty Company prior General American the Securities ment and in violation of promissory receivership. Each of genuine all which are Act question by deeds notes in were secured require fact, which material issues of by executed cross- of trust real estate trial.” security plaintiffs the notes as for respective companies consideration their mo- in the same instrument filed and the bonds. summary against Lang- judgment tion for cancellation, rescission As their basis for that the deed of trust deau recovery the notes and and deeds Langdeau’s attached to motion and note alleged that trust, cross-plaintiffs summary judgment revealed that by and trust secured deeds were *5 failed; (4) the the note consideration of special exceptions all overruled contain- given note violation of was bonds in in Langdeau’s supplemental petition ed XII, Art. the Constitution of and his each of the answers to cross-actions Texas, in- and laws State of brought by cross-plaintiffs. On the Statutes, cluding Art. Texas Civil hearing summary judg- of the motions for paid, was money since the note labor cross-plaintiffs by ment filed ux., Dick et performed, property there- or received and ux., Pierce ux., and Zachman et the Trial voidable; (5) fore or that General void Court considered the pleadings and exhibits Casualty Company American at the time attached and the thereto for sum- motions note was issued was insolvent mary judgment together with the affidavits in doing business violation the laws of and exhibits attached thereto found corporations prohibiting Texas insolvent that there an absence any genuine Texas, any operate especially issue as to material relating Art. fact against defenses Statutes, notes described pur- Texas Civil cross-actions and that Langdeau was including *6 6, 12, Article Section Consti- of Texas any exists as to grounds seven as- tution, Texas, including and Statutes of by appellees serted for which summary 1348, Statutes; (4) Texas Civil Article judgment would granted as a matter of purchase and bond that the notes con- law, judgment of the Trial Court should tract were void or voidable inasmuch not be disturbed. It is necessary therefore company the insurance or com- each to examine in order to ascer- panies, at the time the issuance of of tain the effect thereof as a basis for notes, insolvent, doing any genuine absent issue of ma- in violation the laws of business of terial fact. prohibiting corpora- insolvent Texas Texas, operate in especially tions to The transactions between the Insurance Statutes; Texas Civil or Article Company and the which form the and that said notes deeds trust (5) of present basis of the controversy consist of as a result of fraud were executed making by appellees of contracts with by agents, perpetrated employees, Insurance of directors officers and insurance debenture bonds by or notes issued 5% companies appellees; company or Company. illustration, As an ap- question a material of fact is because pellees Dick executed on December pleadings each of promissory note in the sum grounds.” $6,000.00, due on or before December with interest payable thereon at semi-annually the rate of from date un- appeal This is an from the granting 2% paid, til which note was secured a deed 166-A, judgment under Rule aof certain lands trust on situated in Hidalgo Procedure, Rules Civil Subsection Texas County, Texas. The deed of trust was provides part: (c) ordinary form but contained this additional sought “The shall be ren- stipulation: pleadings, depo- if the dered forthwith sitions, file, “The above described note is together and admissions on affidavits, purpose purchasing by any, that, party if show 1, 1953. year beginning 1st of each in Deben- $6,000.00 -of the coupons Also attached to the bonds were Cas- American ture General Bonds of cou- “principal De- known reduction” sum dated ualty Company, Series maturing pons, $200.00, each numbered 1, 1952, sum being bonds cember due any inclusive, “or interest December through both thereafter, annually date thereafter” at the rate interest bonds bear 5% agreed the Insurance per annum, understood and it is pay option undersigned and at holder. agreed between the Casualty (cid:127)General American Each bond following also contained the American event General recitations: or Compcuny, its successors in- assigns or refuses fails “3. This issue of Debenture Bonds bonds, or interest on the stallment is secured a pledge surplus thirty days them, within .either after funds and Company agrees to set payable, become due the same shall aside out the surplus surplus and/or thereof, there- to the terms according profits, an amount not to exceed the heirs, execu- undersigned, his upon the equivalent percent of two (2%) of the assigns, shall tors, or administrators premium previous income of the six cancel option to .have (6) months date, on each interest due trust and deed .terminate this which amount pro- shall be sufficient to upon the sur- purchase agreement, and vide one twentieth (½o) pro- of' the heirs, his undersigned, render portionate part of principal total of ' assigns, to executors, administrators the issue sold and the accrued interest Company, to that date. (cid:127) all of the assigns, of its successors “4. From this fund on each interest mentioned, thereupon this bonds above paying date, the Company n deed pay, will no further be of of trust shall first, the interest due and accrued as of fully effect, re- shall force *7 date; and, secondly said from the bal- however, the provided, leased; sinking in the ance it pay fund will Casualty rights of Principal Coupons Sum Reduction ten- im- be shall not (cid:127)Company hereunder pay dered and will redemp- or call for by such affected paired or otherwise principal tion the sum balances of this under- to the given option so and 1, 1962, issue, option December with to executors, heirs, administra- signed, his Principal redeem all Sum balances De- and terminate cancel assigns to tors or 1, at Principal cember the then under- It is trust. deed of this further plus percent (l'%) pre- Sum value one undersigned, agreed that the and stood mium. bonds, or will not sell the holder of n conveysame Ameri- except General to Provided that Company “5. the purpose the Company can pledges it’s full faith and credit to all Italics loan.” mortgage retiring provided herein and further agreements supplied. maturity these bonds shall as a liability not otherwise construed the contract part Insurance As American Casualty the General Dick delivered to Company et ux. six Company. debenture bonds dated $1,000.00 December 1, 1962, due December an 1, and with sale, In the event of the “6. rein- : redeem on December (cid:127)option to surance, liquidation or consolidation of each were 20 interest Attached General American Com principal part thereof, sum coupons, any in the pany, obliga each or $25.00 payments provided make shall 1st and tion to matured on December However, case, readily in it is thereby the instant any reduced not in manner be contracting apparent appellees in binding that the shall be assumed or notes the debenture bonds upon successor, assign any or reinsurer Company from did not be- the Insurance Casualty Com of General American Company come said creditors of the Insurance terms pany, according to Under the terms following reasons. obligation. Dick et ux. contract optional “7. conversion on receive from Insurance Company on provisions stated payable semi- each bond the sum $25.00 with cou- together side reverse hereof year. In annually per a total of or $300.00 hereby amade pons are attached turn, pay appellees obligated themselves this bond.” upon interest 2% semi-annually payable a total notes privi- Among optional conversion annually, a bal- thereby creating of $120.00 par. in leges referred to debenture ance Com- due them from the Insurance bond, coupons it is recited that interest pany annually for sum $180.00 withdrawable with interest dates shown years in excess a total sum of $1800.00 year thereon each in is also There cash. obligation to Insurance Com- of their typewritten page the same “THIS addition, pany the 5 their notes. BOND IS TO CONTRACT SUBJECT coupons principal on each reduction sum transcript rec- ATTACHED.” The year bond payable on 1 of each December any fails to attached ord reveal contract beginning December each bond, appellant and to the both since payable $200.00, sum to retire would be provisions have treated pur- principal of the note note, deed of trust the bond question on December chase the bonds contract, constituting presumed that it is desired if the Insurance “contract attached” the words refer par. option forth in to avail set itself of particular refer- trust note deed of which, bond and 4 of the debenture option quoted to cancel above ence event, payable due De- would be of trust. contained the deed maturity date of cember appellees’ notes. Ordinarily words “debenture is *8 of Board purchase Company for the of the debenture specified constitute written a rate at bonds, contrary the on if the Insurance money loaned cor repay to the promises to performed Company had the contracts ac- of principal and interest poration. The terms, appellees cording their to would have payable may not out may be or notes these profit an annual on received each of the corporation of the profits specified net of $150.00,if the of Company bonds Insurance by corporation the issued generally are its had or option, exercised $300.00 De- capital rather funds raising of a means as appellees cember for which had not preferred sale of the issuance than monetary paid any consideration to the In- 1147, p. Corporations stock. § C.J.S. Company. surance Corporations, Sec. 480. 723; Hildebrand on or debenture bonds purchasers of provides of the par. 5 bond Since preferred creditors of thereby become Company pledges notes “the its faith full liquidation upon to the corporation agreements herein” and credit to the maturity only profits from the the prior of the to the bond shall not extent liability construed they of payable, otherwise otherwise note is the or upon appellees placed Company, were ordinary notice creditors. as considered are right public general had the holders and the Company would that the Insurance were rely upon appellees’ lia- to as notes which any bonds required list the of to books, forming upon secured liens real as Company its estate upon the bilities of a part capital the the Insurance to of the assets of reports records financial or any lia- Company corresponding without maturity date thereof. bility. placed However, such restriction was no of Company by the Insurance the use placed Appellees having been trust notes secured the deed full notice of recitations the various County, Hidalgo estate in real liens on the bonds, of trust debenture notes and deeds Insurance capital assets Texas as of the paid neither nor loaned deposit the State Company their with In monetary to the consideration whatever the Com- protection Treasurer annual Company in return for surance by Art. provided pany’s bondholders profits they from the were receive to n 8.05of the Code, V.A.T.S. Texas Insurance Company their Insurance for the use of appellees and deed trust of The note assets, capital opinion and notes as it is our deposited so with Dick et were rights we hold that liabilities record. shown Treasurer as State appellees respect each to their affirmatively show does not Since the record purchase contracts for the debenture notes the Pierce or Zachman that either analogous rights are and lia bonds to the Company deposited by the Insurance purchase persons agree bilities who to provi- Treasurer under the with the State preferred of the Insurance shares stock 8.05, presumption there is of Art. sions Company notes executing promissory their deposited. the clear they From were so excep therefor, with the consideration be- terms of contract unambiguous In appellees are creditors of tion Insur- appellees and the tween each of un Company to the extent of surance apparent that Company it is ance prin coupons and paid interest semi-annual Company Insurance not creditors coupons. cipal reduction except to payment of *9 June though only same extent appellees cancel exercised in could the had event con- purchase preferred coupons 1,
tracted to interest due the stock of were the June Company Insurance paid by Company the July not on or dividend before 5'% payable surplus 1, out of the surplus Company Insurance profits having 1954. The company’s (cid:127)of business, the placed in the the preferred which been hands of receiver on n stockwould be a rights of the and liabilities on Insurance June capital. Company’s This became emphasized fixed on their contracts that date provision the 21.28, each 2(c), shall Art. Texas not Insurance Sec. other- wise construed as a liability Appellees ux. and Pierce et Zach- the In- Code. Company. surance Certainly policy- the ux. admitted man et cross-actions against estate with- provision receivership claims the cancellation although the pro- required by 3(a), (b) in the time or as Sec. by them trust executed the deeds of 21.28, or (d), Art. Texas Insurance Code. option such vided for the exercise of 1, 1954 coupon due event the interest June As to failure consideration the record the within Company paid by not the appellees shows that Dick et ux. failed date, its due expiration days from of ten payment make the semi-annual of the 2% elapsed period would have due interest on their note which became receivership proceedings the institution of 1, 1954, the same date the June attempt not 17, 1954, did then June coupons semi-annual attached interest or about option until to exercise such payable their bonds became also due and upon which 1, 1954, December the date if Company. a result Insurance As action an appellees instituted and others it a failure consideration be- there was for the United District States came a mutual consideration failure of purpose for Texas Southern District of appellees. Company and both the Insurance rescinding the transaction. cancelling affirmatively disclose The record does and Zach- appellees whether Pierce et ux. rights parties Since the all had become Insur- pay man to the et ux. did or did not appellees fixed on 1954 and Pierce June pay- interest ance the semi-annual and Zachman et ux. not exer- al- notes due ments on their options cised their cancel their contracts June does it though appellees alleged, and these prior thereto, appellees’ all assertions of the Insurance that the disputed, to be seem rights cancellation and rescission pay the semi-annual Company did fail to summary grounds for rendition due coupons their bonds interest attached to are without basis. on the same date. Appellees assert as their second and grounds opinion of the that each It is our grounds judgment that third for con- was no alleged by appellees that there the notes were without consideration or that con- for notes or sideration As consideration of the notes failed. failed, con- does not the notes sideration for above, the consideration for stated summary judgment ground for stitute agreement *10 977, 978, Amarillo, 211 S.W. 109 Tex. appellees any filed none the ever that provision. ing Gen- appellees’ constitutional notes were secured 1. Since Moseley, Bonding upon estate, Co. v. & real of trust liens eral deed “property” S.W. Tex. within mean- the constituted what he ought the con- not to have done. It it held that above under prop- a note estopped, provision giving holds stitutional the therefore him erly that payment so.” is not a valid for stock the note nor the issued
neither stock In view to enforce holding suit our that the result in a is As a void. rights the creditors liabilities of the benefit of under the for note contracts the invalid- the estopped assert of the debenture is to subscriber for this bonds analogous rights basis the lia The to ity the transaction. persons bilities of pre who subscribe for ruling part is in as follows: ferred stock corporation giving corporation dealing “Creditors with a promissory notes as a consideration there capital right that its have the to assume for, we hold permitted having paid in accordance been or will be has the to their notes use a warrant law. It constitutes as a capital assets of the com effect, It, in the extension of credit. pany upon policyholders which the security of pledge for the as a stands other right rely, appel- creditors had the to Upon the cor- corporation’s debts. estopped lees are now to assert the invalid insolvency, a trust it becomes poration’s ity being transactions violative of protection creditors. fund prohibition. Thompson constitutional up, they have paid it has not been If First supra; v. State Bank Amarillo, paid be that it right clear to insist Burns, Tex.Civ.App., Davis v. S.W. permitted has who up. stockholder 476, 480, ref.; error McWhirter First such, has who out as held himself be Amarillo, State Bank of Tex.Civ.App., from benefits appropriated received ref.; Irby, S.W. error Forman v. has not enterprise but corporate Tex.Civ.App., 1229, 1231, 115 S.W.2d error duty stock, under rests paid for his ref. debts of the With it. upon a fraud corporation unpaid, it is Appellees’ contention that the In as a creditors, as well innocent surance Company was insolvent at the time law, him from to release fraud execution of the notes and was there duty. doing fore business in violation of the laws “ * * * possessed With the bank of Texas prohibiting corporations insolvent power stock, to issue the credi- operate in Texas renders the pur without fault have tors would chase contract void or voidable as a matter assume that it was issued a law- wholly law is without merit. Until the They manner. ful not would institution receivership proceedings chargeable with notice facts the Insurance was engaged in made manner its issuance going business as a concern with all the true, estoppel unlawful. With this rights privileges created its charter. equity creates in their favor can- July It was not until 1954 when the be defeated fact temporary receivership proceedings insti was, parties, transaction between permanent tuted on 1954 was made In equity all such invalid. cases re- under Court order that it could be conclu permit sively presumed fuses stockholder in de- the Insurance Com plead his wrong result, fault own As a pany insolvent. defeating just obligation.
means
his
that the Insurance contention
good
a matter of
at the
As
conscience
insolvent
the notes
he
time
were exe
plead
be heard to
does not constitute
should
it.
cuted
equity
situations
basis
concerned in
Lyons-Thomas
granted.
he
doing
ought
stockholder’s
what
could
Hard
do,
Co.,
Perry
Mfg.
rather than in his
Co. v.
Stove
done
ware
86 Tex.
*11
corporation
of the
802;
the maker
in favor of
16, 18, 22
143, 24 S.W.
L.R.A.
Jackson
not
Appellees’
does
claim
setoff
Bowie,
note.
of
Tex.Civ.App., 114 S.W.2d
v.
for
basis
matter
law form
no author-
Appellees cite
error dism.
Appel-
summary judgment
a
the rendition of
in support
ities
their
contention.
21.28, Texas-
their
3(g),
sum-
favor. Sec.
basis
Art.
no
for
ground
lees’ fifth
states
Insurance Code.
mary judgment
of law.
as a matter
the first
Since we
that each of
have held
ground
For
as
appellees
their sixth
rely
appellees
grounds
six
all
they
sert
that
are entitled to set off
summary judg-
to sustain
of a
the rendition
amount of the
bonds which
contracted
as a mat-
ment in their favor are untenable
purchase
against
*12
cross-actions,
In his answers
ground
to
on the
not be sustained
et ux. could
appellant specially
estoppel,
pleaded
ma-
waiver
of
issues
genuine
were no
that there
of
allegations
fraud
and laches
of
as defenses
allegations
fact under the
terial
misrepresentation
part of
by the
fraud
and
the
perpetrated
alleged
have been
to
officers, directors, employees
agents
and
employees
directors,
and
officers,
agents
in the
fraud
contained
Company, “of
Insurance
Insurance
appellees,
pleadings
knowledge.”
in the cross-actions
judicial
court has
questions
primarily
are
of fact.
for sum-
the amended motion
to
Attached
by appellees Dick
mary judgment filed
proof
However the burden
Smith,
F.
the affidavits Garland
are
upon appellees
only every
to show not
fact
Bowyer.
It
Spencer
attorney, and
R.
essential
misrepre
to establish fraud and
unduly
purpose and
useful
would serve no
part
sentation on the
of the Insurance Com
opinion
already lengthy
prolong this
pany
rights
policy
but also that the
Garland
contents of the
detail
discuss in
holders and other creditors of the Insur
demonstrate
in order to
F.
affidavit
Smith
ance
had accrued
provisions
comply with the
that it does
appellees permitted
time
the notes secured
Civil
166-A(c), Texas Rules of
Rule
the deed of trust liens to
be used
profuse
The affidavit is
Procedure.
capital
of its
matters
affiant as to
legal conclusions
This is an
assets.
essential element of
judicial
within the
are
asserts
he
by appellees
defense
Dick
et ux.
referring to
knowledge
the Court
by appellant
repre
the suit
as the receiver
in the
in Civil Action
proceedings
senting
policyholders
and creditors
South-
for the
District Court
United States
the note
in
and deed of trust and it was
Division,
Texas, Brownsville
District of
ern
upon appellees
allege
cumbent
both
97,864, the
proceedings in Cause
No.
prove it.
Gen-
receivership proceedings of
original
Company, and
eral
It is also an essential element of
Wheeler,
styled
103,084,
D.
Cause No.
J.
the causes of action alleged by
al., both
B. Erwin et
C.
Receiver v.
in their
against
cross-actions
appellant for
Trial
same
pending
are
which actions
the cancellation and rescission of the notes
instant
having jurisdiction of
Court
and deeds of trust on
fraud
case.
misrepresentation
and it was incumbent
upon them both to allege
prove
it.
the affidavit refers to the
While
event whether
estopped
pleadings,
testimony
various
sworn
rescind their
contracts of
depositions
original receivership pro
grounds
misrepresentation
of fraud
ceedings
well as to the
other
suits
two
genuine
constituted a
issue of material fact
to,
specific
referred
reference is made
decision of the Trial
Court
any pleadings, testimony, deposition,
doc
ument,
copies
Harris,
letter or statement nor
Chapman
v.
merits.
Tex.Civ.App.,
attached
thereof
affidavit. The fail
history;
no writ
275 S.W.
22 Tex.
copies
pleadings
ure to attach
“Estoppel”,
Jur.2d
documentary evidence in the
causes
various
estoppel
Appellant’s defense of
should be
referred
in the Smith affidavit renders
Trial
considered
under the
nullity
ruling
such affidavit a
under the
Thompson
law enunciated in
rules
Supreme
Texas in Gardner
v.
Court of
v.
supra;
Amarillo,
Bank of
Davis
Tex.,
First State
al.,
Martin et
cord with this PER CURIAM. Reversed and remanded with instructions. Appellees Dick, L. D. H. Zachman John and R. G. Pierce have filed a motion Appellees’ On Motion for Rehearing set opinion aside filed and rendered herein on the motion for rehearing our Associate Richards who wrote such Justice attention is to the directed statement in our opinion disqualified is him- should recuse original opinion that “The Insurance Com- self because “he was (1) counsel pany having placed been in the hands of (2) case” and1 “he advised and counseled 17, 1954, receiver on rights June with the Board State of Insurance and liabilities on their contracts became appellant is a agency subordinate 21.28, 2(c), fixed on that date Sec. Art. State, directly matters affecting this Code,” Texas Insurance is erroneous be- litigation.” 2(c), Art. 21.28 cause Sec. did not become September, Appellees’ until effective 1955. The claim that Richards was Justice is statement correct. counsel in this cause is based on the erro- assertion that neous Richards was Justice Legislature The enactment Attorney an Assistant 17, General on June 21.28, 2(c), Texas Insurance Art. 1954, when the General American Code, V.A.T.S., in 1955 however not did placed in receivership at the existed in change the law as it Texas instance of State acting through the rights and status of creditors thereto. The Attorney General. corporation become fixed as of the aof Richards was employed by Justice appointment receiver (cid:127)date even Attorney Sep- General Texas from known that though it is then the cor through 1, 31, 1956, tember 1953 December McCormick Puri poration is insolvent. inclusive. (U.S.C.A., Pa.) Co. F. Mining tan Coal 28 331, den., 651, 49 2d cert. U.S. S.Ct. conceding Appellees, Rich- Justice 176, 562; Baylor University v. 73 L.Ed. participate ards did not in this coun- case Bank, Tex.Civ.App., Savings Chester disquali- sel contend he is nonetheless ref.; error Cor S.W.2d C.J.S. Attorney during fied because the General ; porations 1492 75 Receivers § § C.J.S. the time Richards was of his one Justice employees advice Board gave “old rights
Since liabilities Insurance Commissioners” which result- appel- practices lees had become fixed on fraudulent ed in deceitful and 1954 un- law, der above rule of General American assertion of cancellation became recission which enmeshed. V, Constitution, 1. Art. See. Texas Vernon’sAnn.St. Rich- Appellees do not Tex.Cr.R. state 252 S.W.2d Justice Tex.Jur. advice, only
ards that he gave Judges, of this Sec. 48. Attorney employee was an only dis- legal ground upon which Rich- when given. such advice was Justice qualification sought, of coun- that he was giv- party ards denies that he was a case, sel this is untenable. *14 ing such advice. persuade Appellees also seek to not a Richards was Justice Richards not to sit in this case Justice General; Attorney Assistant of the office background the reason service that his applicable. hence Art. is not V.A.C.S. dis Attorney during with the General employee He Attorney was an Gene turbing days company failures of insurance employee ral.2 responsible An is not frauds, participation and his some employer, although acts of his an em phases in these makes it controversies ployer responsible for is the acts of his appropriate take in the deci for him to employee performed scope his solely sion of this This is a matter case. employment. Applying fundamental these his determination. Richards de Justice principles it that an follows Assistant Attor step clines to down. ney every General is of counsel in case Attorney in which may General be of The motion is overruled. counsel, Attorney General is Motion overruled. every of counsel case in which an As Attorney such, General, proper sistant State,
ly See: J., of counsel. RICHARDS, sitting. Prince v. Leg., carry sary responsibilities. 2. See Ch. First Called Sess. out his authorizing Attorney p. persons also, course, These em- personnel employ ployees as are neees- of the State. subject of trust are ter- and deed note fraud, misrepresentation deceit and in cancellation Dick mination Act of the National violation of Securities cancelled and been -and had same thereof mail fraud section gen- and therefore there no terminated Casualty Company American material fact which would en- issue of uine the first amended forth detail judgment, attaching there- set Langdeau to title defendants L. attorney, original answer of by their an affidavit executed John allegations con- ux. and which Dick et his an- Langdeau F. Smith. filed Garland Paragraphs I “in answer summary tained said motion to defendants’ swer XVI, hereby all of which through special exceptions consisting of judgment adopted hereof assert and made provisions in the a denial affirmatively cross-action for Plaintiff’s providing for the cancella- trust deed fraud, deceit, Securities the note and deed termination of violation tion and Act, Statutes Limita- assertion of against him re- available trust was pled therein.” and all other matters tion attaching Langdeau’s affidavit stat- ceiver, Langdeau unsworn answers to the amended filed then filed their Dick et ux. special consisted of ex- alleging cross-actions which summary judgment motion for ceptions, laches, waiver, pleas estoppel, ma- genuine issue as there general special and an- basis denials that on the terial facts and summary judg- swers attached to the motions for and affidavits pleadings, exhibits cross-plaintiffs ment filed connection various depositions taken thereto and stating that fact issues were as to receivership of General each grounds Trial relief was Casualty Company, of which sought they summary judg- in the motions for judicial knowledge, Court had ment. matter The answers the motions for summary entitled to they had nor (1) were not sworn to grounds that of law supported controverting ter- were af- to cancel exercised agree- fidavits. purchase contract minate the bond note provisions; (2) the ment under its hearing Prior to the on the mo- various (3) was without consideration and/or summary judgment tions for the Trial Court
Notes
chase contract not entitled to recover on notes de- a therefore voidable matter of void as scribed the cross-actions law; cross-plaintiffs (6) that are entitled against to set-off the amount the bonds The Court then entered judgment note; (7) the amount nothing Langdeau by take his suit and can- celled, released, and deed of trust note were executed as rescinded and declared to null be and void perpetrated agents, a fraud notes executed result of cross-plaintiffs together with the employees, officers directors of General payment trust securing deeds of thereof. Casualty Company, American of which further The Court ordered that the various judicial has knowledge. fraud the Court Debenture Bonds General American Cas- summary judgment were filed Motions ualty Company and Casualty Alamo Com- Pierce et ux. Zachman et ux. based pany cross-plaintiffs delivered grounds alleged the same in the Dick Clerk the District Court of Travis omitting ground. motion but the 7th Each then County who was instructed to deliver summary judgment (cid:127)of the motions Langdeau as receiver them for the Gen- supported by the affidavits of Garland F. Casualty Company, American eral from attorney for Smith, plaintiffs each of the judgment Langdeau, Receiver cross-action, will adverted Casualty Company American as General opinion, cross-plaintiffs later this perfected cross-defendant, appeal has his Spencer Bowyer. R. .and one herein. except damages, Ameri- to the amount of Langdeau as of General Receiver any genuine hereinafter there is no Casualty Company will be issue can party Dick et appellant, moving L. material fact and that the to as referred John ux., and D. H. is entitled et ux. to a as a matter Pierce Gordon R. ap- referred to of law.” Zachman et will be pellees and allowing This rule has been construed as Alamo summary judgment only when there is Company. will be referred to as disputed duty fact issue and is the it Appellant appeal upon bases this summary four hearing the motion for points of error. We will first any discuss his if there are to determine error, point fourth as follows: issues of fact to be tried. The burden of proof any genuine that there is no issue of “The Trial Court granting erred in material fact is the movant and all motions for judg- genuine doubts as the existence grounds; (1) appel- ment on the issue fact must be resolved as to material lees were entitled to cancel the notes Penn, against the Gulbenkian v. movant. in the exercise of a contract Thus, 252 S.W.2d Tex. option; (2) that given said notes were if as to material genuine there is a issue without consideration the con- and/or summary judgment fact will not lie. failed; (3) sideration for such notes that the bonds were in violation genuine But if no issue of material fact
means a note or series bond” differently, appellees Stated were to corporation by a as authorized its sued no consideration whatever to the Insurance providing Directors for interest
after n extentof coupons and unpaid interest Appellees’ theory sup- coupons attached principal reduction sum port is that n each bonds, appellees did since had exercised to cancel and pay any monetary consideration valuable purchase terminate the bond agree- contract Company basis provision ment under cancellation con- bonds. tained the deed of trust referred above undisputed But the Insurance to. It is agree did from the record that pay appellees monetary Dick et ux. could consideration not have exer- n per option annum each cised their agreement of the deben- cancel the $50.00 ture for the use bonds of the failure of the notes and because of the Insurance capital deed trust liens as coupons interest assets the Insurance option matured since
executing a matter of law. pay Insurance annual interest between the difference 5% Appellees’ fourth payable upon the and the interest bonds 2% note was for bonds violation of Company upon the notes XII, Art. Sec. of the Constitution of and appellees paying monetary resulting no laws of State of Texas and under to the Insurance for consideration Statutes, Civil Vernon’s does not Art. When the re notes. the execution legal ground summary judg constitute a for ceivership proceedings were instituted on matter law.1 XII, ment as a Art. rights and liabilities of Texas, Ann.St., Vernon’s Constitution appellant fixed and became parties corporation provides that no shall issue obligation to interest cou under money except paid, labor stock or bonds liquidation process until pons actually done, property received and a stage the distribution reached increase of stock or indebtedness fictitious receivership estate assets void. shall be payment available Thompson First State Bank of In this connection it is admitted claims.
the amount law, genuine ter issues no being there given by them for the involved, remain- sole material fact bonds, citing that holding numerous cases ing ground rendition basis equitable setoff is available as an defense summary alleged notes, brought promissory in suits et that their appellees motion Dick ux. pertinent cases are not here issues aas were executed note and deed of trust involved. by agents,, perpetrated result of fraud Appellees In- general cite rule of the employees, then and directors officers law Company, that when a takes a claim receiver surance of which fraud above, administers, appel- favor of the estate which he noted judicial notice. As has subject equities claim is did then Zachman et ux. lees Pierce et ux. parties a existing against between the basis allege ground fraud although a the demand the receiver debtor is it summary judgment respective affirmatively entitled to set off claim his exist pleaded a favor in their there- ing appellant. at the time when title against the receiver's We cross-actions only ground takes which the law have of fraud would fore shall consider effect against summary a the in allowed counterclaim raised in the motion for receivership. no appellees solvent had there been et filed Dick in such allowance counterclaim original their answer motion give preference a case the debtor does summary judgment by appellant, filed whose counter creditors in over favor appellees ux. categorically Dick admitted only exists it is the amount due claim since original their amended answer con by the debtor the insolvent which misrepresentations, raised issues of fact payment of its an asset for the stitutes fraud, violation concealment and passes to the receiver creditors and 1933, all Act of of which were Securities purpose, citing 38 for such Tex.Jur. material fact which genuine issues of re- Wright, v. Tex.Civ. p. Cocke quire pleading never trial. This aban- App., 299 S.W. specifically adopted' but instead was doned general foregoing statement tire While in the cross-action of and the correct, misrepresentation we do not think it is law is of fraud instant case in applicable in the view to the other grounds in addition Tex.Civ.App., Wright, holding judg- in Cocke their motion for bases in aff., Tex.Com.App., S.W.2d ment. it held in a factual wherein was S.W.2d agree position with the taken We similar the instant somewhat situation pleading as to obligation on a note which an case misrepresentation, genu- pleas fraud and of an in- assets constituted presented. material fact ine issues of corporation could not be offset or solvent why is an additional reason There amount of claim with the credited summary judgment filed Dick motion the assets of the insolvent discharged out of