25 Tex. Civ. App. 167 | Tex. App. | 1900
This is a suit instituted by appellant in. the District Court against the San Antonio & Gulf Railroad Company, George W. Brackenridge, George Dullnig, J. W. Graves, and E. S. Carpenter, independent executors of the estate of John Ireland, deceased, H. O. Engelke, J. C. Davis, John Scott, and the San Antonio Rational Bank. A general demurrer to the petition was sustained. The object of
It was alleged in the petition that the appellant company was organized in 1894; that William Davis and others were elected its first board of directors, and John Ireland its general attorney, and that he served as such attorney until Ms death, on March 15, Í894; that a contract was made with Massey & Co. to build the railway; but, failing in the same, a contract was made by appellant with Ireland, Dullnig, Engelke, J. C. Davis, and Scott, "commonly known as the ‘Construction Company/” whereby they agreed to construct the railroad and equip the same in consideration of $12,000 per mile in bonds, secured by mortgage upon its property; that by the contract the construction company was to discharge all debts for material or labor used in the construction and equipment of the railroad; that the construction company built about thirty miles of railroad, and in so doing incurred an indebtedness for labor, material, engines, and cars aggregating about $200,000; and that appelant, relying upon the debts being paid by the construction company, on January 8, 1895, issued to it $860,000 first mortgage bonds, and they were received by the company as payment for the number of miles of railway built. It was further alleged that Ireland, Dullnig, and Engelke had William Davis removed, and Clifford elected a director and made president, and that he filed a suit against William Davis and others to obtain possession of the property belonging to the railway company, and that an injunction was obtained against Davis and others to prevent them from meeting and voting certain stock, which judgment was reversed by the Supreme Court, and the cause remanded for another trial; that afterwards Davis and his associate stockholders instituted suit against appellant, DulMig, Ireland, and others "for certain relief, •and praying the appointment of a receiver of plaintiff’s (appellant’s) property,” and Engelke and Dullnig joined in the request for a receiver. ‘The prayer for a receiver was granted, and Henry Terrell was appointed, ■■and qualified as such, and took possession of the property, rights, and franchises of appellant, and held the same until the sale of the property was made.
Appellant, after alleging all the foregoing facts as constituting a conspiracy, alleges that upon the appointment of a receiver the conspiracy came to an end, and another was formed, and Ireland and Dullnig then entered into a conspiracy to secure the property of appellant through a receiver’s sale; that Clifford resigned the presidency of the board of directors, and was elected in his stead. It wás further alleged: That Ireland and Dullnig procured the filing of claim before the master in chancery by Colley and Potts, and that upon a hearing appellant was
A description of the property is then given, among which the following is described: “Also the charter, rights, liberties, privileges, immunities, and franchises of this plaintiff of every kind and description whatsoever pertaining to said railway.” That it was further decreed therein that the said Bergstrom, trustee, “should have and h^ld the said property, with all the appurtenances, rights, and privileges to each and every part thereof so sold and hereinbefore described, his successors and assigns, forever, free from any claim or demand whatsoever on the part of this plaintiff or its creditors,” except for the balance of said $112,500, and that said property was to remain in the possession of said Bergstrom, subject to be retaken possession of by the court in the event they failed to pay the said balance of $112,500. And it was further ordered that to that end the said property was charged with a lien for the ultimate payment o"f said balance, with the power and right of the court
It is then averred, wMle Bergstrom deposited said certified check, that the said amount was in fact paid in claims of laborers and materialmen, which were owed by the said Ireland and Dullnig as members of. the said
Plaintiff further alleges that the said bonds delivered in payment for the building and equipping of its railway were not presented as a claim in said receivership, nor was any coupon for interest thereon presented, but it alleges the fact to be that the said Dullnig and Ireland’s executors disputed the validity of said bonds, and denied that they or the construction company-had accepted the same; and it avers that "the sale of its. property by the receiver was not ordered or made for the purpose of paying said bonds, or any of them, or any accrued interest thereon. “(10) It is averred: That said receiver’s sale is void for the reason that each and every claim presented against the plaintiff in the said receivership was originally filed with the master in chancery appointed by the court in said receivership, and not with the clerk of the court; and that on the filing of each claim the master would issue a notice to the parties in interest requiring them to appear before him at a given time for the purpose of contesting the claim, if they saw proper to do so, except that he never gave this plaintiff such notice, nor any notice, in any case, and this plaintiff did not, in person or by attorney or agent, appear before the said master upon the hearing of any claim by him. That upon the hearing of each claim the master would make his findings, and report them to the court in which the receivership was pending, and the court would render judgment for or against this plaintiff, without notice to it, and without its appearing in person or by attorney ; and .that this plaintiff was not served with any citation to appear and answer any claim or demand presented against it in the said receivership, and each and every judgment rendered therein against it, including
And it is averred as follows: “And if this plaintiff did owe any debts, or was liable for any damages,—which it does not admit, but denies,— then it had abundant means and credit with which to pay the same, and it was the duty of the said Ireland and Colley, who, acting as the directors of this plaintiff, to have paid the same, and, had they been faithful to their trust, they would have paid the same; and plaintiff now proposes to reimburse the defendants or any of them any sum or sums of money that they or either or any of them may have paid in satisfaction of any valid indebtedness of. this plaintiff which it primarily owed, and consents that its right of recovery herein may be conditioned upon such reimbursement; and plaintiff alleges that the defendant San Antonio & Gulf Railroad Company, when it took the conveyance from said Brackenridge, Dullnig, and Ireland’s executors, as aforesaid, knew the_ facts which affected the property with a trust in the hands of said Bracken-ridge in favor of plaintiff, or by the use of ordinary care could have known them.” Subdivision number 14 in the petition contains averments with reference to the transfer of property by Ireland and Dullnig to defeat the Illinois Steel Company’s claim, and with reference to the purchase of said judgment by the San Antonio national Bank,—matters not necessary to be considered for the present. Subdivision number 15 claims damages growing out of the handling of the road by Bracken-ridge or the San Antonio & Gulf Railroad, and need not be now considered. The concluding part of the petition contains allegations seeking to recover damages of the defendants Dullnig, Graves, and Carpenter for converting the property, and this need not now be considered. In
It is not claimed by appellant that it attempts in this proceeding to attack and set aside the judgment in the ease in the District Court in which the receiver was appointed, and this court will not enter into a discussion of the question of collateral attack upon the judgment. . It is admitted that the court, “having taken possession of plaintiff’s (appellant’s) property through a receiver, had the power to order the sale thereof upon its own motion, as well as upon the application of a creditor.” The ground upon which appellant bases its suit is that its directors had, at a foreclosure sale, bought its property, and that, being its directors, they were trustees for it, and that the sale inured to its benefit. We understand, therefore, that this' suit is not an attack upon the valid judgment of a court of competent jurisdiction in a collateral proceeding, nor can it be set down as in the nature of a bill of review brought to correct the judgment, because it is lacking in the characteristics of that class of proceeding, but it is simply a suit to have it declared that the directors were trustees for their corporation, and were representing it in the purchase of the property at receiver’s sale, and that the benefits arising from the sale must be obtained by the corporation. On that line the matter will be considered in this opinion.
Directors of corporations occupy towards them the position of trustees, and their acts in connection with the property of the corporation are controlled by the principles governing other trustees, and the obligations' of the trusteeship are made the basis for the ascertainment of what acts on the part of directors will constitute a fraud, and the remedies that may be applied. Cook on Corp., sec. 648; Perry on Trusts, sec. 307. Being in the position of trustees, the directors of the corporation could not purchase its property for themselves, and such purchase would be void
Under the view of the case herein presented, it becomes unnecessary to consider the numerous matters raised by different assignments of error •or points raised by special demurrers. The judgment will be affirmed.
Affirmed.
Writ of error refused.