Mann v. Mitchell

On Motions for Rehearing.

Both appellant and appellee have filed motions for rehearing. Appellant especially complains that our statement of the pleadings and obligations sued upon is not sufficiently detailed, so as to present the facts upon which the plea of the statute of limitations may be more apparent, which we accordingly do. The suit was filed January 6, 1316, by receiver of the Commonwealth Bonding & Casualty Insurance Company, a corporation, but its residence and domicile is not alleged, and declares on a promissory note dated the 30th of January, 1911, for the sum of $1,750, due the 30th day of January, 1915, with 6 per cent, interest from date and 10 per cent, attorney’s fees. It then sets out the collateral security pleaded “to secure the payment of the note here sued upon.”

The second count in said petition is that “defendant on said 30th day of January, 1911, subscribed in. writing for the capital stock of- said bonding company corporation for stock, value $1,750,” reciting that the deed of trust described and sought to be foreclosed was given to secure the payment of the subscription “of said capital stock of said bonding company.” The prayer is, first, to have judgment “on the note, interest, and attorney’s fees,” then, in the alternative, for amount due “on his subscription to its capital stock,” with prayer also for foreclosure of the “lien against said collaterals,” etc.

The appellant pleaded to said petition with exceptions, and by answer denied “the delivery of the note sued on herein or the subscription to said stock, and says that said note was never in fact delivered or intended to be, and was never to be delivered or intended to be except upon certain contingencies which have never happened, and hence never had any legal operation,” alleging same thing in respect to any subscription for stock, and, if so, did not know what he was signing; then pleaded the two and four year statutes of limitation to any such' subscription. The plea here of the statute of limitations seems only directed to the stock subscription, and not to the note sued on.

Nothing seems to have been done with the case until over four years thereafter, when, on April 13, 1921, appellee filed an amended pleading amending the original petition filed January, 1916, alleging that on the 30th day of January, 1911, appellant executed and delivered to said bonding company, a corpora*738tion, Ms certain promissory note, in writing, for the sum of $1,750, due the 30th day of: January, 1915, with 6 per cent, interest per annum from date, with the usual 10 per cent, attorney’s fees; then, as in the original petition, sets out the collateral security given “to secure the payment of the note here sued upon”; then further pleaded, as fully set out and quoted on pages 2 and 3 of our opinion (243 S. W. 735); substantially; that on the 16th day of December, 1910, the Commonwealth Organization Company of Port Worth was promoting the organization of a casualty bonding and accident insurance company to be incorporated under the laws of the state of Texas under the name of the Commonwealth Bonding & Accident Insurance Company, or such other name as might he selected, and appellant on said date subscribed for 50 ono-tenth shares of said stock, for which he agreed to pay $2,000, of which amount $250.00 was to be paid in cash, as the promoters’ fees, and the balance, $1,750, to said Bonding & Accident Insurance Company, or its trustees, in Port Worth, at anj time after November 1,1910.

It was. alleged:

“Before said contemplated corporation had been incorporated the name of the proposed corporation had been changed to the Commonwealth Bonding & Casualty Insurance Company, which was incorporated on the 23d day of March, 1911, under the laws of the then territory, but now state, of Arizona, instead of under the laws of Texas.”

It is then alleged that appellant wholly failed to pay his subscription to the capital stock of said corporation, for which judgment is prayed with 6 per cent, interest from the 16th day of December, 1910. It is then alleged that as an additional security for and as evidence of his indebtedness for the capital stock of said corporation he executed his promissory note set out in paragraph No. 2 of the amended petition (dated the 30th day of June, 1911, for $1,750 due the 30th day of June, 1915), which it is alleged was given as an additional security for the capital stock of said corporation and attaches the note and stock subscription as exhibits to and made a part of the petition.

Turning to the exhibits, the note is a plain promissory note in the usual form, dated June 30, 1911, payable on June 30, 1915, to Commonwealth Bonding & Casualty Insurance Company for $1,750, with 6 per cent, interest from date. It has no provision as to attorney’s fees whatever. The subscription to the stock recites that the company is “to be incorporated in pursuance of the laws of the state of Texas under the name of Commonwealth Bonding & Accident Insurance Company” and to be organized on or before December 31, 1910. And any time after November 1, 1910, upon receipt of notice of the organization of said company and that its capital stock in good faith has had paid in the aggregate $200,000, appellee agreed to pay $250, the remaining sum of his promoters’ subscription. This subscription bears date December 16, 1910. It is nowhere shown that the said $200,000 was ever paid in.

On April 13, 1921, appellant filed his first amended answer, generally excepting to the allegations in appellee’s petition, then specially excepting to so much of the amended petition setting up the subscription- contract, and because it shows that it matured more than four years prior to the filing of this suit, and four years prior to the appointment of the receiver, and hence was barred by the four-year statute of limitations; that it is set up for the first time in plaintiff’s amended pleading filed April 13, 1921, which petition was filed over appellant’s objection, as of date September 18, 1916, which on its face showed it to be barred by the four-year statute of limitations.

It further excepted to that part of the petition alleging that “he sues defendant upon a note alleged to have been executed June 30, 1911, and due June 30, 1915. The same for the first time appears in the amended petition filed the 13th day of April, 1921, filed as of September 18, 1916, over appellant’s objections, because the allegations show the same matured June 30, 1915, and the receiver was appointed September, 1915, when more than four years elapsed from the maturity of said note to the filing of said amended petition,” setting up for the first time said note. Said note, not being described in the original petition, is barred by the four-year statute of limitations at the time of filing the amended petition. He specially answered that when he signed the subscription for stock Mr. Mays, one of the promoters who secured it, represented to him, and emphasized the fact, that the company was to be organized as a Texas corporation, a home corporation, which representations he relied upon, and they induced his subscription, and thereafter, when he signed the note sued upon, the same representations were made that it was to be a Texas corporation, which representations he believed, and caused the execution of the note, and nothing was ever said to him that it was to be an Arizona corporation; that when said note was signed the agent promised to send him the subscribed for shares of stock, which was never done, and he never knew that same were to be issued by the Arizona corporation until years after and never ratified, acquiesced in, or consented to his subscription contract or note being diverted to said Arizona corporation, and has ever since being so informed consistently renounced and repudiated the same and had no knowledge or information thereof until the appointment *739of the receiver. Appellant also put in a sworn plea of the want of a valid consideration to support the said subscription contract and the note sued upon, the consideration having wholly failed, the only consideration being that the same was to be for stock issued by a company of like name, but to be incorporated under the laws of Texas.

It was further pleaded that said corporation was organized under the laws of Arizona, and that neither the subscription for stock nor the note was delivered to said Arizona corporation by appellant or with his knowledge and consent; that the subscription contract set up in the first amended petition is a different subscription contract and utterly variant and different from that one set up in the original petition filed on January 6, 1916, and the same difference m respect to the note described therein from that now described in said amended petition, and that the four-year statute of limitation had barred each when the amended petition was filed, and they were so barred when the original petition was filed; that the note sued on in the amended petition dated June SO, 1911, due on June 30,1915, is wholly different from the note described in the original petition, and was barred by the statute of limitation of four years when the amendment was filed.

It is very apparent that the two notes, while calling for the same rate of interest and bearing same date, are materially different. The due date in the first is 30th day of January 1915, and that in the second is June 30,1915. Both notes call for 6 per cent, interest per annum from date, and both petitions allege the notes sued on contain the usual 10 per .cent, attorney’s fees.

The amended petition attaches as a part of its petition the note as an exhibit. It is in a very simple form, of the usual plain promissory notes for the payment of money, but has no clause such as alleged in the petition, payable to the Commonwealth Bonding & Casualty Insurance Company, with 10 per cent, attorney’s fees, etc. As establishing the fact of the existence of two' notes and that the last note sued on was barred when the amended petition was filed, the note so executed is described as follows:

“Brady, Texas, June 30th, A. D. 1911. $1,750.00. No. 23. On June 30, 1915, after date, I promise to' pay to the order of Commonwealth Bonding & Casualty Insurance Company seventeen hundred fifty and no/100 dollars, for value received, negotiable and payable without defalcation or discount at Fort Worth, Texas, with interest at the rate of 6 per cent, per annum from date until paid, payable annually as it accrues. O. D). Mann. Due June 30, 1911. Address, Brady, Texas.”

The undisputed testimony is that, when he signed this second note, no mention of the Arizona corporation was made, and he signed the note because the agent told him there had been some mistake in the first, and there was nothing to show in the face of the note or anywhere else that it was payable to the Arizona corporation.

Appellant is mistaken in his contention that the first petition sets out a contract reciting “a corporation under the laws of Arizona,” but is correct in saying it sets out a contract with Mann and the “Commonwealth Bonding & Casualty Insurance Company, a corporation.” While it recites tne contract with the Commonwealth Organization Company, we do not think, as appellant contends, there is any material difference or variance between the two petitions in respect to the amount of the stock subscription. $1,750 was for stock and the $250 for promotion, making the aggregate $2,000.

There is a material variance in the description of the subscription contract for stock in the first, for the date alleged is January 30, 1911, and in the amended one it is alleged to be December 10, 1910, which latter date corresponds with the stock subscription attached to the amended petition as an exhibit.

We proceeded upon the theory in our original opinion that there was but one subscription list for stock sued upon and one note, and therefore but one cause of action set up, being the same cause sued upon originally. The difference is too great for that, and for that reason we have set out the pleadings themselves in this opinion. We have verified the pleadings and the evidence, and say that the same are found as alleged and shown herein and as contained in the pleading, which shows the misrecitals and variance as set out herein. In view of the pleadings, it is apparent that, when the amended pleading was filed, the cause of action sued upon was barred by the statute of limitations of four years, if indeed it was not barred at the institution of the suit. However liberal our system of amendment may be, it will not allow the suit to be based on a note or a subscription for stock of one date, etc., and then, after the four years, set up another obligation distinct and different in its terms.

Appellant complains that we did not act on his assignment challenging the action of the court in allowing the appellant to file back his amended petition to September 18, 1916, though in fact not filed until April 13, 1921, on the alleged ground that appellee had given same to the clerk of the court, who had failed to file it. A paper would be considered filed in law if lodged with the clerk and he was directed to file it, whether he indorsed the file mark thereupon or not. In a proper case and upon a proper motion to file nunc pro tunc an unindorsed paper, supported by sufficient evidence, the court would be authorized to direct the clerk to file the *740same as of the requested date. There is no evidence that the same was properly lodged with the clerk as a file paper and his- attention called thereto. There is evidence it was placed with the papers in this case and was among them on the 18th day of September, 1916, and appellant had notice thereof, but that did not constitute a legal filing.

We further find, at appellant’s request, that there is no evidence that the agents to whom appellants gave the power of attorney to vote as his proxy- at the annual or special or any other meeting of the stockholders voted for said change of the' corporation to be organized as a -corporation under the la-ws of Arizona. Nor is there any evidence that either one of said agents, appellant himself, or any other person or agent authorized by him was present at said stockholders’ meeting or 'any other meeting of the stockholders, or otherwise participated therein or voted for any change. There is no evidence that John Scarbauer, N. P. Brahan, or M. H. Wills attended any of said meetings or voted for said change or voted any proxy or stock of appellant for any such change.

The fourth assignment of error and proposition thereunder sufficiently raise the question as to whether there was ever any liability on the part of appellant to the Arizona corporation, and cites in support of that contention Fletcher’s Cyclopedia Corporations, vol. 2, § 521, pp. 1130, 1131. See, also, New Nueces Hotel Co. v. Weil Bros., 243 S. W. 731, this day decided by this court.

Appellant’s subscription to the Texas corporation terminated upon its failure to incorporate under the Texas laws, and therefore the Arizona corporation could not enforce his subscription, and he was not es-topped from denying his liability thereon. This change was equivalent to a material alteration in the subscription for stock, without the consent of appellant, and released him from any obligation upon his subscription. Cook on Corp. vol. 1 (7th Ed.) § 194; Owensboro Seating & Cabinet Co. v. Miller, 130 Ky. 310, 113 S. W. 423.

It is perfectly clear to us that the obligation sued upon, aside from the variance in the allegations and the proof in respect to the several contracts sued upon, appellee’s claim, is wholly lacking in consideration and nonenforceable. He never subscribed to or bound himself to the assignee corporation, and there is no evidence to support such contention.

The motion for rehearing filed by appellee is overruled.

The motion for rehearing filed by appellant is granted.

Our judgment reversing and remanding said cause is now set aside, and judgment is here now entered reversing, and rendering said cause in favor of appellant.