Wrather v. Parks
Cases that cite this one
2 later published cases cite this decision.
- Long v. City Nat. Bank of Commerce (Tex. App. 1923)
- Mitchell v. Bowles (Tex. App. 1923)
This list shows which later cases cite this one. It does not say how they treated it, and no review of that has been done. Not a substitute for Shepard’s or KeyCite — verify before relying.
Opinion of the Court
The appellee, Parks, sued J. D. Wrather, J. R. Wrather, and W. M. •Rice on a promissory note for $5,000, bearing interest at the rate of 8 per cent., and providing for 10 per cent, attorney’s fees, alleging a credit on the note of $3,000 as of date April 3, 1918. The note bears date March 15, 1918. There was also indorsed on the note the following: .
“It is agreed that L. P. Parks is to take $2,000.00 interest in mine at Webb City; Mo., and the other $2,000.00 on the note to be applied. [Signed] J. D. Wrather.”
It is alleged substantially in the original petition that this indorsement was made by J. D. Wrather on the note without the knowledge or consent of L. P. Parks, and was fraudulently so indorsed for the purpose and design of 'trying to make it appear the note was fully discharged, etc. The «defendants answered by general denial, and specially that they had made full payment and settlement of the note, and that on the 3d of April, 1918, they paid to the appellee $3,000 cash, and at the same place and about a week later paid and discharged the remainder of the note by transferring and agreeing to transfer to appellee an undivided interest in certain mining property situated near Webb City, Mo., upon which they had acquired and then held a lease in the name of appellants W. M. Rice and J. D. Wrather; that they agreed that Parks should have an interest in the mining property and lease to the extent of $2,000, and that this understanding existed at the time the note sued on was executed by appellants, and that such agreement so indorsed on the note was entered in the presence of Parks and his wife. They further allege that subsequent thereto a corporation was organized in the state of Colorado, incorporating the Amarillo Dead & Zinc Company, for the purpose of taking over, controlling, and operating the lease of the mining company, and that after the charter was obtained, and the company organized, Parks, as part owner, claimed the right to be chosen as one of the directors, and it was agreed that he should receive a certificate of stock in said corporation for the amount of $2,000, in consideration of his interest in said property. They allege substantially that the certificate was issued and delivered to Parks and held by him.
The appellee replied by supplemental petition, denying that he agreed to take an interest in the Webb City proposition, and that if any transfer of interest therein was ever made to him it was without his knowledge or consent. He pleaded that any lease of such mining property held by Rice and Wrather was nonassignable, and that an interest therein could not be assigned to the appellee; also denied any connection with securing a charter from the state of Colorado *515 for the Amarillo Lead & Zinc Company; and denied that he was ever a director in the corporation, and that the using of his name was without his knowledge or consent. He also alleged that the incorporating of said company was a fraudulent scheme and device, and1 that the company never held or owned any lease or any mining property or had any assets or property of any character; that any stock in said company ever issued to him was without his knowledge and consent and never delivered. He alleged that, at the instance of J. D. Wrather, he attended some meetings, looking to the organization of the company, with R. B. Masterson, as president, in which H. W. Galbraith, W. E. Herring, and other prominent citizens of Amarillo would be interested, and that he did contemplate taking an interest in such company, but did not invest any money in the project, and the organization of any such contemplated company was never effected; that if there was any transfer or assignment in the lease by W. M. Rice and J. D. Wrather, or if any stock was issued to him in a company organized in Colorado, that it was without his knowledge or consent, and was an artifice, scheme, and conspiracy with an indorsement on his note by J. D. Wrather, including an inducement by said Wrather to attend meetings to fraudulently deprive him of the collection of the balance of his note. He alleges that the lease of mining property in Webb City, Mo., was of no value, and any agreement to take an interest therein was without consideration; that the property was represented as being very valuable, producing large revenues, and in fact that the mine could only be operated at a heavy loss. He alleges that the contract, if any made, was wholly without any consideration.
The record shows that there was a lease of some 70 acres of land near Webb City, Mo., for mining purposes, executed originally by the Osceola Lead & Zinc Mining Company and A. D. Hatton to one R. M. Clark. This lease also let with the land the mining plant, containing mills, mining machinery, and equipment. The lease further contained a provision that the rights and provisions herein granted to the lessee shall not be assigned or transferred to any other person or persons, firm or corporation, without the written consent of the parties of the first part (meaning lessors) had and obtained. Neither should the lessees sublet any of the land nor grant any rights and provisions without the consent in ^writing of the first parties, without first notifying said first parties of the name of the proposed sublessee or grantee, and of the terms and conditions of the proposed sublease or grant; that any sublease or grant made in the covenants of the terms of this lease should be wholly void, and all subleases and grants must be subject to the terms of the lease. This lease contract is dated the 1st day of September, 1917. On the 10th day of March, 1918, R. M. Clark assigned this lease to J. D. Wrather and W. M. Rice, both of Amarillo, and on the same day it is indorsed on the lease that the original lessors consent to the transfer and assignment by Clark, as set out.
The evidence shows that the appellants sought to obtain money for the purpose of operating the mine on the lease; that Mrs. Parks, wife of the appellee, was working in the office of J. D. and Dr. Wrather, who were engaged in the drug business in Amarillo; that she heard the discussion of the matter, and suggested that her husband would obtain some money from an estate in Missouri, and possibly they could get it from him. He did lend them the money, $5,000, for which they executed the note sued on, dated March 18, 1918, due in 90 days. It appears that after the execution of the note J. D. Wrather returned to Webb City, Mo., and'wrote a letter to Mrs. Parks, a part of which, in effect, was that, he was enthused over the prospect and the proposition that they had at that place, and that they contemplated incorporating for $75,000, and some other matters in connection with that. Apparently he made this proposition to Mrs. Parks:
“If you and Mr. Parks want in with us, we will, let you have say $2,000.00 or $2,500.00, as we are now, that is, in this company, and put in or incorporate at $75,000.00, without further investment. I believe it will be a big thing for you, and if I didn’t I would not say so. If you want it this way let me know at once and you can credit the note for $2,000.00 or $2,500.00, and when the company is incorporated we will issue you your stock fully paid. You could send receipt for the amount, or credit the note, in the presence of J. R. or Rice.”
Mrs. Parks dated her letter and answer March 18, 1918:
“We received your letter this morning and feel sure you have a good proposition, Mr. Parks says he will put in either $2,000.00 or $2,500.00, and will let you know at once just how much. How much are you going to ask per share? Mr. Allen and Mr. Bert are glad of the chance to get in too. * * * Write us at once how much per share, etc., and we will then decide just how much to put in.”
On April 3, 1918, the appellee, who was working at that time for the Avery Company, and says that he was in his working clothes, and that his hands were dirty and greasy, went into the drug store, and J. D. Wrather then said to him that he had the money to pay on the note and wanted to do so, and stop the interest, and said he could pay $3,000.00, and that he had the note in a pocketbook, and presented it to his wife to make the credit, and that Mr. Wrather took the note himself and wrote the credit; that the reason he did not make the credit himself was because his hands were dirty and greasy; that there was nothing said about taking the *516 stock or an interest in the mine at that time and no mention made of it; that he did not consent for Mr. Wrather to make the notation on the note which we set out in our statement of the pleadings heretofore, and that he knew nothing of his making that notation until after he started out of the house, when he saw the notation was made; that he made no mention of it at that time to Wrather or made no complaint. Mrs. Phrks corroborated Mr. Parks in his statement that nothing was said at that time about making the notation and that she did not know that the notation had been made. They both testify positively that they never made any agreement to take an interest in the mine or stock in the corporation. Their testimony is controverted on this point by J. D. Wrather and a Sir. Allen, who was then working in the store, who say it was agreed to make the indorsement, etc. J. D. Wrather, Dr. J. R. Wrather, and Mr. Rice, it appears, employed an attorney in Colorado to secure a charter for an incorporation. The charter was obtained by three citizens of Colorado, Nichols, Taylor, and Wood. The corporation was to be known as the Amarillo Dead & Zinc Company. The object of the corporation formed was for the purpose of leasing, subleasing, buying, and otherwise acquiring mineral lands and' oil lands and selling the same, and mining the same, or drilling for oil or gas thereon; to buy and sell and operate mining or drilling machinery, etc. The capital stock of the corporation was to be $200,000, divided into 200,000 shares, of the par value of $1 each, stock nonassessable. It was to consist of seven directors; J. R. Wrather, W. M. Rice, L. P. Parks, J. D. Wrather, R. M. Clark, J. E. Carpenter, and C. B. Gustavus. This charter was obtained on the 20th day of June, 1918. Parks and his wife both testified that they knew nothing of the obtaining of this charter at the time, and were not consulted in the matter, and that Parks was made a director without his knowledge or consent. It seems after getting the charter the appellants got out a prospectus, giving the name of the corporation and its purposes, its capital stock, and giving the names of the directors and officers. Both the appellee and his wife denied knowing anything of this prospectus. However, Wrather «says that Mrs. Parks did know of it; that she called his attention in the proof that they had the name of Mr. Parks wrong. Some time in the summer, July or August, after obtaining this charter, there were various negotiations between the Wrathers and Rice on one side, and Masterson and Galbraith on the other. It appears that Masterson and his crowd owned mining property in Oklahoma, and the negotiations were to effect a consolidation or merger into one company, and it finally resulted in an agreement of consolidation into one company. Mr. Parks was present at some or several of the meetings, and especially the one in Judge Kimbrough’s office, where the agreement appears to have been finally consummated. It was agreed substantially that they would continue the corporation in the name of the Amarillo Dead & Zinc Company, and each of the respective parties should hold one-half of the stock to be issued ; that is, that the stock should be $200,-000, $100,000 by Masterson and his crowd and $100,000 by Rice and his crowd. It. was represented at one time that no stock had been issued by the Wrathers or Rice in the corporation as originally organized, but it was finally ascertained that as a matter of fact J. D. Wrather had a stock book, in which he had written up stock to some of the proposed stockholders, but that it all remained in the book, and had never been delivered, except possibly the stock to Parks. As to the delivery of this stock to Parks, there was a sharp conflict; Parks and his wife testifying positively that no stock was delivered to them, and others testifying that it had been delivered — that is, to Mrs. Parks — and that she had redelivered it to J. D. Wrather, who kept it in a separate envelope. At the meeting in Judge Kimbrough’s office it was there determined that this stock must be all surrendered and destroyed; that otherwise it might show a double issue. On this occasion Parks was present, and one or more of the appellants stated that the stock would be destroyed, and that the stock to Mr. Parks had been delivered to him, and that he could do as he saw proper about it, or something to that effect, and that all of the stock, with that of Parks, was then destroyed or thrown into the wastebasket. This meetinlg was called for the purpose of perfecting the- consolidation, and the old officers in the corporation were required or requested to resign, and were called for that purpose, and it seems that all of them did resign. The transfer of the lease of Masterson was to be made, and, as we understand, was made to the corporation. It seems that Judge Kimbrough called attention at the timé to the provision of the lease held by Wrather and Rice that it could not be transferred without the consent of the original lessor, and they were to get up the paper effecting that transfer to the Mining Company, which had never been obtained. Judge Kimbrough says that some of the papers were turned over to him and held by him, but that all the necessary papers were not delivered to him, and that he never finally passed on the title and the necessary papers to effect the transfer, and as a result no stock was ever issued under the consolidation agreement', as had been agreed upon, and that nothing further has ever been done about it, since which time it appears that the appellants have ceased to work on the lease, and that as a result the lease has been forfeited and the machinery and land have gone *517 back to tbe original lessors. At this meeting it also appears that Parks had been named as one of the directors, and it is stated that in the new organization he possibly would have been entitled to have received $4,000 or $5,000 in stock, which it appears was never issued to him or to any one else. It does appear that after this meeting Mr. Rice appears to have been in Webb City, and claimed there was a deficiency in funds for the purpose of operation, and that he would draw a draft for some $700, and to secure this draft the members were to pay in proportionately to the bank a fund for meeting the draft; but it was understood at the time that if they would give their checks that they would not be paid, and it appears as a matter of fact none of the checks were paid, and no money was contributed by the stockholders to the fund. The effect of the appellee’s testimony appears to be that he had contemplated entering into the company, and to take stock if it had been consummated with the other company, which had been attempted, as he regarded them as being strong men, and able to put the matter over; but, as it was never consummated, he paid nothing into it or agreed to do so. The case was tried before the court without a jury, and no conclusions of fact or of law were requested of the trial jcourt.
The fourth assignment is overruled. It is asserted the court erred in excluding the prospectus issued by the Amarillo Lead & Zinc Company. The statement of facts in this case shows this instrument was in fact introduced in evidence and considered as evidence.
We think there is no reversible error shown, and the judgment will be affirmed.
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Case-law data current through December 31, 2025. Source: CourtListener bulk data.