Peek v. Berry (184 S.W.2d 272, 1944)

FOLLEY, Commissioner.

This suit was filed by petitioners, Mrs. Gilmer Peek and her son, Houston Peek, individually and as stockholders of Berry’s Inc., against respondents, G. S. Berry and wife, Ethel Berry, and Berry’s Inc., to establish and impress a trust against the property of the corporation, both real and personal, for recovery _fo£_ money__and, goods jdlegecLto have beenjnisappropriated by Berry and wife as stockholders of the corporation, for an accounting, a receiver, an injunction, a lien on the property of_the corporation, and for dissolution of the corporation and liquidation and distribution of its assets. By motion to dismiss and special exceptions respondents interposed certain defenses, hereinafter set out, by reason of a judgment of dismissal in a former cause of action of like character between the same parties. The trial court granted the motion of respondents and also dismissed the present suit with prejudice against petitioners filing any other based upon the same cause of action. The Court of Civil Appeals affirmed the judgment of the trial court. 181 S.W.2d 116.

From the pleadings of petitioners it appears that G. S. Berry and wife for several years prior to 1939 had operated a general merchandise business in the City of Green-ville in Hunt County. They had in their employ Gilmer Peek, husband and father respectively of petitioners, who was general manager and bookkeeper for the store. For his services he received a salary and 20 per cent of the profits of the business. In January 1939 respondents and Peek agreed to change their former arrangement whereby the business would be incorporated and Peek would purchase a 1/4 interest in it and respondents would retain the other 3/4. It was determined that an undivided 1/4 interest in the assets of the business would amount to approximately $8600. It was agreed that the assets of the old business would be transferred to the corporation and that 1/4 of the stock of the corporation would be issued to Peek, 3/8 thereof to G. S. Berry, and 3/8 to his wife. Peek was unable to pay cash for the value of his interest, but it was agreed that he should pay therefor out of his share of the profits of the corporation. The parties stipulated against his personal liability for the $8600. Accordingly, in February 1939 the business was duly chartered as Berry’s Inc., with a capital stock of $24,000 divided into 24 shares of $1000 each. Six of these shares were issued to Peek and nine each to G. S. Berry and Mrs. Berry. Berry became president of the corporation, Mrs. Berry became vice-president, and Peek secretary-treasurer. Berry’s salary was fixed at $200 per month and Peek’s at $150 per month. Thereafter, on July 31, 1939, Gilmer Peek died intestate, leaving surviving him his wife and son. In February 1940 the corporation was dissolved by the Secretary of State on the application of Berry and wife who certified they were the sole owners of the stock of the corporation.

On May 16, 1940, petitioners filed Cause No. 19861 in the 62nd District Court of Hunt County against respondents alleging substantially the same facts as above stated, and further, that they were the owners of a 1/4 interest in the assets of the corporation; that immediately^upon entering business .a.s/a corporation respondents coitapired ..together, .to. .destroy, the. value of the_stock_owned by_Gilmer__Peek; that respondents had been guilty of many fraudulent acts, conyerting the_assets of the corporation to their own use; that they had excluded petitioners from any participation in the business and denied that petitioners owned any interest therein; that the dissolution of the corporation was fraudulent; that by virtue thereof respondents became trustees of the corporation to hold its property'for the benefit of the creditors and stockholders; and that respondents were disposing of the property of the corporation and appropriating the proceeds to their own use, which, if permitted to continue, would result in the total destruction of petitioners’ stock to their damage in the sum of $10,000. Petitioners asked for the appointment of a receiver and for judgment for their damages.

The petitioners filed five amended original petitions in Cause No. 19861, each time setting up substantially the same cause of action. The fifth was filed June 23, 1941. Immediately prior thereto they had filed an affidavit of their inability to pay the costs of court or give security therefor. This affidavit was contested by the district clerk and by respondents. The costs accrued in the cause were unusually high, which was due to the appointment of an auditor to examine and state the accounts between the parties in conformity with Rule 172, T.R.C.P. The charge for the audit was $750, which account was allowed as costs by order of court dated January 20, 1941. Of this amount petition