San Antonio Irrigation Co. v. Deutschmann (102 Tex. 201, 1908)

Mr. Chief Justice Gaines

delivered the opinion of the court.

Selig Deutschmann brought this suit against R. H. Russell, J. A. Simmons, and the San Antonio Irrigation Company, to-recover for the appropriation and conversion of his interest in a certain franchise granted by the city of San' Antonio, which he claimed to be one-third. He recovered a judgment against the Irrigation Company for the value of his interest in the franchise, which judgment was by the Court of Civil Appeals affirmed in so far as it gave a judgment against the Irrigation Company, but reversed in so far as it gave a lien upon the company’s property for the payment of the judgment.

The facts as found by the Court of Civil Appeals are that Russell and Simmons and defendant in error entered into a contract to acquire from the city of San Antonio a franchise for the disposition of the sewerage of the city, and that for his labor, assistance, and legal services in the enterprise, defendant in error was to have one-third interest in the franchise when acquired. The franchise was procured and defendant in error’s interest attached. But having failed to procure the money to operate the proposed plant in exercise of the franchise, it was agreed between the promoters that they would organize a corporation to which the franchise should be transferred and that they would procure money for the prosecution of the business by the sale of stock in the corporation. The capital stock of the corporation was to be $25,000. There Avas $5,000 of stock agreed to be set apart to the promoters as a bonus, but as this was never done it is fact of no importance in the case. The defendant in error agreed to take one-fourth of the stock. He claimed that he was to have time to pay for it, Avhich Avas denied on the other side, but the Court of Civil Appeals resolved the conflict in his favor. The franchise was granted to “Russell & Simmons and their associates” and was transferred by Russell & Simmons to the corporation. But it seems that before this Avas done Russell °& Simmons Avent to defendant in error and demanded that he should subscribe for the stock he was to take and should pay fifty percent thereof on the next day. The defendant in error, claiming that he had the right under their agreement to take the stock on a credit and to pay for it. in future, declined to -accede to their request and the negotiations were broken