Nabours v. McCord (97 Tex. 526, 1904)

BBOWbr, Associate Justice.

Certified question from the Court of Civil Appeals of the Third Supreme Judicial District, as follows:

“The plaintiffs in error, Uabours and others, brought this suit for their own use, and for the use of all other accepting creditors of W. F. and E. M. Crawford under a deed of assignment made to defendants, McCord and Henderson, as assignees, naming as defendants the assignees and their bondsmen and the Milam County Oil Mill Company. At the trial the plaintiffs dismissed their suit as against the defendants Henderson and the bondsmen, and upon the verdict of a jury for the remaining defendants, judgment was accordingly entered, from which the plaintiffs have sued out this writ of error. The suit as against McCord is predicated upon the charge of breach of duty on his part in negotiating and making a pretended sale of part of the assigned estate to a third party under circumstances contemplating a retransfer to him, followed by such transfer and subsequent appropriation of the property to his own use.

“The property which it is alleged that McCord thus acquired consisted of stock in the defendant oil mill of the par value of $24,200, an undivided interest of 1300 acres of land in Jefferson County, a like, interest of 1000 acres in Milam County, and a one-half interest in five notes of the face value of $5743.75, secured by a vendor’s lien on 510 acres of land in Milam County.

“The oil mill was made defendant for the purpose of protecting the rights of creditors in the above stock pending this suit as to the payment of dividends and otherwise.

“The plaintiffs in error seek a reversal of the judgment upon three grounds, viz: (1) Error in the court’s charge as given; (2) error in refusing a special charge asked, and (3) error in refusing to set aside the verdict on motion for a new trial, because contrary to the evidence. It is sufficient for the purposes of this opinion to find the facts of the case, as shown by the record, to be:

“(1) W. E. Crawford and F." M. Crawford, bankers at Cameron, Texas, under the firm name of Milam County Bank, failed in business March '16, 1896, owing debts secured to the amount of $45,190.97, and unsecured in the sum of $79,619.40. On that day they executed a statutory deed of assignment, naming McCord and Henderson as assignees, who qualified on the following day and proceeded with the .administration of the trust until they filed their final report on June 23, 1900.

“(2) This report shows that the remnant of the estate, consisting of the property sued for and other lands and chattels, was sold to C. W. Lawrence on May 5, 1897, for the sum of $22,500. That the total receipts were $90,271.21, a large part of which was used in redeeming such of the assets held in pledge as were thought to be to the interest of the estate, and the balance, after paying expenses, was sufficient to pay five dividends, aggregating 40.82 per cent to the unsecured creditors, who had filed claims amounting to $76,624.22, leaving unpaid practically 59 per cent of these claims, or more than $45,000.

“(3) The plaintiffs were among those who accepted under the deed of assignment, filed their claims duly verified, as required by law, and have rights entitling them to prosecute this suit.

“(4) The facts connected with the sale to Lawrence, as disclosed by the testimony of himself and Ealston and other witnesses for the defendants, are as follows: Lawrence and one Sprinkle had for some time been considering the joint purchase of the remnant of the assets, after the assignees had indicated a desire to close the administration by sale in bulk, if necessary, and had made a list of what remained and attached a value or selling price to certain articles, among which was the property in controversy. Ealston and his law partner were employed by these parties under an agreement that Lawrence and Sprinkle should furnish the money to make the purchase, and the lawyers were to assist in making collections and sales, and the net profits, after repaying the money advanced and interest, were to be equally divided.

. “Mr. Henderson, as one of the assignees, appears to have been anxious to close out the assets and received a bid of about $20,500 for the remnant from one Hefley. Notice of this reached Lawrence and Ealston, and they began to consider what amount they would offer. There is no evidence that the bid made by Hefley was his final offer, and it is shown that as soon as he heard of the deal with Lawrence for $22,500 he offered him $2000 for his bargain. Lawrence did not want to buy the oil mill stock and the other property sued for, to which values were affixed in the list, and-objected particularly to the stock. Ealston, who lived with McCord and was related to him, told him of Lawrence’s objections, to which McCord replied, as shown by'Ealston’s testimony, ‘The oil mill stock is worth that much money ($8000) and ought to sell for that much money, and if he makes a proper bid and gets the oil mill stock and wants to sell it for that amount, I can get him a purchaser for it at that.’

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