Kanaman v. Gahagan , 231 S.W. 797 ( 1921 )

This cause was appealed from the Sixty-Eighth district court of Dallas county. On February 5, 1916, this court delivered its opinion reversing the judgment of the trial court, and rendering judgment for appellant, because of fundamental error. The opinion of this court so deciding the case is reported in 185 S.W. 619. That opinion clearly states all the facts and exhaustively considers the questions presented. For a full understanding of the issues thoroughly considered, and the conclusions correctly adduced, we refer to the report of the opinion.

The suit was upon notes executed and delivered by appellant, under appellee's direction, as consideration for certain shares of stock in a prospective corporation in process of organization, which was later incorporated and the stock issued. In the course of events preceding suit, the notes were transferred by the promoters of the corporation to appellant, their employé the consideration for the transfer being that he might do with the notes for them whatever his judgment dictated. Maturity arrived, appellant failed to pay, and the suit was filed. This court adduced from the facts that the transactions involved resulted in the issuance of stock of a corporation in violation of article 12. § 6. of the state Constitution, which provides that —

"No corporation shall issue stock or bonds, except for money paid, labor done, or property actually received."

The case having been decided as above indicated, the appellee filed an insistent motion for a rehearing, and the court, in considering this motion, arrived at the conclusion that the holding upon the decisive feature of the case was in apparent conflict with certain other decisions of our appellate courts, whereupon the case was presented to the Supreme Court by this court upon the following certified question:

"Do the facts and transactions recited in our statement of the case constitute, within the meaning of the Constitution and statute, an issue of corporate stock?"

The Supreme Court has answered this question in the affirmative, affirming the opinion of this court above cited. See opinion of Supreme Court in W. I. Kanaman v. H. I. Gahagan, 230 S.W. 141. The opinion of this court originally handed down, reversing and rendering the judgment, and published in 185 S.W. 619, therefore stands as the law of the case, and reference is made to that decision without further discussion.

The motion for rehearing is overruled.