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Mining Gold in Harris County’s Historical
Case Files
The Harris County Courts Had Plenty of Rice By Ann Zeigler In William Marsh Rice left Massachusetts after his general store there failed in the Panic of 1837. He settled in Houston and began his Texas business career as the manager of the bar in the Milam Hotel. By 1840 he owned 320 acres of land and had a first-class license to conduct a mercantile business. He rapidly became a major player in the Texas business community.1 In the ensuing decades, Rice was a party to at least four lawsuits in the Harris County District Courts.
Case No. 2579 (1853). In October, 1853, James Brown sued Rice, Ingham J. Roberts and Cornelius Ennis for $8,000, alleging they had agreed to buy from him a stage line he operated between Houston and Austin, but that they failed to hire appraisers to value the coaches, horses, associated gear and other assets, and thereafter paid him much less than the value of the equipment. Brown also alleged that they had hired him to be the superintendent of the stage line at a salary plus 25 percent of the profits from the operation, totaling $2,000, which they failed to pay when they terminated him six months later. Rice and the other defendants answered, listing a number of Brown’s debts that they had paid on his behalf under the sale agreement, and stating that as agent he had taken a greater amount than that to which he was entitled. Despite Brown’s sworn statement, various witnesses answered interrogatories and cross-interrogatories confirming that Rice had paid Brown’s debts to them in full, and that Brown had, in fact, told them he sold the line to try to pay off his debts. The case came to trial on December 12, 1855. Brown dismissed the petition on the agreement of the defendants to pay his costs. A judgment writ for the $22.60 in costs was issued.
Case No. 2833 (1854). Rice was the general partner of the Houston and Galveston Navigation Company, a limited partnership established in 1851 to carry goods and passengers up and down Buffalo Bayou on the steamboat “Farmer.” Under the Limited Partnership Act of 1846, the general partner had to be an individual, and the partnership expired after a certain number of years. The Houston and Galveston Navigation Company’s charter expired on June 1, 1854. In November of that year, in the course of winding up the partnership’s business, Rice filed a verified petition against Harrisville merchants Sidney Sherman and Dewit C. Harris, who were doing business under the partnership name of Sherman & Harris. In his petition, Rice sought compensation for unpaid freight charges incurred by Sherman & Harris from fall 1852 through spring 1853, which Rice estimated to be approximately $600, with total damages of $1,500. The petition also included Rice’s request for a writ compelling the defendants to produce all of their own business records related to the freight charges at issue in order to prove up Rice’s damages. The production of documents was required due to the destruction of all of the shipping company’s records in the explosion that destroyed the “Farmer” in the summer of 1853. Sherman & Harris answered by asserting that Rice’s agent, E. Webb, had signed a contract with them absolving them of liability for the unpaid freight charges in light of the much-reduced freight charges and free passenger transportation that the contract required be provided for the merchants and their agents. The Webb contract stated that the navigation company was to have a steamboat continuously on call to carry Sherman & Harris’goods between Galveston, Houston and Harrisburg. Sherman & Harris counterclaimed for $5,000 for warehouse and wharfage fees for delays in moving their goods. The parties issued written interrogatories and cross-interrogatories to various witnesses. Although the witnesses’ answers are not contained in this file, a quick reading between the lines tells the story: Rice alleged in an amended petition that the contract signed by Webb was invalid, as Webb was never Rice’s agent. The defendants asked the witnesses to admit that the captain of a vessel is always the proper person to negotiate the terms for transportation of freight and passengers. When the matter came to trial in late 1858 (after an inexplicable gap of more than three years), the defendants withdrew their answer and counterclaim, which had asserted the validity of the Webb contract. The court granted judgment for Rice for $150.65 plus $75 in costs, with judgment writs issued against the personal property of the two individual defendants.
Case No. 4101 (1858). In September 1858, Rice sued William Cunningham over his entry onto and use of property owned by Rice. The file lacks any answer by Cunningham, interrogatories, verified statements or other information about the dispute. However, according to the Handbook of Texas Online, Rice moved to Matamoros, Mexico for the duration of the Civil War. In 1865, a docket entry shows the case was dismissed by agreement, with each side to pay half of the costs.
Case No. 6349 (1867). In the spring of 1867, Rice sued J. T. Houston of the Grimes County town of Anderson to collect two promissory notes. The notes were both made in August 1862, when Texas was part of the Confederate States. One of the notes stipulated that it was not payable until peace was established. Offered in support of the petition, the two original notes are in the court’s file. Notably, they do not identify the currency in which they are payable. Houston did not answer Rice’s petition and default judgment was issued for Rice on May 10, 1867 for $1,802 plus $79.10 in costs. Eventually the judgment writ caught up with Houston, who filed a motion to set aside the judgment, asserting that he had several meritorious defenses. Among Houston’s defenses were that the first note was payable in Confederate money, which was no longer legal tender (and which was arguably not legal tender when the note was made), and that the second note was made when the exchange rate between Confederate and American dollars in Texas was ten to one, so that the actual amount due was not as stated. Houston also asserted that when he received the summons he did not examine it closely, and therefore went to the district court in Grimes County on the appointed day, not to Harris County. Houston’s motion includes the verification of a Grimes County justice of the peace, who confirmed that Houston’s lawyer had indeed appeared in his court, but that the suit was not being prosecuted there. Houston thereupon dashed to Harris County and dispatched a lawyer to the district court, which happened to be sitting on that day, requesting that the judgment be set aside. The judgment writ was suspended, and a hearing on the motion to set it aside was held. But the Harris County judge, after hearing the parties’ arguments, was not impressed with any of Houston’s defenses. The motion to set the judgment aside was denied, whereupon Houston’s lawyer announced a bill of exceptions and that an appeal would follow. Unfortunately, the outcome of Houston’s appeal is not reflected in the file. Ann Zeigler is an associate editor of The Houston Lawyer. She practices bankruptcy law at Hughes, Watters & Askanase, L.L.P.
Endnote 1. William Marsh Rice’s fortune helped establish Rice University, his namesake.
A Collection Suit Involving Jesse H. JonesBy Linhuyen Pham Jesse H. Jones, a successful businessman and philanthropist who later served as a New Deal official in President Franklin D. Roosevelt’s administration, was known as the largest real estate developer in the Houston area in the early 1900s. He was responsible for most of the City’s major construction before World War I. According to the Handbook of Texas Online, Jones owned nearly 100 buildings in Houston and also built structures in Fort Worth, Dallas, and New York City. Jones bought part of the Houston Chronicle in 1908 and became its sole owner in 1926. Jones and his wife later endowed the Houston Endowment, a charitable foundation which supported many notable undertakings, including establishing a permanent home for the Houston Symphony Orchestra, the Houston Grand Opera Association, and the Houston Ballet Foundation. The Jesse H. Jones Hall for the Performing Arts was named for him in 1962. Jones started in business by going to work in his uncle’s lumber company in Hillsboro, Texas. After his uncle died in 1898, Jones came to Houston, where he continued working in the family business for several more years while establishing his own lumber company. Harris County court records reflect that Jones and his company appeared in several lawsuits to collect payments for unpaid accounts. For example, in Jesse H. Jones & Co. v. Taylor, No. 34053 (55th Dist. Ct., Harris County, Tex., filed Jan. 13, 1904), Jones’s company filed suit on a sworn account against James T. Taylor to collect $2,896.97. Plaintiff’s original petition alleged, in sum, that the company had furnished goods, wares, and merchandise to Taylor for his use on the Texas World’s Fair Building in St. Louis, Missouri, and the Stowers Building1 in Houston, Texas, but that Taylor failed to pay the remaining balance on his account. Defendant’s first amended answer denied owing the money and alleged that some of the lumber and materials furnished by the plaintiff were unmerchantable and priced higher than their actual value, which entitled Taylor to a credit on his account. Approximately two months after suit was filed, the court held a hearing on defendant’s application for continuance. Taylor asserted that he could not go to trial because the two witnesses who knew about the unmerchantable lumber, much of which was rotten and decayed, were not available to testify. The court overruled the application for continuance and held a bench trial on the same day, with plaintiff obtaining a judgment for $2,538.06 plus costs and interest at six percent per annum. Linhuyen Pham practices with the firm of Heard & Medack, P.C. She is a member of The Houston Lawyer editorial board.
Endnote 1. The building was later home to the G.A. Stowers Furniture Company, the litigant in the famous case that created the Stowers doctrine. See G.A. Stowers Furniture Co. v. American Indem. Co., 15 S.W.2d 544 (Tex. Comm. App. 1929, opn. approved); Handbook of Texas Online, George Arthur Stowers, http://www.tsha.utexas.edu/handbook/online/articles/SS/fst69.html (last visited November 26, 2007).
The Roaring Twenties for Howard Hughes in Harris CountyBy Nelson S. Ebaugh We all know Howard Hughes as the movie producer, the aviation innovator, and the enigmatic billionaire. What you might not know about Hughes is that he spent his formative years in Houston. In fact, his renowned wealth originated in Houston. Harris County court cases from the 1920s provide a fascinating backdrop of Hughes’s life. By anyone’s standards, Hughes had quite a time during this decade. But as explained below, the Roaring Twenties were not always fun for Howard Hughes, or his family, in the Harris County Courthouse.
Hughes’s Struggle to Obtain Control over His Inheritance In the early 1900s, Hughes’s father invented a drill bit that could easily drill through solid rock. This revolutionary drill bit allowed prospectors to drill for oil in many places that were once out of reach. It also made Hughes’s father rich. He produced and marketed this drill bit through the Hughes Tool Company. On January 14, 1924, when Howard was only 18, his father died from a heart attack. Howard’s mother had passed away two years earlier. As an only child, Howard inherited a majority share in the Hughes Tool Company. There was only one problem for Howard. Although Howard owned most of Hughes Tool Company, he could not exercise control over the company until he turned 21 years old, the age of majority at that time. Probably seeing an opportunity to enrich himself, Howard’s uncle expressed a strong desire to serve as guardian until Howard turned 21. Howard viewed this as a threat to his inheritance. Prior to the death of Howard’s father, Frank Andrews had served as chief counsel for Hughes Tool Company. Having confidence in Andrews, Howard retained him to protect his inheritance. Andrews recommended that Howard petition the court for majority status on his 19th birthday. To make sure the petition would be granted, Howard ingratiated himself to the judge who would hear the petition. For several months prior to his 19th birthday, Howard played golf as often as possible with the judge at the Houston Country Club. On December 24, 1924, Howard filed his petition with the Harris County Court “for removal of his disabilities as a minor.”1 Two days later, the judge granted the petition, allowing Howard to exercise full control over his finances as an adult.2 From that case forward, Howard developed a lifelong relationship with the law firm where Andrews worked, known today as Andrews Kurth L.L.P.
Howard’s Boyhood Home In 1918, the Hughes family moved into a mansion located at 3921 Yoakum Boulevard, Houston, Texas. Howard was only 12 years old when the family moved into the mansion. As a boy, Howard learned how to construct shortwave radio equipment. From the Yoakum mansion, Howard would send messages via his shortwave radio to ships and amateur operators across the country. Howard lived there until he and his first wife moved to Los Angeles in 1924 so that he could pursue his dream of producing movies. In 1953, the University of Saint Thomas purchased the Yoakum mansion. Today, the University of Saint Thomas uses the mansion to house the University’s Theology Department. In 1919 and 1920, the Hughes family failed to pay taxes on the land that the mansion occupied. Consequently, on March 14, 1923, the Criminal District Attorney for Harris County filed a suit in the 61st Judicial District Court to collect unpaid taxes on the family’s home.3 Howard’s father promptly paid the delinquent taxes on the property. It is unclear why the Hughes family failed to timely pay these property taxes. Perhaps it was just a simple oversight on the part of Howard’s father.
Howard’s Disastrous First Marriage When he was 19 years old, Howard married Ella Rice. Ella’s granduncle was William Marsh Rice, the namesake of Rice University. Soon after their marriage in Houston, Howard convinced Ella that they should move to Los Angeles so he could pursue a career as a movie producer and director. Almost immediately after moving to Los Angeles, Howard began having extramarital affairs with various actresses. For awhile, Howard was able to keep his affairs relatively secret. Howard did so by instructing Ella to return to Houston for extended periods of time. While in Houston, Ella spent time with her family and maintained the Hughes residence in the Montrose section of Houston. As time went on, however, Hughes’s affairs became more and more public, to the extent that Ella likely discovered them. In 1928, Ella was checked into St. Joseph’s Infirmary in Houston for “nervous exhaustion,” among other conditions. On November 8, 1929, Ella filed her petition for divorce from Howard alleging that soon after their marriage, Howard did the following: “[Hughes] began a course of conduct toward [Ella], in which he was guilty of excesses and cruel treatment; that he studiedly neglected her, was irritable, cross, cruelly critical, fault finding, and inconsiderate of her in his course of conduct toward her and in his contact with her, and that such ill treatment was of such a nature as to render their living together insupportable.4” Howard did not contest the divorce. He settled the divorce by agreeing to pay her a total of $1.25 million. Howard considered this settlement a bargain. After all, at the time, he was worth about $30 million. The Harris County cases involving Hughes in the 1920s illustrate an outlandish lifestyle that would continue for decades. Although many of Hughes’s actions cannot be condoned, it is fascinating to learn about his ties to the City of Houston through the court cases preserved by the Harris County District Clerk’s Office. Nelson S. Ebaugh has his own firm, Nelson S. Ebaugh, P.C. Through his father, Ebaugh is the great-great-great nephew of the Honorable Abner S. Lipscomb. Abner Lipscomb served as the Secretary of State for the Republic of Texas in 1841. After Texas’ annexation to the United States in 1845, Abner Lipscomb served as one of the first justices on the Texas Supreme Court.
Endnotes 1. Ex Parte Howard R. Hughes, No. 114681 (Dist. Ct., Harris County, Tex., filed Dec. 24, 1924). 2. Order of Judge Walter Montieth, Ex Parte Howard R. Hughes, No. 114681 (Dec. 26, 1924). 3. State of Texas v. Howard R. Hughes, et. al., No. 104136 (61st Dist. Ct., Harris County, Tex., filed March 14, 1923). 4. Petition for Divorce, Ella Rice Hughes v. Howard R. Hughes, No. 169608 (11th Dist. Ct., Harris County, Tex., filed Nov. 8, 1929).
The Case That Lead to the Creation of Hermann HospitalBy Stephan Selinidis While most Houstonians are familiar with Hermann Hospital, now known as Memorial Hermann Hospital, many are unaware of the hospital’s rough beginnings. Hermann Hospital was established under the will of Houston entrepreneur and philanthropist George H. Hermann, who died on October 21, 1914. Hermann’s will bequeathed real and personal property valued at $2.6 million to T. J. Ewing, Jr., J. J. Settegast, Jr., and John S. Stewart to be held and used by them in trust to build a hospital named the “Hermann Hospital.”1 In today’s dollars that $2.6 million bequest would be valued at approximately $53,503,597.18. It was Hermann’s intent for the “indigent, sick and infirm of the City of Houston” to be taken care of in Hermann Hospital.2 Notwithstanding those wishes, according to an original petition filed in Texas v. Stewart in the 61st District Court of Harris County, Texas, Ewing, Settegast and Stewart failed to carry out the terms of Hermann’s will and mismanaged the property. As a result, then-Harris County district attorney John H. Crooker filed suit on June 28, 1918, for the State of Texas on behalf of the unknown and unnamed beneficiaries of Hermann’s estate, praying that the court remove Ewing, Settegast and Stewart from their positions and appoint an auditor to review the books and records of the estate.3 In the petition, Crooker alleged that Ewing, Settegast and Stewart mismanaged the estate by (1) failing to appoint four other citizens from the City of Houston to complete the Board of Trustees for Hermann Hospital,4 (2) purchasing real estate owned by Stewart worth no more than $175,000 for a price of $312,000 through a sham transaction involving Stewart’s mother,5 and (3) extending a $100,000 loan to Settegast’s uncle at an interest rate below the market level.6 According to the original petition, in the more than three years since being named trustees, the biggest step Ewing, Settegast, and Stewart made toward building Hermann Hospital was to display a large drawing of the proposed hospital while one of them was campaigning for public office in Houston.7 However, the three trustees took no further action to carry out Hermann’s wishes. The State of Texas filed a motion to appoint an auditor in the action signed by both Harris County District Attorney John H. Crooker and Texas Attorney General B. F. Looney.8 Ewing, Settegast, and Stewart’s first appearance in the case was to reply to a notice served on them by the court to show cause why an auditor should not be appointed to audit the books, papers, transactions and records of the Hermann estate. They argued that the court lacked subject matter jurisdiction over the case because, among other reasons, they were executors over the Hermann estate, not trustees, and the State of Texas did not have an interest in the Hermann estate.9 Ewing, Settegast, and Stewart finally filed a plea to the jurisdiction and an original answer, asserting, among other defenses, that the original petition failed to state a cause of action, there was no time limit to perform their duties as executors, and they had a ten-year period to hold, manage and control the estate under Hermann’s will.10 They further contended that Crooker, as the Harris County District Attorney, did not have authority to institute the lawsuit in the name of the State of Texas.11 At the same time, Houston’s mayor filed a lawsuit identical to Crooker’s in the 80th District Court.12 Crooker argued to that court that only he and the attorney general had the proper standing to bring suit.13 A panel of judges from the 11th, 55th and 80th District Courts agreed with Crooker that the case belonged in the 61st District Court.14 Subsequently, Crooker left his position as the Harris County District Attorney to enlist in the army, and Governor William P. Hobby appointed James A. Elkins to replace Crooker.15 Elkins reluctantly accepted the appointment, taking time away from his newly formed partnership with William A. Vinson.16 Sometime thereafter a settlement was reached. Ewing, Settegast and Stewart resigned from their positions, and on September 11, 1918, the 61st District Court dismissed the case by a hand-written order. Hermann Hospital opened in 1925—11 years after Hermann’s death—with 100 beds and a staff of 109 physicians at a location that will become the gateway to the Texas Medical Center. In 1985, Hermann Hospital found itself in trouble for a second time when Texas Attorney General Jim Mattox charged the Hermann Hospital Estate Board of Trustees with failure to provide sufficient care to the poor, indigent, and infirm residents of Houston as required under Hermann’s will. The trustees eventually agreed to establish a charity care endowment of $100 million. In 1997, the Hermann Hospital and Memorial Hospital systems merged to create the Memorial Hermann Healthcare System. Today, the Memorial Hermann Healthcare System boasts 14 hospitals. In just the past year, its 19,000 employees have assisted in 131,752 in patient admissions, 515,075 outpatient visits, 339,948 emergency visits, 2,960 Life Flight missions, and 24,167 newborn deliveries. After being discharged from the army, John Crooker formed a partnership with R. C. Fulbright. Fulbright & Crooker is better known today as Fulbright & Jaworski. After spending a year as the Harris County District Attorney, James Elkins returned to private practice at his firm, Vinson & Elkins. It is hard to imagine Houston without Memorial Hermann Hospital, but that might have been a reality if not for the actions of John H. Crooker, B. F. Looney, and James A. Elkins. Stephan Selinidis practices with the firm of Harrison, Bettis, Staff, McFarland & Weems. He is a member of The Houston Lawyer editorial board.
Endnotes 1. Plaintiff’s Original Petition at 4, Texas v. Stewart, No. 78533 (61st Dist. Ct., Harris County, Tex., filed June 28, 1918); Handbook of Texas Online, George Henry Hermann, http://www.tsha.utexas.edu/handbook/online/articles/HH/fhe28.html (last visited November 26, 2007). 2. Plaintiff’s Original Petition at 3, Stewart, No. 78533 (filed June 28, 1918). 3. Id. at 10–11. 4. Id. at 6–7. 5. Id. at 7–8. 6. Id. at 8. 7. Id. at 9. 8. Motion for Appointment of Auditor, Stewart, No. 78533 (filed July 22, 1918). 9. Defendants’ reply to notice served upon them by the court to show cause why an auditor should not be appointed by the court to audit the books, papers, transactions and records of the estate of George Hermann deceased, at 1–2, Stewart, No. 78533 (filed July 22, 1918). 10. Original Answer of Defendants at 2, 7, Stewart, No. 78533 (filed August 19, 1918). 11. Id. at 6. 12. John J. Crooker, Jr. & Gibson Gayle, Jr., Fulbright & Jaworski: 75 Years (1919-1994) 14 (Fulbright & Jaworski L.L.P. 1994). 13. Id. at 15. 14. Id. 15. Id. 16. Harold M Hyman, Craftsmanship and Character: A History of the Vinson & Elkins Law Firm of Houston, 1917–1997, at 52–53 (The University of Georgia Press 1998).
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