Neyland v. Brown, 2454-8013.

Citation170 S.W.2d 207
Decision Date17 March 1943
Docket NumberNo. 2454-8013.,2454-8013.
PartiesNEYLAND v. BROWN et al.
CourtSupreme Court of Texas

The parties to this suit are O. L. Neyland, plaintiff in the trial court, and the partnership of Brown & Root, the individual members thereof, and Brown & Root, Inc., successor to the partnership, defendants in the trial court. Both the plaintiff's and the defendants' applications for writ of error were granted, the result of which is that each party is both petitioner and respondent here. We shall refer to the plaintiff as Neyland and the defendants collectively as Brown & Root.

In its general aspect the suit is one for an accounting, but more specifically stated it is a suit for the recovery by Neyland of specific amounts claimed to be owing to him by Brown & Root under ten separate and distinct contracts, relating to ten separate construction jobs superintended by Neyland for Brown & Root. As stated in one of the briefs, although the suit presents many independent grounds of recovery and defenses, they all stem back to an oral contract made April 26, 1929, at Edinburg, Texas, between Herman Brown for Brown & Root, as employer, and Neyland, as employee. Prior to the making of that contract Brown & Root had been awarded a contract by the State Highway Commission to build eleven miles of road in Kerr County. The Edinburg contract was made with reference to the Kerr County contract. The terms of that contract material to the questions presented here for decision were not put in dispute. In substance and effect they were that Neyland should be field superintendent of the road construction work and the performance generally of Brown & Root's contract with the State. He was to be allowed $200 per month, charged against the job, and was to receive one-half the profits realized therefrom. Brown & Root were to furnish all money, pay all bills and keep the books. Neyland was to O. K. all expenses for labor, material, etc., used on the job, and Brown & Root were to charge to the job as costs thereof only items having Neyland's O. K., with the exception of premiums on surety bonds and workmen's compensation.

During the course of the construction of the Kerr County highway Neyland procured for Brown & Root nine other contracts for nine other different construction jobs and was employed to superintend each of such jobs on the same terms as those embodied in the Edinburg contract. All of the work was completed in about two years. The different causes of action asserted in this suit grow out of the performance of those several construction contracts. In the trial court judgment was rendered in part upon the jury's verdict and in part non obstante veredicto in favor of Neyland against Brown & Root for approximately $94,000 besides interest. The Court of Civil Appeals on original hearing reversed and remanded the case generally but on rehearing affirmed the trial court's judgment in part, reversed and rendered it in part and reversed and remanded it in part. 161 S.W.2d 833.

As noted above, each party made application for writ of error and each was granted. The parties agree that each asserted cause of action is severable from the others and we shall therefore consider the various causes of action separately. Our order of consideration will be to follow the order of presentation in the application of Neyland and then the additional questions presented in the application of Brown & Root.

Saxet Company Stock Transaction.

While Neyland was acting as superintendent of the construction of the State Highway under the Edinburg contract, he negotiated for Brown & Root a contract with W. L. Moody III for the construction of a concrete dam across the Johnson Fork of the Llano river in Kimball County, on property belonging to Moody. It was planned that the dam would cost about $35,000. By the contract for the construction of such dam Brown & Root were given the option to be exercised by June 25, 1930, to accept in settlement thereof the equivalent in common stock of 700 shares of the preferred stock of Saxet Company. The option was not exercised by Brown & Root. After the original contract was made Moody decided to enlarge the plan and the final cost of the construction of the dam in its enlarged form was approximately $64,000. Other small construction jobs were performed by Brown & Root for Moody during the period, and after the completion of all of them Brown & Root sent to Moody a statement as prepared by Neyland of the amount owing with the request that same be paid. After about thirty days Brown & Root again called upon Moody for its payment by telegram. In response thereto Moody mailed to Brown & Root a certificate for 3750 shares of the common stock of Saxet Company stating in the letter of transmittal that same was sent in payment for the construction of the dam in accordance with the terms of the contract. This certificate was received by Brown & Root in Austin about February 19th or 20th, 1931, and on or about April 1st. Thereafter they sent Neyland to Galveston to effect a settlement with Moody. Neyland effected a full settlement with Moody's representative, J. F. Reed, by the terms of which Brown & Root were to receive 3750 shares of Saxet stock valued at $10 per share, and a check for $30,758.61. As evidence of such settlement Neyland executed and delivered to Reed a receipt in full for the stock and the check, signing same "Brown & Root, by O. L. Neyland, Authorized Agent." Thereafter, on April 7, 1931, Brown & Root credited Moody's account with 3750 shares of Saxet stock at the value of $37,500.

An unsigned copy of a letter was offered in evidence dated April 2, 1931. The letter was addressed to Mr. John F. Reed, Galveston, Texas, and concluded as follows: "Yours very truly, Brown & Root, by ______, Authorized Agent." By the terms of that letter Reed was granted an option of ninety days within which to purchase 3750 shares of Saxet stock at $11 per share. The option was conditioned as follows: "If at any time prior to noon, April 15th, 1931, we have made a bona fide sale of said 3750 shares of the common stock of The Saxet Company to you and Mr. O. L. Neyland for a consideration of $10.00 per share, less transfer stamps and taxes, then, and in that case this option is voided." The original of the letter was not produced. Herman Brown testified that Neyland brought a copy of the letter from Galveston upon his return with the stock and the check. Neyland denied this and testified that he knew nothing of this option letter. The jury found that Neyland knew of this option letter, but there was no issue submitted calling for a finding with reference to whether or not he signed same.

On April 15, 1931, Brown & Root in answer to a telegram from Neyland notified him of their willingness to sell the stock to him and Reed at $10 per share, the price named in said option letter, but Neyland did not exercise his option to purchase same. Reed declined to forfeit his ninety day option and thereafter the stock became practically worthless. It was finally sold to Henry Brown, one of the stockholders in Brown & Root, Inc., for a sum slightly in excess of $1,100. Neyland claims that he should be paid one-half the sum of $37,500, the price at which such stock was accepted, while it is the claim of Brown & Root that payment should be one-half of the price received by them in the sale of such stock.

The transactions with reference to this matter are shrouded in uncertainty. Sharp conflicts appear in the testimony and the special issues submitted to the jury were in the main with reference to undisputed matters having no particular relation to the real controversy. By his pleadings Neyland sought to recover on this item upon allegations that on or about the 19th day of February, 1931, Brown & Root received and accepted from Moody 3750 shares of the stock of Saxet Company and credited the receipts and revenues of the jobs performed for Moody with $37,500, the agreed valuation of said stock. He completely failed to establish that ground of recovery, and does not now contend that Brown & Root accepted said stock at that time. In his application for writ of error it is stated that the undisputed evidence shows that this stock was received by Brown & Root and credited on the Moody account, together with a cash remittance of $31,768.51 on April 7, 1931. That date was shortly after Neyland was in Galveston effecting a settlement with Reed, the representative of Moody, and was the date when Brown & Root claim to have accepted same.

Alternatively, Neyland pleaded that Brown & Root impliedly agreed to credit his account with one-half of $37,500, the price at which the Saxet stock was taken. That fact was disputed by Herman Brown and no special issues were submitted or requested to be submitted to the jury with respect thereto. Such ground of recovery was therefore waived. Ormsby v. Ratcliffe, 117 Tex. 242, 1 S.W.2d 1084; Wichita Falls & Oklahoma Ry. Co. et al. v. Pepper, 134 Tex. 360, 135 S.W.2d 79.

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