Blakeway v. General Elec. Credit Corp., 11613

• Decision Date: 05 June 1968
• Docket Number: No. 11613,11613
• Citation: 429 S.W.2d 925
• Parties: Clayton BLAKEWAY et al., Appellants, v. GENERAL ELECTRIC CREDIT CORPORATION, Appellee. . Austin
• Court: Texas Court of Appeals

Page 925

429 S.W.2d 925

Clayton BLAKEWAY et al., Appellants, v. GENERAL ELECTRIC CREDIT CORPORATION, Appellee.

No. 11613.

Court of Civil Appeals of Texas.

Austin.

June 5, 1968.

Rehearing Denied June 26, 1968.

McGinnis, Lochridge, Ilgore, Byfield, Hunter & Wilson, Donald F. Nobles, Austin, for appellants.

Pearce & Smith, Maloney, Black & Hearne, Thomas Balck, Austin, for appellee.

PHILLIPS, Chief Justice.

This case involves a breach of a lease agreement to purchase 120 television sets, among other property, and an action for damages.

In December of 1962 an agreement for the lease of 120 television receivers, 120 television bases, an antenna distribution system and certain related equipment was entered into between General Electric Credit Corporation as lessor and Ramada Inn Motel of Midland, Texas, as lessee. At the time of the execution of the lease agreement this Ramada Inn was owned by a partnership comprised of Clayton Blakeway and Donald McGregor. Subsequent to the execution of the lease agreement McGregor sold and transferred his interest in the partnership to appellant Ben W. Greig, Jr. Appellee had the lessor's interest in the agreement assigned to it subsequent to the execution thereof.

Appellants made 43 of the 60 payments provided for in the agreement, then made no payments after September, 1966.

In December of 1966, the Republic National Bank of Dallas foreclosed its deed of trust lien on the real estate and improvements in which the leased equipment was located. Since appellants had been dispossessed of the property where the leased equipment was located, they relinquished physical possession and control of the leased equipment to the Bank, who purchased the realty at the foreclosure sale.

During the early part of January, 1967, appellee requested the Bank to assume appellants' obligations under the lease agreement; however, the Bank repudiated the lease agreement. Appellee also tried to renegotiate a lease agreement with the Bank, however this was also unfruitful.

On January 19, 1967, appellee notified appellants that it intended to hold a public sale of the leased television receivers on February 1, 1967. Appellee then published a notice of this proposed sale in a Midland newspaper on each day from January 23, 1967 through January 27, 1967. On February 1, 1967, appellee entertained bids to purchase the leased television equipment from a number of people; however, on its own bid, appellee was successful in purchasing this equipment for $2,400, which amount was credited to appellants.

Thereafter, appellee sold the equipment to the Republic National Bank of Dallas.

Appellees filed this suit in April, 1967. After trial on the merits, the court entered a take nothing judgment; however, the court, on proper motion, and in December of 1967 after a second trial, entered judgment awarding appellees $6,103.06 in damages. Hence this appeal.

We affirm.

Appellants are before us on eleven points of error, the first three, briefed together, being the error of the trial court in his conclusion of law No. 1 that the lease was and is a valid and enforceable obligation and in failing to hold, as a matter of law and under the terms of the lease contract, that such lease contract was terminated by the parties; that in conclusion of law No. 6 appellee did not accept surrender of the lease and in failing to hold, as a matter of law, that appellee accepted surrender of the lease; in conclusion of law No. 4 that appellee was entitled under the lease and under the law to sell the leased equipment and recover its damages and in failing to hold, as a matter of law, that appellants were relieved of liability by reason of surrender of lease equipment by appellants and acceptance by appellee.

We overrule these points.

Appellants cite a number of cases ¹ to the effect that where the lessor has taken possession of leased property before the expiration of the term of the lease or done any act inconsistent with the continuation of the 'lessor-lessee' relationship, there is a termination of the lease as a matter of law.

It is conceded that appellants defaulted in the payments due after October, 1966. The court found, without objection, that in November, 1966, appellee unsuccessfully wrote appellants and requested immediate payment of the delinquent rentals and Continued performance of the lease contract. It is further conceded that in January, 1967, appellants allowed ad valorem taxes on the equipment to become delinquent and cancelled the insurance required by the lease. It is also conceded that in December of 1966, the Ramada Inn was conveyed through foreclosure to the Bank and appellants left the premises where the leased equipment was located and installed and relinquished all possession and control of the equipment to the Bank.

It was stipulated and found by the court that after appellants vacated the premises the Bank was called upon to honor the lease agreement; however, the Bank repudiated the lease and refused to make the delinquent payments current or to make any further payments thereon or to perform any of the duties or obligations of the lease. It was also found by the court that appellee attempted to renegotiate the lease with the Bank but was unsuccessful in this effort.

We hold that the trial court was correct in finding that appellants abandoned the leased property. Under the breach of the contract before us, appellees had either of two remedies: (1) sue for payments of the rents provided for in the contract, or (2) take possession of the property and sue for their damage which would be the difference between the rent contracted for and that received by appellees for the use of the property. ² Stewart v. Basey, 241 S .W.2d 353 (Tex.Civ.App.Austin 1951), aff'd. 150 Tex. 666, 245 S.W.2d 484; Marathon Oil Co. v. Edwards, 96 S.W.2d 551(Tex.Civ.App.Amarillo 1936, writ dis'm); Evons v. Winkler, 388 S.W.2d 265 (Tex.Civ.App.Corpus Christi 1965, writ ref'd n.r.e.).

The cases cited by appellants are not in point as they all involve situations where there was a surrender as a matter of law. The principle is well stated in Barret v. Heartfield, 140 S.W.2d 942 (Tex.Civ.App.Beaumont 1940, writ ref'd) wherein the Court stated:

'(1, 2) When the tenant abandons the leased premises, it is the settled law of this state that the landlord may relet the premises by taking proper precaution not to create a surrender by operation of law. Early v. Isaacson, Tex.Civ.App., 31 S.W.2d 515; see criticism of this case 9 Texas Law Review 578. So, the mere renting of the filling station by appellant to third parties after appellees' default in the payment of their rent notes and after they and their sublessee vacated the premises in violation of their contract did not terminate the rent contract and did not release appellees from the payment of the notes in controversy. Marathon Oil Co. v. Rone, Tex.Civ.App., 83 S.W.2d 1028.'

The facts here amply support the finding of the trial court that the lease was abandoned.

Appellants' points four through seven, briefed together, are the error of the trial court in finding that there was no mutual agreement for appellee to accept surrender of the lease, since there was no evidence to support such findings; such finding is against the great weight and preponderance of the evidence; that appellee never intended to accept surrender of the lease since there was no evidence to support such finding; that such finding is against the great weight...