Armendariz v. Mora, 6550

• Decision Date: 08 June 1977
• Docket Number: No. 6550,6550
• Citation: 553 S.W.2d 400
• Parties: Pearline Cathy ARMENDARIZ, Micha Miracle and B & B Vending & Music Company, d/b/a B & B Vending Company, Appellants, v. Joe B. MORA, d/b/a Central Vending Company, Appellee.
• Court: Texas Court of Appeals

Page 400

553 S.W.2d 400

Pearline Cathy ARMENDARIZ, Micha Miracle and B & B Vending &

Music Company, d/b/a B & B Vending Company, Appellants, v. Joe B. MORA, d/b/a Central Vending Company, Appellee.

No. 6550.

Court of Civil Appeals of Texas, El Paso.

June 8, 1977.

Rehearing Denied July 6, 1977.

Brewster, Steinberger & Mayhall, Jack L. Brewster, El Paso, for appellants.

Charles E. Anderson, El Paso, for appellee.

OPINION

WARD, Justice.

This is a tort action for damages arising from the alleged intentional interference with the Plaintiff's contractual rights where the Plaintiff had the exclusive right to operate his coin-operated machines at that establishment known as "The Brass Asp." The Defendants were the lessee-bar owner who executed the contract with the Plaintiff, the successor-lessee of the premises, and the Plaintiff's competitor who placed his own machines in the premises under contract with the successor-lessee. Trial was to a jury on special issues which determined there had been a wilful and intentional interference with the performance of the contract participated in by all of the Defendants. Based on the verdict, judgment was entered which awarded the Plaintiff both actual and exemplary damages. The three Defendants have appealed and as modified we affirm.

S & H Realty Company was the owner of the real estate in question, and on February 28, 1972, entered into a written lease of the business premises with the Defendant, Cathy Armendariz, for a period of two years, the lease containing an option to renew for an additional period of three years. Cathy permitted the installation of certain coin-operated machines in the bar by a third party, and on June 6, 1972, these machines together with the concession under which they were operated were purchased from the then owner by the Plaintiff, Joe Mora, who was doing business under the name of Central Vending Company. According to Mora, Cathy participated to the extent that she witnessed this transaction and saw Mora purchase the machines for $1,000.00. She also at that time executed the written exclusive concession lease which became the subject of this suit and which provided that for a period of five years, Mora was granted the exclusive right to place coin-operated amusement and vending machines in the premises, with the receipts from the operation of the machines being equally divided between the parties. These two parties thereafter operated under this agreement until the events which brought about its breach in March, 1974.

On October 31, 1973, Cathy Armendariz entered into a written contract of sale with the Defendant, Micha Miracle, to sell to her the assets and business of The Brass Asp at an agreed price of $22,000.00 plus inventory, the sale being conditioned that the purchaser, Micha Miracle, secure a liquor license by March, 1974, that Cathy Armendariz execute the option to renew the lease of the premises for the three-year period beginning March, 1974, and that that renewal lease be then assigned to the purchaser. At that time, the Defendant, B & B Vending Company, which was in the coin-operated machine business, had agreed with Micha Miracle that if she purchased the business, it would lend her $10,000.00 and in turn would place its machines in the premises. By March, 1974, Micha Miracle had secured her liquor license, and the option to renew the lease had been exercised by Cathy Armendariz. According to the Plaintiff's version, at that time the Defendants realized that they would not be able to remove the Plaintiff's machines without a fight. In any event, they decided not to proceed under the assignment of the original lease but would obtain a new lease between the owner and Miracle. They were successful and on March 13th, the owner of the building, S & H Realty Company, released the Defendant, Cathy Armendariz, from the renewal lease and in turn executed an entirely new lease of the premises to Micha Miracle for a term of three years, the terms of this new lease being guaranteed by the Defendant, B & B Vending Company. On March 7th, the two Defendants, Micha Miracle and B & B Vending Company, entered into a location agreement which provided that B & B Vending Company would have the exclusive right to install and operate its coin machines on the premises for a term of six years. It was only then that the Defendants first informed Mora of the events and called upon the Plaintiff to remove his machines from the premises. Joe Mora instituted suit against the three Defendants seeking temporary and permanent injunctive relief to protect his interests under his exclusive concession lease which still had three years to run. The trial Court granted the temporary injunction, this Court of Civil Appeals affirmed, and the Supreme Court reversed and dissolved the temporary injunction. Armendariz v. Mora, 526 S.W.2d 542 (Tex.1975).

The Plaintiff then amended his pleadings, dropped his request for injunctive relief, and sued for damages arising from the tortious interference with his contractual rights. As stated, the case proceeded to trial before a jury, which by its answers to special issues made the following findings: (1) that one or more of the Defendants knew, or in the exercise of ordinary care should have known, of the existence of the exclusive concession lease between Mora and Mrs. Armendariz before Micha Miracle bought The Brass Asp; (2) that one or more of the Defendants interfered with the operation of Mora's machines at the location; (3) that the interference was wilful and intentional; (4) that the interference was a proximate cause of a monetary loss to the Plaintiff; (5) that each of the three Defendants interfered with the operation of Mora's machines at the location; (6) that the reasonable compensation to Mr. Mora for his financial loss by reason of the interference was the sum of $3,250.00 for loss of income to the date of trial, $4,750.00 for future loss of income, and $25.00 loss of equipment from the machines in question; (7) that the three Defendants acted with malice in their interference; (8) that exemplary damages should be assessed; and (9) that $7,000.00 was assessed as exemplary damages. Based upon the verdict of the jury, judgment was entered that the Plaintiff have recovery for $8,025.00 actual damages and $7,000.00 exemplary damages.

By an overly broad and multifarious first point, the Defendants-Appellants complain that no cause of action exists against them in that the Plaintiff had no valid contract which could be interfered with or rights that could be invaded, and that the Plaintiff failed to both prove and secure jury findings that any interference upon the part of the Defendants was "without just cause or excuse." Defendants first insist that the Plaintiff's exclusive concession lease was invalid as entered into in direct violation of the terms of the real estate lease between S & H Realty Company and Cathy Armendariz, which prohibited subleasing without the landlord's written consent, and the subleasing was also contrary to the prohibition contained in Article 5237, Tex.Rev.Civ.Stat.Ann.

The general rule is that for there to be a right of action against one for contractual interference, there must be in existence a valid contract subject to that interference. Glenn v. Gidel, 496 S.W.2d 692 (Tex.Civ.App. Amarillo 1973, no writ). To maintain the action for interference with the contract, it must be established that (1) there was a contract subject to interference, (2) the act of interference was wilful and intentional, (3) such intentional act was a proximate cause of Plaintiff's damage, and (4) actual damage or loss occurred. Here the attack is that the first element was missing as there was no valid contract. The rule announced in Clements v. Withers, 437 S.W.2d 818 (Tex.1969), controls. There, the Court held that the unenforceability of the contract in question, because of its failure to meet the requirements of the Statute of Frauds, was no defense to an action for tortious interference with its performance. The fact that the landlord in the present case might complain and invalidate the agreement gave no right to third parties to interfere with the performance of the contract.

Regardless, it is our opinion that this contract is not within the prohibition of the lease or of the statute. No exclusive possession of any of the premises was granted to the Plaintiff thereby. It did not create a leasehold estate and was not a sublease. To that extent, we approve the holding in Hancock v. Bradshaw, 350 S.W.2d 955 (Tex.Civ.App. Amarillo 1961, no writ). We do not follow that authority where it held that the three-year exclusive concession lease was a mere privilege revocable upon transfer to a new sublessee. While there has been no uniformity in upholding these exclusive concession agreements regarding coin-operated machines or in determining whether they are mere licenses or contracts, we think the better view recognizes them as valid contracts between the parties where they are for a term and are supported by a valuable consideration. Vass v. Fisher, 405 S.W.2d 866 (Tex.Civ.App. Houston 1966, no writ). See Annot. 53 A.L.R.3d 471 (1973). These contracts have become a fixture of everyday life and have been the subject of attempted regulation in this State. Art. 13.17, Taxation General, Tex.Rev.Civ.Stat.Ann.; Taylor v. State, 513 S.W.2d 549 (Tex.Cr.App.1974). We hold there was a valid contract which could be the subject of the tort action.

The complaint made by the Defendants that the Plaintiff failed to prove and secure jury findings that any interference upon the part of the Defendants was "without just cause or excuse" is without merit. Tippett v. Hart, 497 S.W.2d 606 (Tex.Civ.App. Amarillo), writ ref'd n. r. e., 501 S.W.2d 874 (Tex.1973). See Comment 28 Baylor L.Rev. 687 at 689 and 696 (1976). The four elements discussed above establish a prima facie case of interference with contract, and it...