Baker v. Baker

• Decision Date: 01 November 1944
• Docket Number: No. 8151.,8151.
• Citation: 183 S.W.2d 724
• Parties: BAKER v. BAKER.
• Court: Texas Supreme Court

183 S.W.2d 724

BAKER v. BAKER.

No. 8151.

Supreme Court of Texas.

November 1, 1944.

On Second Motion for Rehearing December 6, 1944.

Error to Court of Civil Appeals of Fourth Supreme Judicial District.

Suit by Myla Baker against Earl M. Baker, to recover two-thirds of the common stock of the Gunter Hotel Corporation. Judgment for plaintiff was reversed and judgment rendered for defendant by the Court of Civil Appeals, 169 S.W.2d 1016, and plaintiff brings error.

Judgments of Court of Civil Appeals and of district court set aside and cause remanded to Court of Civil Appeals with instructions.

Cantey, Hanger, McMahon, McKnight & Johnson, of Fort Worth, Eskridge & Groce, of San Antonio, and Rawlings, Sayers & Scurlock, Gillis A. Johnson, and Alfred McKnight, all of Fort Worth, for plaintiff in error.

Johnson & Rogers and Nat. L. Hardy, all of San Antonio, Vinson, Elkins, Weems & Francis, Sam G. Croom, and Croom & Croom, all of Houston, W. O. Gross, of Mineral Wells, and Black, Graves & Stayton and C. L. Black, all of Austin, for defendant in error.

FOLLEY, Commissioner.

On the original submission of this cause we delivered an opinion reversing the judgment of the Court of Civil Appeals and affirming that of the trial court. The cause is now before us upon motion for rehearing filed by the respondent, Earl M. Baker. We reach the same conclusions herein as heretofore announced, but in passing on the motion for rehearing we order our former opinion withdrawn, and in lieu thereof substitute the following for the disposition of the cause and for publication.

This suit was filed by the petitioner, Myla Baker, against the respondent, Earl M. Baker, to recover 2/3 of the common stock of the Gunter Hotel Corporation, owner of the Gunter Hotel in San Antonio. In a jury trial in the district court the petitioner recovered judgment. The Court of Civil Appeals reversed such judgment and rendered one for respondent. 169 S.W.2d 1017.

For many years prior to the inception of this suit the petitioner and her brother, T. B. Baker, were engaged as partners in the hotel business, first in Kansas, and later in Texas where they accumulated large interests in hotels, farms, ranches and other property. The respondent, Earl M. Baker, is a nephew of petitioner and T. B. Baker. Since his early youth he has been associated with petitioner and T. B. Baker in their business activities and from time to time acquired certain interests of his own. About 1930, or shortly thereafter, the partnership experienced financial difficulties, and respondent, with the consent of the partners, assumed greater responsibilities in the management of the business enterprises and acquired in his own name most of the property theretofore held by the partnership. The true character of such arrangement is highly controverted. The petitioner claimed that respondent was holding such property only in trust for the partnership under an agreement between the parties to that effect. The respondent claimed that the property belonged to him since he had paid valuable consideration therefor from his own funds. No specific finding was made on this question in the trial court. However, the Court of Civil Appeals found that the respondent was holding such property for the benefit of Myla Baker and Earl M. Baker, the latter having succeeded to the rights of T. B. Baker. There is no complaint about this finding, and as we view the matter it becomes immaterial.

At any rate, some time prior to December, 1938, the parties began negotiations for a settlement or partition of the respective rights of Myla Baker and Earl M. Baker in the assets of the estate. An instrument dated December 1, 1938, was prepared for the parties to sign. This paper included, among other divisions of the property, a stipulation that Earl M. Baker was to receive 1/3, and Myla Baker 2/3, of the stock of the Gunter Hotel Corporation. The petitioner signed the instrument as prepared but respondent refused to do so because it included the division of the Gunter stock. At that time the stock was held by and in the name of Earl M. Baker and other co-trustees for the benefit of a creditor of the corporation, the Gunter Hotel being heavily incumbered. A few days later negotiations were reopened by the parties through their attorneys, which culminated in the preparation in writing of another settlement or partition agreement dated December 9, 1938, but which was not executed until December 11, 1938, when the parties and their attorneys met in Fort Worth for the purpose of making a settlement. By consent of the parties no provision was included in the latter instrument with reference to the stock of the Gunter Hotel Corporation. The petitioner introduced evidence to the effect that at the time the second instrument was executed respondent orally promised to deliver 2/3 of such stock but requested that no mention be made of it in the written agreement because it was then held in trust as aforesaid and he was not in position to procure or deliver it. This evidence was strongly controverted by respondent. The partition agreement was executed by respondent and his wife, Gladys Whorton Baker, as parties of the first part, and petitioner as party of the second part. It was therein agreed that on or before December 19, 1938, first parties would convey to second party all or portions of certain holdings in real estate in various counties in Texas, an undivided 1/2 interest in the minerals of 40 acres of land in Aransas County, and all of the grantors' interest in WFAA radio stock. The petitioner in turn agreed to convey to respondent and his wife the Crystal Plant in Mineral Wells, the Piedmont Hotel property in Mineral Wells, and 8100 shares of stock in the Resort Hotel Company, owner of the Baker Hotel in Mineral Wells. The Piedmont Hotel property consisted merely of the right of petitioner to purchase such hotel under a contract with the City National Bank of Mineral Wells, which right had theretofore been transferred by written assignment from petitioner to the Resort Hotel Company. About 70 per cent of the stock of the latter company was owned by respondent and about 10 per cent thereof by petitioner. At the time of the execution of the partition agreement petitioner possessed no interest in the Piedmont Hotel property except such as she might have claimed indirectly as owner of the 8100 shares of stock in her assignee, the Resort Hotel Company, and thus the transfer of this stock to respondent, which was all she owned, carried with it all her interest in the Resort Hotel Company, including her remote interest in the Piedmont Hotel property.

Simultaneously with the execution of the partition agreement the parties executed fifteen conveyances or agreements, which included all the property mentioned in the partition agreement except the Piedmont Hotel property, the WFAA stock, and the 8100 shares of stock in the Resort Hotel Company. Since petitioner had divested herself of all her interest in the Piedmont Hotel property, as above stated, no further executions were necessary with reference to it. The WFAA stock and the 8100 shares in the Resort Hotel Company were transferred by written endorsement. Also, as a part of the settlement, respondent surrendered to petitioner 2230 shares of stock in the Citizens Hotel Company, which stock was not specifically mentioned in any of the written instruments. It was in petitioner's name and belonged to her, but had been held by respondent as collateral security for petitioner's overdraft of her account at the Baker Hotel in Mineral Wells.

The fifteen collateral instruments also embraced five distinct matters which were not mentioned in the general partition agreement. Such obligations were as follows: (1) A trust agreement promising payment of $9,000 per year to petitioner for the remainder of her life and pledging 64,000 shares of stock of the Resort Hotel Company to guarantee its payment; (2) a stipulation authorizing payment of the $9,000 in monthly installments of $750 each; (3) an agreement with warranty to furnish petitioner an apartment in the Baker Hotel at Mineral Wells for the remainder of her life, together with her meals, laundry and maid service without cost to her; (4) an assignment of a 2/3 interest in the unpaid balance of a note given by Edson Realty Company and Wilson Holding Company in the sum of $8,000; and (5) a mutual agreement between the parties insuring correct description of the lands conveyed to each other.

Also, contemporaneously with the execution of the several instruments above enumerated, the parties executed a mutual release which furnishes the chief background for the present controversy. The provisions of this release which are here material are as follows:

"Whereas, on the 9th day of December, 1938, a contract was entered into by and between Earl M. Baker and Gladys Whorton Baker, as first party, and Myla Baker, as second party, for the purpose of exchanging certain properties therein mentioned and executing conveyances thereto, respectively; and,

"Whereas, it is contemplated by all of the parties hereto that when the terms of said contract are complied with that it shall constitute a full, final, and complete release, each to the other, respectively, from all claims, demands, choses in action, suit, or other right of action of every character and description, whether enumerated herein or not, save and except the rights and benefits accruing to Myla Baker under a certain trust agreement executed by Earl M. Baker, December 10, 1938.

"Now, therefore, in consideration of the foregoing premises, and the respective rights and benefits passing to each of said parties, respectively, under the terms of said contract, we enter into the following release agreement:

"I. I, Myla Baker, do hereby release Earl M. Baker and Gladys Whorton Baker from any and all claims, demands, choses in action, or other right of action, of every character...