Bell v. Manning

• Decision Date: 26 February 1981
• Docket Number: No. 1422,1422
• Citation: 613 S.W.2d 335
• Parties: Lloyd BELL et ux., Appellants, v. William C. MANNING et al., Appellees.
• Court: Texas Court of Appeals

Page 335

613 S.W.2d 335

Lloyd BELL et ux., Appellants, v. William C. MANNING et al., Appellees.

No. 1422.

Court of Civil Appeals of Texas, Tyler.

Feb. 26, 1981.

Rehearing Denied March 26, 1981.

Gaddy Wells, James N. Parsons, Parsons, Thorn & Wells, Palestine, for appellants.

John Mosley, Morgan & Mosley, Kaufman, for appellee.

MOORE, Justice.

This is an appeal from a summary judgment rendered in favor of an attorney in a suit filed by a non-client seeking damages for negligent misrepresentation. Plaintiffs, Lloyd Bell and wife, Mildred Bell, instituted suit against William C. Manning, Esq., alleging that in the course of the closing of a contract for the construction of a house upon plaintiffs' property, defendant William C. Manning, the attorney representing J. W. Guill, the contractor, acting by and through his secretary, made certain false representations to the plaintiffs by stating that it was necessary for them to execute a deed of trust to the Kaufman State Bank securing the payment of a mechanic's lien note. Plaintiffs alleged that defendant's secretary failed to exercise reasonable care or competence in obtaining and communicating this information to the plaintiffs and as a result the plaintiffs relied upon false information which proximately caused them damage. They further alleged that after paying the contractor practically all of the construction cost in cash, the contractor assigned the mechanic's lien note to the bank and secured additional funds which they were forced to pay when the bank threatened to foreclose under the deed of trust and but for the false misrepresentation that a deed of trust was necessary the bank would have been unable to enforce its claim.

Defendant, William C. Manning, responded with a motion for summary judgment. As grounds for the motion Manning alleged that he is entitled to a summary judgment because the uncontroverted summary judgment evidence establishes as a matter of law that no privity of contract existed between him and the plaintiffs. He alleged that since privity was one of the essential elements of plaintiffs' cause of action and the summary judgment proof shows as a matter of law that there is no genuine issue of fact on such essential issue, he was entitled to a summary judgment. In their reply to the motion for summary judgment, plaintiffs admitted that they did not retain the defendant to represent them in the closing transaction in question and that there was no privity of contract. Plaintiffs alleged, however, that although there was no privity of contract between the plaintiffs and defendant, the pleadings, when taken together with the depositions, affidavits and other summary judgment proof on file shows that the cause of action asserted against the defendant sounds in tort rather than contract. Consequently, they say that the question of whether there was privity of contract is immaterial. After a hearing, the trial court granted the defendant's motion for summary judgment, decreeing that plaintiffs take nothing by their suit, from which judgment plaintiffs perfected this appeal.

We affirm.

The material facts are not in dispute. Viewing the evidence in a light most favorable to the plaintiffs, as we must, the summary judgment proof shows that in early June 1977, plaintiffs contacted J. W. Guill, a building contractor, for the purpose of building a house on property owned by them in Henderson County, Texas. At that time plaintiffs were residents of Texas City, Texas. On June 15, 1977, after plans and specifications had been worked out, the contractor agreed to build the house for the sum of $67,900. On the same day Mr. Guill, the building contractor, instructed his attorney, William C. Manning, to prepare a mechanic's and materialman's lien contract, a mechanic's lien note to be executed by plaintiffs in the amount of $67,900, as well as a deed of trust to the First National Bank of Kaufman, Texas. Defendant Manning instructed his secretary, Delores Sexton, to prepare the instruments. Later that day Mr. and Mrs. Bell and Mr. Guill went to Manning's law offices for the purpose of closing the transaction. Plaintiffs did not know Mr. Manning and had never been to his offices prior to this time. When the parties arrived at the Manning law offices, Mr. Manning was not there. Delores Sexton, his secretary, was the only person in the office. Mr. Guill, the building contractor, introduced Mrs. Sexton to the Bells but did not mention her name. Mr. Bell testified by deposition that he was of the impression that Mrs. Sexton was attorney Manning. It is undisputed that neither Mr. Guill nor Mrs. Sexton represented that she was an attorney or that her name was Manning. After making a cursory examination of the instruments, Mr. Bell stated that since he intended to pay cash for the construction of the house, he did not understand why it was necessary to execute the deed of trust to the Bank and that he should not be required to sign any instrument except the mechanic's and materialman's lien contract. Thereupon he pushed the unsigned instruments back toward Mrs. Sexton as if he did not intend to sign either of the instruments. After further discussion, Mr. Bell then asked Mrs. Sexton why she had prepared a deed of trust when he was going to pay cash. In reply Mrs. Sexton said: "That's a legal way to get your house built, that's the way its got to be done." Thereupon the Bells signed the instruments. Mr. Bell testified that in signing the instruments he relied upon Mrs. Sexton's statements because he believed she was an attorney. Although Mr. Bell later testified by deposition that it was his intention to finance the construction of the house on a cash basis with funds he had on deposit in Texas City, it is undisputed that no part of the construction cost had been advanced to Guill at the time the instruments were presented to plaintiffs for signing nor is there any evidence that parties had entered into a prior agreement that the construction would be paid for in cash. It appears from the record that what Mr. Bell meant when he said he was going to pay cash was that he intended to advance the cash as the construction progressed. ¹

Shortly after the instruments had been executed, the contractor commenced work on the house. The record shows that between July 6, 1977, and February 1, 1978, plaintiffs made cash advances to the contractor in the amount of $57,266. The funds were advanced periodically as the work progressed. The contractor thereafter abandoned the job before the house was completed. According to Mr. Bell, the sum of $2,300 was due and owing to the air conditioning subcontractor. In addition to this, he testified that an expenditure in the amount of $6,000 would be required to complete the house according to the plans and specifications. While the record is not clear, it appears that the building contractor, at some undisclosed time, assigned the mechanic's and materialman's lien contract and note to the Kaufman State Bank and that the bank advanced him some funds thereon. At any rate, the undisputed testimony of Mr. Bell shows that when the bank threatened to foreclose, he paid the bank $26,000. According to the unchallenged statement in plaintiffs' brief Mr. Guill, the building contractor went into bankruptcy after he abandoned the contract.

By a single point of error, plaintiffs contend that the trial court erred in rendering summary judgment for attorney Manning because he failed to prove, as a matter of law, that no genuine issue of material fact existed as to one or...