Catania v. Garage De Le Paix, Inc., 936

• Decision Date: 30 September 1976
• Docket Number: No. 936,936
• Citation: 542 S.W.2d 239
• Parties: George CATANIA et al., Appellants, v. GARAGE DE LE PAIX, INC., et al., Appellees.
• Court: Texas Court of Appeals

Page 239

542 S.W.2d 239

George CATANIA et al., Appellants, v. GARAGE DE LE PAIX, INC., et al., Appellees.

No. 936.

Court of Civil Appeals of Texas Tyler.

Sept. 30, 1976.

Rehearing Denied Oct. 28, 1976.

George M. Bishop, Tipton & Bishop, Houston, for appellants.

Milton Schwartz, Schwartz, Judice & Farrell, Houston, for appellees.

MOORE, Justice.

Appellants, plaintiffs below, brought suit against appellees, defendants below, seeking damages for fraud in the inducement of a real estate lease agreement under the provisions of the Texas Business and Commerce Code, sec. 27.01 and, in the alternative, for the rescission of the lease contract because of fraud and deceit and sought a recovery of prepaid rent and for damages for conversion of certain personal property left on the leased premises. After a trial before the court judgment was entered granting appellants a $4,000 recovery for conversion of personal property left on the leased premises but denied them any relief on their claim for fraud. Appellants have limited their appeal to that part of the judgment denying them any relief on their claim for fraud. Appellees seek the reversal of that part of the judgment awarding appellants a recovery for conversion.

We affirm the judgment except that portion granting appellants judgment for conversion which we reverse and render in favor of appellees.

The appellants, George Catania and Earl Williams, leased a restaurant from the appellee, Garage De Le Paix, Inc., a Texas corporation. The lease which was for five years was to encompass the period from January 1, 1973, through December 31, 1977. Under the terms of the lease, the appellants as lessees agreed to pay rent of $2,000 per month and to assume the obligations of maintenance, insurance, taxes, etc. Upon execution of the lease appellants paid the lessors the sum of $24,000 covering the rent for the first month and prepaying the rent for the last eleven months in accordance with the terms of the lease. The appellant's operated the restaurant on the leased premises for about one year under the lease and then, with the consent of the appellee corporation, they assigned the lease and sold several items of operating equipment in the nature of personal property to Mark Harris. Harris continued to operate the restaurant for about six months after which he vacated the premises, leaving behind the operating equipment he had purchased from appellants. At the time Harris abandoned the premises he was one month's rent in arrears and there were three and one-half years remaining on the lease. After the assignee Harris vacated, the appellants immediately re-entered the premises, changed the locks to the building and set out to find a new lessee.

It is apparent from the pleadings and the evidence that aside from their cause of action for conversion the appellants sought to recover upon two theories. First, they sought damages for fraud and secondly, they sought a rescission of the contract based upon fraud in the inducement and prayed for a recovery of $22,000 in prepaid rent. In his findings of fact and conclusions of law the trial judge found, among other things, that the appellees did not make any of the fraudulent representations alleged by the appellants as a basis for the cause of action for fraud. The court further found that the appellants abandoned the premises and defaulted in the lease payments. Finally, the court found that the lessor converted certain personal property of the appellants worth approximately $4,000. As conclusions of law the court found that the lease was a binding and valid agreement not having been procured by fraud or deceit and that there had been no unjust enrichment. The court concluded further that although the appellants were entitled to a judgment for conversion in the amount of $4,000 appellants were not entitled to any relief on their claim for fraud.

Appellants have no points of error attacking the trial court's findings that the evidence failed to establish fraud on the part of appellees. Appellants' points of error, ¹ as we understand them, contend that the trial court erred in refusing to make additional findings in response to their request, by refusing to find that after appellants abandoned the leased premises and the appellees re-entered, the lease contract became terminated and therefore appellants were entitled to recover the sum of $22,000 in prepaid rent. Appellants now contend on this appeal that since the record establishes that the lease was terminated as a matter of law by the acts and conduct of the parties, it becomes our duty to reverse and render judgment in their favor for the prepaid rent. We cannot agree with this proposition.

The record is devoid of any pleadings or proof establishing a cause of action upon the theory that the lease terminated. The record clearly shows that aside from the cause of action for conversion, the appellants' theory of recovery was based solely on actionable fraud and, alternatively, for rescission of the lease contract based on fraud in the inductment thereof. The trial court, therefore, properly refused to find that the appellants were entitled to a recovery on the ground that the lease contract...