Conrad v. Judson

• Court: Texas Civil Court of Appeals
• Writing for the Court: BATEMAN
• Citation: Conrad v. Judson, 465 S.W.2d 819 (Tex. Ct. App. 1971)
• Decision Date: 05 March 1971
• Docket Number: No. 17588,17588
• Parties: Mary Daniel CONRAD, Ind. and as Executrix of the Estate of Grover C. Conrad, Appellant, v. Ruby Wanda JUDSON et al., Appellees.

Page 819

465 S.W.2d 819

Mary Daniel CONRAD, Ind. and as Executrix of the Estate of Grover C. Conrad, Appellant, v. Ruby Wanda JUDSON et al., Appellees.

No. 17588.

Court of Civil Appeals of Texas Dallas.

March 5, 1971.

Rehearing Denied April 9, 1971.

Harvey L. Davis, Dallas, for appellant.

Robert H. Mow, Jr., James E. Coleman, Jr., Carrington, Coleman, Sloman, Johnson & Blumenthal, Bascom H. Thomas, Jr., Bowyer & Thomas, Dallas, for appellees.

BATEMAN, Justice.

The five appellees are sisters. They sued their father, Groved C. Conrad, to establish a partnership between him and them for the management and disposition of community assets of Conrad and his first wife, Edith Conrad, mother of appellees, who died intestate. Appellees sought a declaration of ownership by the partnership of certain real property, an accounting of all partnership operations, and a distribution to them of their mother's estate not previously distributed, and for general relief. Conrad died while the suit was pending and his second wife, Mary Conrad, was substituted as legal representative of his estate and also in her individual capacity. She filed an amended answer and counterclaim for the value of Conrad's services in operating the properties, and her attorney's fee under Vernon's Ann.Civ.St., Art. 2226.

The jury found, in response to the issues submitted to them: (1) the existence of a partnership between Conrad and the appellees beginning on or about July 1, 1950; (2) which continued to exist as such until Conrad's death on or about February 4, 1966; and (3) that Conrad was the manager of the partnership throughout its existence. The court rendered judgment on June 18, 1970, the pertinent elements thereof being:

1. That the partnership so found to exist, and called 'G. C. Conrad, Et Al,' be declared dissolved as of February 4, 1966;

2. That appellee Kathryn Louise McCarthy be appointed as surviving partner to wind up the affairs of the partnership;

3. That certain real property known as the Lake Ranch in Collin County, Texas, and as 5530 Lobello Drive, in Dallas, Texas, be declared assets of 'G. C. Conrad, Et Al,' with title and possession awarded to and vested in said surviving partner as such; subject, however, to a homestead right, during her lifetime, to the use, benefit and enjoyment of one-half of the net proceeds of the sale of 5530 Lobello Drive, after payment of all expenses in connection therewith, in Mary Daniel Conrad, individually;

4. That the sum of $54,751.05 be debited to the capital account of Conrad on the partnership books, to reflect reversal of his 'unauthorized drawings' found by the auditor and to reverse one-half of an unexplained credit of $5,000 which Conrad took for himself, as also stated in the auditor's report, so that after doing so Conrad's account would show a deficit of $40,298.12;

5. That Kathryn L. McCarthy, as such surviving partner, have and recover from appellant, individually and as executrix of Conrad's estate, $40,298.12 principal (representing the said deficit or overdraft) together with $41,076.27 as interest accrued to May 31, 1970 at 6 per cent per annum on the following unauthorized withdrawals by Conrad:

a. On $255.13 from Dec. 31, 1951

b. On $9,951.85 from Dec. 31, 1955

c. On $4,777.50 from Sept. 30, 1963

d. On $2,500 from Jan. 2, 1954

e. On $60,000 from Dec. 31, 1963

f. On $14,500 from Dec. 31, 1964,

together with interest on the total sum of $81,374.39 from May 31, 1970;

6. Fixing the court-appointed auditor's fee at $5,850 and taxing it and all other costs against appellant.

7. That all portions of the cause of action relating to the winding up of the affairs of the dissolved partnership 'and the determination of the amount of credits, if any, to be given to the capital account of Grover C. Conrad, deceased, for purchase moneys supplied by him in the purchase of Lake Ranch,' be severed and docketed under a different number, 'to remain under the continuing equitable jurisdiction of this Court until all affairs of the dissolved partnership are wound up and all properties distributed'; and

8. That appellant take nothing by her counterclaim.

Appellant presents twenty-nine points of error on appeal. All of these except Nos. 14 and 29 are based upon assignments of error contained in appellant's amended motion for new trial. Appellees object to our consideration of these points because the so-called amended motion for new trial is in fact a second amended motion for new trial for which there is no authority in the rules. This contention is based upon the quite unusual circumstance that on June 26, 1970 two motions for new trial were filed, one by the appellant herself (a layman) entitled 'Notice of Appeal for a New Trial,' and the other in more traditional form signed by her then attorney of record. Appellees contend that since there is authority in the rules for only one motion for new trial and one amended motion for new trial, one of the motions filed June 26, 1970 must be considered as an amendment of the other, and that when the instrument entitled 'Defendants' Amended Motion for New Trial' was filed on July 16, 1970 it in reality was a second amended motion for new trial and not entitled to be considered because of the prohibition in Section 2 of Rule 329b, Vernon's Texas Rules of Civil Procedure, against the filing of more than one amended motion for new trial.

We do not agree with appellees in this. Neither of the motions filed on June 26, 1970 purports to amend the other, and there is nothing in the record to indicate that either the appellant or her attorney knew that the other was filing a motion. Under these circumstances, we think the trial court correctly ruled that the two motions filed on June 26, 1970 should be considered as one motion and the amended motion filed on July 16, 1970 as the only amended motion for new trial. This is consistent with the spirit of liberal construction demanded by Rule 1, T.R.C.P.

Appellant presents her first four points of error on appeal together, and we shall so consider them. Under these points it is urged that the trial court erred (1) in failing to hold that the amounts charged by G. C. Conrad for his services to the enterprise known as 'G. C. Conrad, Et Al' were reasonable, (2) in failing to hold that the making of a charge for such services is usual and customary in the oil industry, (3) in excluding the testimony of appellant's expert witnesses, Winn and Price, concerning the reasonable and customary charges for such services, and (4) in overruling appellant's motion for judgment notwithstanding the verdict because Conrad was entitled as a matter of law to compensation.

As noted above, the jury found that a partnership existed between Conrad and the appellees. There is no evidence that the parties to that arrangement ever agreed upon compensation for Conrad for his services in managing the jointly owned properties; in fact, the evidence is fairly certain that no such agreement was ever made. Appellees' mother, Edith Conrad, died January 14, 1949, intestate. Included in the community estate of Grover and Edith Conrad were half of the outstanding shares of common stock of Oil Well Drilling Company. On July 1, 1950 this stock was cancelled and the assets of the corporation represented by said stock, consisting of oil and gas leases, land, buildings and equipment, valued at $264,409.65, were distributed, 50 per cent to Conrad and 10 per cent to each of the appellees. These assets were kept intact and managed by Conrad over a period of about fifteen years. Records were kept and income tax returns filed designating this enterprise as 'G. C. Conrad Et Al.'

The general rule is that a partner is not entitled to compensation for services rendered to the partnership business unless there has been an agreement therefor. This is embodied in the Texas Uniform Partnership Act, Vernon's Ann.Civ.St., Art. 6132b, § 18(1)(f). See also 44 Tex.Jur.2d, Partnership, § 54, pp. 381--2.

The facts of this case do not provide a basis for a finding of an implied contract and thus bring it within the exception to that general rule announced in Hooker v. Williamson, 60 Tex. 524, 527 (1883); Montgomery v. Burch, 11 S.W.2d 545 (Tex.Civ.App., Amarillo 1928, writ dism'd); Lewis v. Hill, 409 S.W.2d 946 (Tex.Civ.App., Amarillo 1966, no writ); and 40 Am.Jur., Partnership, § 124, p. 216.

It was clearly contemplated by all the partners, when they entered into the relation, that Conrad would act as manager and would be the only partner active in the conduct of the business, yet no agreement for his compensation was made or even suggested at that time. Such an agreement 'may not be implied contrary to the intentions or understanding of the parties or against the express declaration of the person to be charged.' Lewis v. Hill,409 S.W.2d 946, 949 (Tex.Civ.App., Amarillo 1966, no writ).

There was in evidence a brief exchange of correspondence between Conrad and the appellee Mrs. Judson, who lived in New York, beginning in December, 1961, and extending into 1963, from which it clearly appears that there was never an agreement as to his compensation, although in one letter she stated that she realized that he was entitled to 'a fair fee' which she felt sure could be agreed upon if they ever reached the point where the accounts of all the owners were 'evened up.' The evidence does not show that Conrad ever actually withdrew from the partnership assets any money as salary, only that in 1963 he caused to be shown on the books of the partnership a credit to his account of $60,000 described as 'Partners' salary--for services rendered the Partnership,' and in 1964 a similar credit for salary in the sum of $14,500 with a notation on the books, 'To record partner's salary for the year.' These were mere bookkeeping entries rather than actual withdrawals, but without those credits his account would have been substantially overdrawn. Furthermore, there was...