Curry Auto Leasing, Inc. v. Byrd

• Decision Date: 18 December 1984
• Docket Number: No. 05-83-01387-CV,05-83-01387-CV
• Citation: 683 S.W.2d 109
• Parties: CURRY AUTO LEASING, INC., Appellant, v. J. William BYRD, John N. Johnson, and Robert M. Bryson, individually and d/b/a Physicians Accounting Services, Inc., Appellees.
• Court: Texas Court of Appeals

Page 109

683 S.W.2d 109

CURRY AUTO LEASING, INC., Appellant, v. J. William BYRD, John N. Johnson, and Robert M. Bryson individually and d/b/a Physicians Accounting Services, Inc., Appellees.

No. 05-83-01387-CV.

Court of Appeals of Texas Dallas.

Dec. 18, 1984.

Martin Barenblat, Barenblat & Wolovits, Dallas, for appellant.

Forrest R. Carlton, Smith, Miller & Carlton, Dallas, for appellees.

Before GUITTARD, C.J., and CARVER and CHADICK ¹, JJ.

CHADICK, Justice.

This is a breach of contract case. The plaintiff, a Texas corporation, undertook to recover damages from defendants, a Texas corporation and its president, vice-president, secretary, and treasurer, each of whom was a director of the corporation. The only question is the liability of the individual defendants on a contract made by the corporation before its corporate privileges were forfeited because of failure to pay franchise taxes. The trial court denied recovery, and we affirm.

Plaintiff, Curry Auto Leasing, Inc., as lessor, and defendant, Physicians Accounting Services, Inc., as lessee, entered into a motor vehicle lease agreement on December 1, 1980, in Dallas County, Texas. The lease stipulated a term of forty-eight months and a monthly rental of $500.57. Possession of the rental automobile, a 1981 Lincoln, was delivered to Physicians Accounting Services. On September 15, 1982, the corporate privileges of Physicians Accounting Services were forfeited by the Comptroller of Public Accounts of the State of Texas, pursuant to TEX.TAX CODE ANN. §§ 171.251-171.255 (Vernon 1982), and were not revived at any pertinent time.

No evidence was introduced at the trial; instead the parties filed a stipulation of facts of the case in the trial court containing a provision that the court might draw reasonable inferences and conclusions from the facts stipulated. A jury was waived and the case was decided by the judge. At Curry Auto's request the judge made and filed findings of fact and conclusions of law.

Physicians Accounting Services failed to pay the monthly rental due for May 1982 and thereafter. Curry Auto terminated the lease and thereafter repossessed the rented vehicle on September 10, 1982. The lease contained, among its several provisions, the following:

At the election of lessee, the lease term covering any vehicle leased hereunder may be terminated by lessee at any time prior to the expiration of said lease term by giving lessor thirty (30) days written notice of termination.

All vehicles with respect to which the lease term thereof and this agreement has terminated shall be sold, at wholesale, by Lessor to the highest bidder. If such vehicle is sold for an amount in excess of the undepreciated balance of Curry Auto Leasing's cost of such vehicle, if any, such excess shall be deemed to be and is hereinafter referred to as "profit". If such vehicle is sold for an amount which is less than the undepreciated balance of Curry Auto Leasing's cost of such vehicle, the deficiency shall be deemed to be and is hereinafter referred to as "loss". Promptly after the sale of said vehicle Lessor shall deliver to Lessee an accounting and information statement showing the amount of profit or loss.

Final settlement between the parties hereto with respect to each vehicle sold, pursuant to the terms and provisions of this agreement, shall be made within fifteen (15) days after delivery of the accounting and information statement.

If the sale of such vehicle resulted in a profit as defined herein, eighty (80%) per cent of such profit shall be paid to Lessee by Lessor and twenty (20%) per cent of such profit shall be retained by Lessor.

If the sale of such vehicle resulted in a loss, as defined herein, Lessee shall pay to Lessor the full amount of such loss.

In October 1982 Curry Auto sold the repossessed Lincoln automobile in accordance with the contract and suffered a loss under its terms of $6,499.82. After repossession of the Lincoln, Curry Auto paid $27.00 storage fees, and in September 1982 Curry Auto charged Physicians Accounting Services' account with $10.00 late payment fee that became due when rental for September was not paid on September 1st. These items were all ascertained, paid, or charged after Curry Auto exercised its option to terminate the rental contract and after Physicians Accounting Services' corporate privileges had been forfeited. No provision of the contract allowed the corporate officers to suspend Curry Auto's option to act under the quoted provision. The trial court awarded Curry Auto judgment against Physicians Accounting Services for the sum of these items along with interest, attorney's fees, and cost, but entered a take nothing judgment in favor of the corporate officers.

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