Dial Temp Air Conditioning Co. v. Faulhaber, 15669

• Decision Date: 15 July 1960
• Docket Number: No. 15669,15669
• Citation: 340 S.W.2d 82
• Parties: DIAL TEMP AIR CONDITIONING COMPANY et al., Appellants, v. Charles H. FAULHABER, Appellee.
• Court: Texas Court of Appeals

Page 82

340 S.W.2d 82

DIAL TEMP AIR CONDITIONING COMPANY et al., Appellants, v. Charles H. FAULHABER, Appellee.

No. 15669.

Court of Civil Appeals of Texas, Dallas.

July 15, 1960.

Rehearing Denied Oct. 21, 1960.

Tobolowsky, Hartt, Schlinger & Blalock, Dallas, for appellants.

Wilbur T. Knape, Dallas, for appellee.

DIXON, Chief Justice.

Appellee Charles H. Faulhaber filed suit in 1957 against Dial Temp Air Conditioning Company, a corporation, Hugh S. Martin, individually and as president of the corporation, and Tip Graham, individually and as vice-president of the corporation. Appellee sought damages under Art. 4004, Vernon's Ann.Civ.St. resulting from the alleged fraudulent sale to him of corporation stock which he had purchased in 1951. Tip Graham was later dismissed as a party to the litigation.

On March 13, 1959 a judgment based on a jury verdict was rendered in favor of appellee for $15,000, of which $5,000 was for actual damages and $10,000 for exemplary damages.

On December 1, 1951 appellee Faulhaber bought 60 shares of stock in Lone Star Air Conditioning Company for a consideration of $6,000, his check for that amount being made pavable to the company. On that same date the name of the company was changed to Martin-Johnson Engineering Company. In October 1952 a stock certificate for 65 shares of stock in Martin-Johnson Engineering Company was issued to appellee, representing the 60 shares of stock bought in December 1951 and five shares bought later from Ivy Joe Stewart for a consideration of $500. In September 1955 the name of the company was changed to Dial Temp Air Conditioning Company. The charter amendment shows that appellee was then one of three members of the Board of Directors, the other two members being appellant Martin and Tip Graham. The capital of the company was recited to be $100,000, all paid in.

Appellee Faulhaber charges various acts of misconduct on the part of Martin as president of the company. As a result he employed a lawyer in February 1957. On February 28, 1957 Dial Temp Air Conditioning Company, after a change of name, ceased doing business. On that same day appellee, with his attorney present, executed a contract for the sale of his stock to Martin, and a release of all his claims against Martin and Dial Temp Air Conditioning Company for a consideration of $1,828.

The material portions of the release are as follows:

'In consideration of the payment of $1828.00 by Hugh S. Martin to the undersigned, receipt of which is hereby acknowledged, I, Charles H. Faulhaber, do hereby transfer to Hugh S. Martin 65 shares of stock (all my stock) in the Dial Temp Air Conditioning Co., a private corporation, and accept said sum in full payment for said stock, all salary claims, and in full and complete settlement of all and singular the causes of action, claims and demands of any kind or nature whatever which I have had up to the date hereof, against him the said Hugh S. Martin, individually, or against the Dial Temp Air Conditioning Co by which I have been employed; and do hereby in consideration of the above amount give Hugh S. Martin, individually, and the Dial Temp Air Conditioning Co., full and complete release and acquittance from all salary claims, and from all and every cause of action, claim and demand against the said Hugh S. Martin, individually, and the Dial Temp Air Conditioning Co. as aforesaid up to the date hereof.

'To which witness my hand this the 28 day of February, 1957.

'/s/Charles H. Faulhaber

'Approved:

'/s/ William O Braecklein

'Attorney for Charles Faulhaber.'

The instrument bears the statutory acknowledgment of appellee Faulhaber taken before Mary Louise Jacks, a notary public.

Appellee has levelled objections to each of appellants' points on appeal and says that we should not consider them because of certain alleged departures from the rules of briefing. For example he asserts that (1) point No. One does not follow the correct statement of the nature of the case, and (2) is merely an abstraction and does not present the real question for decision in a concrete manner.

Appellee's objections are overruled. While appellants' points on appeal, as drawn, are open to criticism as to form, in substance they clearly point out the specific grounds of appellants' appeal. Therefore we shall proceed to consider them. Rule 422, Texas Rules of Civil Procedure.

It is undisputed that appellee Faulhaber, executed the written release on February 28, 1957, and that in doing so he had the services and advice of his own attorney. At this time he had full knowledge of the claims against appellants, which claims he relies on as a basis for his recovery of this judgment. Therefore, until set aside the release must stand as a bar against appellee's claim in regard to the fraudulent sale of corporation stock, which claim is the basis of appellee's suit against appellants. Hart v. Traders & General Ins. Co., 144 Tex. 146, 189 S.W.2d 493; Atkins v. Womble, Tex.Civ.App., 300 S.W.2d 688. We think it is significant that no one claims in pleadings or testimony that the release is ambiguous. The case was not tried on that theory.

Appellee obviously recognized the importance of the release for in his second amended petition he alleged that he was caused to execute the release (1) by certain fraudulent misrepresentations made to him by Martin between February 16, 1957 and February 28, 1957, the date the release was executed; and (2) by certain threats which amount to 'persuasion, coercion and duress.'

No issues were submitted to the jury with reference to the alleged fraudulent misrepresentations in regard to the procurement and execution of the release. Appellee contends that in the absence of such issues it must be held that the trial court in support of the judgment made implied findings under Rule 279 T.R.C.P. in regard to the said fraudulent misrepresentations.

We cannot agree with appellee. The alleged fraudulent representations were alleged as an independent grounds of defense against the legal effect of the release. Not having been submitted, the particular defense must be held to have been waived. Rule 279 T.R.C.P.; Ormsby v. Ratcliffe, 117 Tex. 242, 1 S.W.2d 1084; Long v. City of Austin, Tex.Civ.App., 265 S.W.2d 632.

Further, though appellee in his pleadings and brief makes general charges of fraud in the procurement and execution of the release, he does not point out any evidence in the record in support of such charges. Quite the contrary he, himself, testified that by about February 15, 1957 he had ceased to believe appellant Martin. It was Martin who then suggested that appellee should employ an attorney to advise him in matters pertaining to the settlement which the parties were negotiating. Sometime between February 17, 1957 and February 21, 1957 appellee employed an attorney, William O. Braecklein, whom he consulted in regard to his settlement with Martin and his execution of the release. It will be observed that the written release was signed and acknowledged by appellee before a notary public, and that the instrument also bears the written signed approval of appellee's attorney.

Appellants' first point on appeal is that the court erred in failing to direct a verdict for appellant and in submitting special Issue No. Six to the jury as there was no evidence or insufficient evidence to support such issue.

Special Issue No. Six, and the jury's answer were as follows:

'Do you find from a preponderance of the evidence, that plaintiff, Charles H. Faulhaber, was caused to sign the release dated February 28, 1957, by duress? Answer 'yes' or 'no'. Answer 'yes'.'

The only testimony in the record with reference to duress that has been brought to our attention was offered by appellee. He testified that Martin told him (1) if he did not sign the release he would be held liable on the company's building lease, which still had three and a half years to run; and (2) Martin also told him that he would counter-sue him, Faulhaber, if Faulhaber, 'took this thing to court and didn't prove what I charged him with'.

Martin denied that he told appellee he would be held liable on the lease, but for present purposes we must accept appellee's statement as true.

It is our opinion that as matter of law under the undisputed facts of this case appellants' statement that appellee would be liable on the company lease unless he signed the release, did not constitute duress. Martin was expressing a legal opinion. In the absence of any fiduciary relationship, or any proof of superior knowledge taking advantage of ignorance, such expression does not amount to duress. Mann v. Rugel, Tex.Civ.App., 228 S.W.2d 585; Safety Casualty Co. v. McGee, 133 Tex. 233, 127 S.W.2d 176, 121 A.L.R. 1263; Panhandle & S. F. Ry. Co., v. O'Neal, Tex.Civ.App., 119 S.W.2d 1077. As we have already stated, appellee himself testified, referring to Martin, that by February 15, 1957 he had ceased to 'believe him'; appellee also testified that appellant Martin during their negotiating suggested that appellee employ an attorney, which appellee did.

Moreover we think that Martin's statement that appellee would be liable on the lease does not constitute duress because the facts were equally available to both parties, and appellee either knew, or by the exercise of reasonable diligence should have known that he would not be held liable. Mann v. Rugel, Tex.Civ.App., 228 S.W.2d 585; Duncan v. Texas Employers' Insurance Association, Tex.Civ.App., 105 S.W.2d 403, 405; Conklin v. Missouri Pacific Ry. Co., 331 Mo. 734, 55 S.W.2d 306. Appellee himself testified that he had told his attorney, Braecklein, about appellants' threat regarding the lease, and Braecklein 'didn't seem to be perturbed about it.' Braecklein testified that he talked to the landlord and was told that the landlord had no intention of trying to hold appellee liable on the lease.

Further the alleged statement about legal liability under the lease, does...