Dietz v. Van Nortwick, 11687.

• Decision Date: 07 June 1945
• Docket Number: No. 11687.,11687.
• Citation: 188 S.W.2d 590
• Parties: DIETZ v. VAN NORTWICK.
• Court: Texas Court of Appeals

188 S.W.2d 590

DIETZ v. VAN NORTWICK.

No. 11687.

Court of Civil Appeals of Texas. Galveston.

June 7, 1945.

Rehearing Denied June 28, 1945.

Appeal from District Court, Harris County; W.W. Moore, Judge.

Action by Joseph Praiss against Carl W. Dietz, Oliver E. Van Nortwick and another, to determine the ownership of a certain note, and the ownership of certain funds deposited in escrow and representing payments on the note, wherein the defendant Dietz filed a cross-action against the defendant Van Nortwick, who also filed cross-action against all parties. From an adverse judgment, the defendant Dietz appeals.

Judgment affirmed in part and reversed and rendered in part.

Harry W. Freeman, of Houston, for appellant.

Merrill & Scott, of Houston, and Crawford & Borofsky, of Galveston, for appellee.

CODY, Justice.

The plaintiff below was Joseph Praiss. He has not been made a party to this appeal. On July 20, 1943, he gave his promissory note to appellant Dietz in the principal sum of $4200, payable in monthly installments of $375.

Thereafter, on August 20, 1943, appellant Dietz and appellee Van Nortwick entered into a written contract by which Dietz agreed to buy certain described beer and pay therefor the sum of $7,399.90; and to buy certain described punch boards (which are gaming devices) and pay therefor the sum of $4,981.46, or a total of $12,- 381.36. By the terms of the contract it was provided that the merchandise was to be stored in a warehouse in Texas City, where Dietz ran a cafe, and be gotten from there by him. The cost of drayage to the warehouse, the insurance, etc., were to be paid by Dietz over and above the cost of the merchandise. The terms provided that payment should be made at the rate of not less than $1,238.13 a month, and that Dietz could go to the warehouse and get such of the merchandise as he desired at any time, but whatever he withdrew should be paid for in cash as withdrawn until the full sum of $12,381.36 had been paid, and that all payments which were required to be made, except those made on withdrawals of merchandise, should be applied on the tail end of the contract.

To secure the performance of the contract Dietz assigned the aforesaid Praiss note to Van Nortwick, together with the lien securing it. To further secure the performance of the contract he executed his note in the sum of $3000 payable to Van Nortwick, which was secured by a mortgage. If the contract were paid out before the notes were paid out, the notes were to be re-assigned to Dietz.

Seemingly the enforcement officers would not permit Dietz to use the punch boards in his place of business. In any case he and Van Nortwick got into a dispute, whereupon Van Nortwick notified plaintiff Praiss that he owned Praiss's note, and demanded of Praiss that he make payment direct to him. When Praiss inquired of Dietz he found that Dietz claimed still to own the note. Thereupon Praiss arranged to place the remaining payments in escrow in the Union National Bank of Houston as they fell due. Van Nortwick was not a party to the arrangement, but did not interfere with it, and Praiss finished making the remaining payments.

Thereafter, Praiss brought this suit, making Dietz, Van Nortwick, and the bank parties defendant, in order to have it judicially determined who owned his note, and to whom the money in escrow belonged.

The bank answered as a stakeholder that it claimed no interest in the money, and would pay the money to whom it was determined to belong.

Dietz answered alleging that he was the owner of the note, and entitled to the money held by the bank. By a cross-action he then sued Van Nortwick. He fully alleged the contract between himself and Van Nortwick, and that after the contract was executed he had severed the lawful part of the contract, relating to the sale of the beer, from the allegedly unlawful part of the contract relating to the sale of the punch boards, and had repudiated the sale of the punch boards. He alleged that he had paid $1656 on the contract over and above the value of merchandise which he had removed from the warehouse, and that he was entitled to recover this. And he asked for judgment against Van Nortwick in such sum of $1656, and for the cancellation of his note for $3000 held by Van Nortwick to insure performance of the contract, and asked for judgment for the money held by the bank as stakeholder.

By his answer Van Nortwick claimed the money in the bank, and traversed the allegations of Dietz's cross-action. And he also filed a cross-action against all parties. In his cross-action against Dietz he sought damages in the sum of $6003.41, on account of the breach of the contract.

Hereafter Van Nortwick will sometimes be referred to as appellee, and Dietz will sometimes be referred to as appellant.

In his cross-action seeking damages in the sum of $6,003.41, appellee sought to recover from appellant various items on which he alleged that appellant had defaulted in paying, and which he alleged appellant was obligated to pay by the terms of the contract. These items included insurance, the rental value of the warehouse, certain drayage costs, and the salary of a caretaker. Appellee further alleged that appellant repudiated the contract, and failed to remove the beer from the warehouse as he was bound to do, and that the beer caps began to rust, which caused the beer to begin to deteriorate, which compelled appellee to recondition the beer, and after so doing, appellee alleged that he sold the beer for $2900, for the account of appellant, and that he held the same as a credit to be applied in favor of appellant against such damages as he, appellee, recovered against appellant. Appellee further alleged that the fair value of the gaming devices in their then condition was the sum of $1200, and appellee by his pleadings tendered said sum as a credit in favor of appellant, upon a disclaimer to said gaming devices being filed in the case by appellant.

In his answer to appellant's action, appellee adopted the allegations of his cross-action. In other words, appellee pled the same state of facts as constituting both his defense to appellant's action, and as constituting his cross-action against appellant. We omit appellant's further pleadings.

During the trial the parties agreed in open court that the punch boards in question were gaming devices within Articles 615-642 of the Penal Code, Vernon's Ann. P.C. arts. 615-642.

The case was tried without a jury, and the court rendered judgment:

That the plaintiff, Praiss, had fully paid off his note, and was entitled to a release of the mortgage securing its payment.

That Dietz had fully performed his contract of purchase relating to the beer, and was not indebted to Van Nortwick in any sum, and was entitled to the money held by the bank as stakeholder. Further, that he was entitled to a cancellation of his note in the sum of $3000, given to insure the performance of the contract of purchase, and to the cancellation of the mortgage securing the payment of said note. But recovery upon his cross-action for the sum of $1656 against Van Nortwick was denied.

That Van Nortwick was not entitled to recover any sum on account of the purchase price of the gaming devices, and should recover nothing on his cross-action against Dietz.

The Bank was duly...