Eagle Drug Co. v. White

• Decision Date: 11 December 1915
• Docket Number: (No. 863.)
• Citation: 182 S.W. 378
• Parties: EAGLE DRUG CO. v. WHITE.
• Court: Texas Court of Appeals

182 S.W. 378

EAGLE DRUG CO. v. WHITE.

(No. 863.)

Court of Civil Appeals of Texas. Amarillo.

December 11, 1915.

Rehearing Denied February 2, 1916.

Appeal from District Court, Wilbarger County; J. A. Nabers, Judge.

Action by J. F. White against the Eagle Drug Company and others. From the judgment for plaintiff, certain defendants appeal. Reversed in part, and remanded.

Cook & Tant and Geo. W. Garland, all of Vernon, Seay & Seay, of Dallas, and Dedmon & Potter and W. C. Blalock, all of Ft. Worth, for appellants. Berry, Stokes & Morgan and Bonner & Storey, all of Vernon, for appellee.

HUFF, C. J.

This suit was instituted in the district court of Wilbarger county by J. F. White, against S. D. Bettis, J. L. De Pauw, A. S. Ross, and A. B. Garland, alleging that the three last-named parties constituted the firm known as the Eagle Drug Company. White sued on a note for $1,000, executed by S. D. Bettis, dated the 2d day of July, 1912, due October 2, 1912, payable to the order of J. F. White, bearing interest at the rate of 10 per cent. from date per annum, and 10 per cent. attorney's fees; and also set up a mortgage on a soda fountain and other fixtures in the drug store, which is alleged was duly recorded. It is alleged: About March 20, 1913, De Pauw, Ross, and Garland purchased the drug store from Bettis, who used the trade-name of Eagle Drug Store while conducting the business, that the parties so purchasing had actual and constructive notice of the above debt and mortgage, and that as part of the consideration for said property De Pauw, Ross, and Garland assumed the above note, and that the above debt was one of the listed debts furnished the proposed purchasers by Bettis during the pendency of the trade and was taken in consideration as part of the purchase price, and that they agreed in writing to pay the same, and that they took charge of the store and proceeded to run the same in the name of the Eagle Drug Company. That about the 26th of March, 1913, an execution was levied on the drug store to collect a judgment of about $1,415.38, and that at said time the purchasers had in a manner taken charge of the store and were then so in charge, with the view of getting familiar with the business and ascertaining the indebtedness against it in order to finally close the sale. That Bettis was unable to pay the judgment and discharge the execution, and that all of the defendants requested White to pay it, which he did. In order to induce White to do so, "it was agreed and understood by and between the plaintiff and all of the defendants that all of the equity or overplus to the said S. D. Bettis, from such sale of such property, after the payment of the listed debts against the same, should be applied to the payment and reimbursement of the plaintiff of the said $1,415.38 until the same was fully satisfied, and all of the defendants, as a further inducement to plaintiff to pay said $1,415.38, represented to him that there would be a balance of at least $1,500 going to defendant S. D. Bettis, after paying all listed debts against said Eagle Drug Company, and that plaintiff should get his money back in a few days from that time, and that J. L. De Pauw, A. S. Ross, and A. B. Garland, as an inducement to plaintiff to get him to pay said $1,415.38, represented to him and promised him that if he would pay said amount that they would see that he was repaid his said money within a few days from that time out of the price they were paying for said stock of goods," etc. That plaintiff was unacquainted with the facts and relied on the representations and promises so made and paid the money, as requested, and agreed upon, and that such payment was a material benefit to all the defendants. That there was, after paying all of the listed debts and expenses provided for, an equity, approximately $1,500, which should have been paid to plaintiff or so much thereof as was necessary to pay the amount advanced, with 6 per cent. interest from the 26th day of March, 1913, which De Pauw, Ross, and Garland failed and refused to pay, except the sum of $503, paid about the 20th of May, 1913.

There is a prayer for judgment on the note, for interest and attorney's fees, together with a foreclosure of the mortgage lien, and also for the balance on the $1,415.38, the sum advanced after deducting the sum of $502 paid, leaving a balance of $863.38. Plaintiff asked for judgment against all of the defendants.

The defendants, appellants herein, J. L. De Pauw, A. S. Ross, and A. B. Garland, denied specifically the assumption of the debts or either of them, or that there was $1,500 equity belonging to Bettis and specifically denied the allegations in the petition, setting up liability, and that they or plaintiff knew how much equity Bettis had in the drug store at the time of the trade. They specifically alleged, on information and belief, that White was the owner of the drug store and fixtures, alleging that Bettis had conveyed the same to him by a bill of sale. They further alleged: That about the 5th of April, 1913, White and Bettis sold and delivered to these appellees the Eagle Drug Store, and under the contract of sale therefor they were to accept as correct the list of articles and prices thereof composing said stock, as set forth in a certain inventory of said stock, made after the 20th day of March, 1913, and prior to the contract by Bettis and others. That while making the inventory certain goods and articles were sold, and that the cash realized therefrom amounted to $1,005.45, which was on hand and held in contemplation of the sale; that these appellants would accept said sum of money in lieu of the articles sold. They agreed that the fixtures which had been purchased from Houssels and Fain should be fixed at the price as shown by the inventory made by said parties and upon which same was sold to the Eagle Drug Company, and that the remainder of the fixtures were to be the original cost price to the Eagle Drug Company. That these appellants were to pay plaintiff and the said Bettis for said property as follows: They were to assume a certain debt to the Crowdus Drug Company, aggregating the sum of $2,100.98, in satisfaction of which it was understood the Crowdus Drug Company had then agreed to accept notes executed by appellants, payable to said company, in the sum of $300 each (except the last due), and due respectively monthly after date thereof, and appellants agreed to assume and pay certain debts due the Waggoner National Bank of Vernon, Tex., aggregating the sum of $840, and agreed to pay the sum of $5,000 cash, or so much thereof as was necessary to amount to the full of said stock and fixtures, and agreed that the balance over and above said sum be paid in cash, or, if appellants elected, by delivering to Bettis and White their promissory notes, payable to White's order. It was further agreed that appellee and Bettis were to make, execute, and deliver to appellants a good and valid bill of sale, in due form, transferring the goods, and that these appellants, in connection with one A. S. Brice, and defendant Bettis, were to ascertain the amount due each of the various creditors by said Eagle Drug Company, and apply said cash payment to the payment and discharge of each of said creditor's claims, to the extent thereof, if necessary, or as much thereof as was necessary to pay all of said debts, and any balance of said cash, if any, left after paying said debts, was to be paid over to the appellee in satisfaction of any and all interest or claim he held in or to said property. They alleged that the inventory of said stock amounted to the sum of $5,760.10; that the amount of said cash held was $1,005.45; that the total amount of fixtures which were purchased from Houssels & Fain, as disclosed by the inventory, made by said parties, amounted to $2,187; and that the full amount of the remainder of said fixtures was $563. It is alleged that during the pendency of the negotiations that appellant entered into an agreement in writing with Bettis, stipulating that whatever equity Bettis had after the payment of the indebtedness of the Eagle Drug Company, which existed prior to March 20, 1913, and all expenses incidental to the transaction (meaning the sale of the property to appellant) had been paid; that said equity, if any, was to be deposited in the Farmers' State Bank, to the credit of appellee; and it was further provided, among other things, that the $5,000 cash payment to be paid should be applied, as far as it would go, to the then present indebtedness of the drug store; that the agreement was made the 27th day of March, 1913. It is then alleged that they applied to Bettis for a list of creditors of the company, and that they sent out notices to the creditors under the Bulk Sales Law. They alleged that they discharged the debt assumed to the Crowdus Drug Company, and the Waggoner National Bank, and ascertained the debt due on the list, which amounted to the aggregate sum of $5,284.84; that they paid, under the agreements, certain expenses incidental to the sale, to appellants, aggregating the sum of $300; that after adding up the list they believed that there was a balance remaining due on the equity of Bettis of $502.53, and, so believing, paid that amount to White, the appellee. They set up the fact that Bettis and White executed to them a bill of sale for the stock of goods on the 5th of April, and they allege the execution of the bill of sale aforesaid by White, as in effect a release of any claims or lien on the stock of goods sued upon by appellee.

By supplemental petition, the appellee denied generally the allegations in the answer and denied that he had any interest in the drug store, and that if there was a bill of sale, executed by Bettis to him, that he knew nothing of it, and that it had never been delivered to him, and that the bill of sale signed by him April 5, 1913, was signed, but not to be delivered until his...