Evons v. Winkler

• Decision Date: 25 February 1965
• Docket Number: No. 44,44
• Citation: 388 S.W.2d 265
• Parties: Harry EVONS et al., Appellants, v. Province M. WINKLER, Appellee.
• Court: Texas Court of Appeals

Page 265

388 S.W.2d 265

Harry EVONS et al., Appellants, v. Province M. WINKLER, Appellee.

No. 44.

Court of Civil Appeals of Texas, Corpus Christi.

Feb. 25, 1965.

Motions for Rehearing Denied March 18, 1965.

Bradford Miller, San Antonio, James W. Wray of Lewright, Dyer & Redford, Corpus Christi, for appellants.

John R. Radilla, Corpus Christi, for appellee.

GREEN, Chief Justice.

This is a suit for delinquent rents accruing under a written lease contract. The suit was filed by appellee Winkler, owner and lessor of the realty in question, against Arthur Murray Dance Studios of San Antonio and Corpus Christi, Inc., a Delaware corporation, original lessee named in the lease, and Harry Evons, Daniel H. Kirk, Michael V. Lawless, Leigh Dickey and Jack Klein, all allegedly subsequent assignees. Evons was sued in both his individual capacity and as statutory trustee of the assets of the dissolved corporation lessee. Trial was to the court without a jury.

Pursuant to stipulation, agreed judgment was rendered against Dickey and Klein for $3,283.94. Default judgment was entered against the corporation for $13,503.90. Judgment in the same sum was rendered, after trial, against Evons individually and as statutory trustee of the assets of the dissolved corporation, and against Kirk and Lawless. The final decree recited joint and several judgment, so as to avoid double recovery on the part of Winkler. Evons and Lawless have each appealed. Evons requested and the trial court filed Findings of Fact and Conclusions of Law, insofar as the judgment relates to recovery against him. Lawless requested no such findings.

Winkler was the only witness testifying as to the facts of the case. His evidence shows that by written instrument executed May 8, 1952, he leased certain described premises in Corpus Christi to Arthur Murray Dance Studios of San Antonio and Corpus Christi, Inc., for a term of ten years from and after June 1, 1952, for an annual rental of $5,000.00 payable in monthly installments of $416.66. (The difference of 8 cents per year was resolved favorably to defendants.) Evons signed and acknowledged this contract as president of defendant corporation. From June 1, 1952, for several years, a dance studio was conducted in these premises, and rent was paid satisfactorily until August, 1957.

The defendant dance studio corporation was voluntarily dissolved on March 25, 1953, and its permit to do business in Texas was cancelled on April 1, 1953. This fact did not become known to Winkler until September, 1956, since business continued to be conducted and rent paid as provided in the lease contract. By instrument dated July 1, 1956, and signed by Evons, Lawless and Kirk, Evons, representing himself to be the lessee in the aforementioned lease contract, assigned said lease to defendants Michael V. Lawless and Daniel H. Kirk, the said Lawless and Kirk agreeing to 'pay the rent which may hereafter become due, according to the terms of said lease, and that we will perform all the covenants in said lease contained, which are to be performed by the said lessee.'

The lease provided that the lessee should not assign the contract, or underlet the premises, without the written consent of lessor. See also Article 5237, Vernon's Ann.Tex.Civ.St. When the written transfer of the lease from Evons to Lawless and Kirk was submitted to Winkler, he forwarded it to his mortgagee, since his mortgage provided that he make no changes in the lease without approval. Correspondence followed, and on September 17, 1956, the attorneys for the mortgagee wrote Winkler to inquire why Evons, and not the dance studio corporation, executed the transfer of the lease as lessee. This letter was sent by Winkler to Evons, and in reply Evons wrote Winkler on September 24, 1956, as follows:

'I have just returned from the hospital, and I am happy to answer the questions posed by Levy and Levy:

'I, Harry Evons, succeeded the rights of the dissolved corporation as to the subject lease. This was brought about by a dissolution order from the State of Delaware.

There is a signed instrument which can be referred to as evidence if this is absolutely necessary. However, I am not as yet able to go to the office, and it may take a little while before we can arrange for a photostatic copy to be sent, if that is necessary * * *.

Cordially yours,

HARRY EVONS.'

This letter being forwarded to Levy & Levy, attorneys for the mortgagee, they authorized Winkler to give his consent to the assignment of the lease by Evons to Lawless and Kirk, which he did by written instrument dated October 4, 1956, subject, however, to the payment and performance by Lawless and Kirk of all agreements and covenants contained in the original lease.

By separate instrument dated and effective July 1, 1956, executed by Evons as Seller and Lawless and Kirk as Buyers, for a recited consideration of $60,000.00, Evons sold to Buyers the entire business in connection with a school of dancing 'conducted by Seller' in the premises in question, including the franchise and license agreement issued to Seller by Arthur Murray, Inc. of New York, and the 'right, title, interest and estate of the Lessee provided by the Lease under which Seller holds said premises.' Among other provisions, this instrument contains the following:

'Buyers do hereby expressly assume the performance of the Lessee provided by the aforesaid Lease under which the premises known as 718 North Lower Broadway, Corpus Christi, Texas are held by Seller, and do hereby agree to hold Seller harmless from the performance of the obligations imposed upon Lessee by said Lease.'

We are setting out these facts in some detail, because of the contention of appellant Evons for himself, and also of appellant Lawless, for himself, that there is no evidence and insufficient evidence to show liability on them for delinquent rent under the lease contract.

Lawless and Kirk took over the dance studio affairs under the above instruments and continued to conduct the business for a period of somewhere between two and three years. Rent was paid regularly through August, 1957. Thereafter, there were some delinquencies so that by the end of 1958 unpaid rent amounted to $999.92. The record is not clear as to just who did operate this business during the early months of 1959. Winkler testified that Kirk and Lawless both stated that they didn't own or operate the studio in 1959. In answer to a request for admissions duly submitted prior to trial and read into evidence, said two defendants denied that they owned an Arthur Murray Dance Studio in Corpus Christi, Texas, during the year 1959. Obviously, business was conducted on the premises, since, while no rent was paid in January, 1959, the contract rent of $416.66 was paid in each of February, March and April of that year.

Winkler testified that prior to June, 1959, several letters were written to Lawless and Kirk concerning the back rent under the contract, but no reply to such letters was received. He made frequent visits to the studio for collection purposes, with no sucess. He thereupon employed Dave Coover as his lawyer and agent, and as he testified, 'Turned the thing over to him.'

Coover, on behalf of Winkler, sometime in June, 1959, when the delinquent rent under the contract amounted to $2,250.56, entered into an oral month to month lease agreement of the premises with defendants Dickey and Klein, under which the latter entered upon and occupied the premises from June, 1959, to December, 1960. In August, 1959, Lawless and Kirk, by written instrument, sold the entire business, including furniture, franchise, school, etc., to Dickey and Klein for a recited consideration of $35,000.00. A large part of this consideration appears to be represented by the assumption by Buyers of the obligation to pay existing indebtedness of the business. This sale was made to be effective as of June 1, 1959.

Payments of rent made by Dickey and Klein during the remainder of 1959 were sufficient so that after a portion was applied to current rent and the remainder to the delinquent rent accruing while Lawless and Kirk were in possession, the amount owing at the end of the year was reduced to $375.59. However, in 1960 only two payments, amounting to $932.66, were made, and in December, 1960, the building was vacated and the keys were returned to Winkler. No further payments of rent have been made. Although he has tried diligently to lease the premises since, in order to minimize his loss, Winkler has been unable to do so, and by the end of the ten-year period covered by the contract, in June, 1962, the delinquent unpaid rent amounted to $11,626.07. This sum plus interest, plus insurance premiums to be discussed later represents the amount of the judgment recovered jointly and severally against the defendants, only two of whom have appealed, namely Lawless and Evons.

APPEAL OF APPELLANT LAWLESS

Defendants Lawless and Kirk, in their second amended original answer included a cross-action naming as cross-defendants Winkler, Evons, Dickey and his wife, and Klein and his wife. When the cause was called for trial in the district court, the attorney for Lawless and Kirk, a resident of Houston, though duly and timely notified of the setting, failed to appear, nor did he or his clients furnish any explanation for his non-appearance. The trial proceeded as to all parties, with no attorney present in court representing Lawless and Kirk.

At the start of the trial, counsel for Dickey and Klein moved that the said cross-action be dismissed. The court announced that he would take this motion with the case and rule on it afterwards. As the testimony was about to end, this motion was renewed and sustained, and the court dismissed the cross-action with prejudice, and granted judgment against cross-plaintiffs on the cross-action in his final decree.

Appellant Lawless is represented on this appeal by counsel other than the attorney who failed to...