Giddings Convalescent Home, Inc. v. Wilson, 11847
| Decision Date | 27 October 1971 |
| Docket Number | No. 11847,11847 |
| Parties | GIDDINGS CONVALESCENT HOME, INC., et al., Appellants, v. Rogers D. WILSON et al., Appellees. |
| Court | Texas Court of Appeals |
Johnson, Jones & Sheppard, Samuel D. McDaniel, Salmanson & Smith, Allen E. Smith, Austin, for appellants.
Baker, Watkins, Ledbetter, Hayden & Ramsey, Thomas H. Watkins, Austin, for appellees.
O'QUINN, Justice.
Appellants brought this suit for actual and punitive damages and, alternatively, to enforce a constructive trust on certain property in Giddings, Texas. Appellants abandoned their contract theory and went to trial before a jury on the theory that a constructive trust grew out of breach of a fiduciary duty by Rogers D. Wilson, one of the appellees.
Upon a jury verdict favorable to appellees, the trial court entered judgment that appellants take nothing.
We affirm the judgment of the trial court.
Eric K. Palmros, Sr., and his son, Eric K. Palmros, Jr., entered into a joint venture with Rogers D. Wilson to construct and operate a convalescent home in Giddings, Lee County, Texas, early in 1966. Palmros and his son agreed to find a site for the building and to supervise the construction work. Wilson, who was experienced in the operation of convalescent homes, agreed to manage, or supervise management of, the completed home. The parties agreed that the project would be owned fifty percent by Palmros and his son and fifty percent by Wilson.
In March of 1966 the parties organized Giddings Convalescent Home, Inc., as a vehicle for their project, with Palmros and son holding half the stock and Wilson holding half. Directors of the corporation were Palmros and his son and Wilson.
A commitment for permanent financing had been obtained by the parties from the First National Bank of Giddings, with interim financing by the Fort Worth National Bank. A condition of the commitment letter was that the permanent loan be guaranteed personally by Wilson and by the elder Palmros. Construction of the building was substantially complete by the middle of October in 1966.
Late in September or in October Wilson asked Palmros and son to agree to an increase in the number of directors of the corporation to four and to let Wilson name the fourth director. The purpose of this proposal was to accord equal control as well as equal ownership of the project. The suggestion was rejected by the Palmroses. Wilson resigned as a corporate officer and director of Giddings Convalescent Home, Inc., and tendered his interest in the project. Wilson also advised Palmros and son that he would not enter into the upcoming permanent loan arrangements by personally guaranteeing the debt. All parties considered their relationship as joint venturers to be at an end.
Wilson later told the Palmroses he would buy them out if they would sell. The Palmroses first asked $25,000 for their interest and later raised that figure to $44,800. In either case, Wilson was to assume payment of the interim financing note of $81,835. Wilson declined to buy on either basis. Some time later the elder Palmros advised Wilson he would sell the Palmros interest for $91,500 if they could keep a fifty percent interest in the project, or would sell for $96,500 and not keep an interest. Again Wilson refused the offers, and afterwards, about a week before the property was sold at foreclosure sale, informed the Palmroses that he intended to bid individually on the property at the sale.
After the interim financing became delinquent, the First National Bank of Giddings declined to make the permanent loan without compliance with the commitment calling for the personal obligation of both Palmros, Sr., and Wilson. At the trustee's sale, early in December, Wilson bought the property for $91,172.77, which was sufficient to discharge all debts against the project. Neither of the Palmroses...
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