Graham v. Turner

• Decision Date: 14 October 1971
• Docket Number: No. 5055,5055
• Citation: 472 S.W.2d 831
• Parties: R. C. GRAHAM, Jr., Appellant, v. C. E. TURNER, Appellee.
• Court: Texas Court of Appeals

Page 831

472 S.W.2d 831

R. C. GRAHAM, Jr., Appellant, v. C. E. TURNER, Appellee.

No. 5055.

Court of Civil Appeals of Texas Waco.

Oct. 14, 1971.

Jonathan H. Allen, Dallas, R. Matt Dawson, Corsicana, Henry Akin, Dallas, for appellant.

Harry W. Margolis, Dallas, for appellee.

OPINION

JAMES, Justice.

This suit was filed by C. E. Turner (plaintiff or appellee) against defendants R. C. Graham, Jr. (appellant) and East Fork Sand and Gravel Co., Inc. (hereinafter called East Fork) to establish a 50% Ownership in behalf of Turner of East Fork and to recover a balance of $101,569,16 allegedly due Turner for 50% Of the proceeds received from sale of the assets of East Fork to Trinity Concrete Products Co., (hereinafter called Trinity), which sale took place on or about February 25, 1966, out of which proceeds appellant Graham had previously paid Turner $20,000.00.

Appellee Turner further alleged that appellant Graham had kept and appropriated appellee's share of the said sale proceeds for himself and for his own use and benefit, and had used some of the money to buy real estate and personal property in his (Graham's) own name, and that a constructive trust should be imposed upon the monies so appropriated and that such constructive trust should follow the monies into whatever real or personal properties they were converted into, and that a lien should be placed against all of such property, and for a full accounting with respect to all such monies.

Appellee Turner further sued for $100,000 exemplary damages on the theory that appellant Graham's appropriation of the monies allegedly due Turner, and Graham's failure to pay appellee was wanton, wilful and malicious and an intentional fraud on appellee Turner.

Turner sued for judgment against Graham individually and against East Fork for damages in the sum of $101,569.16 plus interest at 6% From July 1, 1967, for $100,000 exemplary damages, for a constructive trust and lien on all monies belonging to Graham and upon all properties into which said monies had been converted and for costs; and in addition thereto, Turner alleged the Graham distributed and conveyed to himself individually and from East Fork interests in various gravel royalties and agreements, which conveyances were made as part of the dissolution of East Fork, and upon this alleged set of facts, Turner sued for a 50% Interest in such royalties and agreements, and for 50% Of all the monies collected by Graham since such conveyances in 1966, and for an accounting to establish same.

Graham and East Fork answered by general denial, a plea of the two year statute of limitations, a special denial that Turner owned 50% But that on the contrary Turner owned only one share of stock in East Fork while 998 shares belonged to Graham with the remaining one share belonging to Graham's wife, a verified denial of partnership between Turner and either defendant, and that Turner take nothing.

Graham's theory throughout the case was to the effect that never at any time were he and Turner partners, but that Turner was merely an employee of East Fork (other than Turner owning only one share out of the 1,000), and that he (Graham) was the sole owner of East Fork (with the exception of Turner's one share plus one share owned by Graham's wife); and that therefore all the sale proceeds of East Fork as well as interests and proceeds from the gravel royalties and agreements was Graham's own individual money and property, in which Turner had no interest.

The jury verdict on special issues is in effect as follows: Turner and Graham did not orally agree to the percentage in East Fork that each owned, but they impliedly agreed that they each owned 50% Of the corporation; that Turner contributed to the Corporation $1700.00 in money and equipment consisting of a dragline of the market value of $40,000.00, pumps worth $3000.00, bull dozer worth $12,000.00 and trucks worth $2500.00; that the corporate stock certificates were not issued and delivered to the stockholders before dissolution of East Fork; that Turner and Graham agreed to divide the proceeds of sale of East Fork assets on a 50-50 basis after payment of all just debts; that on or about February 23, 1966, when Turner received notice of the $20,000.00 deposit Graham had made to him, that Graham told Turner that he would receive the balance of his share within 15 months; that Graham is indebted to Turner in the amount of $81,128.63 from the proceeds of the corporate dissolution and sale; that in addition to money, Graham received an overriding royalty interest in the sand and gravel leases from said dissolution and sale, and that Turner is entitled to 50% Of such gravel royalty; that Turner placed his trust and confidence in Graham with regard to the business dealings between them in this lawsuit; that thereafter Graham breached his trust and confidence in distributing the proceeds received from the dissolution and sale; that Turner paid in $500.00 of the $1,000.00 allocated as capital of East Fork; that Graham acted with malice when he distributed the proceeds from the corporate sale and dissolution; that $50,000.00 should be awarded to Turner as exemplary damages; that Graham paid $27,000.00 of the monies which he received from sale and dissolution of East Fork to his father for the release of a $32,000.00 vendor's lien note; that the purchase price of the 108 acres purchased by Graham from Luther and George Harrington et al was paid with monies Graham received from the sale and dissolution of East Fork, said purchase price being $42,000.00; that the 20 head of cattle which Graham bought from one Reeves were paid for with money Graham received from the sale and dissolution of East Fork; that said cattle and their offspring have become so mixed with Graham's present herd that it is now impossible to separate them; that the agreement of Turner and Graham to divide the proceeds from sale of East Fork on a 50-50 basis was not breached by Graham before November 12, 1966; that Turner did not know before November 12, 1966 that Graham did not intend to make any payment to Turner; that before November 12, 1966, Turner was not aware of any facts and circumstances which would have caused a person of ordinary prudence to make inquiry by which he would have learned that Graham did not intend to make any payment to Turner.

The trial court entered Judgment that Turner take nothing against East Fork, but that Turner take judgment against Graham in the amount of $149,524.27, same being $81,128.63 actual damages, $18,395 .64 interest from July 1, 1967 to the date of judgment, and $50,000.00 exemplary damages, together with interest at 6% Per annum from date of judgment and costs; plus 50% Undivided interest in four certain gravel royalties and assignments conveyed by East Fork to Graham and 50% Of the monies theretofore received or collected by Graham by reason of his owning such royalties on or for the sale, conveyance or assignment of such royalties, and ordering Graham to furnish Turner with an accounting with reference to same, together with an accounting of the monies Graham received from sale and dissolution of East Fork and to pay Turner 50% Of the monies due Turner pursuant to such accounting; that a constructive trust is imposed and Turner is awarded a lien on all the cattle in the care, control and ownership of Graham and a lien on an 80% Interest in the real estate conveyed by Graham's father to Graham on or about September 28, 1964, together with foreclosure of such liens; that Turner recover from Graham 50% Undivided interest in 108.13 acres of land conveyed to Graham by deed dated October 4, 1966, and that Graham is ordered to convey such one-half interest to Turner free and clear of any incumbrances that did not exist when Graham bought the land, and that Graham be given $21,000.00 (plus interest from July 1, 1967) credit on the judgment when such conveyance is made.

Appellant attacks the trial court's judgment upon twenty-three points of error and for convenience in discussion and disposition thereof, we will group points of like kind together.

The first four points in effect assert that Turner's cause of action is barred by the two year statute of limitation as provided in Article 5526, Vernon's Ann. Revised Civil Statutes of Texas, and that the court erred in submitting Special Issue No. 13 (which in effect found that on or about February 23, 1966, when Turner received notice of the $20,000.00 deposit, that Graham told Turner that Turner would receive the balance of his share within fifteen months).

Turner's original petition was filed November 13, 1968.

The pertinent portion of Article 5526 in effect provides that the two year limitation period bars actions for debt where the indebtedness is not evidenced by a contract in writing.

Appellant's assignments of error do not attack the jury's finding on Special Issue No. 13 on any specific grounds; however, we have concluded after examination of the 343 assignments of error in appellant's Amended Motion for new trial that such attack contains objections based upon allegations that there is no evidence to support such finding, insufficient evidence to support such finding, and that such finding is against the great weight and preponderance of the evidence. We have carefully examined the entire record in this cause and conclude that the evidence is amply sufficient to support the jury's answer to Special Issue No. 13, as well as the jury's answers to Special Issues Nos. 31, 32, and 33 (the two-year limitation issues). Appellant has not attacked the jury's findings to Special Issues 31, 32, and 33 by any assignment of error, and is therefore bound by such findings. To No. 31 it was found that the agreement of Turner and Graham to divide the proceeds from sale of East Fork on a 50--50 basis was not breached by Graham before November 12, 1966.

To No. 32 it was found that Turner did not know before November 12, 1966...