Hatchett v. Williams

• Decision Date: 30 December 1968
• Docket Number: No. 15387,15387
• Citation: 437 S.W.2d 334
• Parties: Robert L. HATCHETT, Jr., Appellant, v. C. W. WILLIAMS, Appellee. . Houston (1st Dist.)
• Court: Texas Court of Appeals

Page 334

437 S.W.2d 334

Robert L. HATCHETT, Jr., Appellant, v. C. W. WILLIAMS, Appellee.

No. 15387.

Court of Civil Appeals of Texas Houston (1st Dist.).

Dec. 30, 1968.

Opinion on Remittitur Jan. 9, 1969.

Rehearing Denied Jan. 30, 1969.

Moore & Morris, Thomas W. Moore, Jr., Houston, for appellant.

William Key Wilde, John R. Cope, Houston, for appellee, Bracewell & Patterson, Houston, of counsel.

PEDEN, Justice.

C. W. Williams filed this suit for damages against Corky's Hong Kong Clothes, Inc., for breach of a contract whereby he was to be paid for supplying all the ready-to-wear clothing to be sold in the corporation's Shreveport, Louisiana, store and against Robert L. Hatchett, Jr. for breach of his guaranty agreement in favor of Williams. A default judgment was entered against Corky's Hong Kong Clothes, Inc. (which we will call Corky's), and it has not filed an appeal. After a jury trial Hatchett has perfected this appeal from the judgment of the trial court in favor of Williams in the amount found by the jury, $15,030.69.

Appellant's points of error assert that the original contract between Williams and Corky's was void because it was in restraint of trade; that the trial court erred in refusing certain special issues submitted by appellant inquiring whether his signing of the guaranty agreement was conditioned on his being joined by a certain other guarantor. Further, that the verdict will not support the judgment. He also raises points of no evidence, insufficient evidence to support the judgment and asserts that the judgment is against the great weight of the evidence. He presents in the alternative a point that if appellee is to prevail appellant is entitled to an offset of $1,422.31.

The original contract (as it will be called in this opinion) between Corky's and Williams, the appellee, was executed in Shreveport on October 7, 1964. It recited that Corky's was a Texas corporation duly qualified to do business in Louisiana, that Williams was a resident of Caddo Parish, Louisiana, that Corky's owned several stores, one of which was in Shreveport, that sold 'made to measure' suits made in Hong Kong and that it would be of considerable financial advantage to Corky's if it had Hong Kong tailored ready-to-wear suits and similar items to sell. Also, that Williams desired to purchase such ready-to-wear items and place them for sale with Corky's. The relevant contract provisions, with emphasis added, were:

'(1) Williams is * * * granted the exclusive right to furnish all merchandise that is sold In the store known as 'Corky's Hong Kong Clothes', Petroleum Tower, Shreveport, Louisiana, with the exception of made to measure items of clothing.

'(2) Williams will purchase from time to time items of ready to wear clothing for both men and women. The purchases will be made in Hong Kong or such other place or places as may be mutually agreeable to Corky's and Williams. Williams will cause such items to be shipped to Corky's store in Shreveport, Louisiana, pay all shipping costs and custom tariffs or charges.

'(3) Upon arrival in Shreveport, Louisiana, the items will be inventoried; cost of each item to include customs charges and its proportion of all shipping costs. * * * The cost as thus determined, shall be sometimes referred to hereinafter as 'gross cost' * * *.

'(4) The merchandise will remain the property of Williams until sold to customers or purchased, as hereinafter provided, by Corky's.

'(5) Williams will maintain an inventory of ready to wear items of not less than FIVE THOUSAND AND NO/100 ($5,000.00) DOLLARS, gross costs. * * * At no time shall such inventory be in excess of TWENTY THOUSAND AND NO/100 ($20,000.00) DOLLARS without the mutual consent of both parties. Provided, however, that items purchased by Corky's under the minety (90) day provision shall not be included as a portion of the inventory. * * *

'(6) With respect to the purchase of the ready to wear items by Williams, it is understood that Corky's shall have the exclusive right and the obligation to select the merchandise and to negotiate the price to be paid the manufacturer or tailor. However, Corky's shall have no general authority to obligate Williams and must have specific authority from Williams for each order to include the maximum amount to be paid the tailor, manufacturer or exporter for the shipment. Williams shall also have the same rights to make such purchases with Corky's consent.

'(7) Corky's shall have the exclusive right to fix and determine the price at which each item shall be sold. However, without the expressed authority of Williams, the retail price shall not be less than gross cost plus twenty (20%) percent, which percentage is hereinafter sometimes called the 'mark-up'. With respect to items purchased by Corky's from Williams under the ninety (90) day provision hereinafter set forth, the sales price shall be at the sole discretion of Corky's.

'(8) On the first banking day following the date of sale, Corky's shall deposit in The First National Bank in Shreveport to the credit of Williams, an amount equal to the gross cost plus fifty (50%) percent of the mark-up of each item sold. Williams shall be furnished daily with a list of items sold the previous day together with cost and mark-up of each item, sales slips and bank deposit slip.

'(9) At the request of Williams, Corky's shall purchase and immediately pay for any item received by the store more than ninety (90) days prior to the demand. The purchase price shall be the gross cost plus five (5%) percent. Williams shall have the right to remove any merchandise which he has furnished, which has been in the store for more than ninety (90) days. At any and all reasonable times, Williams may inventory the merchandise placed in the store under this agreement. Any items not in the store shall be considered as having been sold as a normal store sale unless the store has been robbed or burglarized and evidence of such robbery or burglary is established.

'(10) In the event a petition is filed for the bankruptcy of Corky's, either voluntary or involuntary, * * * Williams shall have the right to remove all of his unsold items without payment of any kind to Corky's. * * * In the event Williams shall be reasonably apprehensive that the merchandise placed in Corky's store or stores is in jeopardy from the claim of creditors or from poor management, he may call upon Corky's for security acceptable to him. In the event Corky's should fail or refuse to provide such security, Williams may at his option remove the merchandise placed by him in the store and terminate this agreement. * * *

'(12) It is further agreed that at the option of Williams, this contract shall extend to and cover all other retail outlets which Corky's now owns or may acquire during the life of this contract. In such event the gross cost of each item shall be computed at the local store and not the Shreveport, Louisiana store. This option must be exercised within six (6) months from date as to each store or retail outlet now owned by Corky's and within sixty (60) days after the opening of each new store or retail outlet.

'(13) * * *.

'(14) This contract and agreement shall be and remain in full force and effect for a period of one (1) year from date. Corky's further grants to Williams the option to renew and/or extend this contract * * * for nine (9) additional consecutive periods of one (1) year each, * * *' by his depositing in the Central National Bank at Houston, Texas to the credit of Corky's $1,000.00 for one year's renewal on or before 60 days from the anniversary date of this contract.

Mr. A. L. 'Corky' Jackson, president of Corky's, testified that early in 1965 the corporation was in a state of bankruptcy and that he wanted to move to a new Dallas store the merchandise which was on consignment from Williams in the Shreveport store. He asked Williams for permission and Williams agreed to give it provided he received sufficient securities.

Williams' attorney prepared the guaranty agreement. It refers to the original contract summarized above and guarantees that Williams will be paid the gross cost of the merchandise he had placed in Corky's which was valued at $17,772.78, less the gross cost of any merchandise returned to Williams which had been held by Corky's for 120 days or less. The guaranty agreement recites that it was recognized that Williams had the right under paragraph 10 of the original agreement to terminate it and remove the merchandise and be fully protected from loss. The guaranty agreement was executed by appellant, who was a stockholder and director of Corky's, on Feburary 9, 1965 at Houston.

It is uncontroverted that the goods purchased under the original contract moved in foreign and interstate commerce. Appellant alleged by proper pleadings that the original contract was in restraint...