Ingle Bros. Pacific, Inc. v. Scott
| Decision Date | 13 March 1972 |
| Docket Number | No. 8230,8230 |
| Citation | 478 S.W.2d 210 |
| Parties | INGLE BROS. PACIFIC, INC., Appellant, v. H. L. SCOTT, Appellee. |
| Court | Texas Court of Appeals |
Gibson, Ochsner, Adkins, Harlan & Hankins, Michael C. Musick, Amarillo, for appellant.
C. J. Humphrey, Amarillo, for appellee.
This is an appeal from a judgment entered in favor of H. L. Scott, plaintiff-appellee, against Ingle Bros. Pacific, Inc., defendant-appellant, arising out of the parties' written agreement for the sale and purchase of plaintiff's mop manufacturing business. Affirmed in part and reversed and rendered in part.
On June 16, 1969, H. L. Scott and Ingle Bros. Pacific, Inc., entered into a purchase agreement whereby Scott would sell to Ingle Bros. his mop manufacturing business known as Scott Manufacturing Company located in Amarillo, Texas. The purchase agreement is set out as follows: (paragraph numbers inserted for convenience of reference.)
'June 16, 1969
'PURCHASE AGREEMENT
(1) 'Ingle Bros. Pacific a California Corporation and Scott Manufacturing Co. a solely owned Proprietorship by H. L. Scott have entered into the following Purchase and Sale Agreement. Principals to be herein referred to as Ingle and Scott.
(2) 'Scott agrees to sell all assets, trade names, manufacturing and marketing rights to Ingle. Ingle agrees to pay Scott $50,000 in the following manner . . .
(3) '$35,000 cash at time of transfer of title and, $15,000 on or before December 31, 1969. The $15,000 shall be a 7% Note secured by assets of the business.
(4) 'The physical assets shall consist of.$19,000 in marketable inventory and accounts receivable combined, and all the equipment of the present business, no real estate.
(5) 'An Employment Agreement has been prepared, wherein H. L. Scott will manage the business for a minimum of five years at an annual salary of $15,000, payable monthly, with a $3,000 increase after the 1st year, providing annual gross sales exceed $200,000.
(6) 'A separate lease agreement shall be drawn between Mr. and Mrs . H. L. Scott and Ingle as follows; ten year lease at $550.00 monthly with option to renew for additional 5 years at $550.00 monthly plus tax increase over 1969 to be added.
(7) 'Until legal operating status is determined, Scott will operate as a division of Ingle. Management will be directly responsible to Ingle. All operating policies shall be subject to Corporate Headquarters, Stellar Industries, of which Ingle is a subsidiary.
'/s/ H. L. Scott
'/s/ J. B. Tompkins'
Title to the assets of Scott Manufacturing Company was transferred by bill of sale on June 20, 1969, and the $15,000.00 note was executed and delivered on the same date with the due date of the note being December 31, 1969. When the note became due, the due date was extended to November 1, 1970, and thereafter was again extended to December 1, 1970.
After the transfer of title of Scott Manufacturing Company to Ingle Bros., Scott remained as an employee in charge of the Amarillo plant. Between the dates of November 24, 1970, and December 1, 1970 Ray Rivero, the then General Manager of Ingle Bros., made it known to Scott that he had decided to close the Amarillo plant and move the equipment and operation to Tucumcari, New Mexico, and there combine it with another Ingle Bros. facility. Also, there was indication that Scott's duties would be altered to include sales work. The $15,000.00 note had not been paid and Scott did not desire that the equipment of the Amarillo plant be moved until the note was paid in full. Scott consulted with his lawyer concerning this matter. Scott's attorney contacted Rivero, advised him that the equipment was not to be moved until the note was paid, and secured an agreement to that effect from Rivero. On December 11, 1970, Rivero contacted Scott and inquired of him as to the financial status of the local account of Scott Manufacturing Company. Rivero indicated concern that the note be paid as soon as possible in order that the transfer of the equipment could be accomplished with the minimum amount of delay. Upon being advised by Scott that approximately $12,000.00 was available above the amount needed for payroll, Rivero instructed Scott to send $5,000.00 to Ingle Bros. headquarters in California and to write a check to himself for $7,000.00 and apply it on the $15,000.00 note. Scott sent the $5,000.00 to California but did not write a check for $7,000.00 to himself. Upon advice of his attorney, Scott did not take the $7,000.00, but it was determined to permit the account to build up to near the sum of $15,000.00 and then 'clean it out.' Scott did not advise Rivero or any representative of Ingle Bros. concerning his decision in this matter. Without consulting or advising his employer, on January 6, 1971, Scott had his wife, also an employee of Scott Manufacturing Company, to write him a check on the company account for $13,896.46 as payment on the $15,000.00 note and an additional check in the sum of $450.00 for 'legal fees pertaining to note on Ingle Bros. Pacific.'
On January 19, 1971, Rivero, having learned of the above described transactions, sent Scott a formal letter of termination of his employment. Scott then filed suit against Ingle Bros. Pacific, Inc., seeking, among other matters, the balance due on the promissory note and asserting breach of an alleged employment contract. Ingle Bros. challenged the existence of an employment contract and further took the position that in any event the termination was for good cause. The trial was held before a jury, and, upon the verdict, judgment was rendered in favor of Scott for (1) $305.00 for balance of principal and interest on the $15,000.00 note; (2) $2,250.00 for reasonable attorney fees; (3) $250.00 for the reasonable cost and expense in obtaining a default judgment in a previous proceeding; and (4) the net sum of $54,210.00 (after agreed discount) remaining to be paid Scott under the alleged employment contract.
Appellant raises no points of error and seeks no review of those portions of the judgment wherein the appellant recovered the above stated sums for balance due on principal and interest on the promissory note, the attorney fees and the costs and expenses in obtaining the default judgment. Therefore, these unchallenged portions of the judgment are affirmed, and we shall confine our consideration to the challenged part of the judgment awarding the appellee the net sum of $54,210.00 under the alleged employment contract.
Appellant has assigned 10 points of error with respect to that portion of the judgment upon which it brings this appeal and contends primarily that paragraph 5 of the purchase agreement of June 16, 1969, is not a valid employment contract between appellee and appellant. Appellee, on the other hand, contends paragraph 5 of the purchase agreement is a valid and enforceable contract of employment, relying primarily upon the following language found in that portion of said agreement designated as paragraph 5:
'An Employment Agreement has been prepared, wherein H. L. Scott will manage the business for a minimum of five years at an annual salary of $15,000, payable monthly, with a $3,000 increase after the 1st year, providing annual gross sales exceed $200,000.'
Appellant, in its first point of error, complains of the trial court's failure to...
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Scott v. Ingle Bros. Pac., Inc.
...for some $54,210. The court of civil appeals completely disagreed. It held that as a matter of law there was no employment contract. 478 S.W.2d 210. We disagree with both courts. Our holding is that there is an issue of fact as to the intention of the parties. Accordingly, as to this portio......