Johnson v. Buck
| Decision Date | 30 June 1976 |
| Docket Number | No. 1051,1051 |
| Citation | 540 S.W.2d 393 |
| Parties | Joseph J. JOHNSON et al., Appellants, v. Robert L. BUCK and Bunny Jayne Buck, Appellees. |
| Court | Texas Court of Appeals |
Fred A. Collins, W. James Kronzer, Vinson, Elkins, Searls, Connally & Smith, Tom A. Alexander, Butler, Binion, Rice, Cook & Knapp, Houston, for appellants.
Percy Foreman, Levert J. Able, Tom Coleman, Jr., Houston, for appellees.
This is an appeal from a judgment that rescinded and set aside certain instruments of sale executed by Robert L. Buck and Bunny Jayne Buck, and awarded them the sum of $6,377,365.89, with interest thereon at the rate of 6% Per annum from January 31, 1970 until paid. The suit arose out of a partnership between Joseph J. Johnson and Robert L. Buck in which each party owned an undivided one-half interest in certain properties in Houston, Texas. Buck agreed to sell his interest therein to Johnson in late 1968, but the sale was not fully completed until January 31, 1970, when the final instruments of sale were executed and the partnership was terminated.
The case was tried to the court without a jury. Following a two-month trial which commenced on January 6, 1975, judgment was rendered on April 30, 1975. Joseph J. Johnson, SSRD, Inc., Memorial City General Hospital, Inc., and SSB, Inc., plaintiffs and cross-defendants in the trial court, have appealed from the judgment. We affirm.
The appellants will be referred to as 'Johnson', and the appellees will be referred to as 'Buck'.
Findings of fact and conclusions of law were neither requested nor filed. Therefore, the trial court's judgment implies all necessary fact findings to support it. Seaman v. Seaman, 425 S.W.2d 339 (Tex.Sup.1968).
Johnson says in his brief:
'. . . The attack here will be that those 'implied' and 'presumed' findings are against the great weight and overwhelming preponderance of the evidence, and alternatively, that the damage finding is 'excessive'.'
The trial court impliedly found that in connection with the sale and purchase Johnson made misrepresentations and concealments of material facts which induced Buck to sell his interest in the partnership properties for less than what they were actually worth, and that but for such misrepresentations and concealments Buck would not have sold the same to Johnson at the agreed sale and purchase price. We hold that there is ample evidence to sustain those implied findings and that they are not against the great weight and overwhelming preponderance of the evidence. We further hold that the judgment award is not excessive.
Johnson filed suit against Buck on July 14, 1972 to recover certain monies, which he alleged was due because of Buck's failure to pay certain sums of money pursuant to their agreement of sale, and to recover an unspecified amount of money caused by the failure of Buck to execute partial releases and subordination agreements in accordance with their agreement. In addition to answering the petition, Buck filed a cross-action against Johnson and SSRD, Inc., Memorial City General Hospital, Inc., and SSB, Inc., Johnson's wholly-owned corporations. It was alleged; that a 50--50 partnership was entered into by and between Johnson and Buck in May, 1959; that the partnership thereafter acquired and developed various real properties; that Johnson, on several occasions, dealt secretly and for his own account in certain projects of his own and thereby violated the fiduciary duty he owed to Buck; that the purchase of Buck's net equity in the partnership was an unfair transaction and for an inadequate consideration; that the sale was made as a result of fraud, misrepresentations and concealments by Johnson which were deliberately made by him as an inducement for Buck to agree to the sale; and that but for such fraud, material misrepresentations and concealments, Buck would not have agreed to sell their net equity in the partnership properties to Johnson for the amount of money paid by Johnson. Buck asked for a dissolution of the partnership as of January 31, 1970, for an accounting for the difference between what they had received and the value of their one-half interest in the partnership as of January 31, 1970; and that the sale of their interest therein to Johnson be rescinded and set aside because of Johnson's fraud, misrepresentations and concealments.
Johnson denied generally the allegations of the cross-action and also set up a plea of limitations to the asserted action. In addition, he pled that in 1969 and 1970, he purchased Buck's interest in the properties owned by Buck 'in their joint ventures' and that their 'relationship was terminated by the purchase of the interest of Robert L. Buck and Bunny Jayne Buck, as reflected in the instruments'.
Johnson, in his first six points of error, contends:
The implied finding or findings that Johnson made material misrepresentations of material facts leading to the execution of the buy-sell agreement, or failed to disclose material facts, is or are so against the great weight and overwhelming preponderance of the evidence as to be clearly wrong and unjust.
There is no competent or probative evidence to support an implied finding that the alleged misrepresentations of Johnson were not merely statements of opinion, which opinions were based upon underlying facts which Buck either knew or to which Buck had equal access, and, therefore, no recovery can be premised upon such statements and this cause must be reversed and remanded.
The implied finding that the alleged misrepresentations of Johnson were not merely statements of opinion, which opinions were based upon underlying facts which Buck either knew or to which Buck had equal access, is so against the great weight and overwhelming preponderance of the evidence as to be clearly wrong and unjust.
The implied finding or findings that Buck did not know the true facts respecting the claimed misrepresentations or the alleged undisclosed facts is or are so against the great weight and overwhelming preponderance of the evidence as to be wrong and unjust.
There is no competent or probative evidence to support an implied finding that Buck could have justifiably relied to his detriment upon any alleged misrepresentation of the type allegedly made by Johnson in agreeing to sell for the agreed upon consideration and, therefore, this cause must be reversed and rendered.
The implied finding that Buck could have justifiably relied upon any of the alleged misrepresentation of the type allegedly made by Johnson in agreeing to sell for the agreed upon consideration is so against the great weight and overwhelming preponderance of the evidence as to be clearly wrong and unjust.'
In disposing of the 'no evidence' points, the rule of Renfro Drug Co. v. Lewis, 149 Tex. 507, 235 S.W.2d 609 (1950), controls since findings of fact were neither requested nor filed; in that respect, we, therefore, will consider only the evidence that is favorable to the judgment and will disregard entirely that evidence which is opposed to it. In ruling on the 'against the great weight and preponderance of the evidence' points, we will consider and weigh all of the evidence. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1951); 38 Tex.L.Rev. 361 (1960).
The evidence conclusively shows that Johnson and Buck entered into a business arrangement in May, 1959, for the purpose of acquiring and developing real property in Houston. At that time, Johnson was in the house-building business, and had built between 20 and 25 houses the year before. In 1958, johnson had a net profit of $8,045.72. Buck, who had been a vice-president of Williams Brothers Pipeline Company, but who was not employed in 1959, sold a large block of stock in Williams Brothers in order to provide the needed capital for the business. He made $100,000.00 available to the business by advancing $50,000.00 directly to the business and by loaning $50,000.00 to Johnson, who advanced that sum to the business. All of the $100,000.00 had been repaid to Buck by February, 1968. In June, 1963, it was agreed that Johnson and Buck would 'draw' $2,500.00 each per month from the business, which was later increased to $5,000.00 each per month.
It is undisputed that Johnson and Buck, each owned a 50% Interest in the business, and were to share profits and losses on a 50--50 basis after the capital contributions were repaid. They kept a separate set of books and maintained bank accounts designated as partnership accounts of Joseph J. Johnson and Robert L. Buck. Johnson was designated and acted as managing partner. The record supports an implied finding that a partnership existed between Johnson and Buck from May, 1959 until January 31, 1970, and that Johnson was the managing partner at all times. Johnson does not challenge that implied finding by a point of error.
There is competent and probative evidence that Johnson, on several occasions prior to June, 1968, by some of his dealings with partnership properties, obtained and retained monetary benefits that were not shared in by Buck. We do not deem it necessary to discuss those details. However, Johnson, the managing partner, is prohibited and precluded from reaping any benefit, to the exclusion of Buck, from self-dealing in the properties in which Buck had a partnership interest, irrespective of whether the title thereto was held and owned by one of the development corporations owned by Johnson and Buck, or by the partnership entity. International Bankers Life Insurance Co. v. Holloway, 368 S.W.2d 567 (Tex.Sup.1963); Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377 (1945); Kinzbach Tool Co., Inc. v. Corbett-Wallace Corporation, 138 Tex. 565, 160 S.W.2d 509 (1942). Johnson must account to the partnership for all profits...
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