Manges v. Willoughby, 15246

• Decision Date: 16 January 1974
• Docket Number: No. 15246,15246
• Citation: 505 S.W.2d 379
• Parties: Clinton MANGES et al., Appellants, v. R. B. WILLOUGHBY et ux., Appellees.
• Court: Texas Court of Appeals

Page 379

505 S.W.2d 379

Clinton MANGES et al., Appellants, v. R. B. WILLOUGHBY et ux., Appellees.

No. 15246.

Court of Civil Appeals of Texas San Antonio.

Jan. 16, 1974.

Rehearing Denied Feb. 13, 1974.

William C. Church, Jr., San Antonio, David R. White, Uvalde, Petry & Petry, J. C. Tatum, III, (on appeal) Carizzo Springs, for appellants.

Ernest Morgan, San Marcos, for appellees.

BARROW, Chief Justice.

This is a dual appeal from a judgment rendered on a jury verdict whereby appellees, R. B. Willoughby and wife, recovered a joint and several judgment in the sum of $17,956, less an escrow deposit of $4,105.78, from appellant, Clinton Manges, and appellant, Harry I. Neuman, for breach of a written lease contract.

On November 1, 1963, appellees entered into a written agreement with Neuman ¹ whereby appellees' 1,002-acre farm in Zavala County was leased for a term of five years for an agreed rental of $25,000 per year. Lessee agreed, among other covenants, to deliver said premises and improvements to lessor in as good a condition as when received, natural wear and depreciation alone expected. Lessee specifically agreed to prevent Johnson grass from spreading on the leased premises. On September 23, 1966, Neuman, as sublessor, entered into a written assignment and sublease with Manges, as sublessee, whereby Neuman subleased, sublet and assigned to Manges all of his right, title and interest in the Willoughby lease contract. The original lease contract prohibited an assignment or sublease without the written consent of lessor. However, Willoughby ex ux. gave such written consent after certain considerations were met, including the deposit of $5,000 in escrow with the First State Bank of Uvalde to insure lessor against damage of said property. ² Furthermore, Willoughby et ux. specifically refused to release Neuman from his obligations under the original lease contract.

At the termination of the five-year lease contract, the leased premises were returned to lessors, Willoughby et ux. Lessors asserted to the Uvalde bank that the escrow deposit should be given to them because the property had been returned in a damaged condition. Manges also asserted claim to said escrow deposit; whereupon, the bank brought this suit in the nature of an interpleader action to determine the owner of said sum. Willoughby et ux. asserted a cross-action against Manges and Neuman, seeking to recover jointly and severally for damages in the total amount of $24,652.75. Neuman denied any liability to Willoughby et ux. and affirmatively sought indemnity from Manges for any such liability. Manges denied by liability to Willoughby et ux., but sought no affirmative relief other than return of his escrow deposit.

Twenty-seven issues were submitted to the jury and all relate to the question of damages and the time same occurred. Each alleged item of damage was submitted in a somewhat similar cluster, whereby the jury was asked to find if Neuman or Manges, or their respective agents, employees or permittees, inflicted such alleged item of damage; if so, inquiry was then made as to whether same occurred after September 23, 1966; and then the cost of repairs necessary to restore the property to the condition it should have been in on November 1, 1968. ³ The jury found substantially as follows:

1. The main dwelling house was damaged and the cost of reasonable and necessary repairs was.$1,143.

2. Certain fences were removed without permission and the cost to replace same was $8,050.

3. Culverts or ditch crossings were damaged and the cost of repairs was $375.

4. The farm was permitted to become infested with Johnson grass and the cost to eradicate same was $4,394.

5. Contour borders on the farm were damaged and the cost of repairs was $3,994.

In response to issues submitted after each item of damage, the jury answered in the negative as to whether any of such items of damage occurred after September 23, 1966. Other items of damage were inquired about, but appellees make no complaint to the negative findings on same.

All parties asserted at the trial, and also assert on this appeal, that the instruments in question are clear and unambiguous and, therefore, no jury issues were submitted or requested regarding same. Nevertheless, each of the three parties urges that said instruments clearly and unambiguously support his construction of same. The trial court concluded that Neuman and Manges were jointly and severally liable on the lease obligations and entered judgment for the sum of $17,956 as found by the jury, less a credit of $4,105.78 for the sum deposited in escrow by Neuman and Manges. Both Neuman and Manges have perfected an appeal from this judgment.'

NEUMAN APPEAL

The original lease agreement required Neuman to return the property to appellees in as good a condition as when received, natural wear and depreciation alone excepted, and to prevent the spread of Johnson grass. Neuman urges, however, that appellees are estopped from claiming any breach of contract, and further, that appellees waived any such claim for damages for breach of contract. It must be recognized at the outset that since no issues of estoppel or waiver were requested by Neuman, he must establish all the essential elements of same ⁴ as a matter of law.

Neuman asserts several things which he says operate as waivers and estoppels to bar any recovery of damages by appellees. Neuman points out that appellees continued to accept the agreed annual rental without complaining of any damage or without urging the contractual right to cancel the lease for default of the lease provisions. This contention is without merit. The obligation was to deliver the property at the termination of the lease in good condition. Willoughby testified that the only damage he noticed during the lease period was that some of the partition fences had been taken down, and upon inquiry, Neuman promised to replace same at the end of the lease. At the very least, a fact issue would be raised concerning appellees' knowledge of a breach of the covenant to keep the property in good repair.

Nor can it be said that appellees waived their contractual right to have the property returned in good condition by requiring an escrow deposit of $5,000 to be made. Rather, it would seem that such deposit demonstrates that appellees expected to be paid for any damage. Nothing in the language of this provision of the sublease can be construed as an agreement by appellees to limit their recovery to such amount. Furthermore, it is seen that appellees, while consenting to the sublease and assignment to Manges, expressly refused to release Neuman from his obligation under the original lease. It cannot be said that, as a matter of law, appellees are estopped from seeking to enforce such obligations against Neuman or that a claim for breach of such obligations was waived. Neuman's first and second points are without merit and are overruled.

Neuman asserts by his third point that he is entitled under the clear and unambiguous language of the sublease to be indemnified by Manges for all liability to appellees under the original lease agreement. The sublease provides in part as follows:

'Sub-Lessee further agrees and covenants that he will carry out all of the terms, conditions and requirements set forth in the original Willoughby et ux lease contract above referred to, and agrees and covenants that he will not in any way violate any of such terms, conditions and requirements, and further agrees and covenants to hold the Sub-Lessor harmless from any and all liabili-whatsoever which might arise or be occasioned by the violations of said Willoughby et ux lease, FROM THE DATE OF THIS SUBLEASE FORWARD TO THE FINAL TERMINATION THEREOF.' (Emphasis ours).

Neuman has not made any complaint of the jury's refusal to find that any of the elements of damage occurred after the date of the sublease. He urges, however, that the clear intent of the parties was that Manges would assume all obligations of the lease. In support of this intent, Neuman offered an instrument executed to supplement a contract of August 23, 1966, whereby Neuman agreed to sell his farm adjoining the Willoughby property to Manges. In the supplemental agreement of August 24, 1966, Manges agreed to take over all obligations of Neuman with regard to the Willoughby lease either as assignee or sublessee, if possible; or to customfarm said property for Neuman, but on behalf of Manges. While wo do not consider the agreement of August 24 to be in conflict with the final agreement executed on September 23, 1966, by Neuman, Manges and appellees, it is obvious that any conflicts would be resolved in favor of the last instrument.

Thus, the question is whether Manges' agreement to assume all obligations of the original lease can be construed as an agreement to indemnify Neuman for his responsibility for any damages which occurred prior to the sublease. ⁵ Texas follows the general rule that an indemnity agreement will not protect the indemnitee against the consequences of his own negligence unless the obligation is expressed in unequivocal terms. Joe Adams & Son v. McCann Construction Company, 475 S.W.2d 721 (Tex.1972); M. J. Delaney Company v. Murchison, 393 S.W.2d 705 (Tex.Civ.App.--Tyler 1965, no writ); Freight Terminals, Inc. v. Ryder System, Inc., 461 F.2d 1046, 1054 (5th Cir. 1972, approving 326 F.Supp. 881, (U.S.Dist.Ct., S.D.Tex.1971)).

Here, although Manges agreed to assume all the obligations of lessee in the original lease contract, he expressly agreed to hold Neuman harmless only for violations of the lease occurring after the date of the sublease. Since the jury did not find that any of the damage occurred after this date, the trial court did not err in rendering judgment against Neuman on his obligation under the original lease agreement.

Neuman urges by his final point that the trial court erred in not granting a new trial because of the misconduct of a...