McClory v. Schneider, 3744.

• Decision Date: 08 June 1932
• Docket Number: No. 3744.,3744.
• Citation: 51 S.W.2d 738
• Parties: McCLORY v. SCHNEIDER.
• Court: Texas Court of Appeals

51 S.W.2d 738

McCLORY v. SCHNEIDER.

No. 3744.

Court of Civil Appeals of Texas. Amarillo.

June 8, 1932.

Rehearing Denied July 6, 1932.

Appeal from District Court, Gray County; W. I. Gamewell, Special Judge.

Action by Alex Schneider, Jr., against A. McClory. Judgment for plaintiff, and defendant appeals.

Reversed and remanded.

Cook, Smith, Teed, Sturgeon & Wade, of Pampa, and Reeder & Reeder, of Amarillo, for appellant.

W. M. Lewright, of Pampa, for appellee.

HALL, C. J.

The appellee, Schneider, claiming commission as a broker, sued appellant, McClory, and nine other individuals to recover the sum of $29,300. Later he filed a first amended original petition in which he abandoned his suit against all of the defendants except the appellant, McClory, who he alleged was a stockholder, officer, and director of certain corporations, viz. Pampa Pipe Line Company, Pampa Refining Company, and Grayco Gasoline Company; that he employed plaintiff as broker to find a purchaser for the properties and assets of the refining and pipe line companies, who would be ready, able, and willing to purchase the assets of said companies at such price and upon such terms and conditions as might be acceptable to appellant; that at the time of making said contract, viz. February 21, 1929, plaintiff had no knowledge of the ownership of the assets of said corporations and did not know that they were, in fact, incorporated; that at the time of the employment defendant represented that he owned the properties which constituted the assets of said companies, and agreed to pay plaintiff a reasonable commission for procuring a purchaser therefor; that plaintiff procured the H. F. Wilcox Oil & Gas Company, which agreed to buy the capital stock from the stockholders of the three companies first above mentioned for a total consideration of $293,000, of which $138,137.03 was paid in oil and the remainder of $154,862.97 was paid in cash; that, in selling the corporate stock of said corporations to the H. F. Wilcox Oil & Gas Company, the plaintiff substantially complied with the terms of his agreement with the defendant, in that the purchase of the stock was a mere medium through which the H. F. Wilcox Oil & Gas Company acquired all of the physical assets and properties of said three corporations, and that the method of the consummation of the sale of such assets by defendant and his associates to such purchaser was immaterial; that plaintiff was the procuring cause of such sale, and as a result defendant became obligated and bound to pay him a reasonable commission, which he alleged to be 10 per cent. of the total sale price.

Plaintiff set out his cause of action in two counts, alleging substantially the same facts in each. By the first count he seeks to recover upon a contract, and by the second he prays for recovery on a quantum meruit for services rendered in selling the property, assets, and/or capital stock of the Grayco Gasoline Company.

The defendant, McClory, answered by general demurrer, general denial, and specially alleged that in March, 1929, he owned stock in the Pampa Refining Company, a Texas corporation, and was the manager of such refinery; that he made his home at the Schneider Hotel, which was managed and operated by plaintiff, and had no knowledge that plaintiff was engaged in the real estate business; that H. F. Wilcox, the president of the H. F. Wilcox Oil & Gas Company, was a stockholder in the Schneider Hotel Company, a corporation managed by plaintiff; that in March, 1929, plaintiff brought George A. Dye, vice president of the Wilcox Oil & Gas Company, out to the refinery, and in doing so it was at plaintiff's free and voluntary will and not at the instance or suggestion of the defendant; that later plaintiff offered the assets of the Pampa Refining Company to the Wilcox Oil & Gas Company for the sum of $500,000, which the latter declined to accept; that, in bringing Dye out to the refining plant in March, 1929, plaintiff acted as the agent of the Wilcox Oil & Gas Company and not as defendant's agent; that whatever was done by plaintiff was done voluntarily and by reason of his friendship for Dye and Wilcox; that, following plaintiff's visit with Dye to the refining plant, the defendant offered the Pampa Refining Company to Wilcox Oil & Gas Company for $500,000, which was not accepted, and thereafter plaintiff abandoned his efforts to sell such property; that the stockholders owning the capital stock of the three corporations sold their privately owned stock to the Wilcox Oil & Gas Company, and plaintiff was in no wise a party to such sale; and that whatever was done by the defendant was done as the agent of the three corporations.

Plaintiff filed a trial amendment in which, with reference to the alleged contract with defendant, he stated that some time between February 21 and March 15, 1929, defendant employed plaintiff as a broker to find a purchaser for the properties and assets of the Pampa Refining Company who would be ready, able, and willing to purchase its assets at a price and upon terms and conditions acceptable to defendant, and that at the time of making such agreement the refining company was the owner of or was then acquiring the properties subsequently known as the Pampa Pipe Line Company; the Pampa Refining Company having purchased said pipe line from the Bell Oil & Gas Company, which became an asset of the Pampa Refining Company from the date of its acquisition on March 4, 1929, to the date of the incorporation of the Pampa Pipe Line Company in July, 1929; that in employing the plaintiff the defendant expressly included therein the properties subsequently incorporated under the name of the Pampa Pipe Line Company.

During the trial plaintiff dismissed his cause of action in so far as he claimed commissions upon the sale of the assets and capital stock of the Grayco Gasoline Company.

The case was submitted to a jury upon special issues, in response to which the following verdict was returned: Alex Schneider, Jr., was not representing the H. F. Wilcox Oil & Gas Company in negotiating with McClory regarding the sale of the refinery and pipe line in question; the purchase by the Wilcox Company of the capital stock of the refining company and the pipe line company did not result solely and only from causes unrelated to and disconnected from the acts done and statements made by the plaintiff; the services performed by plaintiff in connection with the sale of the stock were not performed voluntarily and without expectation of payment; the defendant, McClory, on about February 21 to March 15, 1929, employed plaintiff, Schneider, to procure a purchaser for the refinery and pipe line in question and on about said date agreed to pay plaintiff a reasonable commission for his services in procuring a purchaser therefor, and plaintiff was the procuring cause of the sale made by the stockholders of the two companies of the corporate stock to the Wilcox Company; that a reasonable commission to be paid the plaintiff is $20,000. Judgment was entered accordingly; hence this appeal.

The appellant's brief contains seventy-one propositions, but it will not be necessary to discuss each of the contentions separately.

Proposition No. 5 attacks the action of the court in permitting the witness Wilcox by deposition to answer the following question: "Please state whether or not at any time from the time that negotiations for the purchase of said properties were first opened with the officials of the Pampa Refining Company and its associated companies up to and including April 4, 1930, the H. F. Wilcox Oil & Gas Co. ever at any time considered that all negotiations had been concluded with reference to the purchase of said properties and if at any time it ceased to desire to acquire the same."

The court overruled the objection and permitted the answer of the witness to be read, as follows: "We were interested at all times but negotiations were dropped from time to time only to be brought up again due to our failure to get together on prices," etc.

By this question H. F. Wilcox is asked to testify whether all negotiations had ceased and as to the intentions of his company with reference to purchasing the properties of the refining company. Any answer must necessarily have been a conclusion drawn from the negotiations, conversations, letters, or other communications between the refining company and his company. What was said and done and the substance of such letters or conversations might have been admissible from which the jury could have concluded what the intentions of the Wilcox Oil & Gas Company were with reference to acquiring the property. The general rule is that a witness cannot testify as to the intent or motive of another. Robertson v. Gourley, 84 Tex. 575, 19 S. W. 1006; Dean v. Dean (Tex. Civ. App.) 214 S. W. 505. Wilcox, as a stockholder and even as a president of his oil and gas company, was a separate legal entity from the corporation, and while, under numerous circumstances, a witness may testify as to his own intentions, it is extending the rule too far to permit an officer of a corporation to testify as to the desires and intentions of his company with reference to the purchase of the property.

In transactions between parties, negotiated by a broker, conversations between the broker and either of the parties in the absence of...