McKenzie v. Carte

• Decision Date: 17 December 1964
• Docket Number: No. 46,46
• Citation: 385 S.W.2d 520
• Parties: Robert McKENZIE and Charles McKenzie, Appellants, v. A. C. CARTE, Appellee.
• Court: Texas Court of Appeals

Page 520

385 S.W.2d 520

Robert McKENZIE and Charles McKenzie, Appellants, v. A. C. CARTE, Appellee.

No. 46.

Court of Civil Appeals of Texas, Corpus Christi.

Dec. 17, 1964.

Rehearing Denied Jan. 7, 1965.

Luther E. Jones, Jr., Corpus Christi, Werner A. Gohmert, Alice, for appellants.

Bob Spann, of McDonald & Spann, Michael C. Kendrick, Jr., Corpus Christi, for appellee.

NYE, Justice.

This is a suit for damages resulting from the landlord's unauthorized entry on leased premises. Appellee, A. C. Carte, leased from appellants, Charles McKenzie and Robert McKenzie, the second floor premises at 4428 Highway 9, Corpus Christi, Texas, where he and various sub-lessees operated a private club. The appellants, as lessors, evicted appellee and his sub-lessee B. M. Westover, an intervenor in the suit below, from the premises. Appellee brought suit seeking a temporary restraining order and temporary injunction to gain possession of the premises, and damages for the wrongful dispossession on the part of the appellants. Appellants answered and filed a cross-action seeking damages for alterations made by the appellee and Westover to the premises. Westover, as intervenor, filed a cross-action against appellee and appellants, seeking a declaration that he is the owner of the furniture and equipment located in the premises and for damages for the wrongful ejection of him by the appellants. The trial court awarded damages to appellee Carte, and a take-nothing judgment was entered against appellants McKenzie and intervenor Westover. Westover did not perfect his appeal.

In September, 1953, appellee approached appellants in regard to obtaining a lease of the premises owned by the appellants for the purpose of operating a private club. A lease agreement was entered into wherein the appellants granted the appellee a ten-year lease beginning January 1, 1954, and ending December 31, 1963, with a ten-year option thereafter. The rental for the primary term was $35,100.00, with the first month and the last three months' rental to be paid in advance; calling for $275.00 per month rental during the first year and $300.00 per month thereafter for the full term of the lease. The rental during the ten-year option period was to be $36,000.00, payable $300.00 per month. To exercise the option to extend the lease, appellee was to notify appellants in writing during the month of November, 1962, some thirteen months before the expiration of the primary term. Appellee operated the private club personally for several years and thereafter sub-leased the premises to various sub-tenants who paid appellee a bonus over and above the monthly rental due under the lease. The lease agreement provided in paragraph 6 that: 'In the event Lessee (appellee) sub-leases or assigns said premises Lessee shall remain personally liable for payment of the rental consideration.'

Appellee's operations from the beginning until he was locked out by the appellants were successful. In January, 1957, appellee sub-leased the premises to C. O. Scott for $900.00 a month, $300.00 of which was to be paid to appellants and $600.00 to be paid to him. Subsequently, appellee released the premises to Scott for one year for the sum of $8,800.00, $3,600.00 of which was to be paid to the appellants at the rate of $300.00 a month, and $5,200.00 to be paid to him at the rate of $100.00 per week. Subsequently, appellee sub-leased the premises to Mr. J. B. Rathmell for a two-year period for a rental of $700.00 per month, $300.00 of which was to be paid to appellants, and $400.00 per month payable to him. On or about October 19, 1960, Rathmell made a deal with Westover to take over the premises, with Westover paying Rathmell $2,500.00 cash. Westover was to pay the appellants $300.00 per month and the appellee $400.00 per month. This deal was to be subject to the approval of the appellee. Rathmell and Westover contacted the appellee and he agreed to accept Westover on a trial basis. Westover paid the appellants $300.00 and the appellee $400.00, at which time the appellee gave Westover a receipt which stated: 'Received of: B. M. Westover $400.00 (four Hundred Dollars) for one month rent Oct 19 to Nov 19th for Oil Patch rent--At which time a lease will be drawn and the first & last month will be deposited--$800.00.' The appellants accepted the monthly rental from all of the sub-lessees.

On the 11th day of November, 1960, appellants changed the lock on the premises, refusing to let Westover in the premises. Appellee contacted the appellants in an attempt to ascertain the reason for the eviction. The appellants informed appellee that they did not like the way Westover was operating the club and therefore they were locking appellee, as well as Westover, out of the premises and they (the appellants) were re-taking the property.

Eleven days after the eviction the appellee filed this suit seeking immediate possession of the premises by way of a temporary restraining order, alleging that such eviction did in effect destroy his profitable business of operating a private club. Appellee further alleged that: he had made extensive improvements to the premises in the amount of $35,000.00; that the damages to his operations were in the amount of $80,000.00; by supplemental petition he alleged that he had sub-leased the premises for $700.00 per month, $300.00 of which was to be paid to the appellants and $400.00 per month was to be paid to him; and that by reason of the dispossession he had been deprived of this income for the unexpired term of the lease and for the ten-year option period which the appellants had destroyed by reason of the wrongful eviction. The record does not indicate the disposition of appellee's spplication for temporary restraining order and temporary injunction. The case was tried before the court without a jury in May, 1962, and judgment was entered in October, 1963, just prior to the expiration of the primary term of December 31, 1963.

The appellants asserted three theories of defense to their action in evicting the appellee from the premises. First, that the appellee did not have the right to sub-let the premises to Westover or the other sublessees; second, nonpayment of the rent due under the lease; and third, that the appellee had permitted the operation of an illegal business and that he had permitted the premises to become a common nuisance because of such operations. The trial court filed thirty-two separate Findings of Fact and eleven Conclusions of Law in support of its judgment. The trial court found against the appellants to the effect that the appellee did have the right to sub-lease the premises and that the appellants had accepted such sub-lessees, including Westover. The court further found that the rents due under the lease had been paid and accepted up to the time of the eviction in November, 1960. The appellants do not attack these findings on appeal.

The controlling question on this appeal is the amount of damages awarded to the appellee. The appellants, as well as the appellee by cross points, contend that the trial court erred in awarding damages in the amount of $7500.00.

Appellants assign two points of error to this Court. In their first point, appellants complain that: 'The adjudication in the trial court's final judgment adjudging that appellee recover $7,500 from appellants is not supported by the material trial court formal findings of fact or by any conclusive evidence.'

It was undisputed in the record that the lease provided for a ten-year primary term with a ten-year option. The appellants evicted the appellee from the premises after he had been in possession seven years. The appellee testified, without objection or contradiction, that he had been making $7,800.00 a year profit from the operation of the club while he was the operator and that in all reasonable probability the place of business would make $7,800.00 a year for the three remaining years of the primary term, that is, from 1960 through 1963. The record further showed that the lease had a rental value of $700.00 per month while the stipulated rent payable to the appellants was $300.00 a month, leaving a net to the appellee of $400.00 a month. This was the amount of profits that the appellee was making at the time of the eviction. One expert witness testified, without objection, that the lease had a net market value to the appellee, after being discounted for cash, for the balance of the term of three years and during the ten-year option period, of $48,000.00.

Upon the request of the appellants the trial court filed separate formal findings of fact. Included in these findings of fact are the following:

'24. Plaintiff, under the terms of the lease, had an option to estend the lease for a period of ten (10) years from the end of the primary term.

'25. Such option had to be exercised before the end of November, 1962, while such lease was in full force and effect.

'26. By closing the premises, Defendants damaged the Plaintiff by destroying a profitable business, i. e., that of furnishing and equipping a place for the members of the private club to meet.

'27. The Defendants, by locking Plaintiff and his sub-tenants out of the premises, destroyed the value of the option for the additional 10 years.

'28. The Plaintiff would, in reasonable probability, have exercised the option for an additional 10 years had the eviction not occurred.

'29. The Plaintiff would, in reasonable probability, have realized a profit during such option. After deducting rental payments, maintenance, replacement and other costs, the sum of Seventy five Hundred Dollars ($7500.00), if paid now in cash, would reasonably compensate the Plaintiff for such lost profits.'

The Court concluded that:

'10. The loss or damages sustained by the Plaintiff as the result of being excluded from his leasehold are the profits he would in reasonable probability have received had the lease not been terminated by Defendants.

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