Milam v. Stubblefield

• Decision Date: 26 March 1925
• Docket Number: (No. 1713.)
• Citation: 271 S.W. 410
• Parties: MILAM v. STUBBLEFIELD.
• Court: Texas Court of Appeals

271 S.W. 410

MILAM v. STUBBLEFIELD.

(No. 1713.)

Court of Civil Appeals of Texas. El Paso.

March 26, 1925.

Rehearing Denied April 16, 1925.

Appeal from District Court, Eastland County; E. A. Hill, Judge.

Action by R. G. Milam, trustee, against J. R. Stubblefield. From judgment rendered, both parties appeal. Affirmed in part, and reversed in part.

Wagstaff, Harwell & Wagstaff, of Abilene, and Burkett, Orr & McCarty, of Eastland, for appellant.

J. R. Stubblefield and Chas. C. Robey, both of Eastland, B. W. Patterson, of Cisco, and J. G. McGrady and Lea, McGrady, Thomason & Edwards, all of El Paso, for appellee.

WALTHALL, J.

R. F. Milam, trustee in bankruptcy of the estate of E. B. Massie Drug Company, a private corporation, brought this suit as trustee against J. R. Stubblefield seeking recovery upon two counts in his petition. Milam in the first count alleges, substantially, that J. R. Stubblefield had theretofore in writing leased a certain building and fixtures to the E. B. Massie Drug Company, the rental consideration being $25 per month, and in addition thereto 8 per cent. of the gross income received and collected by the E. B. Massie Drug Company for cash sales made each month. After stating the cash sales, during the rental period, collected to be $31,954.29 and the average "gross income or gross profits" from said sales to be 32 per cent. during said lease period, and that the E. B. Massie Drug Company had paid J. R. Stubblefield the sum of $3,038.62 as rents, and that the sum of $2,685.62 was paid to Stubblefield directly, and $353.33 was paid to others for Stubblefield on the rent account, it is alleged that only $1,067.94 should have been paid Stubblefield, including the monthly payments of $25, thereby paying him $1,970.68 more than he was to receive as rents under said lease contract. By the first count Milam, trustee, seeks to recover the sum of $1,970.68 over payment on rents. In the second count it is alleged, in substance, that during the life of the E. B. Massie Drug Company, and prior to the filing of its petition in bankruptcy, the assets of said corporation were taken out of said corporate funds to the extent of the sum of $3,902.36, and used to pay the personal debts of Stubblefield, and the trustee seeks recovery of said sum.

The petition, in addition to the above, alleged that the total amount of the capital of the E. B. Massie Drug Company was $6,000, which was represented to be wholly paid in and unincumbered; that at the time said corporation was formed the stock of drugs and other merchandise which constituted the capital of the corporation, and then owned by Stubblefield, was not in fact clear of incumbrance, but was incumbered to the extent of $3,902.36, and which amount in accounts Stubblefield at that time personally owed on said goods and merchandise to his creditors; that prior to the time of filing the petition in bankruptcy the assets of said corporation to the extent of said sum of $3,902.36 were taken out and used to pay said accounts, and for reasons stated it was alleged that Stubblefield was indebted to said bankrupt estate in the additional sum of $3 902.36. It is alleged that by reason of the facts alleged the estate of the said corporation is now, and was at the time of its incorporation insolvent. The suit of the trustee was to recover of Stubblefield for the bankrupt estate the sums of $1,970.68, for excess of rents paid, and $3,902.36 paid on personal debts of Stubblefield by the corporation — the total sum of $5,873.04.

Stubblefield answered by general demurrer, general denial, and special answer, admitting the execution of the written lease contract beginning on March 3, 1922, and ending on December 31, 1925, and for the rental consideration stated and alleged that he had received no greater amount of rents than he was justly entitled to receive. He further answered that if the written contract declared on was uncertain in its meaning, which was denied, in such event it was the intention of both that he should be paid the sum of $25 as rent on the fixtures mentioned in the rental contract, and in addition thereto he was to be paid as further rental a sum equal to 8 per cent. of the gross sales received and collected during the preceding month as a monthly rental; that the interpretation of the rental contract as alleged was mutually agreed upon and acted upon by both parties to the contract, and that, if the contract does not express the intention as alleged of the parties to it, in such event, the contract through mutual mistake failed to properly declare the contract as mutually agreed upon.

Stubblefield further answered that at all times when the E. B. Massie Drug Company paid to him any amount E. B. Massie was the president and general manager of the E. B. Massie Drug Company and had the general control and management of its business; that it was the duty of E. B. Massie, as president and general manager, to pay and discharge any indebtedness of the E. B. Massie Drug Company for rents due him (Stubblefield); that in doing so he acted within the scope of his authority and pursuant to his said duties, and his acts were and are binding upon the E. B. Massie Drug Company. It was further alleged that the sums of $200, received as rentals for the months of December, 1921, January and February, 1922, were less than the reasonable rental and market value of the rented premises, and not unjust or unfair. It is further alleged that it is not true that the E. B. Massie Drug Company was insolvent at the time of its incorporation.

The case was tried to a jury and submitted upon special issues. On special issues the jury found, substantially, that in making the rental contract it was the intention and mutual agreement of the parties that Stubble field should receive as part of the rentals for the building 8 per cent. of the gross profits which might be received from the sale of merchandise; that the amount of the gross profits received from March 3, 1922, to March 31, 1922, was $785.83; that the amount of the gross profits received for each month beginning with April 1, 1922, and terminating with the last day of each succeeding month up to and including the 31st day of December, 1922, was as follows: For April, $784.65; for May, $996.42; for June, $1,193.30; for July, $1,523.49; for August, $1,318.47; for September, $1,198.77; for October, $890.44; for November, $712.66; for December, $821.29; that the amount of rents received by J. R. Stubblefield from the E. B. Massie Drug Company for the period of time from March 3, 1922, up to and including December, 1922, was $2,936.93.

The trial court overruled the motion of Milam, trustee, to enter judgment as prepared by him, and entered judgment in favor of R. F. Milam, trustee, and against J. R. Stubblefield, in the sum of $1,868.90, as excess rents paid, and that R. F. Milam, trustee, take nothing as against Stubblefield on account of the open accounts and indebtedness owing by Stubblefield at the time of the incorporation of the business, and which claims were paid by the E. B. Massie Drug Company, to which Milam, trustee, then and there excepted and gave notice of appeal, and filed assignments of error.

Stubblefield filed motion for a new trial. The motion was overruled, to which ruling Stubblefield duly excepted and gave notice of appeal.

Opinion.

In the briefs filed here R. F. Milam, trustee, is designated as appellant,...