Montgomery v. Creager

• Citation: 22 S.W.2d 463
• Decision Date: 01 November 1929
• Docket Number: (No. 617.)
• Parties: MONTGOMERY et al. v. CREAGER.
• Court: Court of Appeals of Texas

22 S.W.2d 463

MONTGOMERY et al. v. CREAGER.

(No. 617.)

Court of Civil Appeals of Texas. Eastland.

November 1, 1929.

Rehearing Denied December 6, 1929.

Appeal from District Court, Palo Pinto County; Sam M. Russell, Judge.

Action by L. H. Creager against J. M. Montgomery and another. Judgment for plaintiff, and defendants appeal. Reversed in part, and rendered, and in part reformed, and, as reformed, affirmed.

Arrington & Johnson, of Mineral Wells, for appellants.

Bouldin & Zivley, of Mineral Wells, for appellee.

FUNDERBURK, J.

J. M. Montgomery and L. H. Creager were partners in the business of buying and selling gasoline, motor oil, and automobile accessories, and as to the sale of oil and gas were both wholesale and retail dealers. They owned several separate pieces of property in the town of Mineral Wells and the vicinity thereof, including a number of filling stations. About June 14, 1928, the partnership was dissolved by mutual agreement, and the property owned by the firm was partitioned. In the partition, Montgomery conveyed to Creager all of the partnership property and assets save the Park Filling Station in Mineral Wells. The latter Creager conveyed to Montgomery, the language of the contract vesting same in him reading as follows:

"The party of the second part, J. M. Montgomery, shall have and hold and receive as his part of the property belonging to the parties hereto, the following, to-wit: Park Filling Station on Oak Street * * * together with all the fixtures and property rights of any character, which is now being held by party of the first part and party of the second part; also all outstanding accounts due Park Filling Station."

Under the contract, Creager assumed all the indebtedness owing by the firm existing in connection with the property allotted to him in the partition and certain other items of indebtedness not referable especially to any particular part of the property. Montgomery assumed the firm indebtedness relating to the previous operation of the Park Filling Station. The contract contained two provisions, as follows:

"7. It is further agreed that the said J. M. Montgomery shall purchase all gasoline sold by him at the above named Park Filling Station from the said L. H. Creager at tank wagon prices charged by regular standard oil companys in Mineral Wells, Texas; that all the gasoline purchased by the said J. M. Montgomery shall be purchased from the said L. H. Creager, unless the said J. M. Montgomery should sell said Park Filling Station. It being agreed, however, that the said L. H. Creager shall have the right to sell and the said J. M. Montgomery shall receive said gasoline for a period of at least twelve months from this date, regardless of whether sold or not. If said property is not sold this contract shall remain in force for five years from this date.

"8. It is further agreed that the said L. H. Creager will pay to the said J. M. Montgomery one cent on each gallon of gasoline sold and delivered by him, the said L. H. Creager, to the said J. M. Montgomery."

Montgomery operated the Park Filling Station, purchasing from Creager all the gasoline sold by him at that station, in compliance with the provisions of the contract, up to the date of the filing of this suit, about December 3, 1928. About November 7, 1928, Montgomery sold the filling station to W. A. Ford. This suit was brought by Creager against Montgomery and Ford for an injunction, alleging that the defendants were preparing to remove all pumps, barrels, and tanks belonging to the Continental Oil Company, of which plaintiff was agent, and to replace same with pumps, barrels, and tanks owned by another oil company, and alleged that defendants had notified him that they would not accept any more gasoline or oils from plaintiff. In brief, the purpose of the suit as originally brought, was to require by mandatory process that defendants comply with the obligation of Montgomery under the contract to purchase from plaintiff all of the gasoline sold by him at the Park Filling Station for a period of at least one year. Injunction was granted, substantially as prayed for, but on the 4th day of December, 1928, the court, of its own motion, set aside the part thereof requiring the defendants to receive gasoline from plaintiff. Afterwards, on the 4th day of February, 1929, upon a motion by defendants to dissolve the injunction, the court overruled the motion and restored the injunction as originally granted, thereby setting aside the order of December 4th relieving the defendants from receiving gasoline from plaintiff. Between the 4th day of December, 1928, and the 4th day of February, 1929, while the defendants were absolved from the obligation to take gasoline from the plaintiff, they purchased gasoline elsewhere in such an amount that the plaintiff's commissions thereon would have amounted to $630. On the 11th day of March, 1929, the case was tried on its merits; judgment was given in favor of the plaintiff against both defendants for said sum of $630, and the defendants were required to receive all gasoline to be sold and retailed at the Park Filling Station from the plaintiff, in accordance with the terms of the contract. The original injunction was perpetuated, except that part which restrained defendants from removing the pumps and other fixtures of the Continental Oil Company, which was dissolved. From the judgment the defendants have appealed.

Appellants insist in the first place that the judgment of the trial court should be reversed and judgment be rendered for appellants on the ground that the contract, and particularly the provision hereinbefore first quoted, shows an agreement prohibited by the anti-trust laws of this state. Preliminary to a consideration of this question, the provision of section 7 of the contract in question and above set out calls for a construction. Upon a sale of the filling station in less than a year from the date of the contract, Montgomery's obligation to continue for at least one year from the date of the contract to purchase oil of appellee is not clear. It seems certain enough that the contract only obligated Montgomery to purchase of appellee gasoline sold by him at the Park Filling Station. It also seems to be clearly intended by the contract that Montgomery could sell the filling station at any time. The question arises whether the contract sought to place a limitation for one year upon Montgomery's right to sell the business, or whether in case of sale it undertook to impose upon Montgomery some duty to purchase gasoline from plaintiff, regardless of whether he sold it at the Park Filling Station. We do not believe that the contract shows an intention to prohibit absolutely for any length of time the alienation of the property by Montgomery. A more reasonable construction is, we think, that it imposed upon Montgomery, in case he alienated within less than twelve months, the duty to do so upon terms that would require the purchaser to continue to take gasoline from appellee until the expiration of the twelve-month period. The contract we think cannot be reasonably construed as obligating Montgomery to purchase gasoline other than that sold at the particular station, and, unless the contract can be construed as indicated, then we would have to say that the particular provision is ineffective because of being meaningless.

Is the contract as thus construed one creating a trust? Eliminating all...