Nash v. Conatser, 16830

• Decision Date: 30 December 1966
• Docket Number: No. 16830,16830
• Citation: 410 S.W.2d 512
• Court: Texas Court of Appeals
• Parties: A. G. NASH et al., Appellants, v. J. V. CONATSER et al., Appellees. . Dallas

Page 512

410 S.W.2d 512

A. G. NASH et al., Appellants, v. J. V. CONATSER et al., Appellees.

No. 16830.

Court of Civil Appeals of Texas.

Dallas.

Dec. 30, 1966.

Dan Gibbs, of Gibbs, Hooks & Wyrick, Dallas, for appellants.

Joe A. Keith, Sherman, for appellees.

CLAUDE WILLIAMS, Justice.

This action was originally instituted by A. G. Nash and Mack W. Nelson, as plaintiffs, against J. V. Conatser and W. E. Conatser, doing business as J. V. Conatser Insurance Agency, as defendants, in which plaintiffs sought specific performance of an alleged memorandum of agreement dated December 1, 1965 for the sale of the personal and real property comprising the J. V. Conatser Insurance Agency located at 501 West Woodard Street, Denison, Texas. Bethel L . Conatser and Dorothy Weems Conatser, the wives of the original defendants, intervened in the action as defendants. By their first amended original petition plaintiffs joined Conatser Properties, Inc . and Joe Keith as defendants, alleging that subsequent to the filing of the original action the original defendants and intervenors had, with the idea and intention of placing certain assets belonging to the insurance agency out of the reach of plaintiffs, executed a deed from themselves to Conatser Properties, Inc., a Texas corporation such deed describing the real estate occupied by the insurance agency. Plaintiffs further alleged that contemporaneous with the delivery of said deed the corporation executed its deed of trust covering the property in question to Don Elliott, Trustee, to secure Joe A. Keith in the payment of one certain promissory note executed by such corporation in the amount of $30,000, such act on the part of the defendant corporation being a willful intent of place such property beyond the reach of the contract involved and for which specific performance was sought. It was further charged that defendant Joe A. Keith attempted to assign the note to Citizens National Bank of Denison, Texas and that such act on the part of the defendant Keith was an attempt to place the property of the insurance agency beyond the reach of plaintiffs. Plaintiffs again sought specific performance of the December 1, 1965 memorandum of agreement and further urged that each defendant should be 'ordered to place such properties back in their original position at the date of the contract or make them available for the compliance of such contract.' As an alternative prayer plaintiffs sought actual and exemplary damages against defendants for their acts and conduct in allegedly breaching the contract sued upon. All defendants answered and set forth many legal and factual defenses.

Following nonjury trial judgment was rendered denying plaintiffs any relief. Plaintiffs appeal, contending that the judgment should be reversed because of nine errors. Inasmuch as each of appellants' points attempts to assail findings of fact made by the trial court we deem it necessary and advisable to here summarize the material and relevant findings of fact as well as conclusions of law based thereon.

FINDINGS OF FACT

At all times material herein, the business known as J. V. Conatser Agency was an insurance agency owned solely by J. V. Conatser and his son, W. E. Conatser, but owned by them as part of the community estate of themselves and their wives. At all material times, legal title to the real estate upon which the insurance agency was located was owned one-third by J. V. Conatser and his wife Bethel L. Conatser, one-third by W. E. Conatser and his wife Dorothy Weems Conatser, and one-third by J. C. Conatser. That at all material times prior to the conveyance of said real property to Conatser Properties, Inc. the real property was part of the homestead of J. V . and W. E. Conatser and their respective wives. That the wives of J. V. and W. E. Conatser had refused to execute any conveyance to appellants of the real estate in question.

During the latter part of November 1965, and the early part of December 1965, the J. V. Conatser Agency was in financial straits from the viewpoint of ready cash, in that it did not have at all times enough ready cash to meet all of its obligations and was behind in payments to various insurance companies. At all material times the business was solvent, from a book viewpoint, and made money consistently each year, and had net earnings, including amounts withdrawn by the partners, of a little less than $24,000 per year, for the period of five years beginning with 1961 and ending with 1965.

Negotiations with J. V. Conatser and W. E. Conatser with respect to the J. V. Conatser Agency began on November 23, 1965, when they were visited by the appellants and their attorney, Dan Gibbs. Previously, appellants had obtained balance sheets covering a period of about ten months ending with October 31, 1965, such revealing some figures shown on the books of J. V. Conatser Agency, but which did not contain any figures showing the value of the agency's insurance business in force, that is, the list of policy expirations, and did not contain any figures for the good will of the agency except an amount of $1,000. At that time appellees were informed by appellants that they were not interested in purchasing the agency in its entirety, and particularly advised that they were not interested in buying the accounts receivable of the agency. The negotiations at that time proceeded on the basis of an offer by appellants to purchase the specific assets of the agency, including the insurance in force (representing one and one-half times the average annual commissions received by the agency over the past three years), the building, equipment and fixtures, less mortgages and indebtedness, leaving a net balance of $51,600. Based upon such figures, appellants told appellees Messrs. Conatser that they would be willing to pay $50,000 in cash and pay the mortgage of about $11,800, with the understanding that the $50,000 would be placed in escrow to pay the accounts of the agency.

On December 1, 1965, a further meeting was held between the parties at which the above mentioned figures were reiterated and after consultation and negotiations appellants offered to raise the figure of $50,000 to $52,000. The parties then discussed and agreed that the appellants would have complete legal papers drafted setting out the conditions and agreements which appellants desired to be included, and that such papers would then be submitted to appellees for their consideration and in order to enable them to have such papers reviewed by their attorney and their accountant, all such papers to be agreeable to all parties. As a memorandum of the matters involved, appellant Nash dictated to appellant Nelson in longhand the contents of the instrument identified as Plaintiffs' Exhibit 1 and Defendants' Exhibit 1, as follows:

'It is understood that we the undersigned hereby agree to sell to A. G. Nash and Mack W. Nelson the J. V. Conatser Agency located at 501 W. Woodard, Denison, Texas, under the following terms:

$52,000.00 paid to the Citizens National Bank in escrow, to pay all accounts of the Agency.

'Mr. Nash and Mr. Nelson will pay the mortgage on the building.

'The undersigned are to keep the Accounts Receivable.

'When the money is posted with the bank, possession is to commence December 1, 1965. Building is to be deeded as requested.

'/s/ J V Conatser

J. V. Conatser

'/s/ W E Conatser

W. E. Conatser

'Terms accepted by purchaser.

'/s/ A G Nash

A. G. Nash

'/s/ Mark W Nelson

Mack W. Nelson

'Dated 12/1/65.'

On December 6, 1965 appellants submitted to appellees three written instruments, identified as Defendants' Exhibits 2, 3 and 4 (being proposed contract of sale of the agency, escrow agreement and covenant not to compete), said instruments being signed by appellant Nash as well as by L. K. Busch and Dan Gibbs, who were not parties to the memorandum of December 1, 1965 and not parties to this suit. These instruments were never signed by appellant Mack W. Nelson nor were they ever executed by any of the appellees. Upon receipt of these papers appellees transmitted same to their attorney for his review and numerous objections were raised by such attorney. On December 10, 1965 appellants made arrangements to deposit in escrow $52,000 in the Citizens National Bank in Denison and also a checking account of $3,000. On that date they were informed that the proposed sale of the agency would not be consummated.

On December 16, 1965 appellees executed Articles of Incorporation of Conatser Properties, Inc. which were filed by the Secretary of State of the State of Texas on December 17, 1965. On December 18, 1965 they conveyed certain real estate to Conatser Properties, Inc. On the same date the corporation executed its promissory note for $30,000 in favor of Joe A. Keith and its deed of trust on the real estate to secure payment thereof. Keith borrowed $15,000 from Citizens National Bank and as security assigned to the bank the above mentioned note of Conatser Properties, Inc. The $15,000 was used to make payment to Home Insurance Company on the indebtedness of the agency of said company. The Messrs. Conatser invested additional money in the business with the result that all creditors of the agency were paid.

That the instrument of December 1, 1965 did not contain all of the essential terms of the proposal between the parties and was only a memorandum to be used to draw up the agreements to be proposed and considered. That Defendants' Exhibits 2, 3 and 4 not only contained terms and provisions in addition to those reflected by such instrument of December 1, 1965 but, moreover, various terms and provisions contained therein were at variance with those of such instrument of December 1, 1965 and at no time did appellees agree to the terms and provisions contained in Defendants' Exhibits 2, 3 and 4. That said memorandum of December 1, 1965 contained no description of real property, nor did it refer to any available writing in...