Newton v. Mallory

Decision Date03 June 1980
Docket NumberNo. 20290,20290
Citation601 S.W.2d 181
PartiesDonald NEWTON et al., Appellants, v. Robert L. MALLORY and Jon Michael Franks, Appellees.
CourtTexas Court of Appeals

Reid A. Rector, Erhard, Cox, Ruebel & Rector, Dallas, for appellants.

James W. Rainey, Jr., Irving, for appellees.

Before GUITTARD, C. J., and CARVER and HUMPHREYS, JJ.

CARVER, Justice.

This is an appeal from an instructed verdict that appellants take nothing against the appellees on a cause of action for damages suffered by some, but not all, of the general partners in a land venture. The partnership's trustee and manager had allegedly failed to give the complaining partners notice of the partnership's default on a vendor's lien note and a scheduled foreclosure sale which ended the venture. The measure of damage sought by each complaining partner was his cumulative prior contribution to the partnership. No other measure was pleaded or proved. We affirm the instructed verdict that appellants take nothing because the appellants failed to plead or prove the value of the land they lost, which is the proper measure of damage, even if they proved the appellees' liability for the loss.

The record reflects that fifteen partners organized "Irving-Beltline Associates" in March 1974 and acquired, in the name of the trustee, a tract of land on credit from one of their own partners. The credit extended, reflected in a vendor's lien note, was in the amount of $196,945.21, payable in 17 annual installments. The note, including interest at 8%, was secured by a vendor's lien and deed of trust and was without personal liability. The partners each agreed to contribute their pro rata share of the annual installment on the note as well as their pro rata share of other costs, expenses, and fees necessary to the partnership's purposes. The partnership agreement named the appellees as manager and as trustee, respectively, and provided, in part, as follows:

DEFAULT OF AN INVESTING PARTNER. As heretofore mentioned in paragraph VII, the partners shall be responsible for subsequent contributions which will become due during the term of this partnership. The manager and trustee shall notify each partner of the dates and amount of his obligation in writing at least sixty (60) days prior to each due date.

The trustee was unable to make payment of the second installment due on the note on April 1, 1976, because some of the partners failed to make their agreed contribution. In July 1976, the holder of the note (also a partner) sent the trustee a letter reciting the default, giving 15 days to pay, and giving notice of a foreclosure sale on September 7, 1976, if the note was not paid. The sale was actually conducted in October 1976 after a postponement. The appellants asserted that the manager and the trustee each failed to send them notice of the note holder's demand and possible foreclosure and that, as a result, the foreclosure took place and the appellants were deprived of the benefit of their interest in the land. Each partner suing asserted that his damage should be measured by his cumulative prior contributions to the partnership. The factual issues as to liability were hotly contested. When both parties rested, the appellees moved for an instructed verdict on the grounds that the appellants had neither pled or proven a lawful measure of damages even if liability had been established. The trial court...

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3 cases
  • Thomas v. Barton Lodge II, Ltd.
    • United States
    • U.S. Court of Appeals — Fifth Circuit
    • May 12, 1999
    ...summary judgment rulings, including its ruling that the statute of limitations barred various claims and that the case of Newton v. Mallory, 601 S.W.2d 181 (Tex.Civ.App.--Dallas 1980, no writ), applies to bar the largest part of the alleged damages. We therefore affirm in part, reverse in p......
  • Magers v. Bank of Am., N.A.
    • United States
    • U.S. District Court — Western District of Texas
    • February 26, 2013
    ...which, if true, might subject [the substitute trustee] to liability to the extent she is responsible for the defect."); Newton v. Mallory, 601 S.W.2d 181, 183 (Tex. Civ. App.—Dallas 1980, no writ) ("a trustee . . . should respond by the same measure of damages, if [her] want of notice cause......
  • Howell v. Homecraft Land Development, Inc.
    • United States
    • Texas Court of Appeals
    • October 13, 1987
    ...by the Escrow Agreement, Howell must still show that he suffered damages as a result of a breach of that fiduciary duty. Newton v. Mallory, 601 S.W.2d 181, passim (Tex.Civ.App.--Dallas 1980, no writ). Once Howell had waived his claim for damages from the conveyance of the extra square foota......

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