Pacific Molasses Company v. Graves, 14843
| Decision Date | 11 February 1970 |
| Docket Number | No. 14843,14843 |
| Citation | 451 S.W.2d 294 |
| Parties | PACIFIC MOLASSES COMPANY, Appellant, v. Thomas GRAVES et al., Appellee. |
| Court | Texas Court of Appeals |
Gene L. Jameson, Stubbeman, McRae, Sealy & Laughlin, Midland, for appellant.
Legg, Saxe & Baskin, Midland, for appellee.
Appellant, hereinafter referred to as Pacific Molasses, brought this suit to recover the sum of $6,309.82, plus attorneys' fee of $2,000.00, from appellee Graves molasses Company, hereinafter referred to as Graves Molasses, for molasses sold it, and from appellee Thomas Graves on his written guaranty to pay debts of Graves Molasses. Appellees pleaded a general denial and specifically that the sum of $5,349.60 had been mistakenly paid by Graves Molasses to Pacific Molasses on invoices representing molasses delivered to Robinson Food Products Company, hereinafter referred to as Robinson, and that such sum should be credited Graves Molasses' account. Judgment was rendered after a jury trial that Pacific Molasses recover from appellees the uncontested sum of $960.22 with interest from January 1, 1967, but all other relief was denied.
The transactions surrounding the controversy in question occurred in 1965 and early 1966. Thomas Graves, a resident of Midland, operated several businesses through closely held corporations. He operated the Graves Oil & Gas Company and Thomas Graves Transport Company out of Midland. These companies transported butane in bulk and sold it at retail. Out of Abilene, he operated the Graves Oil Company which bought and sold oil. In 1949 he started the Graves Molasses Company and incorporated this business in 1954. It operated out of Fort Worth and bought molasses in Houston for delivery and resale to feedmills and feedlots. Pacific Molasses sold molasses to Graves Molasses for several years prior to 1965. In June, 1965, Graves became associated with David Paige and Truitt Davis and as a result of this association three corporations were formed: Robinson Food Products Company, Lancer Petroleum Company, and Pagrada, Inc. Graves owned forty per cent of the stock in each of these three corporations and Paige and Davis owned the remainder. Robinson and Lancer operated out of Abilene and hauled molasses and petroleum products, respectively, with equipment owned by and leased from Pagrada.
In the latter part of 1965, Graves Molasses and the three Abilene based corporations were in serious financial difficulties. Graves Molasses owed Pacific Molasses approximately $40,000 on its account, and the three Abilene corporations were losing money. An agreement was made between Graves, Paige and Davis whereby Graves was given all the stock in Robinson and Pagrada, Inc., and the latter two persons were given the Lancer stock. The testimony is conflicting between Graves and his two corporate associates as to how the financial affairs of Robinson were to be wound up. It is undisputed, however, that all stock in Robinson was transferred to Graves as of December 31, 1965. He testified that this was for the purpose of dissolving the corporation, and that Davis and Paige were to pay all debts incurred by Robinson prior to December 31, 1965. These two parties testified that Graves took Robinson subject to all its assets and liabilities. In any event, by the latter part of January, 1966, Robinson was virtually insolvent after the transfer by Davis of large sums of money from Robinson to Lancer for undisclosed reasons.
The bookkeeping operation of Graves Molasses was transferred to Midland before January 1, 1966, although the trucks were still dispatched out of Fort Worth. Thereafter, molasses purchased from Pacific Molasses was paid for in the following manner. Pacific Molasses drew a draft on Graves Molasses, payable at The First National Bank of Midland, and attached to it the invoices covered by the draft. Pacific Molasses deposited the draft and attached invoices to its California bank account, and same were then sent through banking channels to Midland. On arrival at the Midland Bank, Adrian Scoggins, who was general manager and bookkeeper for the various corporations operated by Graves, was notified. Scoggins would go to the bank and give a check on Graves Molasses to cover the draft and invoices which were turned over to him. On January 10, 1966, Scoggins followed this procedure in picking up drafts dated January 5th and 7th in the amount of $2,075.47 and $1,240.22, respectively, supported by invoices showing molasses delivered by Pacific Molasses to Robinson in December, 1965. On January 14, 1966, he paid a draft dated January 12th in the amount of $2,033.91, which was supported by invoices showing molasses delivered by Pacific Molasses to Robinson in December, 1965. On the same occasion he paid a draft in the amount of $2,466.15 which was supported by invoices showing molasses delivered to Robinson in January, 1966.
Although Graves planned to dissolve Robinson, since it carried on the same operations as Graves Molasses, it was necessary for Graves Molasses to continue purchases in the name of Robinson until the license permits on the trucks could be changed. Therefore, Graves conceded that Graves Molasses owed for the molasses purchased in the name of Robinson during the first two weeks of January, which was paid for by Scoggins in the same manner as the drafts in question. He contended, however, that Scoggins made a mistake in paying the drafts on the invoices representing purchases by Robinson in December, 1965, since Paige and Davis were to pay for same under the dissolution agreement. This is contradicted by the testimony of the credit manager for Pacific Molasses, which is not denied by Scoggins, that Pacific Molasses sent the December, 1965, invoices owed by Robinson in the above manner, pursuant to a telephone conversation with Scoggins, after they had been rejected by the Abilene Bank which had previously handled the Robinson account.
The jury returned a verdict substantially as follows: 1. The three drafts in question were paid by Graves Molasses to Pacific Molasses by mistake. 2. Scoggins was authorized by appellees to make arangements with Pacific Molasses for payment on invoices incurred during 1965 in the name of Robinson. 3. Scoggins told Pacific Molasses to send sight drafts covering invoices for molasses delivered to Robinson during 1965 through the Graves Molasses' bank account at Midland for payment. 4. Pacific Molasses did send such sight drafts for payment through Graves Molasses' bank account. 5. Such action by Pacific Molasses was done in reliance upon statements made by Scoggins as office manager of appellees. 6. A reasonable attorneys' fee for the services rendered on behalf of Pacific Molasses in this case would be $2,000.00.
Pacific Molasses moved for judgment non obstante veredicto wherein it urged the trial court to disregard the finding to Special Issue No. 1. Appell...
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