Parkview General Hospital, Inc. v. Ashmore

• Decision Date: 30 December 1970
• Docket Number: No. 534,534
• Citation: 462 S.W.2d 360
• Parties: PARKVIEW GENERAL HOSTPITAL, INC., et al., Appellants, v. A. J. ASHMORE, et al., Appellees.
• Court: Texas Court of Appeals

Page 360

462 S.W.2d 360

PARKVIEW GENERAL HOSTPITAL, INC., et al., Appellants, v. A. J. ASHMORE, et al., Appellees.

No. 534.

Court of Civil Appeals of Texas,

Corpus Christi.

Dec. 30, 1970.

Rehearings Denied Jan. 28, 1971.

Stone, Luther & Dyer, Hubert L. Stone, Jr., and Ronald D. Karchmer, Corpus Christi, for appellants.

William H. Bloch, Rockport, for appellees.

OPINION

GREEN, Chief Justice.

This suit grows out of a contract dated March 5, 1968, but effective as of midnight February 29, 1968, whereby appellees purchased from appellants the hospital facilities together with all assets of Parkview General Hospital, Inc. in Corpus Christi, Texas. A promissory note in the principal sum of $324,000.00 executed by appellees to appellant Parkview General Hospital, Inc. secured by a second lien on the property sold, constituted partial payment for the transaction. The note provided that: 'The obligation evidenced hereby is subject to off-sets and credits pursuant to contract dated March 5, 1968 by and between payee and makers upon contingencies set forth therein.' Based upon the alleged failure of appellees to make monthly interest payments as provided in the note, appellants notified appellees that they had accelerated the maturity date of said note, and claimed interest and attorney's fees as provided therein. When payment was not made on the face amount plus interest and attorney's fees, notices of foreclosure sale under deeds of trust were posted.

Appellees thereupon filed this suit against appellants to enjoin foreclosure of collateral securing payment of the note, alleging no default had occurred. They requested the trial court to determine the proper amount of offsets and credits to the note, and to determine the total principal and interest payable in full satisfaction of the note. Appellees tendered into the court the sum of $255,000.00 and made a continuing offer of tender of any additional sums that the trial court might determine to be due and payable on said note in order to extinguish their liability thereon.

Issues were joined on these matters by the pleadings of the parties. Upon trial before the court without a jury, the court determined that certain offsets and credits were allowable against the principal sum of the note, and that certain other claimed credits were not, and fixed the amount of principal and interest due. The court granted temporary injunction against foreclosure proceedings upon the condition that said injunction become permanent provided appellees paid within five days of pronouncement of the court's bench order the difference between the amount determined to be due by the court and the $255,000.00 theretofore tendered by appellees. Appellees paid into court the full amount of the judgment within the five days period, and the injunction became permanent, and the liens securing the note were released. The trial court found that there had been no default in payment of any installment on the note by appellees, and that the sum demanded by appellants, holders of said note, in satisfaction of the note was excessive, and ruled that appellants were not entitled to recover attorney's fees.

The contract between these parties whereby appellants sold and appellees purchased the hospital facilities together with all assets of Parkview General Hospital, Inc., evidences the consideration for such transaction, as follows:--$75,000.00 cash; assumption of accounts payable of appellants amounting to $121,260.39; assumption of notes payable to banks by appellants, the schedule in evidence showing the indebtedness to banks assumed by appellees from appellants at $77,890.54; the $324,000.00 second lien mortgage note executed by appellees; and the payment of a monthly stipend to one of the parties. This action involves only the second lien note and the contract in so far as the contract applies to said note.

Appellants' appeal is based on their contentions (1) that acceleration of the maturity was lawful, and that they were entitled to judgment for attorney's fees; (2) that the trial court erred in allowing certain offsets and credits to the note; and (3) that the trial court erred in failing and refusing to make findings of fact and conclusions of law as requested.

Appellees deny the contentions of appellants, and cross-appeal on the ground that the court erred in refusing an additional credit of $35,000.00.

There were no written findings of fact and conclusions of law filed by the trial court. ¹ In such case, the trial court's judgment implies that all necessary fact findings were made by that court in support of the judgment, and the judgment must be affirmed if it can be upheld on any legal theory that finds support in the evidence. Seaman v. Seaman, Tex., 425 S.W.2d 339; Construction and General Labor Union Local No. 688 v. Stephenson, 148 Tex. 434, 225 S.W.2d 958. In seeking to determine whether the judgment finds support in the evidence, it is proper to consider only the most favorable evidence to the issue, and to disregard entirely that which is opposed or contradictory in its nature. Renfro Drug Co. v. lewis, 149 Tex. 507, 235 S.W.2d 609. In determining whether the findings are contrary to the great weight and preponderance of the evidence (factually insufficient) we give consideration to all of the evidence. Garza v. Alviar, Tex., 395 S.W.2d 821.

BLUE CROSS-BLUE SHIELD MEDICARE OFFSET

Appellants' first four points allege error in the trial court's allowance of an offset against the note of the sum of $9,788.00, representing an advance which had been made to appellant Parkview General Hospital, Inc. before the sale by Blue Cross-Blue Shield of Texas. Appellants contend that there was no duty upon appellants to reimburse appellees for such sum, which according to appellants was a working capital advance to appellant hospital; and that there was no evidence and factually insufficient evidence to support the ruling of the trial court that same was a proper offset to appellees' liability on the note.

There was evidence from qualified witnesses from which the trial court could reasonably find the following: On November 10, 1967, the sum of $9,788.00 was received by appellant Parkview General Hospital, Inc. from Blue Cross-Blue Shield of Texas acting as the fiscal intermediary in Texas of the Department of Health, Education and Welfare (H.E.W.) of the United States Government. This money was so received as a working capital advance For care of medical patients, and was deposited to the account of the hospital. The item was treated on accounting records as a liability of the appellant corporate hospital. Appellees' attorney, who is also one of appellees, was not aware of this item at the time he wrote the contract, nor at the time it was executed. Several months after the closing of the contract, Bule Cross-Blue Shield made demand upon appellees for repayment of or assumption of the $9,788.00 item, and threatened to terminate the successor hospital, P. & S. General, as a medicare provided unless this was done. After negotiations with Blue Cross-Blue Shield, appellees did assume the liability, and made demands upon appellants to pay the same. When appellants refused, appellees sought to deduct this amount from the note pursuant to certain provisions of the contract relating to the right of offset, and thereafter paid interest on the thusly reduced principal balance.

The contract provided:

SELLER'S INDEMNITIES AND WARRANTIES TO BUYERS

'Corporate Seller, joined by Edwin E. Connor and Vida Lee Connor individually, covenant and agree to hold Buyers, and P and S, Inc., free and harmless from any and all liabilities of any kind or character whatsoever except mortgage indebtedness secured by realty and assumed by Buyers and those liabilities set forth in Exhibits A and B hereto. * * *'

The Blue Cross-Blue Shield liability was not listed on Exhibit A or B, and was not a mortgaged indebtedness.

The same paragraph of the contract contains the following provision:

'* * * Should Seller ever become liable for refund or repayment of any sums paid by any person, any entity, or agency of any Government, for hospital or medical services rendered or to be rendered by Parkview General Hospital, Inc., Seller agrees to promptly pay and discharge any such liability or to defend such claim if Seller deems such demand without merit or an unliquidated claim, and should Buyers or their lessee P and S, Inc., ever become liable for repayment or refund thereof, any such amount paid or refunded shall be a direct credit to the unpaid principal balance of said $324,000.00 note executed and delivered by Buyers to Seller pursuant hereto.'

The word 'Seller', the second word at the beginning of this quote, a part of which word was scratched out and an indiscernible word written above it, obviously was written in error, and was intended to refer to buyers, as is clearly shown by the remainder of the quote. The testimony shows this to be the case. The $9,788.00 was advanced by an agency of the United States for hospital services to be rendered by Parkview General Hospital, Inc. The appellants by their contract agreed to promptly pay and discharge any such liability or to defend such claim. They did neither. Appellees became liable for same, and set the same up as a liability of appellees' successor hospital, P and S General Hospital, Inc. Blue Cross-Blue Shield can demand repayment thereof from appellees at any time, and, according to the evidence of appellees' attorney, they will have to pay it.

In view of these provisions of the contract, and of the evidence concerning the advance by the Blue Cross-Blue Shield of this sum to the appellants, and the subsequent liability of appellees therefor, we hold that the ruling of the trial court that this amount was a proper offset to appellees' liability on the note found support in the evidence, and was not against the greater weight and preponderance of the evidence. We...