Petroleum Anchor Equipment, Inc. v. Tyra

• Decision Date: 25 November 1966
• Docket Number: No. 16491,16491
• Parties: PETROLEUM ANCHOR EQUIPMENT, INC., Appellant, v. William D. TYRA, Sr., et ux., Appellees. . Dallas
• Court: Texas Court of Appeals

Page 238

410 S.W.2d 238

152 U.S.P.Q. 634

PETROLEUM ANCHOR EQUIPMENT, INC., Appellant, v. William D. TYRA, Sr., et ux., Appellees.

No. 16491.

Court of Civil Appeals of Texas.

Dallas.

Nov. 25, 1966.

Rehearing Denied Dec. 23, 1966.

Burford, Ryburn & Ford, Spencer C. Relyea, and John L. Estes, Dallas, for appellant.

Baker, Jordan, Shaw & Foreman, Russell M. Baker, and Edwin L. Davis, Dallas, for appellees.

CLAUDE WILLIAMS, Justice.

Action by Petroleum Anchor Equipment, Inc., against William D. Tyra and wife, Dorothy B. Tyra, seeking equitable relief by way of injunction and cancellation of two written instruments designated as Assignments of Application for Letters Patent covering an invention described as a screw type earth anchor and pipeline saddle, a device utilized in anchoring pipelines laid in marshy terrain. The essential facts and material pleadings are set forth in our original opinion in this case. Petroleum Anchor Equipment, Inc. v. Tyra, Tex . Civ.App., 392 S.W.2d 873. In that opinion we held that the cause should be reversed because of the absence of an indispensable party, Luther S. Fite. The Supreme Court disagreed holding that Fite was a 'conditionally necessary party' but not an indispensable party. Petroleum Anchor Equipment, Inc. v. Tyra, Sr., et ux., Dorothy B. Tyra, Tex.Sup.Ct., 406 S.W.2d 891. The case has been referred back to us for consideration of the points advanced by appellant.

In response to special issues the jury found (1) that the Board of Directors of Petroleum Anchor Equipment, Inc., did not pass the resolution on or about January 8, 1963 (being a corporate resolution authorizing W. A. Moss, as President and General Manager to purchase and sell property of the corporation); (2) that the Application for Letters Patent constituted substantially all of the property and assets of Petroleum Anchor Equipment, Inc., on February 14, 1963; (3) that consideration did not pass to Fite when he transferred the Application for Letters Patent to Petroleum Anchor Equipment, Inc., on April 7, 1962; (4) that the Board of Directors of Petroleum Anchor Equipment, Inc., after January 8, 1963 were informed as to the contents of the instrument identified as 'Plaintiff's Exhibit 18' (being the corporate resolution inquired about in Special Issue No. 1); (5) that the Board of Directors of Petroleum Anchor Equipment, Inc., after learning of the contents of Plaintiff's Exhibit No. 18' failed to act as ordinary prudent persons would have acted under the same or similar circumstances.

Based upon this verdict the trial court rendered judgment against appellant, thereby decreeing title and ownership of the Application for Letters Patent to vest in appellees.

Appellant assails the judgment in twelve points of error. Appellees have objected to our consideration of appellant's points because same are too general, do not point out the particular error complained of, and are multifarious. Appellant's points are indeed, broad, general and often multifarious . But we have elected to consider appellant's points as we understand them and as disclosed in the statements and arguments accompanying same. Moore & Moore Drilling Co. v. White, Tex.Civ.App ., 345 S.W.2d 550; Red Fish Boat Co. v. Jarvis Press, Inc., Tex.Civ.App., 361 S.W.2d 588.

Appellant's first and second points complain of the action of the trial court in submitting to the jury Special Issue No. 3 and in not disregarding the jury's answer thereto because there was no evidence, or insufficient evidence, to support the jury's answer thereto. The issue under attack inquired whether consideration passed to Fite from Petroleum Anchor Equipment, Inc., for the transfer of the Application for Letters Patent on or about April 7, 1962. The jury answered that 'Consideration did not pass' to Fite.

Appellant's 'no evidence' or 'insufficient evidence' points require a careful review of material evidence on the question in the light of the familiar rules promulgated by our Supreme Court. The facts material to the resolution of the question, as well as other points discussed hereafter, are somewhat complex and do not yield to a simple statement.

Prior to 1960 W. A. Moss was Vice-President and Division Manager of A. B. Chance Company of Centralia, Missouri, which company manufactured and sold a type of utility anchor used to overcome buoyancy in pipelines laid in marshy areas. Joe Gardner was a salesman for Chance. Moss resigned from A. B. Chance Company and approached Joe Gardner with the idea of forming a new company to sell pipeline anchors. Moss and Gardner, whose home was Natchez, Mississippi, approached the stockholders of Natchez Steel Products (hereinafter called Natchez), a manufacturing corporation located in Natchez, with the idea of manufacturing the anchors. Prior to leaving Chance, Gardner had, on several occasions, discussed technical improvements of the Chance anchor with Luther S. Fite, then president of Natchez, and several of the improvements suggested by Fite were actually used in the new anchor. Fite was not only president but the owner of one-third of the stock of Natchez, which company was not in too good financial condition at the time. The stockholders of Natchez desired to take on the new endeavor and it was agreed that Natchez would manufacture the anchors and that a new corporation, Petroleum Anchor Equipment, Inc. (hereinafter called Petroleum), would be formed to sell the anchors.

On June 30, 1960 Petroleum was incorporated and of the original 2,000 shares, 500 shares were issued to Moss, 500 shares to Gardner, and 1,000 shares issued to Natchez. The testimony relating to the formation of Petroleum is undisputed. However, a great deal of the testimony concerning the affairs of the corporation after its formation is conflicting. Especially conflicting is the evidence concerning the acquisition by Petroleum of the Application for Letters Patent in question covering what is commonly referred to in the record as the 'Natchez' or 'Saddle' anchor. Fite claims sole credit for the idea of the new anchor which appears to be an adaptation of the Chance anchor. An Application for Letters Patent covering the anchor was filed by Fite with the United States Patent Office in Washington on October 20, 1960. Subsequently, on June 22, 1961 and again on April 7, 1962, Fite executed assignments of this application to Petroleum. The assignment dated June 22, 1961 did not contain a description of the patent and was never recorded with the Patent Office. Fite testified that on and prior to June 22, 1961 he and Natchez had judgments pending against them and that he was asked by Gardner to transfer the Application for Letters Patent to Petroleum to keep the property out of the reach of his creditors. He further said that he was promised that the assignment would not be recorded but would be held in trust for him. He said that no consideration of any kind was paid to him for this assignment. Following the 1961 assignment Fite incurred additional judgments against him. He testified that he was approached by Gardner and persuaded to execute a second assignment to Petroleum on April 7, 1962. He related that this assignment was to be curative of the first so as to supply the necessary description of the patent application. Fite testified that, like the first assignment, this one was to be held in trust by the corporation and no consideration passed to him. The second transfer was recorded with the Patent Office on April 17, 1962.

N. L. Carpenter, the original treasurer of Petroleum, as well as two other officers of the corporation, Truly and Foreman, testified that upon the formation of the corporation Fite had agreed that the corporation should have title to the application and that the two assignments were in furtherance of that agreement.

Foreman testified that Fite agreed to transfer the Application For Letters Patent covering the Natchez anchor to Petroleum because he would benefit by any increased profits accruing to Natchez from the manufacture and sale of the Natchez anchor. Truly testified that Petroleum owed Natchez approximately $750 for expenses incurred in connection with the development of the anchor, and in addition, that it expended over $200 in legal fees relating to the Application for Letters Patent.

At the time of the second transfer to Petroleum on April 7, 1962 Fite was not in a supervisory capacity with Natchez nor was he a stockholder in that company. At that time he was not a stockholder or a director in Petroleum. He received no compensation for his services from Petroleum. Truly testified that Petroleum did not at any time promise to pay Fite any royalty for his patent application. Petroleum has sold over $300,000 in Natchez anchors. It is undisputed that Fite has not received any royalty or other remuneration from this transfer.

There are no pleadings nor evidence that Fite made a gift of the application to Petroleum.

Moss substantiated Fite's testimony concerning the judgments against Fite and against Natchez, and the fact that Petroleum was to hold title to the Natchez patent in trust for Fite. Moss later, while acting as president of Petroleum, transferred the patent of the Natchez anchor to Fite because he said 'from a standpoint of principle, I thought this was Mr. Fite's property and should be returned to him.'

Appellant relies heavily on the argument that consideration to Fite is demonstrated by the record as a matter of law and therefore a fact issue should not have been presented to the jury. An examination of the record, as above summarized, refutes this argument.

Appellant's 'no evidence' or 'insufficient evidence' points must be overruled on the basis of the record. Clear-cut issues of fact were presented, supported by adequate evidence, and such facts were resolved against appellant by the jury. Appellant concedes that Fite received no money or property as consideration for the assignment, other than...