Powell v. Rockow

• Decision Date: 08 April 1936
• Docket Number: No. 1938 - 6528.,1938 - 6528.
• Citation: 92 S.W.2d 437
• Parties: POWELL et ux. v. ROCKOW et al.
• Court: Texas Supreme Court

92 S.W.2d 437

POWELL et ux. v. ROCKOW et al.

No. 1938 - 6528.

Commission of Appeals of Texas, Section A.

April 8, 1936.

Error to Court of Civil Appeals of Ninth Supreme Judicial District.

Suit by Lillian Rockow and husband against J. O. Powell and wife, wherein defendants filed a cross-action. To review a judgment which affirmed a judgment for plaintiffs [58 S.W.(2d) 536], defendants bring error.

Reversed and remanded.

E. B. Simmons and T. H. Ridgeway, both of San Antonio, for plaintiffs in error.

T. J. Newton and J. M. Woods, both of San Antonio, for defendants in error.

HICKMAN, Commissioner.

The Powells (husband and wife) operated the Angelus Hotel in San Antonio as lessees under a lease expiring February 1, 1931. They owned the furniture and furnishings used in the operation of the hotel. On January 29, 1930, they sold their lease, good will, furniture, and furnishings to the Rockows (husband and wife) for a total consideration of $4,000, $1,500 in cash and the balance in a note to be paid in monthly installments of $50 or more, and secured by a chattel mortgage on the furniture and furnishings. Under the contract, the Rockows were to pay the rent monthly to the landlord, but the Powells were not relieved of their legal liability therefor. Four monthly installments of $50 each were paid on the note, reducing the principal thereof to $2,300, after which this suit was instituted by the Rockows for the cancellation of the note for fraud and the recovery of $1,700, the amount paid by them in cash. In the trial court judgment was rendered in their favor against the Powells for $1,700, and for the cancellation of the note and mortgage. An equitable lien was established upon the property described in the mortgage to secure the payment of the judgment for $1,700, with interest, and foreclosure of that lien was decreed. The Powells by cross-action declared upon their note, but were denied any recovery thereon. That judgment was affirmed by the Court of Civil Appeals. 58 S.W.(2d) 536.

Many questions are presented in the application, but, under our view of what we deem to be the controlling question, we do not find it necessary to discuss them. A proper application of the equitable maxim, "He who seeks equity must do equity," effectively bars the right of the Rockows to a cancellation. The jury found that the Powells represented to the Rockows that the hotel bore a good reputation, that it had a lucrative patronage, that its patrons were of good reputation, and that, if the Rockows would purchase same and operate it, they could earn for themselves a comfortable living and, in addition, could save enough in two years from its operation to pay off the $2,500 note. It further found that the representations were false and that they were relied upon. Within less than four months after they took possession of the hotel and began to operate same, the Rockows discovered, according to their own pleadings and testimony, that it had a bad name and its patrons were not high-class people. They do not in their petition offer to do equity, but they do allege that, within a reasonable time after learning of the fraud, and on or about the 10th day of April, 1930, they disaffirmed the sale and tendered to the Powells a bill of sale and possession of the hotel, with its furniture and furnishings, and demanded a return of the $1,700 and a cancellation of the note and chattel mortgage. No proof was made of that fact, but, even if it had been established, the undisputed evidence discloses a course of...