Powers v. Lynn

• Decision Date: 22 May 1975
• Docket Number: No. 964,964
• Citation: 523 S.W.2d 271
• Court: Texas Court of Appeals
• Parties: William L. POWERS, Jr., Appellant, v. Martin LYNN et al., Appellees.

Page 271

523 S.W.2d 271

William L. POWERS, Jr., Appellant, v. Martin LYNN et al., Appellees.

No. 964.

Court of Civil Appeals of Texas Corpus Christi.

May 22, 1975.

Rehearing Denied June 2, 1975.

Bruce D. Viles, Wood, Burney, Nesbitt & Ryan, Corpus Christi, for appellant.

Richard A. Hall, Branscomb, Gary, Thomasson & Hall, Corpus Christi, for appellees.

OPINION

YOUNG, Justice.

Because the trial court refused to temporarily enjoin any of the defendants from initiating any proceedings for the collection of indebtedness resulting from the plaintiffs purchase of the Sand and Sea Resort Hotel of Corpus Christi, Texas, the plaintiff appeals.

On or about June 28, 1974, William L. Powers, Jr., as purchaser, executed a real estate sales contract with Martin Lynn and Bonnie Hayes for the purchase of the Sand and Sea Resort Hotel for a price of $95,000 to be payable partly by cash and the remainder by a note to be secured by a vendor's lien and a deed of trust.

The purchase was closed through Stewart Title Company on August 30, 1974. There Powers executed a secured promissory note for $674,500.00, payable to Lynn and Hayes, together with attendant conventional documents and paid the balance of the purchase price with funds secured primarily from the Small Business Administration.

The note required Powers to make interest payments, only, on the first day of October, November and December of 1974. On January 1, 1975, Powers was scheduled to pay Lynn and Hayes an installment of $24,500.00 plus the first regular monthly payment of $5,558.40; he was obligated to pay a monthly installment of $5,558.40 on the first of each month thereafter until the note became paid in full.

On December 31, 1974, the day before the scheduled payments of $24,500.00 and $5,558.40 were due, Powers filed suit against Lynn, Hayes, Stewart Title Company, and James H. Atwill as trustee of the deed of trust. In that petition he alleged, among other things, that because of fraudulent misrepresentations by Lynn about the ease of Powers' acquiring membership with Best Western Motels, Powers was entitled to recission of the sale or, alternatively, to recover damages. On that same day Powers sought and was granted a temporary restraining order enjoining the defendants from accelerating the indebtedness provided in the note, from negotiating or otherwise transferring the note, and from foreclosing on the real property securing the note. Plaintiff did not make the payments due on January 1, 1975, and had not done so at the time of the subsequent evidentiary hearing.

In his petition Powers alleged as a basis for the suit and the requested ancillary injunctive relief: that before closing of the sale in question the Sand and Sea Resort Hotel was affiliated with Best Western Motels, a chain of member motels with home offices in Phoenix, Arizona; that during negotiating before the execution of the real estate sales contract, Lynn knowingly and wilfully represented to Powers that the Sand and Sea was in a condition which was acceptable to the Best Western chain for a continuation of membership; that the affiliation between the motel and the chain was in good standing; and, that, although the membership itself was non-transferrable, Powers would only have to effect the formality of filing an application and receiving approval to continue operating the motel as a member of the chain. Further, Powers alleged that he relied on those representations; that they were untrue; that he was not granted a Best Western affiliation; and that as a consequence he was entitled to either recission or damages in excess of $100,000.00 .

The hearing on Powers' request for a temporary injunction pending the trial of this case on the merits was begun on January 10, 1975, and culminated in an order dated January 16, 1975, denying the requested injunctive relief. Plaintiff appeals from this order.

Appellant contends in five points of error that he presented a prima facie case; that the subject matter of the litigation should be preserved; that a multiplicity of suits should be prevented; that there was a substantial, bona fide, litigious controversy between the parties; and that, therefore, the temporary injunction should have been issued.

Appellees assert that the trial court properly denied the injunctive relief sought by appellant because he failed to demonstrate the existence of a probable right subject to protection by injunctive relief.

The evidence offered by the appellant in support of his request for injunctive relief may be fairly summarized as follows. Powers has been a licensed real estate broker since 1965 and is affiliated with W. L. Bates Company, a real estate brokerage firm in Corpus Christi and Dallas. He also has a law degree, but is not licensed to practice. Before buying the Sand and Sea he had owned a motel in Port Aransas which suffered considerable loss from Hurricane Celia in 1970. As a result, Powers acquired a Small Business Administration loan which he had yet to use in 1974 when he became interested in buying the Sand and Sea. Besides its appearance and location, the hotel interested him because of its affiliation with the Best Western chain. To him the Best Western referral system, national advertising,...