Rutherford v. Page, Southerland & Page

• Court: Texas Civil Court of Appeals
• Writing for the Court: PHILLIPS
• Citation: Rutherford v. Page, Southerland & Page, 429 S.W.2d 602 (Tex. Ct. App. 1968)
• Decision Date: 29 May 1968
• Docket Number: No. 11610,11610
• Petition History: writ ref'd n.r.e.
• Parties: D. C. RUTHERFORD et al., Appellants, v. PAGE, SOUTHERLAND & PAGE, Appellees. . Austin

Page 602

429 S.W.2d 602

D. C. RUTHERFORD et al., Appellants, v. PAGE, SOUTHERLAND & PAGE, Appellees.

No. 11610.

Court of Civil Appeals of Texas Austin.

May 29, 1968.

Rehearing Denied June 19, 1968.

Johnson, Jones, Clark & Sheppard, John E. Clark, Austin, for appellants.

Clark, Thomas, Harris, Denius & Winters, Conrad Werkenthin, Robert C. McCreary, Mary Joe Carroll, Austin, for appellees.

PHILLIPS, Chief Justice.

Appellants brought their suit in the court below seeking damages for an alleged breach of contract for the lease of an aircraft. The defendants below, and the appellees here, admitted the execution of the contract but asserted that it was void for failure of consideration, lack of consideration, mutual mistake, misrepresentation and the breach of express and implied warranties.

On substantially the same grounds, appellees, by counterclaim, sought rescission of the contract and their special damages comprised of expenses and rental for the time that the plane was actually used during the period from the date of the lease until notice was given that the lease was null and void because of the material breach arising from the fact that the airplane was not, and since the execution of the lease had not been, airworthy.

At the close of the trial it was stipulated that appellant Rutherford had innocently made false representations as to the airworthiness and safety of the plane; that such were representations of material facts; that such representations had induced appellees to sign the lease; and that had it not been for such representations appellees would not have entered into the agreement.

The case was submitted to the jury on three special issues, hereinafter described, after which the court entered judgment '* * * that the 'Lease of Aircraft' of October 4, 1965 * * * be cancelled, rescinded, set aside and held for naught * * * that the defendants do have and recover of and from the plaintiffs * * * $5,472.15 on defendants' counterclaim for repairs and rental paid plus interest * * * that plaintiffs recover from defendants the costs and repairs in Abilene, to wit * * * $4,850.92 plus interest * * *'

We affirm that part of the judgment rescinding the contract and awarding appellees damages, however, we reform the judgment to deny appellants the damages awarded them by the trial court.

On October 4, 1965 appellants entered into a written lease agreement whereby they leased to appellees, an architectural partnership, a twin-engined Aero Commander Airplane for a period of one year. The lease provided that appellees pay a monthly rental of $352.63 during the term of the lease and required the appellees to keep the aircraft in good repair and return it to the appellants in Austin, Texas upon the expiration of the term.

During the discussions and negotiations leading up to the agreement, appellees were told by appellant Rutherford that the aircraft had given him good service, that it had recently undergone a complete, major overhaul and was in good condition, and that it was safe and airworthy.

It later developed that certain of the work supposedly done as a part of the major overhaul had been falsely certified by the mechanic responsible, and that as a result the aircraft was in fact not airworthy; however, it is undisputed that appellant Rutherford believed all of his statements to be true and Bona fides in representing the aircraft as he did are not questioned.

On October 16, 1965, shortly after appellees took possession under the lease, the airplane sustained substantial damage upon landing in Midland, Texas and appellees contracted to have it repaired there. The repairs required considerable time to complete and during this time appellees decided to have the required Federal Aviation Authority annual inspection performed by mechanics who were repairing the plane.

While the repairs were being made and the inspection being performed, it was discovered that certain false entries had been made in the aircraft log book by the mechanic who had performed the last major overhaul, and that, unknown to the parties hereto, certain required maintenance items had been certified by that mechanic as having been performed, when in fact they had not been performed.

Performance of the repairs occasioned by the accidental damage, together with the required annual inspection, and the additional maintenance and modifications occasioned by the prior fraudulent conduct of the mechanic, proceeded concurrently and required some four months to complete. The total charges assessed for all of the labor and parts for all of the functions performed amounted approximately to $10,500, $6,800 of which was reimbursed by insurance.

Upon learning of the total of $3,700 expense attributed by their mechanics to the annual inspection and the correction of the falsely-certified overhaul, appellees called upon appellants to pay part or all of this amount. A conference was held between the parties hereto whereby Rutherford agreed to pay $1,000 of the amount due.

The jury, in answer to special issue No. 1 found that appellant Rutherford subsequently told appellees' bookkeeper, in a telephone conversation in late February, that he would not perform his part of this agreement. The bookkeeper immediately told appellee Louis Southerland of Rutherford's decision after which Southerland dispatched their pilot to Midland to pay the repair bills In toto and fly the aircraft back to Austin.

The aircraft was returned to Austin by the pilot on either the same day or the next day. The aircraft remained in Austin until March 3 when it was flown by one of the appellees from Austin to Lubbock on a business trip. On the return flight from Lubbock the left engine ceased to function. The airplane was landed at an airport in Abilene, and left there by appellees, who returned to Austin by commercial flight and notified appellants a week later that they were cancelling the lease because the aircraft was not, and had never been during the term of the lease, airworthy. One of appellees later went to Abilene to see that the aircraft was stored properly.

Appellants, finding it impossible to sell the aircraft in Abilene, paid the $4,850.92 necessary to put the aircraft in flying condition, together with the hanger rental and certain other related expenses, and returned the aircraft to Austin. Appellants then filed this suit to recover lost rentals from appellees because of the cancellation of the lease, as well as the costs of repairs made and storage charges incurred at Abilene and the cost of returning the aircraft to Austin, less the $1,000 which appellant had agreed to pay previously. Appellees counterclaimed for the amount of rental actually paid by them under the lease, together with the $3,700 in annual inspection and other repair costs incurred earlier at Midland, and for certain smaller repair costs, and for other relief, including cancellation of the lease.

Appellants moved for judgment at the close of the evidence, but the trial court overruled the motion and submitted the case to the jury on three special issues inquiring (1) whether Rutherford told appellees' bookkeeper that he would not perform his part of the promise agreement that had been reached in mid-February, (2) whether the appellees could have minimized the cost of storing the aircraft in Abilene, and (3) the amount by which appellees could have reduced the storage charges in Abilene.

The jury found that Rutherford did advise appellees' bookkeeper that he would not perform his part of the agreement, that appellees could have minimized the storage charges, and that the amount by which they could have been cut was $350.

Upon this verdict, the trial court entered a judgment granting appellees rescission of the lease as of March 10, 1967, and recovery of the $1,410.52 in monthly rental paid and the $4,061.63 in repair expenses paid, which included the $3,700 expense of the annual inspection and the corrective repairs made at Midland. The court granted appellants a judgment for $4,850.92 for the costs of the actual repairs made at Abilene, but not the storage charges or the cost of returning the aircraft to Austin.

Appellants are before this Court on sixteen points of error, the first nine, briefed together, being that of the court in overruling appellants' motion for an instructed verdict because the undisputed evidence shows, as a matter of law, that by their conduct appellees ratified the lease in question after discovering grounds for rescission thereof because the undisputed evidence shows, as a matter of law, that by their conduct appellees elected not to rescind the lease in question after discovering grounds for rescission thereof; because the undisputed evidence shows, as a matter of law, that by their conduct appellees waived the right to rescind the lease in question after discovering grounds for rescission thereof. The next six points refer to special issue No. 1 in that the trial court erred in overruling appellants' objection to special issue No. 1 because the matter inquired about in said special issue was not an ultimate fact issue in the case and had no legal significance in the case, the evidence showing as a matter of law that appellees ratified the lease in question after the conversation inquired about in said special issue; because the matter inquired about in said special issue was not an ultimate fact issue in the case and had no legal significance in the case, the evidence showing as a matter of law that appellees elected not to rescind the lease in question after the conversation inquired about in said special issue; because the matter inquired about in said special issue was not an ultimate fact issue in the case and had no legal significance in the case, the evidence showing as a matter of law that appellees waived the right to rescind the lease in question after the conversation inquired about in said special issue; in refusing to disregard...