Soto v. Doehne

• Decision Date: 18 November 1981
• Docket Number: No. 16638,16638
• Citation: 625 S.W.2d 60
• Parties: Ruben SOTO, Appellant, v. Louis C. DOEHNE, Administrator of Estate of Ernesto L. Lachica, Deceased, Appellee.
• Court: Texas Court of Appeals

Page 60

625 S.W.2d 60

Ruben SOTO, Appellant, v. Louis C. DOEHNE, Administrator of Estate of Ernesto L Lachica, Deceased, Appellee.

No. 16638.

Court of Appeals of Texas, San Antonio.

Nov. 18, 1981.

Oscar J. Pena, Laredo, for appellant.

Ada Cronfel, Goodman & Cronfel, Laredo, for appellee.

Before KLINGEMAN, CLARK and CANTU, JJ.

OPINION

CLARK, Justice.

This suit arose from a written agreement between two certified public accountants concerning a transfer of accounts from one to the other. Doehne, the administrator of Lachica's estate, sued Soto to recover unpaid consideration alleged to be due for the purchase of Lachica's accounting practice. Soto contended the agreement was an employment contract whereby he had hired Lachica as a consultant, and that Lachica had already been paid more than he was entitled to receive. Trial was to the court. After admitting parol evidence as to the intent of the parties, the court found that the agreement was for the purchase and sale of Lachica's accounting practice and that Soto owed $14,500 in unpaid consideration, less a credit of $1,000. We modify and affirm the judgment.

In seven points of error Soto raises issues concerning the trial court's construction of the agreement, the admission of parol evidence, the computation of consideration due, and the asserted lack of competent evidence to support the trial court's findings and conclusions. Soto's fourth point of error, in which he asserts that the trial court's findings of fact "are not supported by any legal, competent evidence and in fact, are in conflict with the evidence," is the equivalent of a "no evidence" point. Garza v. Alviar, 395 S.W.2d 821 (Tex.1965). In resolving that issue, this court must consider only the evidence tending to support the findings, viewing the evidence in the most favorable light in support of the findings, giving effect to all reasonable inferences that may properly be drawn therefrom, and disregarding all contrary or conflicting evidence. Glover v. Texas General Indemnity Co., 619 S.W.2d 400 (Tex.1981); Butler v. Hanson, 455 S.W.2d 942 (Tex.1970).

The parties signed a letter agreement ¹ which was prepared by Lachica's attorney at Soto's request and in Soto's presence. At the time the agreement was prepared Lachica was not present, having already moved from Laredo to San Antonio. There was evidence that Lachica was not in good health at that time, and he died in October, 1974, a few days more than one year after the agreement was entered into.

The threshold question faced by the trial court was whether or not the letter agreement was so ambiguous as to justify the admission of parol evidence to establish the intent of the parties. We agree with the trial court's finding that it was. If read as an employment contract, as Soto contends it should be, the agreement fails to specify what "consulting services" Lachica was to render, or how long he was obligated to render such services in order to earn the stated consideration of "one year's gross fees" from the transferred accounts, or when and under what circumstances the accounts would be returned to Lachica. In addition, the contractual provisions as to the amount of consideration to be paid are subject to conflicting interpretations. Contrary to Soto's contention, the agreement is not complete and unambiguous on its face, and the trial court did not err in admitting parol evidence concerning the circumstances surrounding its preparation and execution, the intent of the parties, and the customs of the profession with regard to the transfer of accounting practices. Neece v. AAA Realty Co., 159 Tex. 403, 322 S.W.2d 597 (1959); Esteve Cotton Co. v. Hancock, 539 S.W.2d 145 (Tex.Civ.App.-Amarillo 1976, writ ref'd n.r.e.). As the court observed in Esteve,

... examination and consideration of the entire contract leaves unresolved the true intent of the contracting parties. While the various contentions of the litigants have predicated merit, they more aptly illustrate that the contract is reasonably capable of conflicting constructions. Thus, the trial court correctly determined that the contract is ambiguous and properly admitted parol evidence bearing on the intent of the contracting parties.

539 S.W.2d at 157.

The attorney who represented Lachica in the transaction with Soto testified that she first prepared a proposed agreement providing forthrightly for the purchase of Lachica's practice by Soto, but that Soto insisted that the agreement take the form of a contract for consulting services by Lachica in order that Soto might obtain the maximum income tax benefit from the transaction. Lachica's attorney then prepared the letter agreement which the parties signed, incorporating therein the provisions Soto requested. The consideration payable to Lachica under both documents was expressed in terms of "one year's gross fees," to be paid in installments over a period of four years. Lachica's attorney also testified that the covenant not to compete contained in the agreement was included "solely for the reason of getting an income benefit (sic)" for Soto.

The agreement in question fixes the transferor's consideration at "one year's gross fees not to exceed the amounts for the prior twelve months, as indicated on the list attached herewith." Lachica's gross fees for the twelve months prior to October, 1973, from all of the accounts on the list totalled slightly more than $45,000. Soto rendered services to some, but not all, of Lachica's accounts during the first twelve months after the transfer. For those services Soto collected $14,553 in fees. The administrator contends that the maximum consideration that could have accrued to Lachica under the contract was $45,000, and that the actual amount due from Soto was the sum Soto collected in that first year, $14,553. Soto argues, however, that the contractual limit on consideration should be applied on an account-by-account basis, and that the maximum consideration due from him was $7,030, the amount he contends Lachica collected in 1972-73 from those clients for whom Soto actually performed services in 1973-74. Doehne, the administrator of Lachica's estate and a certified public accountant himself, testified that he was experienced in the transfer of...