Speed v. Jay

• Decision Date: 17 December 1924
• Docket Number: (No. 2385.)
• Citation: 267 S.W. 1033
• Parties: SPEED v. JAY et al.
• Court: Texas Court of Appeals

267 S.W. 1033

SPEED v. JAY et al.

(No. 2385.)

Court of Civil Appeals of Texas. Amarillo.

December 17, 1924.

Rehearing Denied January 21, 1925.

Appeal from District Court, Hale County; R. C. Joiner, Judge.

Action by Guy B. Speed against R. E. Jay and others, in which defendant Craig Gilliland and another filed cross-action, and the Guaranty State Bank was made a party defendant. Judgment for plaintiff against all defendants except the named cross-complainant, and plaintiff appeals. Reversed and remanded.

M. J. Baird and Oxford & Oxford, all of Plainview, for appellant.

Kinder & Russell and W. W. Kirk, all of Plainview, for appellee Gilliland.

A. C. Hatchell, of Dallas, for appellee Guaranty State Bank.

HALL, C. J.

On and prior to May 31, 1921, the appellant Speed owned a brick business building in Plainview, and, on said date, leased it to O. L. Duncan and W. D. Jordan for a period of two years. The lessees conducted a restaurant business in the building which was known as the "Cozy Café." Afterwards Duncan died, and Jordan continued the business until about the 10th day of August, 1922, when he sold it to J. B. Gilliland with the consent of the appellant. At the time of that sale the Guaranty State Bank of Plainview held a note in the sum of $1,500 signed by J. B. Jordan, secured by a chattel mortgage on the fixtures of the café. Jordan owed Williams & Martin a note for about $600, and was indebted to appellant Speed in the sum of $693.33, unpaid rent for the building. Gilliland assumed the payment of these debts as part consideration for the purchase of the business from Jordan, and executed his note to the bank in the sum of $1,500 in renewal of Jordan's note for about that amount. He also executed and delivered to appellant his note for the amount of unpaid rent and gave a chattel mortgage on the fixtures to Williams & Martin to secure their debt. Gilliland then insured the fixtures for the sum of $2,000 with a loss payable clause upon the policy to secure the bank. After leasing the building to Duncan and Jordan, appellant insured it against loss by fire. On or about October 5, 1922, Gilliland sold the business to R. E. and J. H. Jay; in this sale the Jays assumed and agreed to pay the indebtedness to the bank, Williams & Martin, and Gilliland as part of the consideration for the sale. Williams & Martin filed suit and recovered judgment for the amount of their debt, and foreclosing the mortgage lien. The building and fixtures were damaged by fire on the 3d day of January, 1923, while in possession of said Jays. After the fire the Jays abandoned the building and appellant took possession of it, and on or about the 15th day of April, 1923, after having the building repaired, leased it to other parties at $115 per month. After the fire the fixtures were sold by agreement of all parties interested for $1,050, the proceeds of sale being deposited in the registry of the court. From such proceeds, by agreement of parties, $600 was paid to Williams & Martin in settlement of their claim, and from the balance court costs in that suit were paid, leaving a remainder of $429.95, which was paid to appellant.

Appellant instituted this suit in the district court of Hale county, on the 26th day of July, 1923, against Craig Gilliland, and R. E. and J. H. Jay, in which he alleged the execution of the lease contract to Duncan and Jordan, and the sale of the business by them to Craig Gilliland, with appellant's consent; a verbal agreement on the part of J. B. and Craig Gilliland to accept the terms of said lease contract; the abandonment of the building by the Gillilands, and the delivery of possession thereof by them to R. E. and J. H. Jay; the failure of the Gillilands to pay the rent thereafter; the failure of the Jays to comply with the stipulations of the lease contract; and further alleged that on the 3d day of January, 1923, the Jordans carelessly permitted the same to be damaged by fire to the extent of $985.55; that by reason of the breach of the terms of the contract appellant was forced to pay out various sums totaling $43.90, and the subsequent leasing of the building to other parties for $115 per month for the remainder of the rental term. The appellant's petition also declared upon the note for $693.33 representing unpaid rents, and prayed for foreclosure of the chattel mortgage given to secure it. It is further alleged that the Jays assumed and agreed to pay the bank the amount of said $1,500 note; that they took out insurance on the furniture and fixtures, and, after the fire, had transferred and assigned the rights under the insurance policies to the bank; that by agreement with the bank the proceeds of the insurance policies, amounting to $2,000, were paid to it with the understanding between the bank and appellant that said $1,500 note should be paid, and the balance of $500 should be held by the bank for the benefit of appellant, and other creditors of J. B. and Craig Gilliland....