Terry v. Witherspoon

• Decision Date: 10 October 1923
• Docket Number: (No. 2090.)
• Citation: 255 S.W. 471
• Parties: TERRY et al. v. WITHERSPOON et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

Page 471

255 S.W. 471

TERRY et al. v.WITHERSPOON et al.^*

(No. 2090.)

Court of Civil Appeals of Texas. Amarillo.

October 10, 1923.

Rehearing Denied November 14, 1923.

Second Motion for Rehearing Denied December 5, 1923.

Appeal from District Court, Deaf Smith County; Reese Tatum, Judge.

Action by Vern Witherspoon and others against W. H. Terry and others, with cross-action by defendants.Judgment for plaintiffs, and defendants appeal.Reversed and remanded.

Jno.P. Slaton and Carl Gilliland, both of Hereford, and H. G. Hendricks, of Amarillo, for appellants.

F. T. Roloson, W. H. Russell, and Wm. M. Knight, all of Hereford, for appellees.

HALL, C. J.

This is the second appeal in this case.The first judgment was reversed because the court erred in directing a verdict.See239 S. W. 300.The appellees since then have amended their petition.As amended the petition shows that Vern Witherspoon, Geo Beams, G. E. Webb, and E. W. Kinney are seeking to recover of W. H. Terry, J. G. Terry, and R. A. Terry upon a promissory note, dated May 1, 1920, in the sum of $6,695, due six months after date, with interest at 10 per cent., and containing the usual stipulation for attorney's fees.

It is charged that for the purpose of securing said note the defendants, J. G. and R. A. Terry, on May 1, 1920, executed and delivered to Witherspoon a chattel mortgage on personal property situated in and used by the Hereford Garage, and that on May 1, 1920, W. H. Terry executed a deed of trust to secure said note, conveying the west 400 acres of a certain section of land in Gaines county, Tex.It is further charged that on or about October 16, 1920, the defendants informed plaintiffs that they would not be able to pay the note when due, on November 1, 1920, and that the parties entered into a verbal agreement whereby W. H. Terry, acting either for himself or as agents of the defendantsJ. G. Terry and R. A. Terry, agreed that plaintiffs were to go into joint possession of the garage with the defendantsJ. G. Terry and R. A. Terry, and that plaintiffs would use their efforts in trying to find a purchaser for the business, and were to keep the garage open and as a going concern, and apply the proceeds obtained from the sale of the business or from conducting it to the payment of said note, and that plaintiffs should be paid a reasonable compensation for their services in conducting said business; that, after entering into said verbal agreement, plaintiffs immediately went into joint possession of the property with defendants R. A. and J. G. Terry, and continued to conduct the business in connection with them until about November 1, 1920, when the defendants R. A. and J. G. Terry voluntarily abandoned the business and left said plaintiffs in sole possession and control thereof; that plaintiffs had been active and diligent in trying to find a purchaser for the business and in disposing of the property under said agreement, that at the time said parol agreement was made the defendants R. A. and J. G Terry were conducting a garage and automobile repair shop, dealing in and selling automobile tires, repairs, and accessories; that under said parol agreement two of the plaintiffs were employed and rendered services for a part of the time, which services were reasonably worth $150 per month for each man so employed; that on October 20, 1920, in furtherance of said verbal agreement, the said defendants J. G. and R. A. Terry executed and delivered a bill of sale in form, but which was in fact a chattel mortgage, to plaintiffs, by the terms of which said defendants J. G. and R. A. Terry, conveyed to plaintiffs the said stock of merchandise, consisting of parts, repairs, and accessories then in the garage, and at the same time plaintiffs entered into a written contract with the said J. G. and R. A. Terry, which provided that said bill of sale was not received in discharge of said indebtedness due plaintiffs, and would not in any way affect other securities held by plaintiffs for the indebtedness of the defendants, but that plaintiffs would take charge of the property named in the bill of sale, and use their efforts in selling such property and turning same into cash and other property, and the proceeds to be used in paying the necessary expenses in looking after and carrying on the business, and that any excess should be applied to the note held by plaintiffs.It was further charged that the purpose and intent of the parties was that said bill of sale and contract should create a lien upon the property and operate as a chattel mortgage thereon, and for the purpose of placing plaintiffs in possession of the property to further secure the payment of said note.

Plaintiffs offer in said pleading to account to defendants for all money received and expended by them in running and managing the business while they had charge of it, alleging that the receipts aggregated $24,426.33 and that the expenditures aggregated $24,230.77.The prayer is for judgment for the amount of the note, principal, interest, and attorney's fees, and a foreclosure of the liens upon the real estate and personal property described therein.Since the judgment was reversed the defendants, W. H., R. A. and J. G. Terry, have filed their first amended original answer, in which they admit the execution and delivery of the note sued upon, as well as the chattel mortgage and deed of trust.The execution of the bill of sale and contract, dated October 20, 1920, is also admitted, but they deny that said instruments were executed for the purposes charged in the petition, and allege that the defendants J. G. and R. A. Terry were induced to execute said bill of sale and enter into said contract by false and fraudulent representations made by plaintiffs to them, to the effect that their father, W. H. Terry, who owned the garage, tools, goods, etc., had authorized the said J. G. Terry and R. A. Terry to execute said bill of sale and contract and to deliver the possession of the property and business to plaintiffs; that after the said bill of sale and contract were executed plaintiffs, as a result of the conspiracy between themselves and H. B. Webb, to defraud defendants, took possession of all of said property, and have converted the same to their own use.It is further alleged that the defendantW. H. Terry did not authorize his sons, defendants, R. A. and J. G. Terry, to execute said bill of sale and contract, or either of them, but that, upon the fraudulent representation of the plaintiffs, the defendantsJ. G. Terry and R. A. Terry believed that their father, W. H. Terry, had directed them to execute said instruments and deliver possession of the property to plaintiffs; that, if said representations had not been made, and if they had not believed them to be true, they would not have executed said bill of sale and contract, and would not have delivered possession of the property to Witherspoon and his co-plaintiffs.They allege that said fraudulent representations were willfully and maliciously made; that plaintiffs took charge of and converted the property before maturity of the note; that H. B. Webb had fraudulently conspired with plaintiffs in order to get possession of the property, and assisted and acted with them in taking possession of the same; that upon the date of the conversion thereof the property was of the value of $13,000; that W. H. Terry was the owner of the property when it was converted; that, if he was not the owner thereof, then that J. G. and R. A. Terry had assigned their cause of action herein, by reason of the conversion to him.They asked damages in reconvention for the value of the property and for $10,000 exemplary damages.

H. B. Webb answered the defendants' cross-action by a general demurrer and general denial.By a supplemental petitionplaintiffs demur generally to the answer, and deny the facts set up in the cross-action.The case was tried to a jury, and in reply to special issue the jury found as follows: (1) That Terry Bros. owned the furniture, fixtures, stock of merchandise, consisting of accessories, repair parts, tools, machinery, acetylene generator, and Ford burning-in stand, on the 20th day of October, 1920, known as the Hereford Garage; (2) that W. H. Terry did, on or before the 18th day of October, 1920, agree that Witherspoon and Kinney, or either of them, jointly with Terry Bros., might take possession of the furniture, fixtures, merchandise, generator, and burning-in stand located in the Hereford Garage and conduct or assist in the management of the business; (3) that W. H. Terry, on or before October 18, 1920, did agree that the possession of said personal property should be given to the plaintiffs for the purpose of securing them and applying the proceeds derived from the business to the payment of the plaintiffs' note and the necessary expenses in conducting the business; (4) that W. H. Terry, in the conversation over the telephone with E. W. Kinney, authorized Kinney to have J. G. and R. A. Terry execute written instruments in substance such as the contract and bill of sale dated October 20, 1920, introduced in evidence.Based upon the verdict the court rendered judgment against W. H. Terry, and J. G. Terry and R. A. Terry for the full amount of the note, foreclosing the chattel mortgage and the deed of trust upon the property described therein.It is further decreed that the defendants take nothing against the plaintiffs or H. B. Webb by reason of their cross-action.

It is contended that the court erred in submitting the first issue, inquiring as to the ownership of the property upon the date of the alleged conversion.In so far as the right of W. H. Terry to recover in his own name is involved, the issue is immaterial, because by assignment he is the present owner of the cause of action.But the ownership of the property at the time of the conversion is material as bearing upon the issue of conversion, which depends upon the...