Thermo Products Co. v. Chilton Independent School Dist.

• Decision Date: 27 January 1983
• Docket Number: No. 10-82-110-CV,10-82-110-CV
• Parties: 10 Ed. Law Rep. 447 THERMO PRODUCTS CO., et al., Appellants, v. CHILTON INDEPENDENT SCHOOL DISTRICT, Appellee.
• Court: Texas Court of Appeals

Page 726

647 S.W.2d 726

10 Ed. Law Rep. 447

THERMO PRODUCTS CO., et al., Appellants, v. CHILTON INDEPENDENT SCHOOL DISTRICT, Appellee.

No. 10-82-110-CV.

Court of Appeals of Texas,

Waco.

Jan. 27, 1983.

Rehearing Denied Feb. 24, 1983.

John Hand, Marlin, for appellants.

Robert Stem, Marlin, for appellee.

OPINION

THOMAS, Justice.

This appeal is from a judgment denying Appellants specific performance of an option to purchase real property. The trial court disregarded the jury's finding and entered judgment non obstante veredicto for the Chilton Independent School District. We affirm the trial court's judgment.

On September 19, 1967, Appellant W.E. Lessing entered into a five-year lease with the Chilton Independent School District to rent a former school building and its surrounding 14.92 acres of land. The lease contained an option to purchase, which read as follows: "During the term of the lease, lessee shall have the option to purchase the property for the sum of $15,000.00, less any payments made under the terms of the lease". On July 11, 1972, the lease was renewed for an additional five-year period and included another option to purchase identical to the one quoted above, except that the purchase price was to be $10,000.00 instead of $15,000.00. Less than one month after the renewal, Lessing assigned an undivided one-half interest in the lease to Robert Rue, the principal owner of Corporate-Appellant, and authorized Rue as his agent to exercise the option.

Although the testimony of Robert Rue and Roger Collins, a former board member and former vice-president of the Chilton Independent School District, differ materially concerning what matters were discussed and where certain discussions took place, Rue testified that in late spring or early summer of 1977 he phoned Collins, that Collins came out to the site of the leased property, and on that occasion Rue told Collins that he was accepting the option. Rue also testified that he talked to Collins several times at a restaurant about his plans to buy the property. The Corporate-Appellant continued to occupy the property in question and continued to pay rent to Appellee, which Appellee accepted and deposited. In February of 1981, Appellant's attorney, John Malone, wrote a letter to the School Board to assert that Robert Rue had exercised the option in the lease prior to its expiration, made a tender of $5500.00, and demanded specific performance. The record is silent on any tender of purchase money to Appellee by Appellants prior to February, 1981. Sometime in 1981, the corporation voluntarily vacated the premises.

The case was submitted to the jury on the following instructions and special issue:

"You are instructed that for a person to accept an option that has been heretofore granted such acceptance must be unequivocal, positive, without reservation and according to the terms and conditions of the option as originally written.

"You are instructed that an agent is one who acts on behalf of another under the latter's authority and for the latter's benefit.

"Do you find from a preponderance of the evidence that sometime prior to expiration of the 1972 lease-option to purchase agreement, Robert Rue, as agent for W.E. Lessing notified Roger Collins, a member of the Chilton Independent School District Board, that he accepted the option to purchase the property which is the subject matter of this law suit?

"Answer, 'We do so find', or 'We do not so find' ".

The jury answered, "We do so find". The trial court granted Appellee's motion for judgment non obstante veredicto, which alleged that there was no evidence that the Chilton Independent School District Board ever received notice of the acceptance prior to the option's expiration.

Appellants, asserting two points of error, contend: (1) the trial court erred by rendering judgment for the Defendant notwithstanding the jury's finding; and (2) the trial court erred by finding that as a matter of law the Appellants were required to personally attend the Chilton School Board meeting in order to give their notice to exercise the option.

It is fundamental that a trial court can grant a judgment non obstante veredicto only where a motion for instructed verdict would have been proper under the evidence. Rule 301, T.R.C.P.; Boozer v. Stephens, 509 S.W.2d 910 (Tex.Civ.App.--Tyler 1974, no writ). Likewise, on review of the action of a trial court in granting a motion for judgment non obstante veredicto, the appellate court must consider all the evidence favorable to the party against whom motion was granted, and every reasonable intendment deducible from the evidence is to be indulged in such party's favor. Coffee v. F.W. Woolworth Co., 536 S.W.2d 539 (Tex.1976). In passing on a motion for instructed verdict or on motion for a judgment non obstante veredicto, the trial court is governed by the test whether there has been introduced any testimony of such probative value as to raise an issue of fact and, if so, the motions must be denied. Dunlop Tire & Rubber Corporation v. Slack, 276 S.W.2d 400 (Tex.Civ.App.--Fort Worth 1955, no writ). No other special issues were requested by Appellants in the trial court and, accordingly, Appellants must rely on implied findings required by undisputed evidence to support any judgment in their favor in the trial court. If the jury verdict, together with such findings as are required by the undisputed evidence, would not have supported a judgment for Appellants in the trial court, then the trial court's action in granting a judgment non obstante veredicto for Appellee should be sustained on appeal. First American Life Insurance Co. v. Slaughter, 400 S.W.2d 590 (Tex.Civ.App.--Houston 1966, writ ref'd n.r.e.).

Since the option clause lacked any provisions specifying the manner or method of notifying Appellee, all that was required of Appellants was that they notify optionor of the acceptance of the option prior to its expiration. (Emphasis added). San Antonio Joint Stock Land Bank v. Malcher, 164 S.W.2d 197 (Tex.Civ.App.--San Antonio 1942, writ ref'd w.o.m.).

We find there is sufficient evidence in the record to support an affirmative finding by the jury to the one issue submitted; therefore, such finding conclusively establishes that Rue gave Collins notice of the acceptance of the option prior to the expiration of the 1972 lease. Collins was not the optionor, however, and this is the source of all of Appellants' problems. The jury's finding on this one fact issue, standing alone, cannot assure Appellants' recovery in the trial court against Appellee, unless Appellants can establish that (1) actual notice to Collins is equivalent to actual notice to Appellee's School Board as a matter of law, or (2) the School Board had, in some manner, acquired actual notice of Rue's acceptance of the option either through Collins' communications to the School Board or through some other means, or (3) notice to the School Board was, under the circumstances, imputed through Collins because of an agent-principal relationship.

Appellants contend that actual notice to Collins is equivalent, as a matter of law, to actual notice to Appellee's School Board, citing during oral argument Subsection (c) of V.T.C.A., Education Code § 23.26 as the basis for their contention. Appellants' reasoning is apparently based on the belief that, since Subsection (c) vests all right and title to all School District real estate in Appellee's School Board, when Appellants gave actual notice of the acceptance of the option to purchase the real estate to an individual member of Appellee's School Board, actual notice was, as a matter of law, given to Appellee's School Board as a body. To support this argument, Appellants rely heavily on their assertion that acceptance of notice, under an option to purchase, is a purely passive undertaking and did not require any overt or affirmative act on the part of Appellee's School Board. Thus, Appellants contend that the rule of law laid down in Webster v. Texas & Pacific Motor Transport Co., 140 Tex. 131, 166 S.W.2d 75 (Tex.1942) is not applicable in this case. In the Webster case, the Texas Supreme Court stated as follows:

It is a well established rule in this State, as well as in other states, that where the Legislature has committed a matter to a board, bureau, or commission, or other administrative agency, such board, bureau, or commission must act thereon as a body at a stated meeting, or one properly called, and of which all the members of such board have notice, or of which they are given an opportunity to attend. Consent or acquiescence of, or agreement by the individual members acting separately, and not as a body, or by a number of the members less than the whole acting collectively at an unscheduled meeting without notice or opportunity of the other members to attend, is not sufficient.

We cannot accede to Appellants' argument on this proposition. Although Subsection (c) of § 23.26 does vest all right and title to Appellee's real estate in the trustees of Appellee's School Board, such vesting does not settle title upon the trustees individually but only vests title in the members collectively, as members of a governmental body. It would be fallacious to argue that one or more members of Appellee's School Board, acting separately or individually, could sell, encumber or lease the real property of Appellee. Such business can only be transacted through their collective will, acting as a governmental body in accordance with all legal proscriptions attendant thereto. Just because title to Appellee's real property was vested in Collins as a member of the collective body did not clothe Collins with any express, implied or apparent authority to do anything with Appellee's real property as an individual, whether such act is characterized as truly passive or active.

The giving of notice to Appellee of the acceptance of the option to purchase was a crucial act on Appellants...