Opinion
No. 3949.
February 12, 1931. Rehearing Denied March 19, 1931.
Appeal from District Court, Wood County; Gordon Simpson, Judge.
Action by J. B. Moore and another against the Winnsboro Grain Grocery Company and others. Judgment for plaintiffs, and defendants appeal.
Affirmed in part, and in part reversed and rendered.
The suit was by appellees, J. B. Moore and P. J. Blackmon, against appellant, Winnsboro Grain Grocery Company, a copartnership composed of R. R. McCrary and J. E. Southerland. It was to recover $1,900 claimed to be a balance of rentals due under two contracts in writing (it was alleged) dated October 31, 1925, by one of which C. W. Moore and Will Wilson (the owners thereof) leased a lot and a building thereon in Winnsboro to appellants for a term of three years beginning January 1, 1925, at a rental of $45 per month; and by the other of which Will Wilson (the owner thereof) leased a lot adjoining the one above referred to, and a building he agreed to construct thereon, to appellants, for a like term beginning said January 1, 1925, at a rental of $55 per month. It was recited in said contracts that said Will Wilson was indebted to said R. H. McCrary on a promissory note for $2,600, and stipulated in the one of them first mentioned that one-half of the $45 per month rental to be paid under that contract should be paid by appellants to said McCrary and credited on said $2,600 note, and stipulated in the other one of the two contracts that the $55 per month rental to be paid thereunder should be paid to said McCrary and credited on said note. On the day agreed upon (it was alleged) as the day on which the term of the leases was to begin, to wit, January 1, 1925, the building Will Wilson was to construct having been completed, appellants took possession of it and of the other building and lots, and thereafter occupied and used same in their wholesale grocery business until about June 21, 1926, when they abandoned such occupancy and use, and thereafter refused to pay the monthly rentals agreed upon, it was alleged.
At the trial it appeared appellees had become the owners of the buildings and lots and were entitled to any rentals recoverable by force of the alleged contracts.
In their answer appellants alleged, among other things: (1) That it was understood and agreed that appellant J. E. Southerland was the managing member of said copartnership; (2) that the alleged written contracts were not to be "considered as accepted and delivered as binding contracts" unless same were signed by said Southerland; that they were never signed by him; and therefore that they never became effective, notwithstanding they were signed by and in the name of the appellant grain and grocery company, acting by applellant R. H. McCrary. In said answer appellants alleged, further, that said Wilson about October 31, 1925, agreed to construct and lease a building to them suitable and fit to be used in storing their stock of groceries, etc.; that Wilson constructed a building and presented a written contract to appellant McCrary who signed same with the understanding it "would not (quoting) be considered as binding, effectual and valid unless signed and accepted by J. E. Southerland, who was the person in charge in the operation and exclusive manager of the Winnsboro Grain Grocery Company"; that thereafter a contract was presented to said Southerland, "who (quoting) refused to sign and accept said contract, because it did not contain a covenant clause on the part of said lessor to the effect that the Winnsboro Grain Grocery Company would be protected and guaranteed against any loss or damage on account of water entering said building by same being improperly constructed"; that thereupon Wilson promised and agreed that he would have "said purported contract rewritten containing said requested clause"; that they (appellants) relied upon Wilson "to (quoting) redraft said contract in compliance with said verbal agreement" and "on or about January 1, 1926, began occupancy" of the building Wilson constructed, "but not under any written contract"; that immediately after such occupancy it was discovered that the construction of the building was defective "to the extent (quoting) that it permitted water leaks from the roof and other parts of the buildings, and permitted water to gather and run into the building from the rear and base of same," thereby causing "great damage and loss to the stock of merchandise contained therein"; that appellants' occupancy of said building continued for a period of eleven months, during which "heavy and excessive rains came" and water entered the building and damaged and destroyed merchandise therein; "that (quoting) so great and severe were the damages" it "rendered further occupancy of said building unwise and unreasonable and that the Winnsboro Grain Grocery Company was compelled to withdraw from further occupancy of the building in order to prevent a continuation of severe losses and damages"; that the damages they sustained from water during the time they occupied the building amounted to $3,450.50, which, appellants said, they specially pleaded "as an off-set (quoting) against plaintiffs' said claim, and also as a cross-action over and against plaintiffs and each of them." At appellants' instance, appellee B. H. Estep, who in September, 1926, had purchased an interest in the property and the rent contracts which he conveyed to appellee P. J. Blackmon in June, 1927, was made a party to the suit. In supplemental pleadings appellees alleged facts which, they charged, operated as an estoppel against appellants to claim the written contracts sued upon were not binding upon them and set up the statute of limitations of two years as a bar to the right of appellants to maintain their cross-action for damages for injury by water to their stock of merchandise.
It appeared from evidence heard at the trial (which was to a jury) that appellant J. E. Southerland was the managing partner of the firm composed of himself and appellant R. H. McCrary; doing business as wholesale dealers in groceries, etc., under the name "Winnsboro Grain Grocery Company"; that in October, 1925, oral negotiations between Southerland, acting for his firm and appellee Wilson, resulted in an agreement whereby Wilson undertook to construct a store building on a lot he owned adjoining one he and W. C. Moore owned jointly, on which a store building already had been constructed, and an agreement whereby Wilson acting for himself as to the building to be constructed, and for said Moore as well as to the building already constructed, undertook to lease the buildings to the grocery company for a period of three years from January 1, 1926; that as evidence of the agreement so reached, Wilson had the written contracts above referred to prepared, and after he and said Moore had signed same presented them to appellant R. H. McCrary, said appellant Southerland's partner, for execution on behalf of the firm; that thereupon said McCrary signed each of same as follows: "Winnsboro Grain Grocery Company, by R. H. McCrary"; that Wilson constructed a building on his said lot; that on January 1, 1926, appellants moved their stock of groceries, etc., into the two buildings and thereafter until June 21, 1927, occupied and used same in carrying on their said business as wholesale dealers in groceries, etc.; that on said June 21, 1927, appellants moved their said stock of groceries, etc., out of said building and abandoned the use of same; that during the time they occupied and used the buildings appellants paid rents as specified in the written contracts referred to — that is, they paid $45 a month for one of the buildings and $55 a month for the other — $77.50 of the total amount of each of the monthly payments paid to McCrary by checks drawn by Southerland in the firm name.
With reference to the written contracts McCrary testified:
"At the time I signed my name there (on the contracts) it was not understood that I was binding the Winnsboro Grain Grocer Company. * * * At the time I signed this contract I told him (Wilson) that I would expect J. E. Southerland to sign it. I told him Mr. Southerland was manager. I just told Mr. Wilson, `I will leave space for Mr. Southerland to sign it: he is manager and I would expect him to sign it.' * * * I did not see the contract any more; have no recollection of it. * * * At the time I signed the contract, leaving a space for Mr. Southerland to sign it, there was no intention on my part to bind the Winnsboro Grain Grocery Company. * * * When J. E. Southerland, as manager, gave checks for the rent part of it was paid to Wilson and Moore and part of it came to me. $77.50 of it came to me. The way I understood it that was Wilson's part that was coming to me. * * * The last cheek I got was in June, 1927. That was for June. I got the last payment in June, 1927. I had gotten a payment of $77.50 each month up until that time. The best I remember the checks that came to me were signed `Winnsboro Grain Grocer Company by J. E. Southerland.'"
J. E. Southerland testified:
"Before we occupied that building there was a conversation between Wilson and me about him building a building and us occupying it * * * to put a wholesale grocery stock in. There was to be a contract signed for the buildings. And one day long before the new building was constructed I was called over to Mr. Howell's office on this contract and I read the contract over and I said to Mr. Wilson, `I know those buildings and you do too, and you will have to put it in there that you will take care of the buildings and keep them in repair and manage and take care of the water from the back of the buildings or I can't sign it,' and further I wouldn't sign any contract unless they agreed to keep the buildings in repair; and I took that contract and laid it back on Mr. Howell's desk. * * * I told him (Wilson) I wanted a contract that would guarantee to take care of the building in good shape, keep them from leaking and arrange to take care of the water from the back of those buildings. * * * Prior to moving into these buildings I had a conversation with Mr. Wilson to the effect that the contract would be re-written. That was up there when I refused to sign the contract. He said he would re-write the contract and would put in it that he would take care of the water and fix it so the water wouldn't get in our goods. * * * Mr. Wilson never presented me another contract before I moved in. There was no written contract signed by me as manager of the Winnsboro Grain Grocery Company. * * * Mr. McCrary's name was signed to that contract when it was presented to me for signature in Mr. Howell's office. It was presented to me to sign and I never turned it to anybody. How Mr. Wilson got it I don't know. I turned it down. It was left over there and I was called over there to sign it to make it binding."
Will Wilson testified:
"After he (McCrary) signed them (the contracts) I left them with him to have Mr. Southerland to sign. He didn't have Mr. Southerland to sign them. He gave the contracts back to me. He said there were some changes that Mr. Southerland wanted made in the contracts before he signed them. I saw Mr. Southerland after that and Mr. Southerland wanted me to include some things in the contracts about the damage that might occur to his goods in case of a storm or hail or something, and I wouldn't do it. He didn't sign them and I didn't say anything more to him about it. That was about the date of the contract. * * * Mr. McCrary furnished me the money to construct the new building. In negotiating these contracts there was an agreement as to how Mr. McCrary was to be paid. I was to pay him my part of the rent on this loan and I think that amounted to $77.50 a month. I don't think I ever had a conversation with Mr. Southerland about this transaction prior to the time we met and he didn't sign the contracts. All of my dealings had been with Mr. McCrary. * * * At the time I was talking to Mr. Southerland about signing I agreed to construct a building suitable for his grain and grocery business. * * * At the time I presented this contract to Mr. Southerland to sign, it was signed by Mr. McCrary. Mr. McCrary had delivered the contracts to me before that time signed by him. * * * In the negotiations and conversations leading up to the execution and formation of that contract my negotiations were with Mr. McCrary."
The appeal is from a judgment in favor of appellees J. B. Moore and P. J. Blackmon against appellants Winnsboro Grain Grocery Company, R. H. McCrary, and J. E. Southerland for the sum of $1,332.95, and denying said appellants a recovery of anything on their cross-action for damages against appellees, rendered in conformity to the verdict of the jury returned in accordance with instructions of the court.
J. H. Beavers and R. B. Howell, both of Winnsboro, for appellants.
W. D. Suiter, of Winnsboro, Jones Jones, of Mineola, and Elbert M. Barron, of Sherman, for appellees.
Appellants insist the trial court erred when he instructed the jury to return a verdict in appellees' favor and, such a verdict having been returned, rendered judgment in conformity thereto. The contention is on the theory that if the evidence did not demand it would have supported, (1) a finding that the alleged written contracts sued upon were not binding upon appellants; and (2) a finding that appellants were entitled on their cross-action to recover damages of appellees.
The evidence, so far as it is material in considering the first-mentioned ground of the contention, is set out in the statement above. It must be conceded, we think, that it conclusively appeared therefrom that the delivery of the written contracts was a conditional one, the condition being that before the instruments should become effective as contracts they must be signed by Southerland; and that it further so appeared that Southerland never did sign the contracts. It would follow, it seems from the authorities, that the written contracts never became effective. Merchants' Nat. Bank v. McAnulty (Tex.Civ.App.) 31 S.W. 1091; Thomason v. Berry (Tex.Com.App.) 276 S.W. 185; Roddy v. Bank (Tex.Civ.App.) 11 S.W.2d 652; Steffian v. Bank, 69 Tex. 513, 6 S.W. 823; Lee v. Richmond, 90 Iowa 695, 57 N.W. 613; 4 Elliott on Contracts, 1133, § 3910. In the authority last cited, it is said that the actual or physical passing over of a deed from the grantor to the grantee "may not complete the delivery (quoting) in case the parties both agreed that the deed should not become operative until the happening of some future event, or the fulfilment of a condition or provision, such as the approval of the deed by a co-partner or other person having an interest."
We do not agree with appellees that if the written contracts were never so delivered as to become effective, it appeared appellants were estopped from so asserting. We have found no evidence in the record of anything appellants said and no evidence of anything they did, unless it was their taking possession of and using the buildings, tending to establish an estoppel against them. On the contrary, it was uncontroverted in the evidence that Southerland refused to sign the contracts and declared he would not sign them unless they were made to include a stipulation binding the owners of the buildings to keep them in repair, etc., and that Wilson, acting for himself and W. C. Moore, declared they would not make any change in the contracts as they were written. Whether it appeared that appellants' possession and use of the buildings were under implied contracts or not and, if under such contracts, what were the rights and liabilities of the parties, need not be determined, for appellees' suit was upon express contracts, and they were not entitled to recover as they sought to on any other kind of a contract. Dyess v. Rowe (Tex.Civ.App.) 177 S.W. 1001; Bagley v. Brack (Tex.Civ.App.) 154 S.W. 247; Whitney v. Parish of Vernon (Tex.Civ.App.) 154 S.W. 264.
We think it conclusively appeared from the evidence that the damages to their stock of goods which appellants sought to recover by their cross-action occurred before June 21, 1927; that their cross-action was not commenced until June 24, 1929; and therefore that their right to maintain such cross-action was barred by the two years' statute of limitations. Rev.St. 1925, art. 5526. It follows, of course, that we think said contention of appellants so far as it was predicated on the second ground thereof is without merit and should be overruled.
The judgment will be affirmed so far as it denied appellants a recovery of anything on their cross-action. It will be reversed so far as it allowed appellees a recovery on the written contracts they sued on, and judgment will be here rendered denying them a recovery of anything on said contracts.
On Motion for Rehearing.
It is insisted in the motion that "the evidence (quoting) was conclusive and uncontradicted that the entire negotiations with reference to the contract were between Wilson and appellant R. H. McCrary," and that this court was in error when it said such negotiations were between appellant J. E. Southerland and Wilson. We think it of no importance whether the negotiations were with the one or the other of the partners, but, to correct an inaccuracy hereby conceded to exist in the opinion, here now state it appeared the oral negotiations of Wilson referred to were not with Southerland alone but with both him and McCrary, and mainly, perhaps, with the latter.
The motion is overruled.