Coats v. Windham (281 S.W.2d 207, 1955)

R. L. MURRAY, Chief Justice.

This is an appeal from an adverse judgment in the Special Ninth District Court of Polk County by S. T. Coats and N. A. Coats, appellants. The suit was originally brought by them as plaintiffs against Wyman Wind-ham, E. T. Murphy, James M. Windham and Wyman Windham, Jr. Before the case was tried on its merits Wyman Windham died and Mrs. Mattie Windham, individually and as independent executrix and sole beneficiary under the will of Wyman Wind-ham, was substituted for him as a party defendant. Thereafter the appellants, plaintiffs in the trial court, filed their second amended original petition in which the defendants were Mrs. Mattie Windham, individually and as independent executrix and sole beneficiary under the will of Wyman Windham, deceased, E: T. Murphy, Mrs. Gertrude Murphy, Dr. C. S. Murphy, James M. Windham and Wyman Windham, Jr. This was the-pleading on which the appellants went to trial. During the course of the trial Dr. C. S. Murphy was dismissed as a party defendant upon motion of the appellants. He is not a party to this appeal.

Before the death of Wyman Windham the trial court heard and sustained a plea in abatement filed by Wyman Windham et al. On appeal this court reversed and rendered that judgment and ordered the case tried on its merits. Coats v. Windham, Tex.Civ.App., 254 S.W.2d 530, writ refused n. r. e.

The trial was to a jury and upon a verdict in favor of the appellees, judgment was rendered thereon that the appellants take nothing by their suit against the appellees. Motion and amended motion for new trial were filed by the appellants, a. hearing was had and a large volume of testimony thereon was heard and at the conclusion thereof the trial court overruled it and made numerous findings of fact in connection with such action. The appellants duly perfected their appeal from the judgment and order overruling their amended motion for new trial and it is before us for review.

After the formal allegations the second amended original petition of the appellants alleged in substance, as follows:

On or about June 8, 1951 S. T. Coats learned that one E. N. Sonnier was the owner of some' standing timber on 8,480 acres of land in the Victor Blanco Survey in Harris County, and that said timber was for sale; being interested in the prospect of making a profit from the purchase and resale of such timber the said S. T. Coats made an agreement with one Clarence Coleman, agent for Sonnier, on August 15, 1951, by which it was agreed that S. T. Coats and his son, N. A. Coats, would have ten days in which to inspect and estimate the quantity of standing timber on the land and that Sonnier was to be paid as the sale price of such timber $225,000. . ■

That S. T. Coats thereafter went on the land for the purpose of estimating the timber and while there Wyman Windham saw him on the land and proposed that he be taken into the deal to purchase the timber and that he could and would arrange the financing therefor; S. T. Coats did not then make any agreement with Wyman WindT ham but thereafter on August 22, 1951, an agreement in writing was- made by S. T. Coats and N. A. Coats and Wyman Wind-ham, by which S. T. Coats and N. A. Coats agreed to make and furnish a complete report of the estimated timber and Wyman Windham was to assist in financing the trade, and each of the three, S. T. Coats, N. A. Coats and Wyman Windham was to receive one-third of the proceeds realized from the purchase and resale of the timber and the parties were to mutually cooperate to the best interests of each other to effec-uate a purchase and resale of the timber.

After S. T. Coats completed estimating the quantity of timber S. T. Coats and Clarence Coleman made an agreement with E. N. Sonnier at his office in Houston on August 23, 1951, that a trade had been made between them, and that although a deed conveying the timber would not be delivered to Coats until about three weeks that nevertheless S. T. Coats had purchased the said timber for $225,000, including a $15;000 commission to Clarence Coleman which was to be paid on delivery of the deed from Sonnier to S. T. Coats.

That thereafter the said Wyman Wind-ham associated appellee E. T. Murphy with him in the trade to assist in financing the deal and -on November 3, 1951, Wyman Windham, E. T. Murphy, James M. Wind-ham and Wyman Windham, Jr., secured the timber deed from E. N. Sonnier, all of which was in furtherance and consummation of the deal S. T. Coats had made with E. N. Sonnier and the deal between the Coats and Wyman Windham. , Such deed was filed for record in Harris County November 7,1951:

After August ■ 23, 1951 numerous , prospective purchasers of the timber were referred to S. T. Coats,' each of whom was informed that the timber was owned by 5. T. Coats or. by him and Wyman Wind-ham; that S. T. Coats accompanied, the prospective purchasers or their agents to the land where the timber was and showed the timber;, among such prospects was Kenneth Nelson, an agent for Southern Pine Lumber Company. On or about November 14, 1951, Wyman Windham, E. T. Murphy, James M. Windham and Wyman Windham, Jr., executed a timber deed to the timber on said tract to Southern Pine Lumber Company. Said timber deed was ■filed for record in Harris County December 6, 1951.

That Wyman Windham, E. T. Murphy, James M. Windham and Wyman Windham, Jr., were paid the sum of $325,000 by Southern Pine Lumber Company for said timber in consummation of the sale or trade actually made as a result of the efforts of S. T. Coats, and S. T. Coats and N. A. Coats are entitled to be paid and receive two-thirds of the profit realized from such sale. That the defendants below received all of the money realized from such sale, including the two-thirds which rightfully belongs to the appellants. They are informed and believe that the net profit realized on the trade was in excess of $85,000. That after the sale to Southern Pine Lumber Company, the money received therefor was deposited in the First National Bank of Livingston in a joint account opened in the names of Mrs. Mattie Wind-ham and Mrs. Gertrude Murphy, or Mrs. Wyman Windham and Mrs. E. T. Murphy; that thereafter said money was paid out by check to Wyman Windham and all the appellees, including payments in amounts unknown to the appellants, but well known to the appellees, to Mrs. Gertrude Murphy, Dr. C. S. Murphy and Mrs. Mattie Wind-ham; that the appellants’ share of the profits from said trade has been appropriated and/or converted by the appellees to the damage of the appellants.

The appellants have made repeated demands of the appellees for an accounting of the money received from said sale and for their share of the profits, which demands were refused and appellees are attempting to repudiate the agreement of August 22, 1951, between Wyman Wind-ham and S. T. Coats, of which all of said appellees had notice and knowledge as well as knowledge of their interest in the timber and the sale thereof and the profits therefrom.

They prayed that appellees be required to account to the appellants for all money received for the sale of the timber, with money and profits belonging to the appellants converted by the appellees, together with interest from November 14, 1951.

All of the original defendants in the suit filed a joint answer and the first amended original answer contained in substance the following allegations:

Except as admitted, they denied generally the allegations contained in the second amended original petition.

For special answers appellees allege in detail the execution of the written agreement of August 22, 1951, between the appellants and Wyman Windham, now deceased.

That at the time of this agreement it was contemplated by the parties thereto that in reasonable probability the timber could be bought and promptly resold to either the Texas Creosoting Company or Eden-Burch Lumber Company and that by doing so the extent of the financing would not exceed ten percent of the purchase price, which sum probably would be required to be placed in escrow as earnest money pending title examination and preparation of deeds; that neither of the parties suspected that there would be an unusual delay in the acquisition of said timber and the sale thereof and that they would be called upon to pay the full purchase price of said timber in advance of the resale.

That in pursuance to their agreement the parties began their negotiations to purchase the timber and attempted to obtain a buyer; that S. T. Coats talked with Texas Creosoting Company and learned that they were not interested in the purchase of the timber; that he next talked with Edens-Burch Lumber Company and again to his disappointment as well as to the disappointment of Wyman Windham it was learned that said company was not interested in the purchase of the timber; in addition to the above S. T. Coats also showed the timber to several other people, none of whom were interested in the purchase thereof. An agreement was made with Cecil Smith, L. M. Feagin, E. W. Tubb and H. E. Allin-son of Woodville, by which it was agreed that S. T. Coats, N. A. Coats and Wyman Windham would sell the timber for $320,-000 as soon as they acquired a deed thereto from East Texas Oil Company, in whom the title to the timber was actually vested instead of Sonnier Construction Company or E. N. Sonnier; that for some personal reason appellants doubted that Smith and his associates would ever fulfill their agreement if appellants and Wyman Windham should ever acquire title to the timber, and in fact said parties did refuse to go through with their agreement to purchase when it was actually tendered to them. That prior to the said agreement the parties had learned that title was not in Sonnier but in East Texas Oil Company and that a number of people were attempting to buy the timber directly from East Texas Oil Company. That from August 22, 1951 the parties had dealt with C. S. Coleman, who purported to act as agent and representative of E. N. Sonnier and from whom they expected to obtain an option for the purchase of the timber. That notwithstanding the efforts of S. T. Coats and Wyman Windham they were never able to obtain more than a verbal promise from C. S. Coleman that the timber would be conveyed to them, he never being definite as to the time for closing the sale; that neither Coleman nor Sonnier would commit themselves in writing as to the sale of the timber and when pressed for a deed it was explained that a deed could not be obtained from East Texas Oil Company at that time.

That during the meantime considerable time had been spent by the' parties in connection with their venture and in addition thereto Wyman Windham had spent considerable money in the furtherance of the purchase and sale of the timber, and it was apparent as late as the latter part of September, 1951, that additional money would have to be spent in connection' with said transaction without any assurance of any benefit therefrom and with a chance of a loss thereof; the parties further realized that the additional money to be required would be a very large sum and would be greatly excessive of the amount of money the parties had originally contemplated to be required to close the transaction. That it was also apparent that title to the timber was in East Texas Oil Company, that there was nothing to evidence the fact that it would ever part with the title and if so to whom they would pass title or for how much, and the parties further realized that the' fact that they had been unable to obtain an option or commitment to the timber, and that all other parties desiring to purchase said timber stood on an equal footing with them so far as their right to purchase said timber was concerned, all of which was discouraging to the parties, including Wyman Windham. That it was also apparent that if the timber was acquired as planned the full purchase price would have to be paid at the time of the delivery of the deed and that said cash payment might have to be raised on short notice.

That on or about October 2, 1951, S. T. Coats, individually and acting in behalf of his son, N. A. Coats, went to the office of Wyman Windham in Livingston and in sub- • stance stated to Mr. Windham that he wanted to withdraw from their venture in the attempt to purchase and resale of the timber and that Wyman Windham and E. T. Murphy could carry on and succeed to any rights that he had or might .be entitled to under the terms of the agreement of August 22, 1951; that at the instance and request of S. T. Coats, acting for himself and his son,