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Veale v. Rose
657 S.W.2d 834
Tex. App.
1983
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*1 together. Weaver, Blume v. 412 S.W.2d 760, 1967, 764 (Tex.Civ.App. VEALE, al., Appellants, Paul G. et — Eastland Casas, 175, Cantu v. (Tex.Civ.App. 1954, Antonio writ — San ROSE, Larry Appellee. L. n.r.e.).

ref’d Stated another way, judg ment may be part reversed in and affirmed No. 13-82-014-CV. where the valid portion is not so Texas, Appeals Court of dependent upon the invalid as to fall with Corpus Christi. it. Bank, Garrison v. Texas Commerce su pra. June 1983. points Those of error which have not Rehearing Aug. Denied 1983. hereinbefore been expressly overruled or hereby sustained are overruled.

We sever the issues relating to loss of

past earnings and loss of earning future

capacity from the other issues in the case. portion

That amounting to

$242,493.00 ($272,493.00less the remittitur $30,000.00) awarded Terry Thompson in

his against action Amoco Production Com- Inc.,

pany, as damages past and future

physical pain and mental anguish, past physical future impairment, for cosmet- disfigurement

ic past and for medical ex-

penses is portion affirmed. That

judgment which decrees that Terry Thomp-

son take nothing in his action Ideal Service, Inc.,

Lease por- affirmed. That

tion which decrees that Amoco Production Inc.,

Company, in its cross-action take noth-

ing against Service, Inc., Ideal Lease is re-

versed and remanded to the trial court.

Those portions

decree that Terry Thompson recover from Inc.,

Amoco Company, Production the sum $20,000.00 for loss of earnings past $200,000.00

and the sum of earn- for loss of reversed, capacity the future are

those issues are remanded to the trial court

for a new trial.

Costs of appeal fifty per- are taxed (50%)

cent Terry Thompson fifty (50%)

percent Compa- to Amoco Production

ny, Incorporated.

Neil Norquest, Passmore, professional Walter Ewers business of rendering account- Toothaker, McAllen, & Hartman, Ralph services, E. partners under the firm Jackson, Walker, Winstead, Cantwell & Mil- name Paul Veale and Company. ler, Dallas, for appellants. agreement expressed written partnership general partners duties of as well as Pleuriet, Wiley, Fleuriet, E.R. Hale & *3 different specifying aspects of the busi- Harlingen, for appellee. partner ness for which each would have NYE, C.J., Before and UTTER and The primary responsibilities. agreement GON- ZALEZ, JJ. Veale, expressly recognized Sr. and

Rose had outside investments and a number part- All business commitments. OPINION ners pursue were allowed to other business NYE, Chief Justice. compensation activities and to receive partnership dispute. This is a Larry Rose therefor, long so as activities did not Veale, sued his Paul partners, Sr., former G. conflict partnership practice with the Veale, Jr., Paul Gary Gibson, W. and public accounting materially or interfere Parker, James H. and continuing part- with partners’ partnership. duties nership, Paul and G. Veale Company, for The partnership agreement contained ex- contract, breach of accounting an and mon- press provisions for determination of ey judgment for due sums him under a partner’s value of a share of the busi- written partnership agreement. He also payment ness and the for of the procedures sought relief as declaratory to his right to same in the event of withdrawal. other sums to due him in become the future Appellants challenge do not the findings under the agreement. He asked for inter- of the jury on the amounts to Rose est as damages on the sums which he al- agreement, under partnership or the leged detained, had wrongfully been of the declaratory judgment trial court re- for attorney’s fees. garding the future This payments. The appellants counterclaimed for sums the judgment Appellants will be affirmed. allegedly due them for accounting services challenge findings do negative rendered partnership Rose to clients in counterclaim, well jury on their as the competition with partnership, and for attorney’s award of interest partnership allegedly assets used Rose fees. for which partnership had never been Special Issue No. 7 read as follows: addition, they reimbursed. cross-acted “Do a you preponderance find from defendant, Larros, a party third Larry any the evidence Rose did (Tex-Pack Inc. to recover Express), the val- the following: ue of partnership services ren- allegedly (A) accounting services for Performed dered to that pay- defendant which no a partner outside clients while of Paul ment had been received. Company, competition G. Veale and After jury, a to a and based lengthy trial with the partnership? upon verdict, its the trial court entered a (B) Express for Failed to bill Tex-Pack $177,- in the amount of Company employee Paul G. Veale and 670.34, including attorney’s interest and time used to render computer time and fees, and a declaratory judgment declaring Express? services to Tex-Pack that additional would become due and sums (C) Company Used Veale and payable to Paul G. Rose at certain intervals. The secretarial employees to render services court also rendered that the any following and did not bill nothing by take their counter- claim, and for same: dismissed their cross-action. (1) Express Tex-Pack parties are all pub- involved certified

lic (2) accountants in the engaged who Cameo Broadcasters

(3) Right Away Foods which he was was of a paid (personally) type require which did not the services of (D) Obligated the partnership for an un- However, Rose himself admitted CPA. authorized debt?” Right Away that he billed Foods for The jury answered questions each of these CPA, himself out as holding services of a negative. in the Appellants challenge on He also admitted such on his letterhead. appeal findings except each of these why that there was no reason he coul dnot (D) grounds last sufficiency Right have rendered the same services evidence. In reviewing points, these we accounting as a Away partner Foods follow the familiar determining rules for partners, one of the other firm. At least legal sufficiency factual of the evi- Parker, pub- that he knew of other testified long dence which have been established lic accounting performed firms Supreme Alviar, our Court. Garza v. types question. of services in In fact (Tex.1965); and later see: Bur- regard merg- to services in connection with *4 nett v. Motyka, (Tex.1980). 610 S.W.2d 735 ers and he indicated that he acquisitions, The partnership agreement be any required was unaware of forms that tween Rose and the appellants provided, in prepared by public accounting are not part: preponderance firms. The of all of “Except expressed with the approval of had, clearly evidence establishes that Rose partners the other as to each specific fact, accounting in services for performed instance, partner no perform shall any Right Away partner Foods while a of Paul public accounting services or in engage G. Veale in with Company, competition and practice public of accounting other partnership. jury’s The answer in this than for and on behalf of partner- 7[A]). respect (Special was error. Issue ship.” The record reveals that Rose also admit- may Partners be said to occupy fiduciary performed accounting ted that he services relationship toward one another which re for various owned Mr. enterprises by Ed quires of them the utmost degree good Payne during partner his tenure as a at faith and honesty dealing with one an Veale for he pay- which billed and received other. Huffington v. Upchurch, 532 S.W.2d ment personally. question for There is no 576 (Tex.1976); Hull, Fitz-Gerald v. 150 that were public accounting those services 39, 237 Tex. (1951). S.W.2d 256 Breaches of testimony per- services. His later that he a partner’s duty not to compete with the services, effect, hours, formed these after partnership are compensable by at law partner- or in addition to his duties to the awarding injured to the partners pro their ship, light obliga- is of no value in portionate shares of the profits wrongfully imposed tions partnership agreement acquired by the offending partner. Huff understanding and the common ington Upchurch, supra. term “competition.” It is undisputed partner that while a (B) The Issue 7 part Special second of Paul G. Company, Veale and Rose ren asked whether Rose “failed to bill Tex-Pack dered accounting Right services for Away Express for Paul Veale em- Company Foods for which he pay billed and received ployee time ren- computer time used to ment It personally. undisputed is also that services to Tex-Pack Express der The [?].” the partnership did not share pro jury’s question neg- answer to this was also ceeds of these private billings. It was es ative. tablished that Rose an was officer and misappropriation by partner shareholder in The one Right Away, but that compensation to his property, partner Rose received own use of for his account ship services was not in law capaci received in that considered as constructive if ty. There testimony was some not actual partnership, from fraud and is the jury could have Jewell, inferred that the work actionable. Jewell v. See which Rose did for Right Away (Tex.Civ.App. Foods — Texarkana Bolin, Smith v. 261 S.W.2d 352 for the partnership’s billings. The appel- (Tex.Civ.App. 1953), Worth aff’d in lants failed billings to establish — Fort part, rev’d in part grounds, 153 Right Away did not cover Foods the time Tex. (Tex.1954). 271 S.W.2d 93 expended by secretary Rose’s on Right Away correspondence. jury’s The negative Again, replete the record is with Rose’s 3(e) Special answer in part Issue No. admissions that he had used employee and with respect companies to all three is not so computer time and had billed Tex-Pack against weight great preponder- Express for their explana- services. His ance of so manifestly the evidence as to be tions and his assertions that action in not unjust. billing Tex-Pack was Express done with the knowledge and Veale, consent Paul G. Our determination that re- jury’s effect, are Sr. also of no as far as this issue sponses parts to the first two seventh

is concerned. special weight issue great (C) inquiry Special evidence, third preponderance Issue 7 and and in- was whether Rose Paul used G. Veale and contrary deed in respects completely some Company employees to render secretarial evidence, necessitate that we reverse services, without charge, Tex-Pack Ex- Broadcasters, Cameo press, or Right Away nothing their take coun- Foods. Rose testified that some of the time terclaim. spent by Paul G. Veale and Company em- In this there were fact is respect, ployees Express Tex-Pack was billed. *5 existing sues the appellants as to whether This assertion was confirmed by the intro- rights complain waived their to about such duction into evidence some of of the state- matters. Rose has referred us to the record generated. ments not It was shown that of considerable that his former evidence billings these could have not covered all of partners knew of his involvement with the secretarial of which services there was Right Away Payne, Ed as well as Foods and secretary part- evidence that Rose’s at the partnership to his use of assets on behalf of nership performed special services on behalf they Tex-Pack and that never Express, of Tex-Pack. complained them. According about to Broadcasters, Concerning Cameo there Rose, tacit agreement there was at least or was evidence in that during the record the acquiescence partners all the to his ac by period question, in that Cameo Broadcasters tions in He evi these matters. also cited paid to Paul G. Veale and a re- Company personal partnership dence of of assets use tainer of per Rose $250.00 month. testified which, if partners by believed the the spent by secretary time his jury, an issue of support estoppel. could behalf of Cameo was covered the retain- However, were not cover- these defenses er. There was no to contrary. evidence the ed but rather were by Special Issue No. The only evidence of Rose’s use of jury reserved for which the did later issues partnership Right secretarial time on Away negative not their answer answer because (7c3) Foods was testimony the of his secre Also, to all No. 7. there Special of Issue tary that she had approximately “fifty on these Be- contrary was issues. evidence Right sheets” of Away Foods stationery in provided by cause been the no answers have her desk on which had occasionally she or court on Rose’s defen- jury by the trial some typed correspondence. The secretary issues, this sive Court is in no and because not could state her time whether was billed answers, we position to such must supply Right Away to It was Foods. established the case for a new aspect remand this of that, during time, period that same of Paul trial. Veale Right billed Company Away Foods and us a number of compensation Appellants bring points received for to sub stantial of error Rose’s successful claim accounting relating amounts of and staff to prejudgment damages time. Rose had for interest as personal responsibility the under equitable the of doctrine for use or detention cause did not have control or use they money. of that. Rose he Phillips See Petroleum Co. the funds after contends that Co., Petroleum did the funds either. Stahl not have (Tex.1978). Appellants challenge the do not response The to the issue was jury’s right damages Rose to recover such or $11,832.94 trial requested by full Rose. The theory under for pled which he them. such sum damages court awarded as They challenge the in the issue form which Rose for the compensate loss of the use was submitted to the evidence jury and the the funds. support answer and the objections to the form of Appellants’ awarded thereon. First, they issue are threefold. contend special appel- issue submitted over court that the trial should have limited objection inquired: lants’ jury to a consideration “What sum of if money, any, paid if now form on those only disputed of interest cash, you do find from a preponderance amounts which were not “tendered” to evidence compensate would fairly registry point or into the the court. This Rose for Mr. loss of use of due funds him appel- involves the same considerations as paid but to him in accordance with challenges sufficiency lants’ terms of the agreement?” partnership jury’s finding sustain the evidence to (Emphasis supplied.) the trial issue and Second, appellants claim the thereon. Rose testified concerning the failing jury court erred in to instruct the he established were due and to him it periods to the time should consider the partnership under agreement and the Third, an making such award. various dates of accrual of the different have maintain that trial court should He presented sums. his calculations of his jury instructed the as to the maximum alleged damages for wrongful use and amount of interest allowed law. detention of his money. a return Applying 15% these amounts from accrual The rationale for cause of action dates, Rose testified that the amount of his wrongful use or detention *6 damages in this regard $11,832.94. was of on the money principle is based the prevention unjust Phillips enrichment. The testimony from the on appellants the Co., su- v. Petroleum Petroleum Co. Stahl was issue to the effect they that had of- pra; Republic National Bank v. Northwest fered Rose the they amounts which did not Bank, (Tex.1979). 578 National dispute Later, were owed on the due dates. is the this theory, Because this and because during suit, the pendency of the these un- ar- remedy, appellants is an the equitable disputed portions were deposited by appel- gue they are not dam- responsible that lants into the registry of court. An the affirmatively ages money they on which the was order obtained by the in of, did not have the use they showed either the which trial court ordered District the Rose because had written checks to they “to Clerk receive said money sums of uncashed, they which he held or because hold said sums of money secure and safe the sums into the registry tendered the during pendency action, of this cause court. and distribute this by said funds as ordered upon court the resolution of cause of that, in correctly points out Rose Appellants action.” argue they should Texas, is defined as “an uncondi “tender” pay not have to interest amounts on these pay obligor tional a debtor or offer did they dispute which not another, realm, sum in coin of the correct they claimed that offered to they had amount than that on a not less in due event, a timely any Rose in fashion. specified obligation.” (Emphasis or debt argue, they they pay should not have v. In supplied.) Baucum Great American 863, York, interest was once money after it surance of New 370 Co. S.W.2d into deposited (Tex.1963); May, court be- French v. 484 registry of the 866 S.W.2d 840 1972, (Tex.Civ.App. Corpus Christi prejudice without to his claim for the bal- —

writ n.r.e.). ref’d An offer to than pay less ance. the sum due is not a legally effective damages To hold due to Rose on

tender. French v. May, supra. Appellants the amounts held in the of the registry could stop the running of interest on court because he did not have use the money owed by tendering incorrect funds would turn his cause of action on this amounts to Rose. issue equitable unjust from an one based on The payment of the sums into regis legal profits. enrichment into a one for lost try of the presents court a different matter. That is not supported by pleadings or The tender of amounts controversy into We, therefore, appel evidence. sustain registry of the court has been held to be objections lants’ first two to the submission effective prevent damages accrual of special damages issue on for the for the use of such funds after the date of appellants’ detention money. of Rose’s such tender. v. Barclay, Carter 476 S.W.2d Appellants’ argument under their third 909 (Tex.Civ.App. no — Amarillo objection to the trial court’s failure to in- Phillips Adams, Petroleum Co. v. 513 F.2d jury struct the as to the maximum interest (5th Cir.1975). Likewise, where law, rate solely upon allowed is based the funds in dispute were shown to have argument points. their under the first two placed been in the hands of an agent escrow They reason that if no interest was due on and so disposal defendant, not at the placed the monies after had been they equitable damages in the prejudg form of court, registry lump sum ment interest were disallowed. Anderson rendered would jury damages Havins, 147 (Tex.Civ.App.— clearly exceed the maximum allowable in- 1980, writ). Amarillo no terest rate in controversy amounts Admittedly, case, in the instant periods question, for the and therefore placed registry the court nothing. should be entitled to were less than the full amount in controver Appellants complaints raised no either at However, sy. this case should not be distin appeal propriety trial or here on as to the guished on ground alone. The recov per upon rate of 15% annum which the ery of interest under the equitable based,1 interest award was and we doctrine has consistently squarely rested express opinion thereon other than to solely on the idea of compensation for sup- state that there was evidence to ample the unauthorized use of money. another’s port Therefore, Phillips such an amount. Petroleum Co. v. Stahl Petroleum Co., 485-88; supra, at the trial court’s which awards Republic National *7 Bank v. Bank, Northwest for “loss of use of funds due supra; National Anderson Havins, agreement v. him supra; partnership Miles under but Royal v. Co., Indemnity (Tex.Civ. paid 589 to him in accordance with its App. Corpus 1979, Christi n.r.e.). necessarily writ ref 'd terms” is reversed because it — It is undisputed Instead, appellants incorrectly did not was calculated. we detain or use the funds they once here for Rose for render deposited with the court. There is of his nothing wrongful for the use and detention in the record to indicate any special money, measured a rate of return 15% conditions were attached to the interest on all funds per simple tenders annum when made to the court’s registry. appel- There is detained and used wrongfully nothing to indicate that Rose demanded use lants. the exact amount due figuring Rose, such sums. petition Rose did not sum calcu- owing such shall be trial court to release the undisputed following monies lated on the formula. that, during period very 1. high The record showed interest rates were and investment of appellants appellee’s money, time that detained funds for return of was reasonable. 15%

841 First, for the amounts money provide for the defense attorney’s fees appellants deposited into the court’s regis- claims, provision and there is no such try, the amount of interest due thereon However, partnership agreement. shall be that which accrued from the dates exception general there is an rule of on which the amounts should have been law for cases in which matters encom paid to Rose to the dates on which the sums passed claim and counterclaim are by the were tendered to the court. indistinguishable, they where arose from transactions,

Second, where the same facts same for the remainder of the funds Rose, owed interest at the the claim are (15% required prosecute required above rate per annum) shall be from paid original against to defend the counterclaim. First due dates under the partnership agreement Wood, Wichita National Bank v. 632 S.W.2d to the date trial court’s judgment, 1982, writ); 210 Worth no (Tex.App. — Fort 8, October 1981. Bain, (Tex.Civ. Wilkins v. 615 314 S.W.2d 1981, App. no Ortiz O.J. Third, for the total of the first and — Dallas Inc., Sons, (Tex. Beck and 611 S.W.2d 860 above, second sums interest shall accrue at 1980, Civ.App. Corpus writ). Christi per rate of 9% annum from the date of — Tucker, See also Williamson v. judgment, 8,1981, S.W.2d October paid until by the appellants (Tex.Civ.App. writ jointly or ref’d severally. — Dallas n.r.e.). Appellants challenge the sufficiency of the evidence on the issue of Rose’s attor- case, In this the claim and counter ney’s fees because the amount of the attor- claim are very closely Though related. ney’s spent time prosecution provisions, based on different the claim and against Rose’s claim the partnership was alleged counterclaim breaches of the same not segregated from the spent time on the Basically, contract. the same facts on defense of the appellants’ counterclaim. It which the their affirma based is not disputed that jury’s finding on tive defenses to Rose’s suit formed the basis attorney’s fees and the judgment of the Therefore, of their counterclaim. Rose’s trial court based thereon were aggre- for an counsel, by necessity, spent no more time gate amount of time spent by Rose’s attor- preparation to defend the counter neys on all the matters connected to the necessary appel claim than was to meet lawsuit. Appellants’ objected counsel primary lant’s defenses to the lawsuit. The the submission of the issue requested two actions are so interrelated that no dis the trial court to disregard the jury’s an- prosecution tinction between the of Rose’s swer to the issue on attorney’s fees on the claim non-segregation and the defense of the counterclaim is grounds. Sons, Inc., necessary. Ortiz v. O.J. Beck & Generally, attorney’s fees are Bain, Therefore, supra; supra. Wilkins v. not recoverable unless the same provided appellant’s complaints attorney’s about the by statute or aby contract between the fees award are overruled. parties. New Compa Amsterdam Casualty portion We affirm that ny Industries, v. Texas Inc., 414 judgment which awarded Rose (Tex.1967); Curtis, Bray v. 544 S.W.2d 816 under established him due (Tex.Civ.App. Corpus Christi writ — agreement and for his at- partnership n.r.e.). ref’d It is conceded that Rose *8 fees as awarded the trial court. torney’s be should entitled to attorney’s fees neces portion judgment We reverse that sary to the prosecution of his claim for an which Rose actual awarded accounting, damages for breach of contract loss of the use of funds due him and render and declaratory relief, all of which were judgment founded with instructions said upon written contract within the meaning of be recalculated parties Tex.Rev.Civ.Stat.Ann. art. 2226 amount (Vernon Supp.1982). Article 2226 does not with the accordance instructions set forth in this opinion.2 We reverse remand and

portion of the trial judgment court’s Texas, TEXARKANA, CITY OF Civil ordered nothing Commission, take Appellant Service and their counterclaim. In respects, Cross-Appellee, all other judgment the trial court is affirmed. Costs are assessed against ap- three-fourths FINCHER, Billy Appellee and pellants and one-fourth against appellee. Cross-Appellant. part; Affirmed in reversed and rendered in No. 9124. part; and reversed and remanded in part. Texas, Appeals

Court of Texarkana. OPINION ON MOTION FOR REHEARING 21, 1983. June Court, This original opinion its filed Aug. Denied 1983. Rehearing 16, 1983, June ordered the parties to recal- culate the amount of actual

dollars cents and that would be owed to

Rose if figured in accordance with this Following

Court’s instructions. the instruc- Court,

tions of this the parties stipu- have

lated that the sum due for actual

damages for loss of the use of funds to Rose $7,276.16. We, in the amount of there-

fore, render in this amount to be

the amount due and owing to Rose as of the

date of the trial judgment.

In respects, all other of this

Court appeared original stands as it in our

opinion.

We carefully have all of appel- considered points,

lee’s and they are overruled. amount, parties copy 2. accountants submit calculations, with its Because all are one correct varying vary- copy because are there due dates and this Court and one to due, such amounts monies but amounts party days date within from the of this parties and dates are well known to all opinion. event the are not case, parties this appellant the Court here orders same, parties try exactly will resolve party appellee each calcu- submitting the the differences before same to owing, late the based exact amount due and this Court. parties this Court’s instructions. The shall

Case Details

Case Name: Veale v. Rose
Court Name: Court of Appeals of Texas
Date Published: Jun 16, 1983
Citation: 657 S.W.2d 834
Docket Number: 13-82-014-CV
Court Abbreviation: Tex. App.
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