Marchman v. McCoy Hotel Operating Co.

21 S.W.2d 552, 1929 Tex. App. LEXIS 1060
CourtCourt of Appeals of Texas
DecidedJuly 13, 1929
DocketNo. 12180.
StatusPublished
Cited by5 cases

This text of 21 S.W.2d 552 (Marchman v. McCoy Hotel Operating Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marchman v. McCoy Hotel Operating Co., 21 S.W.2d 552, 1929 Tex. App. LEXIS 1060 (Tex. Ct. App. 1929).

Opinion

DUNKLIN, J.

O. F. Marchman, plaintiff in the trial court, has appealed from a judgment denying him a right to annul and cancel a lease on what is designated as the Marchman Hotel in the city of Wichita Falls, in a suit instituted by him for that relief against the defendant McCoy Hotel Operating Company, a private corporation chartered under the laws of the state of Texas.

The lease sought to’be canceled was duly executed by the plaintiff and the defendant, through its president and secretary, on September 9, 1926, and it was for a term of ten years. The consideration to be paid was $15,-000 for the first year, $18,000 for the second year, $19,000 for the third year, and $20,200 for each of the remaining seven years; the rentals for each year being payable in equal monthly installments at the beginning of each month. ' The lease also contained a provision giving the lessee - an option to extend the same for an additional period of five years, the consideration for which was to be determined by arbitration, in the event of a failure of the lessor and lessee to agree upon the same. The lease is quite lengthy, containing many covenants to be performed by the lessee. It also contained the following provisions: .

“That in case of default in any of the covenants herein, lessor may enforce the performance of this lease and the compliance of said covenants in any modes provided by law; or he may, at his discretion forfeit this lease in event such default continue for a period of thirty days after the lessor notifies the lessee of such default and his intention to declare the lease forfeited; such notice to be sent by lessor by mail or otherwise to the demised premises; and thereupon (unless the lessee shall have completely removed or cured said default) this lease shall cease and come to an end as if it was the day originally fixed herein for the expiration of the term hereof.
“And the lessor’s agent or attorney shall have the right without further notice or de-mand to re-enter and remove all persons and lessee’s property therefrom without being deemed guilty of any manner of breach of contract, and the said lessor shall have a lien as security for the rent aforesaid upon all goods, wares, chattels, implements, fixtures, furniture, tools and other personal property which are or may be upon the demised premises and used in connection with the hotel husiness.”

As grounds for the cancellation of the lease, plaintiff, the lessor, alleged, in substance, that negotiations were begun with him by A. W. McCoy and his wife, Nina L. McCoy, looking to the leasing of the hotel by plaintiff to them personally, and that, as a result of such negotiations, a written contract was entered into, by the terms of which plaintiff leased the hotel to the two McCoys personally ; that the lease contract so executed was dated August 14, 1926; and was in the same terms as the lease later executed to the defendant corporation on September 9, 1926, with the exception that the McCoys were named as lessors instead of the corporation.

According to further allegations, one of the inducements which led the plaintiff to make that lease was the fact that the McCoys were experienced hotel operatives, and plaintiff relied upon their ability and experience to operate the hotel successfully, and also upon their honesty and integrity. After the execution of said contract to the McCoys personally, the latter applied to the plaintiff for permission to form a corporation to take over the lease as lessee upon the same terms and conditions, which request was granted by the plaintiff. Thereafter the defendant, McCoy Hotel Operating Company, was chartered; Nina L. McCoy becoming the subscriber for all the capital stock save and except five shares subscribed by A. W. McCoy, her husband and one share by W. F. Weeks. The charter was obtained, and the lease in controversy was executed on the date mentioned above, to wit, September 9,1926.

It was alleged that the lease first made to A. W. and Nina L. McCoy was made upon their agreement that they would personally operate the hotel during the life of the lease, and that plaintiff gave his consent to the organization of the corporation and the substitution of it as lessee in place of the McCoys upon the agreement between him and the Mc-Coys that the latter would become the executive officers of the corporation and personally exercise the management, control, and operation of the hotel after the lease was made to the corporation.

Neither the lease to the McCoys personally nor to the corporation contained any provision to the effect that the McCoys should become the executive officers of the corporation and should have the exclusive control and management of the hotel. But, according to allegations in plaintiff’s petition, it was mutually agreed by and between the plaintiff as lessor and the officers of the corporation at the time the lease to the corporation was executed, that such agreement would, be embodied in the lease, that both parties to the instrument signed the same under the belief and understanding that such was one of the terms of the lease, and that that term was omitted from the instrument through mutual mistake of both parties thereto. In his plead- *554 mgs, plaintiff sought a reformation of the lease so as to include and embody therein as one of the covenants on the part of the lessee that A. W. and Nina L. McCoy should be the executive officers of the corporation, vested with the exclusive control and management of* the hotel during the entire life of the lease, and that the lease should .be so construed and enforced as so reformed. It was further alleged that on or about the month of March, 1928, plaintiff was advised that the McCoys had sold their entire holdings in the corporation to another and different persons, to whom the management and control of the hotel had been surrendered; and that by reason thereof plaintiff had the right to declare the lease canceled under and by virtue of the option given him so to do, under the provision in the contract quoted above. There was a further prayer for judgment for the reasonable rental value for the use of the property since March 1, 1928, which plaintiff alleged to be $1,500 a month.

The defendant filed an answer to plaintiff’s petition, embodying general and special exceptions and a general demurrer, and by special pleading to the effect that, if any mistake occurred in the making of the lease contract, it was that of plaintiff alone; that defendant would not have executed the lease had it embodied the agreement alleged in plaintiff’s petition; that “A. W. McCoy and Nina L. McCoy should be the executive officers of said corporation and manage and control said hotel so long as the lease was subsisting,” as pleaded by plaintiff; that, if any such agreement was made or attempted to be made, the same was ultra vires the powers of the corporation and therefore void because in violation of the statutes regarding the ownership of stock in corporations and the attributes and powers of the holders thereof with respect to the election of officers and managers of its business.

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Cite This Page — Counsel Stack

Bluebook (online)
21 S.W.2d 552, 1929 Tex. App. LEXIS 1060, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marchman-v-mccoy-hotel-operating-co-texapp-1929.