Phelan v. Settle

438 S.W.2d 377
CourtCourt of Appeals of Texas
DecidedJanuary 27, 1969
Docket7901
StatusPublished
Cited by4 cases

This text of 438 S.W.2d 377 (Phelan v. Settle) 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
Phelan v. Settle, 438 S.W.2d 377 (Tex. Ct. App. 1969).

Opinion

NORTHCUTT, Justice.

On May 11, 1964, the First National Bank of Levelland, Texas and Marilyn Guetersloh Phelan, as Trustees under Trust Agreément with M. F. Guetersloh and wife, Emma Guetersloh, as sellers, and Oby D. Scott, as purchaser, made and entered into a contract of sale in which sellers contracted to sell a labor of land to the purchaser and the purchaser agreed to buy. The Trust instrument is not shown and we are not informed of its contents. The consideration agreed to be paid for the land was the total sum of $97,405.00 payable as follows: $20,000.00 cash down payment and $77,405.00 payable in 20 equal annual installments of $3,870.25 plus accrued interest. On May 25, 1964, these same parties, except the party signing for the bank as Trustees, entered into a supplemental contract as follows:

“To be attached to Contract between the undersigned parties dated May 14, 1964.
Whereas, Parties hereto have on May 14, 1964 entered into a contract for the sale and purchase of certain lands described in such contract, do further agree, as a part of the consideration of such contract as follows:
That in consideration of $10.00 paid to purchaser by Seller, and for the convey- *379 anee of said lands described in said contract between the parties hereto, Purchaser herewith deposits the sum of $20,000.00 with Harold Phelan, who has agreed to and shall, if Sellers perform or are made to perform this contract or if purchaser alone defaults, pay such sum to the sellers as a part of the purchase money for such land, but otherwise return the same to purchaser.
In the event that this contract is not performed by purchaser, he being in default, and sellers not being in default, sellers shall have the right to be paid the cash payment above described as damages, such sum being agreed upon as liquidated damages because of the inconvenience of ascertaining the actual damages and the uncertainty thereof; and no other damages, rights, or remedies shall in any case be collectable, enforceable, or available to sellers than in this paragraph defined, but sellers shall be duty-bound to accept and take the said cash payment as their total damages and relief.”

On March 31, 1965, Oby D. Scott transferred all of his interest in said contract and supplement above set out to W. T. Settle.

On May 11, 1964, Oby D. Scott and M. F. Guetersloh made and entered into a construction contract whereby Scott agreed to build a gin for Guetersloh for the total consideration of $114,719.44, said consideration to be paid as follows:

“Article 4. Progress Payments — The Owner shall make payments on account of the contract, upon requisition by the Contractor, as follows: Seventy-five per cent of invoice prices as delivered and constructed on the premises.
Article 5. Acceptance and Final Payment — Final payment shall be due Ten (10) days after completion of the work, provided the contract be then fully performed subject to the provisions of Article 13 of the General Conditions.”
Article 13 reads as follows:
“Article 13. Liens — The final payment shall not be due until the Contractor has delivered to the Owner a complete release of all liens arising out of this contract, or receipts in full covering all labor and materials for which a lien could be filed, or a bond satisfactory to the Owner indemnifying him against any lien.”

M. F. Guetersloh testified he gave the check here in question for the amount of $20,000.00 as a down payment on the contract for the building of the gin here involved. Instead of depositing the $20,000.-00 with Harold Phelan, as specified in the supplemental contract, Scott endorsed the $20,000.00 check given to him by Gueter-sloh as down payment on the gin contract, and delivered it to Phelan as a down payment to be applied on the purchase of the land, and escrow amount of $20,000.00 under the supplemental contract of sale. Phelan did not cash the check but kept the same and after the suit was filed he delivered the check to the District Clerk. The clerk deposited the check for “deposit only” but Guetersloh had stopped payment of the check on 2-11-66 and the check has never been paid.

W. T. Settle brought this suit, as plaintiff, against Harold Phelan, Marilyn G. Phelan, as Trustee under a Trust Agreement with M. F. Guetersloh and wife, Emma Guetersloh and the Trust as defendants to recover under the contract and supplement of sale of the land in question that was transferred to him by Oby D. Scott.

The plaintiff alleged, among other allegations, M. F. Guetersloh was the agent, or apparent agent, or agent by estoppel of the Trustees, Marilyn Guetersloh Phelan, Harold Phelan and/or Trust and Trust Agreement with M. F. Guetersloh and wife, Emma Guetersloh, and caused the plaintiff to rely upon his statements as representing he was acting for and upon behalf of the defendants, and that he was acting with express authority and/or im *380 plied authority for the defendants. Plaintiff further contends the sale as provided by the contract and supplement was never completed because of there being a lien against the land, together with other land, which was in excess of the price the plaintiff was paying for the land here involved, and that defendants were unable to secure a release of such indebtedness and thereby were unable to deliver a clear title to the land, further contending defendants required that plaintiff secure such release. The plaintiff then alleges his right to recover the $20,000.00 under the check and unlawful stoppage by M. F. Guetersloh of payment of said check.

The case was tried to a jury upon special issues. In answer to the special issues the jury found as follows:

“No. 1 — that Mr. M. F. Guetersloh on or about May 1, 1965, had the implied authority to act for the Trust and/or trustee;
No. 2 — that Mr. M. F. Guetersloh on or about May 1, 1965, had the apparent authority to act for the Trust and/or Trustee;
No. 3 — that on or about May 1, 1965, when W. T. Settle talked with M. F. Guetersloh, Sr., that W. T. Settle, believed that M. F. Guetersloh, Sr., had the authority to speak for the Trust in question;
No. 4 — that M. F. Guetersloh, Sr., told W. T. Settle that he (Settle) would have to obtain the Release of the lien from Kansas Life Insurance Co.;
No. 5 — that W. T. Settle relied upon what M. F. Guetersloh told W. T. Settle that he (Settle) would have to obtain a Release of the lien from Kansas City Life Insurance Co.;
No. 6 — that the Trust, being the M. F. Guetersloh and Emma Guetersloh Trust, dated October 14, 1961, was willing to accept W. T. Settle as the Purchaser on or about May 1, 1965, under the terms of the purchase;
No. 7 — that the M. F. Guetersloh and wife, Emma Guetersloh Trust, dated October 14, 1961, upon being willing to accept W. T. Settle as the Purchaser on or about May 1, 1965, under the terms of the Purchase, did not thereafter secure a Release of the lien held by the Kansas City Life Insurance Co.;
No.

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438 S.W.2d 377, Counsel Stack Legal Research, https://law.counselstack.com/opinion/phelan-v-settle-texapp-1969.