Tex-Hio Partnership v. Garner

106 S.W.3d 886, 2003 Tex. App. LEXIS 4514, 2003 WL 21223352
CourtCourt of Appeals of Texas
DecidedMay 28, 2003
DocketNo. 05-02-01186-CV
StatusPublished
Cited by9 cases

This text of 106 S.W.3d 886 (Tex-Hio Partnership v. Garner) 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
Tex-Hio Partnership v. Garner, 106 S.W.3d 886, 2003 Tex. App. LEXIS 4514, 2003 WL 21223352 (Tex. Ct. App. 2003).

Opinion

OPINION

Opinion by

Justice LANG.

The Tex-Hio Energy Partnership (Tex-Hio) brought suit against one of its partners, Ted E. Garner, appellee, for his share of the partnership’s losses after the dissolution of the partnership. Appellee defended claiming he was not liable for any of the amounts claimed as losses since the partners did not comply with the partnership agreement by making written agreements authorizing expenditures in excess of $10,000. Tex-Hio filed a supplemental petition adding the individual partners, Dry, Emmett, and Fieldsmith, as plaintiffs and claiming any requirement for written authorization was waived by appel-lee.

[888]*888A jury answered questions adversely to plaintiffs. The Plaintiffs’ Motion for Judgment Notwithstanding the Verdict (appellants’ motion) was overruled by the court. Then, the court entered judgment in favor of appellee that plaintiffs Tex-Hio, Dry, Emmett, and Fieldsmith take nothing. Only Dry and Emmett,2 appellants herein, filed briefs in this appeal and claim in a single issue that the trial court erred by entering judgment in favor of appellee. We are requested by appellants to reverse and render judgment in their favor and against appellee, for a total of $37,250 to be apportioned to Emmett in the amount of $28,625 and to Dry in the amount of $8,625.

Appellee claims in two responsive issues that this court has no jurisdiction over appellants’ appeal or over any claim of Fieldsmith. In two other responsive issues, appellee argues appellants cannot establish, as a matter of law, any right to recovery or damages. For the reasons that follow, we resolve appellee’s jurisdictional issues against him. Finally, we need not address appellee’s issues numbers three and four regarding appellants’ right to recover or prove damages because we resolve appellants’ issue against them and affirm the trial court’s judgment.

1. Factual and Procedural Background

Dry, Emmett, Fieldsmith, and Garner formed the Tex-Hio Energy Partnership for the purpose of acquiring and operating oil and gas income producing property, particularly an existing field located in Ohio. Each partner contributed $100,000 as his initial investment in the partnership. As provided by section 5 of the partnership agreement, signed April 2, 1986, all of the partners, jointly and individually, executed a promissory note in the amount of $650,000, payable to the order of First City Bank of Farmers Branch, Texas. The purpose of the loan was to finance part of the purchase price of the Ohio oil and gas properties. The partnership agreement provided in section 8 that “[a]ny net profits or losses that may accrue to the Partnership shall be distributed to or [be] borne by the Partners in equal proportions.” The partners were unable to keep the field going and eventually the partnership ceased operations and wound up its affairs.

Tex-Hio filed suit against appellee, alleging that the partnership had been dissolved, was in the process of being wound up, and that it had suffered a loss of approximately $167,302.97 per partner. Initially, Tex-Hio sought to recover $67,302.97 from appellee, to be credited to the other three partners. It was claimed that Dry, Emmett and Fieldsmith bore a disproportionate share of the losses of Tex-Hio because of additional or “other” advances of funds each of them made for the partnership. Tex-Hio’s legal premise was that Texas partnership law requires, upon dissolution, that losses are to be shared by the partners in the same proportions that they shared profits.3 Tex-Hio further alleged that the exact amount of the partnership’s losses needed to be determined and sought both an accounting to determine the amount of the losses and a judgment against Garner for his share of that amount.

[889]*889Appellee filed a general denial and later a motion for summary judgment. The motion for summary judgment was not made a part of this record. However, plaintiffs’ responsive pleading indicates that appellee claimed in the motion that he was not liable for any of the sums claimed to have been expended by the other partners because the partners made no agreements in writing authorizing the expenditures. Specifically, appellee claimed that the partnership agreement requires obligations in excess of $10,000 to be authorized in writing by all of the partners. In response to appellee’s motion for summary judgment, Tex-Hio, Dry, Emmett, and Fieldsmith filed Plaintiffs’ First Supplemental Petition, describing themselves collectively as plaintiffs. In the First Supplemental Petition, plaintiffs argued, among other points, that appellee had waived any right to complain about non-compliance with the written consent requirement for obligations in excess of $10,000.

The “written consent” requirement is contained in section 14 of the partnership agreement. It provides:

[N]o partner shall incur any obligations in the name or on the credit of the Partnership exceeding Ten Thousand Dollars ($10,000.00) without the express written consent of the Partner or Partners. Any obligation incurred in violation of this provision shall be charged to and collected from the individual Partner incurring such obligation.

The case was tried to a jury and submitted on questions regarding whether, after entering into the written partnership agreement, the partners agreed to “new terms.” These “new terms” included: 1) an agreement to pay Fieldsmith a management fee, and 2) an agreement that all of the partners would be responsible for “other advances referred to during trial.”

The term “other advances referred to during trial,” used in the jury question was not defined. Having submitted the question for the charge, appellants made no objection. The jury answered that there was no agreement to either of the alleged “new terms.”

Tex-Hio, Dry, Emmett, and Fieldsmith filed the appellants’ motion and appellee filed a motion for judgment based on the .jury verdict. In their motion, appellants argued, for the first time, that advances made by appellants to reduce the $650,000 promissory note were not advances within the meaning of section 14 of the partnership agreement since the promissory note was expressly authorized in the partnership agreement. Further, appellants claimed that, as a matter of law, they were entitled to have these advances included in the final adjustment of accounts among the partners. The court denied appellants’ motion and granted appellee’s motion for judgment on the verdict.

Appellee’s counsel submitted a proposed judgment to the court which named only Tex-Hio and appellee as parties. During the hearing on appellee’s motion for judg-. ment, after the court ruled, appellants’ counsel requested that appellants’ names be interlined, in handwriting, on the proposed judgment because they intended to be bound by the judgment. Based upon the representation, on the record, that appellants would be bound by the judgment, appellee’s counsel agreed to the modification of the judgment, adding their names and Fieldsmith’s 4 name. The court signed the modified judgment.

2. Appellate Issues

[890]*890Appellants frame the issue on appeal as “Whether the trial court erred in signing a judgment that appellants recover nothing from Garner?” In three subsidiary issues appellants argue:

A.

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Cite This Page — Counsel Stack

Bluebook (online)
106 S.W.3d 886, 2003 Tex. App. LEXIS 4514, 2003 WL 21223352, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tex-hio-partnership-v-garner-texapp-2003.