Opinion ID: 2459188
Heading Depth: 1
Heading Rank: 3

Heading: the order for retrial

Text: We now come to the reason for which the applications were granted in this case, which is the City's contention that the judgment should have been rendered by the Court of Civil Appeals without ordering a remand of the case. The only purpose for returning to the trial court is to determine what, if any, offset should be allowed on the liability of Rattikin and Pippen by reason of work that was performed for the benefit of the City with the funds placed in Hall's hands. The City contends that if any offset should have been made (which it denies), the burden of proof was on the defendants, and no cause is shown for giving them a second chance. To understand the problem we should look again at the evidence. Construction was required in connection with some of these transactions, and Hall padded the construction costs in the same way that he padded the purchase price on other transactions. For example, Mrs. N. K. Reed testified that her deal with Hall was for the payment to her of $1,240.00 for the land and for the City to move her house. The house was moved by Kuykendall Lumber Company, which was paid $4,297.00 after presenting to Rattikin a signed statement by Mrs. Reed saying that the work had been completed satisfactorily. However, there was an additional check for $1,000.00 made payable to J. & H. Construction Company which was traced to Hall's personal account, and it is this $1,000.00 which the jury has found to have been converted by Hall. Similarly, C. O. Stephens testified that his trade was for a payment of $820 and relocation of his house. Kuykendall Lumber Company moved the house and Stephens signed a letter to Rattikin advising that the work had been completed satisfactorily. Kuykendall was paid $6,815.93 by Rattikin check. Previously, a check to J. & K. Construction Co. had been issued for $6,000; but to make up the amount needed for the Kuykendall check, Hall gave his personal check to Rattikin for $5,459.90. [1] Hall retained an excess inasmuch as the City had given Rattikin $8,176.23 for the trade, though the landowner and Kuykendall received a total of only $7,636.13. One of the most revealing transactions was that with F. M. Marsh. The City placed $10,325 in the hands of Rattikin for relocation of residence etc. The trade was closed with the seller on December 22, 1960, when the deed was executed and the seller was paid $1,243 for shrubs etc. Beginning with a small check on the following day, five checks were made by Rattikin to J. & H. Construction Co. over the next year totalling $8,100. On January 3, 1962, with a balance in this particular account of $872, Pippen wrote the First National Bank of Handley to certify that Rattikin was holding $7,745 for payment to Kuykendall Lumber Company when work on this Marsh house was completed. On February 2 Marsh signed a letter of satisfactory completion. On the following day Hall gave his personal check for $7,013 to Rattikin, so that Kuykendall and the named bank could be paid $7,745 on February 5. After studying this record, we can understand why the jury found that Hall acquired these checks for his own personal use. However, there are six checks which he received in the closing of four transactions (C. W. Porter, H. E. Barham, John W. Fox, and Leonard Arnold) about which there is more uncertainty. The City files contain considerable indication that houses were moved, but no mover was paid unless Hall did the moving or paid whomever did it. Very little land was acquired, and the value of the title policy was only a small part of the consideration. However, there is no testimony as to what actually existed on these tracts or what happened there. There is no reference to construction on the seller's closing statements and no certificate by any of them to Rattikin that work on their property was satisfactorily completed. None of these particular landowners testified at the trial. We have only the files and the proof as to the checks which Hall deposited in his personal accounts. The seller signed nothing indicating the relocation of improvements, and the City has proved the contents of its own files to be suspect. The jury found that the full amount of each of these checks was converted by Hall to his own personal use and benefit. Rattikin and Pippen now say that they can prove that substantial work was done in this connection which was a benefit to the City and for which the City should not recover. Both Hall and Rattikin owed fiduciary duty to the City. Hall was not entitled to any personal gain from whatever he did with these funds. [2] When the City proved a breach of duty on the part of these fiduciaries and the amount of the money that went to Hall, the City made its case. Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 160 S.W.2d 509 (1942). The burden then fell on Pippen and Rattikin to show any benefit received by the City which should be offset against its recovery, Wichita Royalty Co. v. City National Bank of Wichita Falls, 127 Tex. 158, 89 S.W.2d 394 (1935); International Bankers Life Insurance Company v. Holloway, 368 S.W.2d 567 (Tex.Sup.1963); Meyers v. Baylor University, 6 S.W.2d 393 (Tex.Civ. App.1928, writ ref'd). Having failed to make this proof at the trial, or to request special issues and obtain findings thereon, Pippen and Rattikin waived this matter. Neither did they raise cross-points in the Court of Civil Appeals under Rule 324, but then they were denied no opportunity in this respect by the trial court and had no error about which to complain. It wasM only after the Court of Civil Appeals rendered judgment against them that they sought, in their motion for rehearing, a new trial so that an offset might be applied against their liability. Under these circumstances they have no basis to claim a right to a new trial.