Court Opinion

ID: 2858074
Source: CourtListenerOpinion
Date Created: 2015-09-05 18:56:06.360059+00
Date Added: 2024-06-11T10:05:40.804098
License: Public Domain

626jv                                                               

IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,

AT AUSTIN

 

NO. 3-92-638-CV

626 JOINT VENTURE d/b/a CEDAR CANYON RANCH,
CHARLES STEGER, JOHN GANTT, AND JIM CASKEY,

	APPELLANTS

vs.

JAMES H. SPINKS AND CLAUDETTE L. SPINKS,

	APPELLEES

 

FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 368TH JUDICIAL DISTRICT

NO. 90-285-C368, HONORABLE BURT CARNES, JUDGE PRESIDING

 

	James H. Spinks and Claudette L. Spinks, appellees, brought suit against 626 Joint
Venture d/b/a Cedar Canyon Ranch, Charles Steger, John Gantt, and Jim Caskey (collectively,
"defendants"), appellants, for a debt allegedly owed to the Spinkses.  Trial was to a jury, which
found that (1) Steger, Gantt, Caskey, and Don Bizzell were partners; (1) (2) the partnership's agent,
Bizzell, signed a note and deed of trust on behalf of the partnership; and (3) the partnership
agreed, through its agent, to pay the indebtedness to the Spinkses.  Based on these findings, the
trial court rendered judgment for the Spinkses.
	Defendants bring four points of error.  They assert that (1) as a matter of law,
defendants are not liable for the indebtedness evidenced by the note because the note does not bear
any of their names; (2) there is no evidence, or alternatively insufficient evidence, to sustain the
jury's finding that the agent signed the note and deed of trust on behalf of the partnership; (3)
there is no evidence, or alternatively insufficient evidence, to sustain the jury's finding that the
partnership agreed, through its agent, to pay the indebtedness evidenced by the note; and (4) there
was no evidence to support the jury instruction on ratification.  We will affirm the trial court's
judgment.

FACTUAL AND PROCEDURAL BACKGROUND
	The Spinkses owned 626 acres of land in Lampasas County known as Cedar
Canyon Ranch.  In 1985 they listed the land for sale with a real estate agent.  The realtor told
them a group of businessmen were interested in purchasing the property.  In touring the property,
Gantt and Caskey introduced themselves to the Spinkses as two of the people who were going to
buy the land.  A short time later, the Spinkses entered into a contract for the sale of the land with
"Don Bizzell, Trustee."  The Spinkses believed Bizzell signed the contract on behalf of the group,
and was not signing the contract as an individual.  Bizzell testified that he entered into the contract
for the group.
	On the date of closing, the group had not yet executed any formal written joint
venture agreement, and apparently the venture did not yet have a name.  The Spinkses deeded the
property to "Don Bizzell, Trustee" in exchange for $300,000 cash, a note for $445,000, and a
deed of trust covering 446 of the 626 acres.  The note and deed of trust were executed by "Don
Bizzell, Trustee."  None of the documents reflected for whom Bizzell was acting as trustee.
	Some months after closing, Bizzell, Steger, Gantt, and Caskey executed a written
joint venture agreement to form the "626 Joint Venture."  The agreement was made effective as
of the date of the sale of the property.  Over the next three years, the joint venture actively
managed the property, including paying taxes, making permanent improvements, imposing
restrictive covenants, listing it as a partnership asset on tax returns, and making payments to the
Spinkses.
	In 1989 Bizzell informed the Spinkses by letter that the next payment due under the
note would not be made.  Bizzell signed the letter as Trustee for "626 Joint Venture d/b/a Cedar
Canyon Ranch."  After the note went into default, the Spinkses foreclosed on the property and
later brought this suit to recover the deficiency balance.

DISCUSSION
	The Spinkses asserted several causes of action in their suit.  They alleged that the
joint venture and its individual venturers were liable for the deficiency balance both on the note
and on the underlying transaction for the sale of land.  In their first and third points of error,
defendants assert that they are not liable because neither the joint venture's name nor the
individual venturers' names are on the note.  See Tex. Bus. & Com. Code Ann. § 3.401(a) (West
1968).  Defendants argue that if they are not liable on the note, they likewise cannot be liable on
the underlying transaction.  They also contend that any evidence that the joint venture agreed to
pay the debt was barred (1) by the parol evidence rule because it contradicts the note of which
only "Bizzell, Trustee" was maker and (2) by the statute of frauds because it was not in writing.
	In deciding a no-evidence point, we must consider only the evidence and inferences
tending to support the finding of the trier of fact and disregard all evidence and inferences to the
contrary.  Alm v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex. 1986), cert. denied, 498
U.S. 847 (1990); Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965); see generally William
Powers, Jr. & Jack Ratliff, Another Look at "No Evidence" and "Insufficient Evidence," 69 Tex.
L. Rev. 515 (1991).
	When reviewing a jury verdict to determine the factual sufficiency of the evidence,
we must consider and weigh all the evidence and should set aside the judgment only if it is so
contrary to the overwhelming weight of the evidence as to be clearly wrong and unjust.  Cain v.
Bain, 709 S.W.2d 175, 176 (Tex. 1986); In re King's Estate, 244 S.W.2d 660, 661 (Tex. 1951);
see also Pool v. Ford Motor Co., 715 S.W.2d 629 (Tex. 1986); see generally Powers & Ratliff,
supra.
	Steger, Gantt, and Caskey testified that they authorized Bizzell to purchase the land
in Bizzell's name as trustee for the group.  Bizzell was authorized to pay $300,000 to the Spinkses
and execute, as trustee, a note for $445,000.  Steger, Gantt, and Caskey testified that they
intended for the obligation to be "non-recourse."  They meant for the note to be an obligation of
the group, but not the individual members of the group.  They apparently believed that as long
as Bizzell executed the note as "trustee," they would not incur personal liability on the debt.
	Defendants contend first that any evidence that the joint venture agreed to pay the
debt was barred by the parol evidence rule.  We disagree.  Where suit is brought on the
underlying transaction rather than the note itself, the parol evidence rule is inapplicable.  National
Mar-Kit, Inc. v. Forrest, 687 S.W.2d 457, 459 (Tex. App.Houston [14th Dist.] 1985, no writ). 
Moreover, even when the parol evidence rule applies, it only excludes evidence that varies the
terms of an unambiguous contract.  Denman v. Hall, 193 S.W.2d 515 (Tex. 1946); Lassiter v.
Rotogravure Comm., Inc., 727 S.W.2d 8 (Tex. App.Dallas 1986, writ ref'd n.r.e.).  The rule
does not exclude evidence offered to clarify or explain an ambiguous writing.  Lassiter, 727
S.W.2d at 9; Byrd v. Southwest Multi-Copy, Inc., 693 S.W.2d 704 (Tex. App.Houston [14th
Dist.] 1985, no writ).  In the present case, the references in the note and other sale documents to
"Don Bizzell, Trustee" are ambiguous. (2)  They show that the note was signed by Bizzell in a
representative capacity, but do not show for whom he was acting.  Accordingly, evidence showing
that Bizzell was acting as a representative of the joint venture was admissible.
	We also disagree with defendants' contention that any liability based on the
underlying indebtedness is barred by the statute of frauds.  The statute of frauds provides that
certain types of promises and agreements, including contracts for the sale of real estate, are
unenforceable unless in writing and signed by the person to be charged or by someone lawfully
authorized to sign for him.  See Tex. Bus. & Com. Code Ann. § 26.01 (West 1987).  However,
where one party to a contract has fully performed his obligations under it, the statute of frauds
is unavailable to the other who knowingly accepts benefits and partly performs.  Estate of Kaiser
v. Gifford, 692 S.W.2d 525, 526 (Tex. App.Houston [1st Dist.] 1985, writ ref'd n.r.e.); LeSage
v. Dunaway, 195 S.W.2d 729, 731 (Tex. Civ. App.Waco 1946, no writ).  In the present case,
the Spinkses fully performed their part of the transaction by deeding the land to Bizzell as trustee. 
Bizzell paid the Spinkses $300,000 cash, and signed a note for $445,000.  Over the next three
years, the joint venture managed the property, made improvements to the property, and made
payments to the Spinkses.  Therefore, the defense of the statute of frauds is unavailable to
defendants.  We conclude there was legally and factually sufficient evidence for the jury to find
that the joint venture agreed to pay the indebtedness underlying the note.
	Defendants also argue that the absence of their names from the note relieves them
of liability, notwithstanding any agreement to pay for the land.  See Tex. Bus. & Com. Code Ann.
§ 3.401(a) (West 1968) ("No person is liable on an instrument unless his signature appears
thereon.").  We disagree.  Even if the absence of their signatures would prevent defendants from
being liable "on the note," it would not preclude their liability for the underlying indebtedness
assumed when they agreed to buy the land:  "Nothing in this section is intended to prevent any
liability arising apart from the instrument itself.  The party who does not sign may still be liable
on the original obligation for which the instrument was given . . . ."  Tex. Bus. & Com. Code
Ann. art. 3.401 cmt. 1 (West 1968).  The Spinkses' pleadings clearly reflect that they brought suit
both on the note and on the original indebtedness.  Under these circumstances, section 3.401 does
not relieve defendants of liability.
	A joint venture is generally governed by the same legal rules as a partnership. 
Pardco v. Spinks, 836 S.W.2d 649, 651 (Tex. App.El Paso 1992, writ denied); Woodrum v.
Cowan, 468 S.W.2d 592, 598-99 (Tex. Civ. App.Austin), modified on other grounds, 472
S.W.2d 749 (Tex. 1971).  It is, of course, settled law that "[a]ll partners are liable jointly and
severally for all debts and obligations of the partnership."  Tex. Rev. Civ. Stat. Ann. art. 6132b,
§ 15(1) (West 1970 & Supp. 1994).  Therefore, the jury's finding that the joint venture agreed
to pay the indebtedness establishes not only the joint venture's liability, but also that of the
individual venturers.
	We overrule points of error one and three.  Because the jury's finding challenged
by these points of error will support the judgment, we need not address the remaining points of
error.

CONCLUSION
	We affirm the trial court's judgment.

  					J. Woodfin Jones, Justice
Before Justices Powers, Jones and Kidd
Affirmed
Filed:   December 29, 1993
Publish
1.        Bizzell was initially named as a defendant, but apparently was dropped from the
lawsuit after he filed bankruptcy.
2.        This case is distinguishable from Vector Corp. v. First State Bank & Trust Co., 430
S.W.2d 536 (Tex. Civ. App.Waco 1968, writ ref'd n.r.e.), on which defendants rely.  The
Vector court held that there was no ambiguity in a note signed by an agent "individually and as
Trustee."  Id. at 538.  The evidence in Vector was undisputed, however, that the Bank relied
on the agent personally to pay the note.  Id.  The court held that because the principal was
disclosed and the agent was bound, the Bank elected to look to the agent, and the principal was
not liable.  Id.  However, Vector involved a suit on a note, not on the underlying transaction. 
Id. at 537.  In addition, the evidence in the present case showed that both the Spinkses and
defendants believed the debt was an obligation of the joint venture and not solely of Bizzell. 
Finally, while in Vector the agent was individually liable on the note, the agent in the present
case, Bizzell, who signed the note only as trustee, may not be liable on the note.  See Bradford
v. McElroy, 746 S.W.2d 294 (Tex. App.Austin 1988, no writ).