Court Opinion

ID: 9763273
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:39:54.575692+00
Date Added: 2024-06-11T07:29:40.306761
License: Public Domain

WALLACE, Justice,
dissenting.
I respectfully dissent.
On April 6, 1972, the Articles of Partnership of Gene Henshaw and Associates were executed. The partners were two individuals, Gene Henshaw and Louis Kroenecke.
On October 15, 1974, the 1972 Articles were amended to permit Henshaw and Kroenecke individually to transfer their respective interests in the partnership to separate, newly formed corporations totally owned by each of them. That amendment provided that it would not cause any of the provisions of the Articles of Partnership dated April 6, 1972, to become inoperative or terminate in any way.
Had nothing more been done, the 1972 partnership would have remained in effect as per the amendment. However, on the same date, October 15, 1974, the two new corporations entered into a separate second partnership as evidenced by the Articles of Partnership of Henshaw, Kroenecke & Associates. The new partnership was funded by a transfer of the assets of the old partnership to the new one and commenced operations on November 1, 1974. This new partnership did business until September 1, 1976.
Article 16 of the agreement provides:
COVENANT NOT TO COMPETE
All employees of each partner will be required to execute a covenant not to compete with the partnership in the form attached hereto as Exhibit A.
Though the form was attached to the Articles of Partnership, it was never in fact executed by either Kroenecke, Henshaw, or the respective corporate partners.
The only logical inferences to be drawn from these facts is that on November 1, 1974, the assets of Gene Henshaw and Associates, the 1972 Partnership, were transferred to Henshaw, Kroenecke & Associates, the 1974 Partnership composed of two corporations, and that the 1972 Partnership became dormant.
We are thus faced with the question of whether, under the 1974 Articles, there is a binding covenant not to compete which will support a judgment for Henshaw. The answer is the covenant is not legally binding on either Kroenecke or Henshaw because it was not executed as required by the Articles. This is simply an application of the basic law of contracts that agreements lacking the element of acceptance are unformed and thus unenforceable as binding contracts. See, e.g., Hutton v. Methodist Home, 615 S.W.2d 289, 292 (Tex.Civ.App.-Fort Worth 1981, ref’d n.r.e.).
Each of the agreements is divided into separate sections entitled articles. Each contains 17 separate articles covering identical subjects with one exception. The articles in both agreements use identical or very similar wording. The only wording in the 1974 agreement which refers to the 1972 agreement is Article 17 which states:
This agreement does not alter or amend those Articles of Partnership between *421L.E. “Gene” Henshaw and Louis Kroe-necke dated April 6, 1972 as amended.
Nowhere in the 1974 agreement is there any wording whatsoever which remotely suggests that the corporate partners were attempting to integrate the 1972 agreement into the 1974 agreement. Further, there are no pleadings or any other suggestions by Henshaw that integration of the two agreements was even considered or discussed. In fact, Henshaw predicated his jury submission on the 1972 agreement, not an integration of the 1974 agreement. At most, the above quoted Article 17 of the 1974 agreement suggests that the corporate partners were agreeing that the partnership of Henshaw & Associates would remain a paper shell since it had no assets.
An integration of two or more separate writings is permissible only where it is shown that such was clearly the intent of the parties or when a writing under scrutiny is ambiguous and it is necessary to refer to the other writing to clear up the ambiguity. The 1974 agreement is clear and unambiguous; neither party suggests otherwise. Thus the intent of the parties is clearly expressed in the 1974 agreement itself.
There is no basis on which the majority can validly base its findings of integration of the two contracts. Without integration the 1974 contract, sans a covenant not to compete, will not support the holding of the majority.
I would affirm the judgment of the court of appeals.
KILGARLIN, J., joins in this dissent.