eLaws | Code of Federal Regulations | United States Code |
 All Courts
 State Courts
 Court of Appeals of Texas
 2001-01

John Dean v. Max L. Gouverne and Ramakrishna Mulukutla ( 2001 )


Menu:

  • TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN




    NO. 03-00-00144-CV

    John Dean, Appellant

    v.


    Max L. Gouverne and Ramakrishna Mulukutla, Appellees




    FROM THE DISTRICT COURT OF TOM GREEN COUNTY, 119TH JUDICIAL DISTRICT

    NO. B-98-0297-C, HONORABLE BARBARA L. WALTHER, JUDGE PRESIDING

    Appellant John Dean appeals the judgment of the trial court in favor of appellees Dr. Max L. Gouverne and Dr. Ramakrishna Mulukutla (collectively "the doctors") in Dean's suit on a promissory note. The case was tried to the court without a jury, following which the trial court rendered a take-nothing judgment against Dean.(1) Findings of fact and conclusions of law were filed by the trial court. On appeal, Dean asserts that the doctors, as partners in a partnership, agreed to assume the debt of the corporation, which acted as managing partner, and that the partnership agreement was retroactive to the day before the closing on the promissory note. We will affirm the judgment of the trial court.

    FACTUAL AND PROCEDURAL BACKGROUND

    In 1993, Red Line Burgers, Inc. (hereinafter "the Corporation") owned and operated fast-food restaurants in the State of Texas. On September 3, 1993, the Corporation contracted to purchase three drive-through hamburger restaurants, two in San Angelo and one in Abilene, that were owned by Hamburgers Unlimited, Inc., of which John Pearcy was the president. The closing of the sale of these restaurants was on September 28, 1993. At the closing, a note (hereinafter the "Pearcy note") in the amount of $411,951.13 and dated September 17, 1993 was signed by Charles Hatch as president of the Corporation for the purchase of the three restaurants. The payee of this note was Hamburgers Unlimited, Inc.

    Some months after the purchase of the restaurants, the Corporation decided that it needed capital to convert the three restaurants from their previous status as "Short Stop" Restaurants to operate under the name and signage of "Red Line." Because the Corporation needed between $100,000 and $200,000 of additional capital to do that, it formed a partnership known as Red Line/West Texas Joint Venture (hereinafter "the Partnership"). When the Partnership was established, the agreement was that individuals would loan money to the Partnership and that the Corporation would supply, for the use of the Partnership, the three restaurants it had previously purchased with the Pearcy note. The Partnership also agreed that the Corporation would operate the restaurants as managing partner for the Partnership and that the Partnership would share the profits and losses. Dr. Mulukutla loaned $30,000 to the Partnership and Dr. Gouverne loaned $100,000 to the Partnership. There were other doctors involved in funding the Partnership, but they were not parties to this suit. The partnership agreement was signed by the appellees on January 24, 1994.

    The partnership agreement stated that the purpose of the Partnership was to "acquire, develop and operate double drive-through hamburger restaurants in . . . West Texas." In the first paragraph of the agreement, the Corporation was named the managing general partner of the Partnership. Article 8 of the agreement provided that the managing general partner alone had "full, exclusive and complete authority and discretion to manage, control and direct, and shall make all decisions affecting the partnership, the operation of the restaurants . . . except as otherwise stated in this article." (Emphasis added.) The authority of the managing general partner was expressly restricted in section 8.5 of the agreement as follows:

    Without the prior consent of the Non-Managing General Partners . . . the Managing General Partner shall not:

    . . . .

    (g) Pledge, mortgage or otherwise hypothecate any assets of the Partnership as security for any loan to the Partnership without the written consent of the Non-Managing General Partners;

    (h) Enter into any contract or agreement to purchase or sell on behalf of the Partnership any property, except in the ordinary course of business of the Partnership;

    (i) Enter into any contract or agreement to borrow on behalf of the Partnership from any person or entity any funds, except for credit accounts with trade vendors opened in the ordinary course of business of the Partnership;

    (j) Execute and deliver any promissory note, negotiable instrument, assignment, deed, conveyance, pledge, deed of trust, mortgage, security agreement, brokerage or commission agreement, instrument or document of any kind or nature purporting to bind the Partnership; . . .

    (Emphasis added.)

    According to the doctors, the restaurants were purchased by the Corporation and were never transferred to any other entity. The Partnership did not exist when the Corporation purchased the restaurants.

    In January 1995 the partners transferred their interests in the Partnership in exchange for stock in a new corporation, Red Line Burgers, Inc., a Nevada corporation. The operation of the restaurants did not go well, and on August 21, 1995 the Partnership filed a voluntary bankruptcy petition. This was part of a bankruptcy proceeding that was filed by Hatch as president of Red Line Burgers Inc., the managing general partner of the Partnership. The Partnership filed its bankruptcy petition in coordination with a bankruptcy proceeding the Corporation filed for itself and the Corporation's numerous other joint ventures, including the Nevada corporation. In the Partnership's petition, the purpose of the Partnership was listed as "Operates Red Line Burgers Restaurants."

    During this time, Pearcy endorsed the note over to Dean, and Dean foreclosed on the collateral. At the foreclosure sale, Dean bought the Pearcy note. Hatch listed the Pearcy note as a debt in the bankruptcy proceeding, which was extinguished when the bankruptcy plan was confirmed. The Partnership was ultimately dismissed from bankruptcy for various administrative reasons, and a Nunc Pro Tunc Order was entered in the bankruptcy court as to Red Line Burgers Inc.

    Dean appeals the judgment of the trial court by fifteen issues. His general complaints are that (1) the Partnership agreed to assume the debt of Red Line Burgers, Inc. and (2) there was a retroactive creation of an agency for an undisclosed principal. For convenience, the issues will be considered as much as possible in groups with the same general complaint and standard of review.

    STANDARD OF REVIEW

    A trial court's findings of fact are reviewable for legal and factual sufficiency of the evidence by the same standards that are applied in reviewing the legal and factual sufficiency of the evidence to support a jury verdict. Anderson v. City of Seven Points, 806 S.W.2d 791, 794 (Tex. 1991). The standards for review of legal and factual sufficiency are well established. A party attempting to overcome an adverse fact finding as a matter of law must surmount two hurdles. First, the record must be examined for evidence that supports the finding, while ignoring all evidence to the contrary. Second, if there is no evidence to support the finding, the entire record must then be examined to see if the contrary proposition is established as a matter of law. Sterner v. Marathon Oil Co., 767 S.W.2d 686, 690 (Tex. 1989). Therefore, we are to inquire only whether any evidence was presented at trial that tends to support the trial court's finding. When we review an "insufficient evidence" or factual sufficiency challenge, we consider, weigh, and examine all of the evidence, whether it supports or contradicts the trial court's finding. Plas-Tex, Inc. v. U.S. Steel Corp., 772 S.W.2d 442, 445 (Tex. 1989). We will set aside the trial court's judgment only when the evidence standing alone is too weak to support the finding or the finding is so against the overwhelming weight of the evidence that it is manifestly unjust and clearly wrong. Garza v. Alviar, 395 S.W.2d 821, 823 (Tex. 1965).

    DISCUSSION

    Dean argues that the evidence supporting the trial court's findings of fact is legally and factually insufficient. He states that the trial court's decision might have been based on misconceptions of his causes of action and the applicable law. Dean further asserts that the trial court made several findings of "no-evidence" with respect to issues that are not elements of Dean's causes of action. As to his first ground for liability, Dean argues in nine issues that the Partnership agreed to assume the debt of the Pearcy note in order to acquire the ability to make large profits from operating the three restaurants. He argues that the evidence, which includes accounting documents, federal tax returns for 1993-1994, and the voluntary bankruptcy petition, shows that the Partnership, through the acts of its managing partner, agreed to be liable for the indebtedness of the Pearcy note. Dean contends that both he and the doctors agreed that the Partnership intended to acquire the right to operate the three restaurants. According to Dean, the two key issues are (1) whether the managing partner had authority to bind the Partnership to assume the debt, and (2) whether this implied agreement falls within an exception to the Statute of Frauds.

    Agreement to Assume the Debt

    Dean's first issue asserts that the trial court erred in its third finding of fact when it found that:

    There is no evidence to support a finding that [the Partnership] or an agent on behalf of [the Partnership] ever promised orally or in writing to assume the debt of [the Corporation]. Furthermore there is no evidence of any consideration given by Hamburgers Unlimited, John Pearcy or John Dean in exchange for a promise by [the Partnership] to assume responsibility for the debt of [the Partnership]. Plaintiff is not entitled to recovery under this theory.(2)

    Dean argues that the trial court erred as a matter of law because the finding impliedly concludes that an agreement to assume a debt must be expressed orally or in writing. An agreement to assume a purchase-money debt need not be expressed orally or in writing; it may be inferred from the circumstances. Parties form a binding contract when the following elements are present: (1) an offer, (2) an acceptance in strict compliance with the terms of the offer, (3) a meeting of the minds, (4) each party's consent to the terms, and (5) execution and delivery of the contract with the intent that it be mutual and binding. Buxani v. Nussbaum, 940 S.W.2d 350, 352 (Tex. App.--San Antonio 1997, no writ); Smith v. Renz, 840 S.W.2d 702, 704 (Tex. App.--Corpus Christi 1992, writ denied). In a contract implied in fact, which is the same as an express contract except for the manner of proof,(3) the element of mutual assent can be inferred from the circumstances of the transaction. Buxani, 940 S.W.2d at 352 (citing Haws & Garrett Gen. Contractors, Inc. v. Gorbett Bros. Welding Co., 480 S.W.2d 607, 609 (Tex. 1972)); University Nat'l Bank v. Ernst & Whinney, 773 S.W.2d 707, 710 (Tex. App.--San Antonio 1989, no writ). Mutual assent can arise from the parties' acts and conduct from which one party can "reasonably draw the inference of a promise." Buxani, 940 S.W.2d at 352 (citing Haws & Garrett, 480 S.W.2d at 609-10). An implied contract arises from the dealings of the parties, from which the facts show that the minds of the parties met on the terms of the contract without any legally expressed agreement thereto. Angeles v. Brownsville Valley Reg'l Med. Ctr., Inc., 960 S.W.2d 854, 859 (Tex. App.--Corpus Christi 1997, pet. denied).

    By his sixth issue, Dean contends that the trial court erred in its fourth finding of fact, which states: "The Court finds that the listing of the [Pearcy note] to Hamburgers Unlimited was a unilateral act by [the Corporation] and was never ratified by the [Partnership]." Dean argues that the bankruptcy record shows the filing to be by the Partnership, bears the signatures of Charles Hatch and the Partnership's attorney, and contains Hatch's sworn oath that the Partnership authorized the filing.

    Jim Lindsey, controller of the Corporation, testified that he prepared the accounting and tax records for the Partnership. He stated that the intent was to put the Partnership in the shoes of the Corporation with respect to the three restaurants so that the Partnership would actually own the restaurants. Lindsey also testified that at the direction of Hatch, he transferred the promissory notes, including the Pearcy note, from the Corporation's books to the Partnership's books. Lindsey stated that in 1994 the Partnership paid all of the installments on the Pearcy note and that the Partnership and the Corporation listed the Pearcy note as an outstanding liability of the Partnership. Lindsey testified that the Partnership listed the Pearcy note as a liability on its federal tax return and that it was included in computing each partner's share of liabilities for the purpose of the schedule K-1. Lindsey also testified that he believed if the Partnership had filed a different voluntary bankruptcy petition, one in which the Pearcy note was not listed as a debt, it would have been inaccurate. He stated that the Partnership paid restaurant expenses, including labor and food costs, ad valorem taxes assessed on the facilities, and sales tax.

    John Pearcy, president of Hamburgers Unlimited, Inc., testified at trial that he was never told by the doctors or any other representative of the Partnership that the Partnership would be liable for or agree to assume the debt of the Pearcy note. Hatch testified that he signed the note to purchase the restaurants for the Corporation and that the title to the restaurants was never transferred to anyone else. He also stated that at the time he purchased the three restaurants and signed the note, he was not buying them for the Partnership. Hatch testified that he and the doctors never intended for the doctors to own the restaurants or assume any obligations with respect to the restaurants or the debts; the doctors' only responsibility was to loan money to the joint venture and share in the profits. After buying the Pearcy note at the foreclosure sale, Dean never received any payments on the note from either the Corporation or the Partnership.

    The doctors testified that they were unaware that the Pearcy note existed until they were sued. The doctors also testified that they did not know the amount of the note or what the note was used to purchase. Dr. Mulukutla stated that the $30,000 he invested in the venture was only for operating the restaurants, not for purchasing them. The doctors also argue that the record shows that the intent was for the Partnership to operate the restaurants, not to assume any debt or obligation incurred by the Corporation on any notes for the purchase of those restaurants. In addition, they argue that the obligation on the purchase debt and ownership of the restaurants was to remain with the Corporation. Finally, no one mentioned at closing that these restaurants were being purchased by the Corporation for a partnership or any entity other than the Corporation.

    The voluntary bankruptcy petition bears the signatures of Hatch and the Partnership's attorney. However, this evidence does not prove conclusively that the Partnership intended to be liable for the Pearcy note. Dean argues that the intent in preparing the accounting and tax records and the bankruptcy petition was to put the Partnership in the shoes of the Corporation with respect to the three restaurants. Dean states that "[a]cting in two capacities, [the Corporation] made that agreement with itself. As obligor for the indebtedness represented by the Pearcy note it agreed with itself as managing partner for the partnership that the partnership would assume liability for that indebtedness." This, he says, is the evidence supporting the implied contract and meeting of the minds that was formed by the parties' act and conduct.

    After reviewing all the evidence tending to support the trial court's findings, and ignoring all evidence to the contrary, we conclude that the evidence is legally sufficient to uphold the trial court's ruling. Dean also asserts that the evidence is factually insufficient. We have reviewed all of the evidence and determine that the court's finding is not so against the great weight and preponderance of the evidence as to be manifestly unjust. Therefore, we overrule Dean's first and sixth issues.

    Dean contends in his fifth issue that the trial court erred in its third finding of fact, which stated that "[p]laintiff is not entitled to recovery under this theory." "This theory" refers to whether the Partnership ever agreed to assume the Pearcy note. Dean argues that this finding is too vague and lacking in specificity to be a finding of fact or conclusion of law, and therefore, the evidence supporting this finding is legally and factually insufficient. Rule 298 of the Texas Rules of Civil Procedure provides an avenue by which a party may request specified additional or amended findings or conclusions. Tex. R. Civ. P. 298. Where the appellant fails to make such a request timely in accordance with Rule 298, that failure is a waiver of any error on the part of the court to make complete findings and a waiver of the right to complain of the trial court's failure to make certain findings deemed necessary by the appellant. Lettieri v. Lettieri, 654 S.W.2d 554, 556 (Tex. App.--Fort Worth 1983, writ dism'd). Assuming that Dean preserved this issue for appeal, we conclude that it is without merit. We overrule Dean's fifth issue.

    Dean argues in his seventh issue that the trial court erred in its fourth finding of fact "by failing to note that the March 11, 1997 bankruptcy order specifically provided in Subsection (j) of section 35, . . . '[w]ith respect to the claims of John Dean the liability of any third parties on the debt shall remain unaffected by the Amended Liquidating Plan and this order,' when the trial court stated that the 'Nunc Pro Tunc Order Confirming First Amended Liquidating Plan of Reorganization . . .' barred claims against [the Corporation]." Dean has raised no specific reason why such failure constitutes error. To the extent this issue was properly raised and not waived by insufficient briefing, we conclude it is without merit. We overrule Dean's seventh issue.

    Authority to Bind Partnership

    Dean's fourth issue states that the trial court erred in its first finding of fact: "The Court finds no credible facts to support evidence that [the Partnership] entered into an agreement with [the Corporation] to assume [the Corporation's] indebtedness to Hamburgers Unlimited." Dean argues that as a matter of law the trial court misconstrued key provisions of the managing partner's authority in the partnership agreement. Moreover, he asserts that such finding is against the great weight and preponderance of the evidence.

    It is well established that partners are charged with a fiduciary duty. Hughes v. St. David's Support Corp., 944 S.W.2d 423, 425 (Tex. App.--Austin 1997, writ denied). In addition, a managing partner owes his partners one of the highest fiduciary duties recognized in the law and an even greater duty of loyalty than is normally required. Huffington v. Upchurch, 532 S.W.2d 576, 579 (Tex. 1976). There is also a presumption that a partner may act as an authorized agent within the scope of his authority to bind the partnership. Metroplex Glass Ctr., Inc. v. Vantage Props., Inc., 646 S.W.2d 263, 266 (Tex. App.--Dallas 1983, writ ref'd n.r.e.); Brewer v. Big Lake State Bank, 378 S.W.2d 948, 951 (Tex. Civ. App.--El Paso 1964, no writ). Generally a principal will be liable for the acts of its agent only if the acts are within the agent's authority or if the principal ratifies the acts. See Elliot Valve Repair Co. v. B.J. Valve & Fitting Co., 675 S.W.2d 555, 560-61 (Tex. App.--Houston [1st Dist.]), rev'd on other grounds 679 S.W.2d 1 (Tex. 1984). If an agent acts within the scope of his authority, both the agent and the principal may be liable. Wynne v. Adcock Pipe & Supply, 761 S.W.2d 67, 69 (Tex. App.--San Antonio 1988, writ denied).

    In the present case, the partnership agreement restricts the managing general partner's authority to act on behalf of the Partnership in certain ways, including prohibiting the managing general partner from executing and delivering "any promissory note, negotiable instrument, assignment, . . . or document of any kind purporting to bind the Partnership" without the prior consent of the non-managing general partners. Dean argues that the partnership agreement did not prohibit the managing partner from assuming a pre-existing debt. He urges that assuming a pre-existing debt is not the same as signing a promissory note or negotiable instrument and the partnership agreement's restriction on the latter does not prohibit the former. According to Dean, the managing partner had the authority to assume the Pearcy note because it was authorized to purchase property for the Partnership in the ordinary scope of business. Dean states that what constitutes the "ordinary course" of business depends on the scope of a partnership's business and what is necessary to carry on that business, and therefore varies from partnership to partnership. Furthermore, Dean asserts that the express, limited, and sole purpose of the Partnership was to "acquire, develop and operate double drive-through hamburger restaurants." According to Dean, "[w]hether the managing partner acquired merely the right to operate the 3 restaurants in San Angelo and Abilene, or acquired the restaurant assets outright, it had authority to do so and bind the partnership for the debt it assumed in connection with the purchase."

    Dean cites Dobie v. Southern Trading Co., 193 S.W. 195 (Tex. Civ. App.--Fort Worth 1917, no writ), in which the court held that the partner had the authority to commit the partnership to purchasing a sawmill and assume the pre-existing debt as part of consideration for that purchase. Id. at 196-97. However, the court also held that the testimony of one of the partners showed that all the partners had waived any restrictions or limitations on the partners set forth in the partnership agreement, and that such waiver is permissible. Id. at 197. In addition, the court concluded that the transaction was within the scope or apparent scope of the partner's authority, and that the subsequent acceptance and use of the mill on the part of the other partners amounted to a ratification of the partner's act. Id.

    Dean also cites to Corinth Joint Venture v. Lomas & Nettleton Fin. Corp., 667 S.W.2d 593 (Tex. App.--Dallas 1984, writ dism'd), where the court held that a partner could commit the partnership to extending the maturity of a million dollar debt owed by the partnership. Id. at 597. However, the purpose of the joint venture in Corinth was "to own and to develop the property in question." Further, the court concluded, "a partner has the authority to borrow money and to give promissory notes if related to the usual business of the partnership." Id.

    Dobie and Corinth are distinguishable on their facts. In the present case, the doctors did not waive the limitations in the partnership agreement, nor did they ratify the assumption of the Pearcy note; they did not even know the Pearcy note existed until this lawsuit was filed. The doctors testified that their intention and the purpose of the Partnership was not to purchase and own restaurants, but rather to operate them. Moreover, Dean did not prove conclusively that assuming the Pearcy note was within the scope of the managing partner's actual or apparent authority.

    After reviewing the evidence, we conclude that Dean did not prove as a matter of law that the trial court erred in its ruling. In addition, we conclude that the trial court's ruling was not against the great weight and preponderance of the evidence. We overrule Dean's fourth issue.

    Statute of Frauds

    The doctors also argue that Dean has waived his Statute of Frauds arguments. In the first three findings of fact, the trial court found that there was no agreement, either implied or express, that the Partnership would assume the debt of the Pearcy note. The Statute of Frauds does not address the existence of an agreement or contract, but rather requires that certain types of agreements must be in writing before they can be legally enforced. See Tex. Bus. & Com. Code Ann. § 26.01 (West Supp. 2000). Accordingly, where there is no agreement, implied or otherwise, there is no Statute of Frauds issue to address. The trial court's decision was proper and we overrule Dean's second, third, and eighth issues.

    Ownership of Restaurants

    By his ninth issue, Dean asserts that the trial court erred in its first finding of fact by finding that "[the Partnership] did operate restaurants at locations owned by [the Corporation]." Dean does not disagree that the Partnership operated the restaurants. He disagrees with the finding that the Corporation owned these locations in its individual capacity, as opposed to its capacity as managing general partner for the Partnership. In light of our previous discussion and analysis of the testimony and evidence, we conclude that Dean has not proven conclusively that the Partnership owned or intended to own the three restaurants. Dean also asserts that the evidence supporting the trial court's finding on this issue is factually insufficient. We have reviewed all the evidence and conclude that it is not against the great weight and preponderance of the evidence. We overrule Dean's ninth issue.

    Retroactive Creation of Agency for Undisclosed Principal

    Dean's tenth issue on appeal asserts that the trial court erred by finding in its fifth finding of fact that "[the Corporation] was not acting as an agent for undisclosed principal for [the Partnership] when it purchased Hamburgers Unlimited and that no fiduciary relationship existed on the date of the transaction which [Dean] seeks to enforce." According to Dean, if read narrowly, as a description of actual, real-time events that had occurred through the transaction date of September 28, 1993, this finding is correct; however, Dean states, it is irrelevant to his cause of action that the agent for undisclosed principal relationship was retroactively created and by agreement extended back to the transaction date. Dean argues that if the trial court's finding is read broadly, denying that in January 1994 the Partnership retroactively made the Corporation its agent for undisclosed principal in the September 28, 1993 restaurant acquisition, it is legally and factually insufficient.

    Dean relies on Jim Lindsey's testimony to argue that because the partnership agreement was back-dated to be effective the day before the closing on the Pearcy note, the Partnership is liable for the note. However, the partnership agreement specifically restricts the managing partner's authority and prohibits it from executing and delivering "any promissory note, negotiable instrument . . . or document of any kind or nature purporting to bind the Partnership" without the consent of the other general partners. Moreover, there is evidence that the purpose of the Partnership was not to purchase the three restaurants, but rather to operate them.

    Although there appears to be some circumstantial evidence that the Corporation acted as an agent for undisclosed principal for the Partnership, Dean still has not proven as a matter of law that this was the case. There is ample evidence to support the trial court's finding that no retroactive creation of an agency relationship occurred. Dean's tenth issue is overruled.

    By his eleventh issue, Dean argues that the trial court erred in its fifth finding of fact, in which it found that "the note in question was entered into on September 17, 1993." Dean states that the evidence supporting this finding is legally and factually insufficient. He argues that the payee, Hamburgers Unlimited, Inc., received delivery of the note at the closing of the sale on September 28, 1993; that is when the note was entered into by both maker and payee and when delivery created an obligation between them. We have already concluded that there is more than a scintilla of evidence to support the trial court's finding that there was no retroactive creation of an agency for an undisclosed principal. Thus, whether the Pearcy note was entered into on September 17 or September 28, 1993 is immaterial. We overrule Dean's eleventh issue.

    By his twelfth issue, Dean contends that the trial court erred in finding that Dean was not a proper party to attempt to enforce any type of breach of fiduciary relationship. By his own admission, Dean concedes that this finding was irrelevant. Dean gives no other argument explaining why this finding constitutes harmful error. Therefore, we overrule Dean's twelfth issue.

    Dean's final three issues complain generally of the legal and factual insufficiency of the evidence to support the trial court's findings of fact. To the extent that these issues were properly raised and not waived by insufficient briefing, we conclude they are without merit. Dean's thirteenth, fourteenth, and fifteenth issues are overruled.

    CONCLUSION

    Having found no reversible error, we affirm the trial court's grant of summary judgment.



    J. Woodfin Jones, Justice

    Before Chief Justice Aboussie, Justices Yeakel and Jones*

    Affirmed

    Filed: January 19, 2001

    Do Not Publish

























    * Before J. Woodfin Jones, Justice (former), Third Court of Appeals, sitting by assignment. See Tex. Gov't Code Ann. § 75.003(a)(1) (West 1998).

    1. The original judgment recited that three defendants were present at trial and that Dean take nothing against the three defendants. Since Dean had only sued two defendants, he filed a Motion to Correct the Judgment, and the trial court subsequently signed a Judgment Nunc Pro Tunc naming only two defendants.

    2. Even though the trial court's findings of fact and conclusions of law were worded as "no evidence," we will construe them as a failure to find based on a preponderance of the evidence, which is the traditional trial court standard.

    3. A contract implied in fact creates a fact question; therefore, we review it to determine whether the trial court's ruling was against the great weight of the evidence so as to be manifestly unjust. See Buxani v. Nussbaum, 940 S.W.2d 350, 352 (Tex. App.--San Antonio 1997, no writ) (citing Hallmark v. Hand, 885 S.W.2d 471, 476 (Tex. App.--El Paso 1994, writ denied)).

    the Partnership retroactively made the Corporation its agent for undisclosed principal in the September 28, 1993 restaurant acquisition, it is legally and factually insufficient.

    Dean relies on Jim Lindsey's testimony to argue that because the partnership agreement was back-dated to be effective the day before the closing on the Pearcy note, the Partnership is liable for the note. However, the partnership agreement specifically restricts the managing partner's authority and prohibits it from executing and delivering "any promissory note, negotiable instrument . . . or document of any kind or nature purporting to bind the Partnership" without the consent of the other general partners. Moreover, there is evidence that the purpose of t