John Frederick Manning v. Merrill, Lynch, Pierce, Fenner & Smith, Inc.--Appeal from Co Civil Ct at Law No 4 of Harris County

NO. 10-89-128-CV

IN THE

COURT OF APPEALS

FOR THE

TENTH DISTRICT OF TEXAS

AT WACO

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JOHN FREDRICK MANNING,

Appellant

v.

MERRILL, LYNCH, PIERCE, FENNER

& SMITH, INC.,

Appellee

* * * * * * * * * * * * *

From County Civil Court at Law No. 4

Harris County, Texas

Trial Court # 520,993

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O P I N I O N

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Manning appeals a judgment taken by Merrill Lynch for the deficit remaining after 300 shares of common stock purchased by Merrill Lynch on Manning's behalf were sold due to nonpayment. Manning contends that no contractual relationship existed between the parties upon which any purchase of securities or subsequent debt could have been based. He also argues that the trial court erred in denying his motion for continuance, his right to counsel, and his right to a jury trial. We affirm the judgment.

Manning asserts in points one, two and eight that the court abused its discretion in overruling his motion for continuance, effectively preventing his retention of counsel prior to trial. Merrill Lynch filed its original petition on February 11, 1988, which Manning answered pro se on September 12. Following a hearing on discovery on December 6, the court set the case for trial on a non-jury docket on Wednesday, December 21, and noted on the order that the parties had been notified of the setting in open court.

On December 15, Manning filed, pro se, a sworn motion for continuance alleging that "[m]ovant realizes he is a layman at law and needs the assistance of a lawyer. . . .," identifying the "attorney of his choice," and stating that the attorney could not be present at the December 21 trial. He gave no reason for the attorney's inability to be present on that date. He further complained that he had not been allowed the normal discovery process and would need additional time to obtain the information denied him by the court in its December 6 discovery order. Manning also alleged as a basis for the continuance that he could not obtain the testimony or presence of his witness, Paul Manning, in such a short period before trial. Manning supplied a California address for Paul Manning and indicated that Manning would testify "about the dealings he had with plaintiff in movant's behalf." The motion made no mention of any diligence used by John Manning to obtain the information he sought or to procure Paul Manning's testimony as required by Rule 252. See Tex. R. Civ. P. 252. The court sua sponte denied the motion for continuance, citing the lack of diligence, following the trial on the merits on December 21.

Manning failed to present his motion and obtain a ruling prior to the beginning of the trial and has therefore waived any error. See Tex. R. App. P. 52(a); Lemons v. EMW Manufacturing Co., 747 S.W.2d 372, 373 (Tex. 1988); City of Corsicana v. Herod, 768 S.W.2d 805, 815-16 (Tex. App.--Waco 1989, no writ); Greenstein, Logan & Co. v. Burgess, 744 S.W.2d 170, 179 (Tex. App.--Waco 1987, writ denied). Moreover, he has failed to demonstrate that the court clearly abused its discretion. The court is presumed to have correctly exercised its discretion when it denies a motion that fails to comply with the rules governing continuances. See Tex. R. Civ. P. 252, 253; Greenstein, Logan & Co., 744 S.W.2d at 179. Lynd v. Wesley, 705 S.W.2d 759, 764 (Tex. App.--Houston [14th Dist.] 1986, no writ); Gendebien v. Gendebien, 668 S.W.2d 905, 907 (Tex.App.--Houston [14th Dist.] 1984, no writ). Points one, two, and eight are overruled.

Manning complains in point three that the court erred when it denied him a jury trial. Manning requested a jury trial in the prayer of the counterclaim he filed on September 12. The parties agreed during oral argument of this appeal that Manning paid the jury fee on December 6, the same day that the court set the case for trial on the non-jury docket. Rule 216 provides that when a written request for a jury trial is filed and the jury fee is paid a reasonable time before the date the case is set for trial on the non-jury docket, not less than thirty days in advance, a jury trial has been properly demanded. See Tex. R. Civ. P. 216 (a),(b). However, we need not decide whether Manning timely paid the jury fee and properly demanded a jury trial under Rule 216 because he has waived any error. When the case was called for trial, Manning failed to demand a jury or to object to the court's hearing the case on its merits. He participated in the trial before the court on December 21 without complaint and asked the court to decide fact questions. Having received an adverse ruling from the court, he may not now complain that he was entitled to have a jury rather than the court decide the facts. See Walker v. Walker, 619 S.W.2d 196, 197 (Tex. Civ. App.--Tyler 1981, writ ref'd n.r.e.). Point three is overruled.

Manning argues in points four and six that the court erred in entering judgment for Merrill Lynch because no evidence was introduced of a written or oral contractual or broker/client relationship between Manning and Merrill Lynch. Manning asserts in point five that, assuming a contractual relationship existed, the sale of unregistered securities in Texas requires rescission of the contract of purchase.

Frederick G. Cater, a thirty-year managerial and administrative employee of Merrill Lynch, identified copies of the new accounts form containing information on Manning and the order ticket to purchase 300 shares of Trimedyne stock showing Manning as the customer. Although Cater did not complete these particular forms as he was not a broker, he was familiar with the official documents and the normal business procedures used by the brokers and by Merrill Lynch. He stated that most of Merrill Lynch's business was done over the telephone and that although the company likes to get a "good faith deposit" to secure the transaction, in some cases no deposit was requested. Cater explained that the word "unsolicited" on the order ticket signified that the purchase was the customer's idea--that the broker did not recommend the purchase of that security. He identified copies of the March and April statements of account reflecting the name of John Frederick Manning as well as copies of letters dated April 9, April 28, and June 10, 1987, sent to Manning regarding the debit balance of his account and requesting payment. All of these documents were admitted into evidence as business records.

The purchase price of the Trimedyne stock totaled $5,817.13. The shares were later sold because of nonpayment for $4,804.37, leaving a debit balance of $1, 012.76. The three letters notifying Manning of the debit balance and requesting payment were sent to Manning at the same post office box address reflected on some of the pleadings sent by Manning to counsel for Merrill Lynch. None of the letters were returned to Merrill Lynch. The court had also addressed a letter to Manning at that post office box.

Benjamin Burgeson, the former Merrill Lynch broker who initially contacted Manning on a "cold call" and had opened the "cash account" for Manning in 1986, related seven or eight lengthy telephone conversations with Manning and felt that he was a "good prospect." They had discussed several stocks, some of Merrill Lynch's recommendations, and some of Mr. Manning's own ideas. Manning told Burgeson of approximately a quarter of a million dollars overseas with which Burgeson might have the opportunity to work. They discussed Trimedyne during the conversations and Burgeson told Manning that that particular stock was not a Merrill Lynch recommendation. Burgeson checked the financial history of Trimedyne and Standard and Poor's guide to give Manning an idea of its activity in the marketplace. Burgeson had never sold Trimedyne to any other customer and had not been familiar with it prior to his research for Manning. They discussed opening an account, and Manning gave Burgeson a "flat order" of three hundred shares--"buy me three hundred shares."

Burgeson explained that he went over the new account form with Manning, getting the necessary personal information from him such as social security number, to complete each question. Burgeson stated that the new account form was his "link to credibility" with the client, and that if he could "successfully get through the form and answer the questions completely, then [he] had confidence in doing the business." Burgeson unequivocally identified Manning as the person with whom he had spoken on the telephone and who had provided him the information needed to complete the new account form and open the account. Burgeson did not doubt that Manning wanted the stock and did in fact place the order.

Burgeson had immediately placed the order and had had no further conversations with Manning, though he tried unsuccessfully to contact Manning three or four times during the week the stock was to be sold due to nonpayment. He spoke at least three times with a woman who identified herself as Manning's wife in an attempt to get a message to Manning that the stock would be sold unless his payment was received. Burgeson believed that Manning understood what he was doing in opening up the account. Burgeson even requested and received an extension before the stock was sold, still believing that Manning intended to pay. Having considered only the evidence in support of the judgment and viewing it in its most favorable light, we find the evidence legally sufficient to establish an agreement by Manning to purchase the stock and to support the court's judgment. See Glover v. Texas Indemnity Co., 619 S.W.2d 400, 401 (Tex. 1981). Points four and six are overruled.

Manning introduced into evidence a photocopy of an "absence of publication" affidavit from the Securities Commissioner of the State of Texas which showed that Trimedyne, Inc. had never registered any securities or that no permit had been granted for the sale of such securities in Texas. Although Manning claims on appeal that the sale of unregistered securities requires rescission of the transaction, he did not plead or prove his entitlement to rescission in the trial court. See Citizens Standard Life Ins. Co. v. Muncy, 518 S.W.2d 391, 394 (Tex. Civ. App.--Amarillo 1974, no writ). Moreover, Manning has waived any right he might have had to rescission by his unreasonable delay in seeking that remedy. See Athans v. Rossi, 240 S.W.2d 492, 495 (Tex. Civ. App.--Fort Worth 1951, writ ref'd n.r.e.). Point five is overruled.

In point seven, Manning points to "inconsistencies" between the contents of Exhibit 1 introduced by Merrill Lynch and its answers to interrogatories, which were never introduced into evidence. Manning has failed to state an identifiable complaint or show how the court erred. Thus, he has presented nothing for review. Point seven is overruled.

The judgment is affirmed.

BOBBY L. CUMMINGS

Justice

Before Chief Justice Thomas,

Justice Cummings and

Justice Vance

Affirmed

Opinion delivered and filed May 16, 1991

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