Beaumont Petroleum Syndicate v. Broussard, 2532.

• Decision Date: 07 November 1933
• Docket Number: No. 2532.,2532.
• Citation: 64 S.W.2d 993
• Parties: BEAUMONT PETROLEUM SYNDICATE et al. v. BROUSSARD et al.
• Court: Texas Court of Appeals

Page 993

64 S.W.2d 993

BEAUMONT PETROLEUM SYNDICATE et al. v. BROUSSARD et al.

No. 2532.

Court of Civil Appeals of Texas. Beaumont.

November 7, 1933.

Rehearing Denied November 8, 1933.

Appeal from District Court, Jefferson County; J. D. Campbell, Judge.

Suit by J. E. Broussard and others, as trustees of the Broussard Trust, against the Beaumont Petroleum Syndicate and others, wherein a judgment was rendered in favor of the plaintiffs, and the defendants filed an application for an injunction to restrain the execution sale under the Moratorium Law. From a judgment refusing the injunction, the defendants appeal.

Judgment reversed, and the cause remanded in accordance with opinion.

Oliver J. Todd, of Beaumont, for appellants.

A. D. Lipscomb, of Beaumont, for appellees.

O'QUINN, Justice.

This is an appeal from an order of the Sixtieth district court of Jefferson county refusing an injunction to restrain or postpone from sale certain lands in Jefferson county, Tex., under an execution issued out of said court by virtue of a judgment and foreclosure of a vendor's lien on said lands.

August 9, 1923, the City National Bank of Beaumont sold and conveyed five certain tracts of land situated in Jefferson county, Tex., comprising some 1,665 acres to the Beaumont Petroleum Syndicate, a Texas corporation, for a consideration of $40,000, of which $15,000 was paid, and said syndicate executed and delivered to said bank its five certain vendor lien notes, each in the sum of $5,000, dated August 9, 1923, numbered 1 to 5, and payable to the order of said bank in one, two, three, four, and five years, respectively, from the date of execution, said conveyance and said notes retaining the vendor's lien on the land to secure the payment of said notes. The notes provided that they should bear interest from date until maturity at the rate of 7 per cent. and, after maturity, if not paid when due, 8 per cent. interest on the principal and unpaid interest, and contained the usual 10 per cent. attorney's fee clause. The first two notes were duly paid. Notes 3 and 4 were not paid, and, by agreement, September 28, 1927, the dates of payment of said notes were advanced to August 9, 1928, the date upon which note No. 5 matured, thus making notes 3, 4, and 5 due on the same date. In said agreement the vendor's lien was expressly retained on the land. On September 21, 1928, the City National Bank, for a valuable consideration, by an instrument in writing assigned and transferred to J. E. Broussard said notes and lien. June 20, 1931, J. E. Broussard, by instrument in writing, assigned and transferred said notes and lien to the trustees of the Broussard Trust, a voluntary association composed of J. E. Broussard, C. E. Broussard, and J. E. Broussard, Jr. May 26, 1932, said trustees of said trust filed suit in the district court of Jefferson county, Sixtieth district, against said Petroleum Syndicate and its stockholders for judgment on said notes and foreclosure of the vendor's lien on said lands. In due course, judgment was rendered for plaintiffs, trustees of the Broussard Trust, in the sum of $19,172.96, for principal, interest, and attorney's fees, and foreclosing the vendor's lien. The land was advertised for sale under execution on said judgment, for July 4, 1933. Appellants, stockholders of said Beaumont Petroleum Syndicate, and defendants in the foreclosure suit, June 29, 1933, filed application with the Sixtieth district court in which the judgment of foreclosure had been rendered, for injunction to restrain said sale and to stay same for a period of 180 days, as provided by House Bill No. 231 (c. 102), enacted by the Forty-Third Legislature, known as the Texas Moratorium Law, and which became effective May 1, 1933 (Vernon's Ann. Civ. St. art. 2218b). Upon a hearing the injunction was refused, from which judgment this appeal was taken.

The provisions of said act thought to be material to the disposition of this case, are set out below:

"Sec. 1. From and after the effective date of this Act and during the period of time this Act is made effective as provided herein, in all suits or causes of action which are pending in any trial court exercising jurisdiction in this State on the effective date of this Act, and in all suits or causes of actions which may be filed within one hundred and eighty (180) days from and after the effective date of this Act and in which a judgment for the recovery of real property sought to be recovered, or wherein a recovery of real property is sought for a failure or omission to pay any indebtedness due thereon, or to foreclose any lien or liens thereon, the defendant shall have the right to a postponement or continuance thereof as herein provided and a stay of orders of sales or executions by complying with the conditions as hereinafter set forth, to-wit:

"(1) That the defendant file therein a sworn statement showing:

"(a) That the defendant is unable to pay said indebtedness and that the property of the defendant, if sold under an order of sale, or any other property of the defendant, if sold under execution, would probably sell for less than its reasonable market value, and/or less than its intrinsic value.

"(1a) That the lien sought to be foreclosed was not procured or obtained for the purpose of securing in part or whole any indebtedness for money or property procured by misrepresentation, fraud, defalcation or embezzlement.

"(b) That the rendition of a judgment as prayed for by plaintiff and the sale of the defendant's property under deed of trust or execution or order of sale would result in an unfair, unjust and inequitable financial injury to the defendant.

"(c) That the property upon which the lien is sought to be foreclosed is not being wasted, illtreated, mismanaged or destroyed and is in substantially as good condition as when the lien was first executed, and that the defendant has not, with the intent to defeat or delay the collection of the indebtedness or the enforcement of the lien, dissipated the property or the rents and revenue theretofore derived therefrom.

"(d) That the defendant is not in arrears in the payment of taxes for more than four (4) years since February 1, 1922, on the property involved in the suit.

"(e) That the defendant consent either to the appointment by the Judge or the Court of a disinterested party to collect all rents and revenues, derived from the property upon which the lien exists, during the period of postponement or continuance or stay of orders of sales or executions and to apply the same as a credit on the indebtedness, or deposit the same in the registry of the Court to await the final disposition of the case or to use, apply or dispose of the rents as the Judge may direct without the appointment of a disinterested party to collect the same.

"Upon the filing of such motion the Judge or Court before whom said suit or cause of action is pending, shall, before proceeding to trial on its merits, hear evidence in support of or against the facts alleged in said motion, and if it be made to appear to the Court that said allegations are probably true, the Court shall defer rendering judgment in said cause for as long a period or one hundred and eighty (180) days, nor shall any order of sale or execution issue until after the expiration of the time fixed by the Court; provided, however, that the Judge or Court shall have authority, upon further application at the end of the time to which cause has been postponed, but not after the expiration of two hundred (200) days from the effective date of this Act, if it reasonably appears that the same condition exists as in the first instance, to grant further extensions from time to time, but in no event beyond May 1, 1934.

"It shall be the duty of the Court in determining whether or not said allegations are true, and whether a postponement or continuance shall be granted, to take into consideration the financial condition of the parties, both plaintiffs and defendants, and the nature and character of the property, and the disposition likely to be made of the property if taken possession of by the plaintiff or retained by the defendant and the general economic conditions existing at the time of the hearing of the application.

"Sec. 3. The Judge or Court having jurisdiction of the subject matter, is hereby authorized to grant temporary injunctions at the instance of the debtor to prevent a sale of real property under execution, orders of sale of real property or under deeds of trust conveying lands as security for debt upon the same terms and conditions as is authorized by Section 1 of this Act and during the life of this Act.

"Sec. 4. Nothing contained in this Act shall prevent the Court or the Judge thereof, upon good cause shown, from granting such preliminary and ancillary remedies by injunction or otherwise, including receivership, in accordance with the provisions of the law and the usages of equity which may, in the discretion of such Court or Judge, appear to be necessary for the preservation and protection of the rights of parties and of property during the pendency of any litigation concerning the subjects herein mentioned.

"Sec. 11. All laws or parts of law in conflict with any of the provisions of this Act, are hereby suspended for the period of one hundred and eighty (180) days from and after the effective date hereof, and to May 1, 1934, in all cases where extensions have been granted to that date as provided by this Act, but no Statute is intended to be repealed and upon the expiration of two hundred (200) days from and after the effective date of this Act, it shall be of no further force and effect and any and all laws suspended during the effective period of this Act, shall immediately become operative and in full force and effect as effectively as if this Act had not been passed.

"Sec. 12. The fact that an extraordinary financial emergency and depression exists within this State and...