Bonilla v. Roberson

• Decision Date: 11 January 1996
• Docket Number: No. 13-94-119-CV,13-94-119-CV
• Parties: Felipe BONILLA, Jr., Appellant, v. L.W. ROBERSON, trustee, et al., Appellees.
• Court: Texas Court of Appeals

Page 17

918 S.W.2d 17

Felipe BONILLA, Jr., Appellant, v. L.W. ROBERSON, trustee, et al., Appellees.

No. 13-94-119-CV.

Court of Appeals of Texas,

Corpus Christi.

Jan. 11, 1996.

Rehearing Overruled March 21, 1996.

Richard K. Houtchens, Corpus Christi, for appellant.

Fred D. Dreiling, Corpus Christi, for appellees.

Before SEERDEN, C.J., and YANEZ and CHAVEZ, JJ.

OPINION

CHAVEZ, Justice.

This case involves a default under a mortgage agreement by appellant/mortgagor, Felipe Bonilla, and the validity of resulting foreclosure proceedings instituted by appellee/mortgagee, Richard Roberson. The trial court awarded judgment in favor of appellee in the amount of $18,706.11. Appellant challenges the judgment by three points of error. In addition, appellee counterclaims by one point of error. We reverse the judgment of the trial court and remand for further proceedings.

On September 9, 1980, Roberson sold property consisting of two lots to appellant. Lot 4, Block 3 contained a housing structure consisting of four rental units. Lot 3, Block 3 was vacant. Appellant executed and delivered to Roberson two real estate notes for the lots in the total principal sum of $60,500.00--$51,500.00 for Lot 4, Block 3 and $9,000.00 for Lot 3, Block 3. The two notes were secured by two separate deeds of trust. In addition, Roberson executed and delivered two warranty deeds to appellant, one for each lot.

Both deeds of trust imposed a number of obligations and responsibilities under the terms of the mortgage agreements. For example, appellant promised to pay monthly mortgage payments, ad valorem taxes, and to maintain insurance coverage. Appellant was also obligated to maintain all improvements in good and tenantable condition, and not to do or suffer any act which lessened the value of the property. Furthermore, upon appellant's default and appellee's request, the deeds of trust provided the trustee with the power to sell the lots in a prescribed manner to the highest bidder for cash.

On November 1, 1984, appellant failed to make the monthly mortgage payment, and subsequently, all mortgage payments thereafter. Appellant also breached the terms of the mortgage contract by failing to pay ad valorem property taxes for the years 1982 through 1984 and failing to maintain insurance coverage on the property. As a result of appellant's breach, Roberson initiated two non-judicial foreclosure sales on March 5, 1985, to foreclose each deed. At the proceeding, Roberson submitted a bid and purchased both lots for $80,000.00, in total--$60,000.00 for Lot 4, Block 3, and $20,000.00 for Lot 3, Block 3.

After the sale, Roberson alleged he entered the property whereby he discovered extensive damage and destruction to the housing structure on Lot 4, Block 3, thereby reducing the value of the lot and rendering the rental units untenantable. ¹ Roberson did not claim that there was any damage to the vacant lot.

On March 7, 1985, the substitute trustee, appellee's father, executed two deeds in which he acknowledged to the notary that he had received consideration for the deeds. And on March 8, 1985, the substitute trustee filed the deeds in the county clerk's office in Nueces County, Texas.

The record does not show the amounts owing on March 5, 1985, the date of the first foreclosure. The amount owing, however, on the date of the second foreclosure, June 4, 1985, was $60,369.75. On May 9, 1985, appellant instituted this suit to request that amounts in excess of lawful charges ² owed to Roberson from the first foreclosure sales be remitted to appellant.

Although the first foreclosure sales complied with all statutory requirements, Roberson and Roberson's father, acting in the capacity of substitute trustee, purported to rescind the first sales and filed cancellation deeds on May 14, 1985, four days after appellant filed this suit. The reason set forth on each cancellation deed was that "said property had been substantially damaged, prior to the sale, without [appellee's] knowledge" and that appellee had refused to pay for the property upon discovering that it had been wasted by the mortgagor.

Appellees then posted notice for the second foreclosure sales which were set for June 4, 1985. In response, appellant requested a temporary injunction to enjoin the second foreclosure sales on grounds that the first foreclosure sales were unlawfully cancelled. By docket entry on June 3, 1985, the trial court denied appellant's application for injunction, and allowed the second foreclosure sales to proceed as scheduled. At the second non-judicial foreclosure sales, appellee submitted successful bids for the deeds totaling $42,500.00 for both lots--$35,000.00 for Lot 4, Block 3 and $7,500.00 for Lot 3, Block 3.

After a non-jury trial, the court upheld the second foreclosures and found that the note principal on both lots, accrued interest, unpaid taxes, insurance expenses, attorney's fees, and trustee's fees owed on the property equalled $61,206.11, leaving a deficient amount of $18,706.11. Although Roberson counter-claimed that he was due $69,700.00 in lost rental income in addition to the deficiency, the trial court awarded Roberson $18,706.11 for the "foreclosure deficiency and/or lost rental income." Roberson was also awarded pre-judgment interest, post-judgment interest, as well as attorney's fees.

By appellant's first point of error, he alleges the trial court erred in denying his application for temporary injunction. Appellant maintains that the first foreclosure sales were valid and the cancellation deeds were invalid. Appellant's second point of error contends the trial court erred in denying appellant's request for judgment against appellee/mortgagee for the amount bid at the first foreclosure sales, less interest up to the date of the first sale, principal due on the two notes, and reasonable trustee's and attorney's fees. Finally, by appellant's third point of error, he alleges that the trial court erred in granting appellee/mortgagee judgment for damages on the second foreclosure sales.

By cross point, appellee claims the trial court erred in failing to award a judgment against appellant for $69,700.00 in lost rental income.

Addressing appellant's first point of error regarding the temporary injunction, under the mootness doctrine, appellate courts may only determine cases in which an actual controversy exists. Federal Deposit Ins. Corp. v. Nueces County, 886 S.W.2d 766, 767 (Tex.1994). Thus, when a judgment cannot have a practical effect on an existing controversy, the case is moot. Brownsville Indep. Sch. Dist. Bd. of Trustees v. Brownsville Herald, 831 S.W.2d 537, 539 (Tex.App.--Corpus Christi 1992, no writ). "Courts are created not for purposes of deciding abstract or academic questions of law or to render advisory opinions, but solely for judicial determination of presently existing disputes between parties in which effective judgment can be rendered." Id. at 538-39.

In Isuani v. Manske-Sheffield Radiology Group, P.A., 802 S.W.2d 235 (Tex.1991), the Texas Supreme Court held that while on appeal of an order granting or denying a temporary injunction a trial court renders final judgment, the case on appeal becomes moot. Id. at 236. In the instant case, the trial court denied appellant's application for temporary injunction, and subsequently rendered final judgment on the merits before appellant even began the appeal process. Applying the standard of Isuani, we accordingly dismiss appellant's first point of error as moot.

We next review appellant's second and third points of error. Appellant claims the trial court erred in 1) denying his request for judgment in the amount of surplus resulting from the first foreclosure sales, and 2) granting appellee judgment for damages on the second foreclosures. Appellant claims that because the first foreclosure sales were valid, appellee was not entitled to rescind the sales and issue cancellation deeds. The issue on appeal is whether appellee and the trustee validly canceled the first foreclosure sales.

By its findings and conclusions, the trial court completely ignored the validity of the first foreclosures, a material issue of the case, and only discussed the second foreclosures. Because appellant did not ask for additional findings, he cannot challenge the lack of findings on appeal. Goldston Corp. v. Hernandez, 714 S.W.2d 350, 352 (Tex.App.--Corpus Christi 1986, writ ref'd n.r.e.). When findings of facts are filed by the trial court, they shall form the basis of the judgment upon all grounds of recovery. TEX.R.CIV.P. 299. But, when one or more elements of the recovery have been found by the trial court, omitted unrequested elements, when supported by evidence, will be presumed in support of the judgment. Id. A thorough review of the statement of facts discloses no evidence to support the trial court's presumed invalidation of the first foreclosure sales.

A foreclosure sale may be instituted either by a judgment of the court establishing the debt and fixing the lien, or by a valid exercise of a power contained in a deed of trust. Taylor v. San Antonio Joint Stock Land Bank, 101 S.W.2d 868, 872 (Tex.Civ.App.--San Antonio 1936), rev'd on other grounds, 129 Tex. 335, 105 S.W.2d 650 (1937). The power of the trustee to sell the deed for the parties is derived wholly from the trust instrument. Winters v. Slover, 151 Tex. 485, 251 S.W.2d 726, 728 (1952). Because a power of sale under a deed of trust is a harsh method of collecting debts and of disposing of another's property, it can only be exercised by strict compliance with the note and conditions of sale. Crow v. Heath, 516 S.W.2d 225, 228 (Tex.Civ.App.--Corpus Christi 1974, writ ref'd n.r.e.). Thus, a trustee must strictly pursue the terms of the instrument, the provisions of law relative to such a sale, and the details prescribed as to the manner of the sale. See Durkay v. Madco Oil Co., 862 S.W.2d 14, 17 (Tex.App.--Corpus Christi 1993,...