Bradford v. Thompson

• Decision Date: 19 November 1970
• Docket Number: No. 498,498
• Parties: Henry BRADFORD et ux., Appellants, v. Walton E. THOMPSON et al., Appellees.
• Court: Texas Court of Appeals

Page 932

460 S.W.2d 932

Henry BRADFORD et ux., Appellants, v. Walton E. THOMPSON et al., Appellees.

No. 498.

Court of Civil Appeals of Texas,

Tyler.

Nov. 19, 1970.

Rehearing Denied Dec. 17, 1970.

Margolis & Staffin, Harry W. Margolis, Dallas, for appellants.

Frank Cusack, Dallas, for appellee, Security Savings Ass'n.

Clifford Thyfault, Dallas, for appellee, Walton E. Thompson.

Brady, Drake & Wilson, Edward J. Drake, Dallas, for appellees, W. B. Post, Fidelity Title Co. & Security Title and Trust Co.

Charles H. Storey, Dallas, for appellee, Style-Rite Homes, Inc. MOORE, Justice.

This is an appeal from a summary judgment rendered in favor of the plaintiffs, Walton E. Thompson et al, in trespass to try title action.

The controversy arose in this manner: On October 13, 1964, defendants, Henry Bradford and wife, entered into a contract with Style-Rite Homes, Inc. for the purchase of a house and lot situated in Dallas County for a total consideration of $8,000.00 payable $1,200.00 in cash, and '$6,800.00 mortgage, $60.00 per month, principal and interest 6%, plus taxes and insurance.' At the time of the execution of the contract Style-Rite did not own the property but was in the process of buying the same from plaintiff Walton E. Thompson. On October 15, 1964, two days after the execution of the contract, Style-Rite purchased the property from Thompson, assuming the unpaid balance due upon a note to Murray Mortgage Company in the amount of $5,246.66 and also delivering to Thompson its second lien note in the amount of $1,553.34. On the same date, Style-Rite executed a deed conveying the property to the Bradfords. The deed recited a total consideration of $8,000.00, payable $1,200.00 in cash and the assumption of the balance due on the first lien note held by Murray Mortgage Company in the amount of $5,246.66, together with the assumption of the second lien note executed by Style-Rite to Thompson in the amount of $1,553.34. The assumption clause in the deed recited that each of said notes was payable as provided therein and was secured by a deed of trust. W. B. Post was named as trustee in the deed of trust securing the second lien note. Prior to consummation of the sale, the Bradfords demanded a title policy. After Fidelity Title Company agreed to issue the policy the closing of the sale took place at the office of the title company. Between the dates of October 19 and October 26, 1964, the parties appeared there at various times bringing the signed instruments, checks and etc. W. B. Post, the agent of the company, was in charge of the closing. After various monies and documents had been received, he recorded the deed and other instruments with the County Clerk of Dallas County. The deed, together with the title policy, was received by the Bradfords on or about November 2, 1964, and they took possession shortly thereafter. Several days later the Bradfords received a letter from Security Savings & Loan Association advising them that the $1,553.34 note assumed by them in their deed, had been deposited with the association for collection. The letter further advised them that the $10.00 monthly payments were to be made to the association commencing on November 15, 1964. Thereafter, the Bradfords promptly made the payments due under each of the notes. In August 1964, they paid off the larger note to Murray Mortgage Company approximately four years in advance of the maturity date. Immediately thereafter they voluntarily increased their payments on the $1,553.34 note from $10.00 a month to $70.00 per month and continued to make such payments until February, 1967, when they stopped making any payments thereon. By letter dated June 5, 1967, Thompson through his attorney, notified the Bradfords that the second lien note was in arrears and that unless payments were made current, the property would be posted for sale under the terms of the deed of trust. No further payments having been made notice of sale was duly posted by Clifford Thyfault, the duly appointed substitute trustee, and the property was subsequently sold on January 2, 1968, to plaintiff, Walton E. Thompson, for the sum of $2,000.00. Thompson called upon the Bradfords to relinquish possession but they refused to do so. He then instituted a forcible entry and detainer suit against them. Being unsuccessful in such suit, Thompson then brought suit against them in trespass to try title which is the basis of the present litigation. In reply thereto the Bradfords answered with a plea of not guilty and by a cross-action for damages for fraud. In addition, they also filed cross-actions against Style-Rite Homes, Inc., hereinafter referred to as 'Style-Rite'; Security Savings Association, hereinafter referred to as 'Security'; W. B. Post, hereinafter referred to as 'the trustee'; Fidelity Title Company and Security Title & Trust Company, hereinafter referred to as 'the title company'.

The cause came on for hearing before the trial court upon the various motions for summary judgment filed by plaintiff, Walton E. Thompson, and all other cross-defendants as well as motions for partial summary judgments on behalf of the Bradfords. After a hearing, the trial court granted summary judgments in favor of the plaintiff and all cross-defendants. The motion of the Bradfords for a partial summary judgment was denied. From this judgment the Bradfords duly perfected this appeal.

By the first point of error defendants urge that the trial court erred in granting summary judgment in favor of the plaintiff and cross-defendants because they contend that the pleadings and summary judgment evidence create genuine issues of disputed facts in each of the following respects.

First, they argue that there is a genuine issue of disputed fact upon the question of whether or not a fraud was perpetrated upon them by Thompson, Style-Rite and Post in connection with their purchase of the property. While they do not contend that any of the foregoing parties made any specific misrepresentations, they take the position that the contract of sale contained a false representation in that it stated that there would be only one mortgage against the property whereas the deed recited the assumption of two mortgages. They argue that the creation of the second lien prior to the sale was in direct contradiction with the terms of the purchase contract and constituted a fraudulent scheme to mislead them. As we understand it, they argue that since it was represented that there would be only one lien they were led to believe that the $1,553.34 note was not secured by a lien; that they relied upon the representation that there was only one lien and in reliance thereon refused to make payments on the $1,553.34 note and as a result suffered a loss by reason of the foreclosure. We are of the opinion that the evidence offered by appellants fails to establish a cause of action for fraud.

In the first place we do not believe that it can be said that the alleged representation caused their loss. In order to sustain a cause of action for fraud, appellants had the burden of showing that the representation proximately caused their damage. Hayden v. Dunlap, 84 S.W.2d 306 (Tex.Civ.App., Dallas, 1935). Assuming arguendo that Style-Rite represented that the mortgage was to be a single mortgage and that such constituted a false representation, and that they were induced to accept a deed whereby they assumed two mortgages, we do not believe that the assumption by them of two mortgages was the cause in fact of the foreclosure. Appellants do not dispute the fact that the sume of $6,800.00 was to be secured by some type of lien, nor do they dispute the fact that the deed provided for a deferred consideration in exactly the amount of $6,800.00 as provided in the contract. Therefore, appellants knew the deferred purchase price of $6,800.00 was to be included in one lien or two liens, that upon the consummation of the sale by the deed, they would thereafter be obligated to pay the $6,800.00. That they did not pay the full amount of $6,800.00 prior to the foreclosure is without dispute. It is without dispute that they stopped making any payments on the note long before the foreclosure proceedings were instituted. Had they not refused to discharge their obligation, the note would have remained current and the second lien would not have been available to Thompson for foreclosure. Therefore, appellants' damages resulted not because the deed provided for the assumption of two liens rather than one, but was directly and proximately caused by the appellants' failure to pay the full amount of the $6,800.00 as they agreed to do in their contract of purchase.

There is still another reason why we do not believe appellants have raised a disputed fact issue upon the question of fraud. The only theory upon which a party is permitted to recover or defend himself because of fraud, is that he believes such representations, and, relying upon them contracted or acted to his hurt. In no event can a recovery be had if either of these elements is wanting. It is imperative that the complaining party believe the false representations to be true at the time he acted thereon.

In the case of Thrower v. Brownlee, 12 S.W.2d 184 (Tex.Com.App., 1929), it is said that:

'* * * Where false representations or promises are made to induce another to act, and, before such other does act, he learns of the falsity of such representations or promises, it cannot of course be said that he relied upon them believing them to be true, for, knowing their falsity, he has not been deceived. Deception is the very essence of an action for deceit, and that which does not deceive cannot be deceit within legal contemplation. It is true that one who makes a false statement, inducing another to act to his hurt, will not be heard thereafter to say the other should have been diligent to inquire as to the truth of the matter, for, in the absence of actual knowledge to the...