Carter v. McHaney

• Decision Date: 14 November 1963
• Docket Number: No. 8,8
• Citation: 373 S.W.2d 82
• Parties: W. B. CARTER, Appellant, v. A. R. McHANEY, Appellee.
• Court: Texas Court of Appeals

Page 82

373 S.W.2d 82

W. B. CARTER, Appellant, v. A. R. McHANEY, Appellee.

No. 8.

Court of Civil Appeals of Texas, Corpus Christi.

Nov. 14, 1963.

Luther Jones, Jr., Corpus Christi, for appellant.

Jack White of North, Blackmon & White, Corpus Christi, for appellee.

GREEN, Chief Justice.

This suit was filed in the District Court of Nueces County, Texas, byW. B. Carter, appellant, against A. R. McHaney, appellee, seeking by way of a declaratory judgment a judicial declaration as to exactly how much Carter owed McHaney on the judgment of the Court of Civil Appeals, 4th Supreme Judicial District in McHaney v. Hackleman, et al., Tex.Civ.App., 347 S.W.2d 822, writ ref. n. r. e.

The prior suit was brought by McHaney against Hackleman and Carter for specific performance of a written contract whereby McHaney should sell, an Hackleman should buy certain described improved real property in the City of Corpus Christi, Nueces County, Texas, for the sum of $60,000.00 to be paid on or before March 14, 1959.

In June, 1959, McHaney filed suit for specific performance against Hackleman and Carter to compel buyers to pay him $60,000.00 for said realty. A jury trial followed, and, though the jury verdict was favorable to plaintiff, the trial court on December 9, 1959, rendered judgment non obstante veredicto denying specific performance and awarding plaintiff recovery of the $1,000.00 earnest money. McHaney appealed and, as shown in the opinion, 347 S.W.2d 822, delivered May 24, 1961, the Court of Civil Appeals reversed and rendered, finding Carter liable as a partner with Hackleman in the contract to purchase, and holding that on the jury verdict, judgment should have been rendered for specific performance.

After writ of error was denied by the Supreme Court, n. r. e. the mandate of the Court of Civil Appeals was issued to the District Court and filed by the District Clerk of Nueces County on November 2, 1961. In view of the effect we give this mandate later in this opinion, we copy the order of the Court therein contained as follows:

'This cause came on to be heard on the transcript of the record, and the same being examined, because it is the opinion of the Court that there was error in the judgment of the Court below in rendering judgment against the appellees, H. B. Hackleman and W. B. Carter, only for the amount of the earnest money, it is therefore considered, adjudged and ordered that said judgment be, and it is hereby, reversed, and judgment here rendered for specific performance that should have been rendered by the Court below.

'It is therefore, ordered, adjudged and decreed that appellant, A.R. McHaney, do have and recover of and from the appellees, H. B. Hackleman and W. B. Carter, the sum of $1000.00 earnest money held by the Guaranty Title and Trust Company of Corpus Christi, Texas, and judgment for the additional sum of $59,000.00, and that the implied vendor's lien against the property described in Plaintiff's Original Petition, as found in the transcript, be fixed, established and foreclosed, and that an order of sale issue and the property be sold as under execution.

'It is further ordered that Appellees, H. B. Hackleman and W. B. Carter, pay all costs of this Court in this behalf expended and incurred, and this decision be certified below for observance.'

Thereafter the property was sold under execution on February 6, 1962, for $45,000.00, of which $68.60 was applied to court costs, $261.81 to costs of the sale, and the balance was credited to the indebtedness. ¹ On April 26, 1962, Carter paid McHaney $7,494.30 on the balance of his debt. ² No other payment has been made on the judgment rendered by the 4th Court of Civil Appeals.

The present cause was tried on a written stipulation of facts which, together with the mandate of the Court of Civil Appeals, constitute the entire statement of facts.

From the time the sales contract was signed until the date of the execution sale on February 6, 1962, McHaney was in possession of the property, using same for his own purposes and collecting rents and revenues therefrom.

It was stipulated that from November 13, 1959, the agreed date of the termination of the trial in the other suit, to February 6, 1962, the amount of gross revenues produced by said realty and retained by McHaney was $9,550.55, of which $2,125.45 was applied to payment of taxes, $593,80 to insurance premiums, and $334.31 to repairs. Carter raised no objections to the propriety of these expenses, but asserted a right to have the net revenues applied as part payment on his debt, alleging that during said period McHaney was mortgagee in possession. McHaney denied such claim.

On November 2, 1945, McHaney had executed a note for $13,000.00, secured by a martgage on this realty, and he claimed the right to deduct from said gross revenues the sum of $1,100.00 interest paid on this loan, in the event Carter was to be entitled to apply such net revenues on his debt. Carter contended that this was not a proper charge against him.

The disputed issues in the trial court resolved to the following:

1. Was Carter entitled to offset against his debt to McHaney the amount of rents and revenues, after deduction of the expenses of taxes, insurance, and repairs, produced by said realty from November 13, 1959, which according to the stipulation of the parties, was the date of the termination of the district court trial, and the date from which Carter claimed, to February 6, 1962, the date of the execution sale?

1(a) Was McHaney entitled to include as a proper expense, to be deducted from gross revenues along with taxes, insurance and repairs, the item of interest paid on the note owing by him?

2. Was Carter entitled to offset against his debt the amount of reasonable rental value of McHaney of the portion of the realty which the parties stipulated McHaney did use during the period, which reasonable rental value, so the parties agreed, was $100.00 per month for each month of said period?

3. Was McHaney entitled to interest on the $60,000.00 purchase price, at 6% per annum from March 14, 1959, the date of the breach of the sales contract by the vendees, to February 6, 1962?

Basing his findings on the stipulation of the parties, and crediting Carter with the net amount received from the execution sale and with his cash payment of $7,494.30 on April 26, 1962, the trial court ruled as follows:

'It is the finding and opinion of the Court that A. R. McHaney as Vendor in possession of the property from March 14, 1959 (the date on which W. B. Carter, the Vendee, was due to pay $60,000.00 purchase price) shall retain all rents and revenues of the subject property received by him until the date of May 24, 1961 (the date on which the Court of Civil Appeals reversed the judgment of the lower Court and rendered a judgment for specific performance). The Court further finds that during such period, W. B. Carter, as Vendee, is not liable to A. R. McHaney for interest on the purchase price of $60,000.00.

'The Court further finds and is of the opinion that A. R. McHaney, as Vendor, is entitled to interest on the sum of $60,000.00 from the date of May 24, 1961 (date of the Court of Civil Appeals judgment) to February 6, 1962 (date of the foreclosure sale by the Sheriff of Nueces County, Texas), and that during such period, W. B. Carter is entitled to the said rents and revenues received during such period by A. R. McHaney as Vendor in possession of the property. The Court is further of the opinion that the claim of W. B. Carter against A. R. McHaney for reasonable rental for the use of part of the property in the operation of A. R. McHaney's business during the period is denied, and the claim for credits to apply against rents collected by A. R. McHaney for interest on mortgage payments is denied as being an obligation which A. R. McHaney could have liquidated and would have saved the interest thus accruing.'

The Court found that the balance of Carter's indebtedness to McHaney was $11,239.72, and rendered judgment for McHaney for that amount, with interest at 6% per annum from May 7, 1963, until paid.

Appellant's appeal is based on two propositions. (1) He asserts the right to offset, against his debt to McHaney, the amount of net revenues collected and retained by McHaney from the realty during the period from November 13, 1959, to February 6, 1962. The trial court allowed him credit only for such net revenues collected after May 24, 1961, the date of the opinion of the 4th Court of Civil Appeals. (2) He asserts the right to offset the rental value of the use made of the property for his business purposes by McHaney while he was in possession thereof between November 13, 1959, and February 6, 1962, which the parties stipulated to be $100.00 per month. The court denied this claim in toto.

Appellee McHaney denies that appellant is entitled to such offsets, and in addition in a counter claim asserts that the trial court erred in not awarding him interest on the $60,000.00 from March 14, 1959, the date of the breach of the contract by appellee. The trial court's ruling was that interest started from May 24, 1961. McHaney further claims the right to charge, against the rents and profits of the building, the item of $1,100.00 paid by him as interest of his note above mentioned.

As shown by his rulings mentioned above, the trial court accepted May 24, 1961, the date of the opinion of the 4th Court of Civil Appeals in McHaney v. Hackleman, et al., supra, as the effective date of that court's judgment and mandate. In this, we believe that the court erred. We agree with the statement contained in appellee's brief, that there is ample authority for the proposition that a judgment of an appellate court reversing and rendering an erroneous judgment of a trial court relates back to the entry of the improper judgment. Givens v. Missouri Kansas...