Chapa v. Herbster

• Decision Date: 12 May 1983
• Docket Number: No. 12-81-0066-CV,12-81-0066-CV
• Citation: 653 S.W.2d 594
• Parties: Carmen R. CHAPA, Appellant, v. David A. HERBSTER, Appellee.
• Court: Texas Court of Appeals

Page 594

653 S.W.2d 594

Carmen R. CHAPA, Appellant, v. David A. HERBSTER, Appellee.

No. 12-81-0066-CV.

Court of Appeals of Texas Tyler.

May 12, 1983.

Rehearing Denied June 29, 1983.

Thomas G. Bousquet, Bousquet & Johnson, Houston, for appellant.

Maurice Bresenhan, Jr., Byrnes, Myers, Adair, Campbell & Sinex, Houston, for appellee.

SUMMERS, Chief Justice.

This is an appeal from a foreclosure of appellant's property. Chapa filed suit against Herbster to set aside a foreclosure sale that occurred on July 1, 1980. Herbster filed a cross-action seeking a deficiency judgment, removal of a lis pendens notice filed against the property and alternatively a judicial foreclosure. Trial was to the court without a jury. The trial court denied all relief sought by Chapa and Herbster except appellee's request for removal of the lis pendens notice.

We affirm.

The record reflects that Chapa purchased the property in question, an apartment building located at 3812 Austin Street, Houston, Harris County, Texas, from Herbster on October 26, 1978. Chapa paid Herbster the sum of $7,000.00 and executed a note dated October 26, 1978, in the principal sum of $15,919.20 payable to him in monthly installments of $150.00 per month, beginning December 1, 1978, such note being secured by a deed of trust of even date for the benefit of Herbster. ¹ Chapa testified that she spent approximately $10,000.00 in plumbing costs, electrical repairs, sheetrocking and other improvements on the subject property, and that Herbster expressed his satisfaction as to her progress in having made such improvements. It is undisputed that she timely paid the monthly installments due Herbster through July 1980, the month of the foreclosure, and also tendered the payment due for the month of August 1980 (that check however was returned to her).

Appellant testified that insurance was maintained on the property throughout the period of her ownership. Admitted into evidence was a certificate of insurance (issued by an insurance company) showing coverage on subject property from January 1, 1980 to January 1, 1981. The evidence shows that Herbster wrote a letter to Chapa on May 5, 1980, wherein he stated,

on several occasions I have asked you about the insurance coverage on 3812 Austin. To date I have still received nothing. If I am going to keep your loan in effect, I must insist that you take care of this matter immediately. Be sure that they send me a copy of the policy showing me as the 2nd lienholder. Sincerely--s/Dave Herbster.

Chapa testified that after receiving this letter from Herbster she put a copy of the insurance coverage on "Mr. David's door."

The record reflects that on May 15, 1980 Herbster appointed James M. Gerson as substitute trustee under the deed of trust, such appointment being recorded on May 28, 1980. On June 5, 1980, Gerson wrote Chapa a letter stating the following:

Enclosed is Notice of Substitute Trustee's Sale which is this date being served upon you by certified mail and being at least 21 days preceding the date of sale. This notice is being sent to you in compliance with Art. 3810, Vernon's Ann.Civ.St., ² Sincerely, s/James M. Gerson.

A copy of such notice was enclosed and posted at the courthouse door, as required by the deed of trust. This notice stated that the grounds for the posting were "... default having been made in the payment thereof..." and that the trustee's sale would be held on Tuesday, July 1, 1980. Chapa testified that she did not receive such notice of sale. Gerson identified the letter as the one he mailed to Chapa and testified that it had subsequently been returned to him, at which time he attempted to telephone Chapa by calling a number listed under a Joe A. Chapa in the phone Thereafter, on or about July 1, 1980, Chapa made her routine monthly installment payment on the note by check to Herbster who endorsed and deposited the same. Also on July 1, 1980, the substitute trustee sold the property at the courthouse door to Herbster and in the substitute trustee's deed recited the reasons for the sale to be "failure to pay taxes, failure to keep improvements in good repair and failure to insure said improvements against loss." The sale was for $15,000.00 and the trustee's deed was executed on July 9, 1980, by James M. Gerson as substitute trustee. Gerson executed an affidavit stating that notice was given to Chapa and such notice was properly posted. The trustee's deed and affidavit were recorded on July 11, 1980.

book. He testified that he never spoke to appellant Chapa about the sale.

Chapa testified that she had no notice of the foreclosure; that on August 1, 1980, being still unaware of the foreclosure sale, she tendered her note payment to Herbster and this check was returned to her. She further testified that later in August 1980 she became aware of the foreclosure and immediately contacted her attorney who filed a notice of lis pendens (recorded August 28, 1980) to protect her interest in the property; that she again attempted to make payment to Herbster on September 1, 1980, and he returned the check.

As stated above, the trial court rendered judgment that Chapa take nothing by her suit and that Herbster take nothing by his counterclaim except a removal of the lis pendens notice. At Chapa's request the court filed findings of fact and conclusions of law. A statement of facts is also included as a part of the record. The findings of fact and conclusions of law are as follows:

FINDINGS OF FACT

1. On October 26, 1978, CARMEN R. CHAPA purchased North Forty (40) feet of Lot Two (2), the South Twenty-Five (25) feet of Lot Three (3) and the adjacent Northeast Twenty-Five (25) [feet], Block Ten (10) of EMPIRE ADDITION, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 69, Page 392, of the Deed Records of Harris County, Texas ("Subject Property") from DAVID A. HERBSTER and gave in partial payment her Promissory Note in the original principal sum of FIFTEEN THOUSAND NINE HUNDRED NINETEEN AND 20/100 DOLLARS ($15,919.20).

2. On October 26, 1978, CARMEN R. CHAPA executed a Deed of Trust to secure payment of the Promissory Note with the Deed of Trust being for the benefit of DAVID A. HERBSTER.

3. CARMEN R. CHAPA paid no taxes on the Subject Property prior to August 8, 1980.

4. Ad Valorem taxes levied or assessed against the Subject Property by Harris County, the State of Texas, the Houston Independent School District, and the City of Houston, were unpaid and delinquent on June 6, 1980 and on July 1, 1980.

5. CARMEN R. CHAPA insured the Subject Property against loss or damage by fire and windstorm only for the year 1980.

6. CARMEN R. CHAPA failed to provide proof of insurance coverage on the Subject Property to DAVID A. HERBSTER for the portion of the year of 1978 the property was owned by CARMEN R. CHAPA, for the year 1979 and for that portion of the year 1980 prior to July 1, 1980.

7. CARMEN R. CHAPA failed to keep the Subject Property in good repair and condition.

8. DAVID A. HERBSTER notified CARMEN R. CHAPA, both verbally and in writing, that proof of insurance coverage had not been provided and thereafter he was not provided with proof of coverage.

9. On May 15, 1980 DAVID A. HERBSTER appointed James M. Gerson as Substitute Trustee under the Deed of Trust dated October 26, 1978.

10. The appointment of a Substitute Trustee was recorded on May 28, 1980.

11. On June 6, 1980, James M. Gerson sent CARMEN R. CHAPA notice of the Substitute Trustee's Sale, dated June 5, 1980, scheduled for July 1, 1980 by Certified Mail in a post paid wrapper.

12. The Notice of Substitute Trustee's Sale was sent to 1203 Ahrens, Houston, Texas 77017.

13. On June 6, 1980 and at all times relevant to where a Notice of Substitute Trustee's Sale by foreclosure should be sent, CARMEN R. CHAPA's address was 1203 Ahrens, Houston, Texas 77017.

14. CARMEN R. CHAPA did not take delivery of the letter containing the Substitute Trustee's Notice of Sale.

15. On July 1, 1980, the Subject Property was sold at foreclosure to DAVID A. HERBSTER for a credit of FIFTEEN THOUSAND DOLLARS ($15,000.00) and a Substitute Trustee's Deed to him executed on July 9, 1980 was recorded on July 11, 1980.

16. On July 9, 1980 James M. Gerson, Substitute Trustee, executed his Affidavit that notice was given to CARMEN R. CHAPA and that posting of said notice had occurred. Said affidavit was recorded on July 11, 1980 as part of the Substitute Trustee's Deed.

17. The property's fair market value was FIFTY-FIVE THOUSAND DOLLARS ($55,000.00) on July 1, 1980.

18. CARMEN R. CHAPA filed a Lis Pendens concerning the Subject Property on August 28, 1980 under Harris County Clerk's File No. G-655492.

CONCLUSIONS OF LAW

1. CARMEN R. CHAPA's failure to pay all ad valorem taxes when due was a breach of a covenant to be performed by the Grantor in the Deed of Trust.

2. CARMEN R. CHAPA's failure to keep the Subject Property in good repair and condition was a breach of a covenant to be performed by the Grantor in the Deed of Trust.

3. CARMEN R. CHAPA's failure to provide proof of insurance coverage on the Subject Property was a breach of a covenant to be performed by the Grantor in the Deed of Trust.

4. Notice given to CARMEN R. CHAPA of the Substitute Trustee's Sale complied with all requirements of Article 3810, V.A.C.S.

5. Notice given to CARMEN R. CHAPA of the Substitute Trustee's Sale complied with all applicable requirements of the Note dated October 26, 1978.

6. Notice given to CARMEN R. CHAPA of the Substitute Trustee's Sale complied with all applicable requirements of the Deed of Trust dated October 26, 1978.

7. CARMEN R. CHAPA's failure to pay all ad valorem taxes, when due, was a default under the terms of the Deed of Trust that authorized maturity of the note dated October 26, 1978, without any notice to the Maker.

8. CARMEN R. CHAPA's failure to keep the Subject Property in good repair and...