Estelle v. Hart

• Decision Date: 22 December 1932
• Docket Number: No. 1575-5929.,1575-5929.
• Parties: ESTELLE et al. v. HART et al.
• Court: Texas Supreme Court

55 S.W.2d 510

ESTELLE et al. v. HART et al.

No. 1575-5929.

Commission of Appeals of Texas, Section A.

December 22, 1932.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by Mrs. G. Hart against L. C. Estelle, Jr., and others. From the judgment, plaintiff and defendant Mrs. Jack O. Allen appealed to the Court of Civil Appeals [34 S.W.(2d) 665], which affirmed the judgment in part and reversed it in part and remanded the cause, with instructions, and plaintiff and some defendants bring error.

Affirmed, with instructions.

W. A. Morrison, of Cameron, and J. W. Thomas, of Belton, for plaintiffs in error.

E. A. Wallace and Henderson, Kidd & Henderson, all of Cameron, and J. P. Alexander, of Waco, for defendants in error.

HARVEY, P. J.

This suit involves the foreclosure of two judgment liens on two separate tracts of land in Milam county. One of the judgment liens is held by Mrs. G. Hart and the other by Mrs. Jack O. Allen. The respective money judgments secured by said judgment liens were duly recovered against L. C. Estelle by Mrs. Hart and Mrs. Allen, respectively, in the year 1928, and both are still subsisting. Each of said judgments against L. C. Estelle was duly abstracted, and, on May 12, 1928, such abstract was duly recorded in the office of the county clerk of Milam county. No question going to the regularity of such abstracting and recording is involved in the case. The controversy herein, in respect of said judgment liens, relates exclusively to the rights of Mrs. Hart and Mrs. Allen, as holders of said liens, in respect of two separate tracts of land in Milam county—one of which is known as the "Mitchell tract" and the other as the "Atkinson tract." With respect to the Mitchell tract, Mrs. Hart and Mrs. Allen sought foreclosure of said judgment liens as against said L. C. Estelle and the First National Bank of Cameron, Tex., which will be hereinafter called the bank. On this branch of the case the trial court peremptorily instructed the jury to return a verdict for the bank, and judgment was entered in favor of the bank denying Mrs. Hart and Mrs. Allen a foreclosure of their judgment liens.

With respect to the Atkinson tract, Mrs. Hart and Mrs. Allen sought foreclosure of their said liens as against said L. C. Estelle, and the latter's two sons, L. C. Estelle, Jr., and John R. Estelle. In this respect, special issues were tried to a jury, resulting in a judgment in favor of the two last named, denying Mrs. Hart and Mrs. Allen a foreclosure as sought by them. It is unnecessary, for present purposes, to state the disposition of the case by the trial court, with reference to other parties to the suit. On appeal, the Court of Civil Appeals affirmed the judgment of the trial court, in part, and reversed and remanded, in part, as will be hereinafter more specifically stated. 34 S.W.(2d) 665. The application for writ of error made by the First National Bank of Cameron, and that made by L. C. and John R. Estelle, and that made by Mrs. Hart and Mrs. Allen, have been granted by the Supreme Court. The two applications last mentioned were granted because of the granting of the bank's application.

We shall first take up the questions which involve the Mitchell tract. The facts relating to this branch of the case, so far as need be stated here, are substantially as follows: On October 28, 1926, L. C. Estelle, being the owner of the Mitchell tract, executed a deed of trust, covering said tract, to Gillis, as trustee, to secure said Estelle's note for $3,000, which note was held by a Mrs. A. F. Mitchell. In said deed of trust it was provided as follows:

"But, in case of failure or default in the payment of said promissory note together with the interest thereon accrued, according to its terms and face, at the maturity of the same, then, in such event, said Mrs. A. F. Mitchell is by these presents fully authorized and empowered, and it is made his special duty, at the request of the said W. G. Gillis, Trustee, at any time made after the maturity of said promissory note, to sell the said above described property to the highest bidder, for cash, at public outcry, in front of the Court House door of said Milam County, on the first Tuesday of any month, between the hours of 10 o'clock a. m. and 4 o'clock p. m. first giving notice of the time, place and terms of sale for at least twenty days successively next before the day of sale, by posting up written or printed notices of such sale at three public places in the County of Milam, State of Texas, one of which shall be at the court house door of said County, and by giving such other notice as is or may be required by law, and after said sale, as aforesaid, to make to the purchaser or purchasers thereof a good and sufficient deed in law to the property so sold, with the usual covenants and warrants, and to receive the proceeds of said sale, and the same to apply to the payment of said note, the interest thereof accrued, and the expense of executing said trust, including five per cent. commission to said Trustee, holding the remainder thereof subject to the order of them the said L. C. Estelle and Fannie Estelle.

"It is expressly agreed that the recitals in the conveyance to the purchaser shall be full evidence of the truth of the matters therein stated, and all prerequisites to said sale shall be presumed to have been performed; and it is hereby specially provided that should the said W. G. Gillis, Trustee, from any cause whatever, fail or refuse to act, or become disqualified from acting as such Trustee, then the said Mrs. A. F. Mitchell shall have full power to appoint a substitute, in writing, who shall have the same powers as are hereby delegated to the said W. G. Gillis, Trustee, and does by these presents fully and absolutely ratify and confirm any and all acts which the said W. G. Gillis, Trustee, or his substitute as herein provided, may do in the premises by virtue hereof."

As already shown, the abstracts of the Hart and Allen judgments against L. C. Estelle were duly filed and recorded on May 12, 1928. After this, the bank brought suit against Estelle, and, on January 3, 1929, had an attachment levied on the Mitchell tract. That suit resulted in a judgment in favor of the bank against Estelle for about $1,400, and foreclosure of the attachment lien. On July 2, 1929, one McIntosh, one of the directors of the bank, and who, at the instance of the bank, had purchased the Mitchell note and lien for the bank, and still held same for the bank, obtained a refusal of Gillis to act as trustee under the above deed of trust, and appointed Wallace as substitute trustee. On the same day, McIntosh, in writing, requested Wallace, as substitute trustee, to sell the land for the purpose of satisfying said note. Wallace proceeded to advertise the land for sale on August 6, 1929, under said deed of trust. At said sale McIntosh, the only bidder, bought in the land, for the bank, for the sum of $3,750, and credited the amount of his bid on the debt and expenses of sale. Wallace, as substitute trustee, conducted said sale and executed to McIntosh a deed to the land, and the latter thereupon deeded the land to the bank. A few days after said sale was made and said deeds were executed, L. C. Estelle, for a valuable consideration moving from the bank, executed to the bank a written instrument in which he ratified and confirmed the sale and deed which had been made by Wallace, as substitute trustee.

Keeping in mind the foregoing facts, questions going to the validity of the sale by Wallace, as substitute trustee, will now be considered. The power of sale which was created by L. C. Estelle in and by deed of trust of October 28, 1926, under which Wallace assumed to act, was by the terms of that instrument conferred on Mrs. Mitchell alone. The language of the instrument, in this respect, is not susceptible of any other meaning. Regardless, therefore, of other alleged irregularities in the sale conducted by Wallace, no valid sale was effected under said power, for the simple reason that said power was not exercised by Mrs. Mitchell, the person to whom same was intrusted. Fuller v. O'Neil, 69 Tex. 349, 6 S. W. 181, 5 Am. St. Rep. 59; Boone v. Miller, 86 Tex. 74, 23 S. W. 574; Michael v. Crawford, 108 Tex. 352, 193 S. W. 1070. The bank contends, however, that an inquiry as to the proper exercise of a power of sale which has been granted by a mortgagor is not available to any one except the mortgagor and his privies in estate. The case of Buvens v. Brown, 118 Tex. 551, 18 S.W.(2d) 1057, is relied on as sustaining this contention on principle. This may be true, perhaps, so far as the inquiry relates to divestiture of the title of the mortgagor and the investing of same in the purchaser at such a sale. But a sale of the mortgaged property under such a power, if the power be regularly exercised in conformity with the terms prescribed, imports something more than a mere transfer of the title to the property. It also has effect to cut off all the rights of junior lienholders respecting the property sold. Hampshire v. Greeves, 104 Tex. 620, 143 S. W. 147. It is perfectly plain, therefore, that a junior lienholder has an interest in the...