Graham v. Pazos De La Torre

• Decision Date: 11 April 1991
• Docket Number: No. 13-90-332-CV,13-90-332-CV
• Parties: Franklin T. GRAHAM, Jr., et al., Appellants, v. Sergio PAZOS De La TORRE, Appellee.
• Court: Texas Court of Appeals

Page 162

821 S.W.2d 162

Franklin T. GRAHAM, Jr., et al., Appellants, v. Sergio PAZOS De La TORRE, Appellee.

No. 13-90-332-CV.

Court of Appeals of Texas,

Corpus Christi.

April 11, 1991.

Rehearing Overruled May 23, 1991.

Franklin T. Graham, Brownsville, William Kimball, Harlingen, for appellants.

Edmundo O. Ramirez, Cynthia G. Gutierrez, Ellis, Koeneke & Ramirez, McAllen, for appellee.

Before NYE, C.J., and BENAVIDES and HINOJOSA, JJ.

OPINION

NYE, Chief Justice.

Franklin Graham and Delia Rodriguez appeal the judgment from a bench trial declaring void both appellant's foreclosure sale and subsequent real estate transaction with appellee, Sergio Pazos De La Torre (Pazos). Appellants raise five points of error. We affirm.

The trial court's findings of fact are unchallenged. When findings of fact are filed and unchallenged, they occupy the same position and are entitled to the same weight as the unchallenged verdict of a jury. See McGalliard v. Kuhlmann, 722 S.W.2d 694, 696 (Tex.1986); Garcia v. Kastner Farms, Inc., 789 S.W.2d 656, 659 (Tex.App.--Corpus Christi 1990, no writ). Such findings of fact are binding on the appellate court. Katz v. Rodriguez, 563 S.W.2d 627, 630-31 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.); Bilek v. Tupa, 549 S.W.2d 217, 220 (Tex.Civ.App.--Corpus Christi 1977, writ ref'd n.r.e.).

The findings of fact and conclusions of law establish the following. Rodriguez sold the real property in question to Arsing, Inc. d/b/a Tortimex (Arsing) on October 30, 1986. In 1990, Rodriguez appointed Graham, her attorney, as Substitute Trustee and instructed him to post the same real property for a foreclosure sale to be held on or about March 6, 1990. On or about March 5, 1990, Arsing filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. On March 6, 1990, Graham purported to sell the real property at a foreclosure sale to Rodriguez. The next day, Rodriguez purported to sell the real property, sold to her by Graham, to Pazos who made a partial payment in the amount of $27,243.21 and executed a Vendor's Lien Note in the amount of $72,792.26, payable to Rodriguez. Rodriguez still possesses the $27,243.21.

Neither Graham nor Rodriguez received notice before Tuesday, March 6, 1990, that Arsing had filed bankruptcy. When Arsing filed Chapter 11 bankruptcy, its assets became the property of the bankruptcy estate. Rodriguez' attempt to have Graham foreclose on the real property and thereby enforce Rodriguez' lien on said real property was stayed by the automatic stay provision of 11 U.S.C. § 362 (1991). The fact that Graham did not receive notice of the Arsing bankruptcy filing was irrelevant because the bankruptcy stayed Graham's foreclosure sale. The foreclosure sale was void because of the stay provisions of § 362; therefore, Rodriguez did not and could not have acquired title to the real property from Graham. Arsing's filing of Chapter 11 bankruptcy and the stay provisions of § 362 preempted any action under state and common law that could have been brought by Graham or Rodriguez against any property belonging to Arsing's bankruptcy estate. See Southern County Mut. Ins. Co. v. Powell, 736 S.W.2d 745, 748 (Tex.App.--Houston [14th Dist.] 1987, orig. proceeding); 11 U.S.C. § 362(a) (1991); Nautical Landings Marina, Inc. v. First Nat'l Bank, 791 S.W.2d 293, 296 (Tex.App.--Corpus Christi 1990, writ denied).

An automatic stay operates to deprive the state court of jurisdiction over the debtor in state court proceedings against the debtor. Powell, 736 S.W.2d at 748; see also Community Investors IX, Ltd. v. Phillips Plastering Co., 593 S.W.2d 418, 420 (Tex.Civ.App.--Houston [14th Dist.] 1980, no writ). All actions taken prior to the lifting of the stay by the Bankruptcy court are void and without legal effect, not merely voidable. Kalb v. Feuerstein, 308 U.S. 433, 60 S.Ct. 343, 84 L.Ed. 370 (1940); Continental Casing Corp. v. Samedan Oil Corp., 751 S.W.2d 499, 500-01 (Tex.1988); Nautical Landings Marina, 791 S.W.2d at 296; Star-Tel, Inc. v. Nacogdoches Telecommunications, Inc., 755 S.W.2d 146, 150 (Tex.App.--Houston [1st Dist.] 1988, no writ); Wallen v. State, 667 S.W.2d 621, 623 (Tex.App.--Austin 1984, no writ); Community Investors, 593 S.W.2d at 420. The findings of fact and conclusions of law regarding the invalidity of the creditor's foreclosure sale and subsequent conveyances due to the stay imposed by the Bankruptcy Code support the trial court's judgment. See U.S. Pipeline Corp. v. Kinder, 609 S.W.2d 837, 841 (Tex.Civ.App.--Fort Worth 1980, writ ref'd n.r.e.); One 1984 Ford v. State, 698 S.W.2d 279, 284 (Tex.App.--Fort Worth 1985, no writ); City of Corpus Christi v. Davis, 575 S.W.2d 46, 55 (Tex.Civ.App.--1978, no writ).

On February 14, 1991, appellants moved to supplement the appellate record with a certified copy of an Order Annulling and Modifying the Automatic Stay from the United States Bankruptcy Court for the Southern District of Texas, Brownsville Division. This order indicated that on February 6, 1991, the Bankruptcy Court specifically annulled and modified retroactively, effective March 6, 1990, the automatic stay in order to validate the foreclosure Graham and Rodriguez conducted on that date. This Court carried the Motion to Supplement with the case.

Appellants argue that this court should allow supplementation of the record because to do so would validate the transfer from appellants to Pazos. We disagree. Admittedly, the Bankruptcy Court has the power to annul the automatic stay to validate actions taking place during the time the stay was effective. Claude Regis Vargo Enters. v. Bacarisse, 578 S.W.2d 524, 527 (Tex.Civ.App.--Houston [14th Dist.] 1979, writ ref'd n.r.e.); 11 U.S.C. § 362(d) (1991); see also Goswami v. Metropolitan Sav. & Loan, 751 S.W.2d 487, 489 (Tex.1988); Powell, 736 S.W.2d at 748. However, the present case is a suit between a creditor, who foreclosed on a bankrupt debtor's property, and a third party purchaser, Pazos. Pazos properly sought declaratory judgment and return of his purchase money because the automatic stay voided the foreclosure; thus, Rodriguez did not have the property or any right to convey to Pazos. Clearly, Pazos did not receive consideration for his payment and delivery of the note. The trial court did not err when it declared the foreclosure void and ordered Rodriguez to return Pazos' money.

The appellate court has wide discretion to supplement the transcript or statement of facts to include omitted matter. K & S Interests, Inc. v. Texas American Bank/Dallas, 749 S.W.2d 887, 891 (Tex.App.--Dallas 1988, writ denied). Tex.R.App.P. 55 empowers the trial court and this court to "direct a supplemental record to be certified and transmitted" concerning "omitted" matters. We interpret this rule to mean that the existing trial court record be correctly transmitted to this court when the original transcript has omitted something of importance. See Pierce v. Benefit Trust Life Ins. Co., 784 S.W.2d 516, 517 (Tex.App.--Amarillo 1990, writ denied); Gerdes v. Marion State Bank, 774 S.W.2d 63, 65 (Tex.App.--San Antonio 1989, writ denied). Furthermore, Rule 55 authorizes trial judges and ...