Interstate Life Ins. Co. v. Turner, 4181

• Decision Date: 24 October 1963
• Docket Number: No. 4181,4181
• Parties: INTERSTATE LIFE INSURANCE COMPANY, Appellant, v. Tom E. TURNER et al., Appellees.
• Court: Texas Court of Appeals

Page 913

371 S.W.2d 913

INTERSTATE LIFE INSURANCE COMPANY, Appellant, v. Tom E. TURNER et al., Appellees.

No. 4181.

Court of Civil Appeals of Texas, Waco.

Oct. 24, 1963.

Rehearing Denied Nov. 14, 1963.

George F. Manning, San Antonio, for appellant.

Fred Woodley, Stahl & Sohn, Pfeiffer & Gittinger, San Antonio, for appellees.

WILSON, Justice.

Judgment setting aside a trustee's deed and sale proceedings under a deed of trust was rendered after a nonjury trial. Findings and conclusions were filed. We reverse and remand in part, and in part reverse and render.

Willow Springs Development Co. and another executed a $48,500 vendor's lien note, additionally secured by a deed of trust, which was assigned to appellant Interstate Life Insurance Co. The note was payable in five installments of $9700 each, plus accrued interest, due October 19, 1960, and on October 19th annually thereafter. The first installment was not paid when due. On November 29, 1960 appellee Turner wrote Interstate that he had signed an earnest-money contract to purchase the land described in the deed of trust, that the transaction was being handled by a title company, that he had applied for a zoning change, that he would assume the balance of the debt, and that he had been informed that Interstate 'is willing to bear with' Willow Springs 'these few days', providing he gave written assurance he would take the property contingent on his obtaining the zoning change and a clear title. His letter recited he was cognizant the first payment was 'due on November 24, 1960.'

December 1, 1960 the title company wrote Interstate, at Turner's request, that it would pay the October installment when the zoning application was approved and funds were available. On December 2, 1960 Interstate wrote Turner, stating the total principal and interest due on the delinquent installment to December 15, and the amount of daily interest to be added thereafter. The court found, and the evidence shows the amount of interest was erroneously computed as being more than the note actually called for. Interstate's letter said, 'In view of the sale, we agree not to take any foreclosure action if payment of the delinquent installment and accrued interest is paid to us by December 18, 1960. It is our understanding that you will see that a check will be forwarded by the title company as a part of your closing proceedings. If payment is made as here requested, the note will be in a current status and no longer delinquent. This letter shall not be construed to in any manner constitute a release of lien.' On December 22, 1960 the title company sent Interstate a check representing the amount of the October 19, 1960 installment of principal and 'interest to December 28, 1960.' The interest was computed and paid to the latter date by the title company, anticipating delivery delay during the Christmas holiday season. The letter of transmittal stated, 'The remaining payments when due will be made' by Turner. The next installment was not paid on October 19, 1961 as the note provided, and Interstate requested the trustee to proceed with sale under the deed of trust, which was held December 5, 1961. Interstate was the purchaser for $40,801. Although the evidence shows an unsuccessful effort was made to locate and make demand for payment on the makers, no presentment, demand or notice was given to Turner, who had assumed payment of the note.

No attack is made on the regularity of proceedings by which the trustee made sale of the land under the power of sale in the deed of trust. Appellees defend the judgment and urge affirmance on three grounds: (1) The note was not in default when the trustee's sale was held because Interstate had agreed to change the annual installment due date from October 19th to December 27. (2) The trial court correctly held that Interstate was required to present the note to, and make demand of Turner for payment before proceeding to foreclose under the deed of trust. (3) Turner 'at all times in good faith believed the second annual installment was due on December 28, 1961, and such belief was due to an honest and justifiable mistake on his part'; and the trial court therefore correctly concluded that Turner's mistake 'calls for the exercise of this Court's equity powers to prevent a manifest injustice', and appellant is estopped. These are substantially the conclusions specified by the trial court as the basis for judgment.

(1) Appellees' argument that Interstate had agreed and contracted to change the due date of the October 19, 1961 and subsequent installments is based primarily on the correspondence above summarized. Appellees emphasize the language in Interstate's letter to Turner of December 2 that 'if payment is made as here requested, the note will be in current status and no longer delinquent', urging that since Interstate received payment December 27, 1960, the next installment would not be due for one year from that date. They state the amount remitted to Interstate by the title company, computed to December 27, 1960, was $53.44 too much, appellant having erroneously computed the daily interest on the entire principal; and this was consideration for the extension. They further claim that because appellant's bookkeeper inserted in its ledger three parallel perpendicular tabulating machine marks in a second ledger column headed 'date due', adjacent to a first column headed 'date'; and because the bookkeeper had posted 'Dec. 27, 60' in the 'date' column when the initial installment payment was received, the three perpendicular...