Jasper Federal Sav. & Loan Ass'n v. Reddell
| Decision Date | 27 May 1987 |
| Docket Number | No. C-6167,C-6167 |
| Citation | 730 S.W.2d 672 |
| Court | Texas Supreme Court |
| Parties | JASPER FEDERAL SAVINGS & LOAN ASSOCIATION, Petitioner, v. Norman W. REDDELL et ux., Respondents. |
Blair A. Bisbey, Seale, Stover, Coffield, Gatlin & Bisbey, Jasper, for petitioner.
Jon B. Burmeister, Moore, Landrey, Garth & Jones, Beaumont, for respondents.
This is a suit for wrongful foreclosure brought by Norman and Carol Reddell against Jasper Federal Savings & Loan Association. In a bench trial, the court rendered judgment in favor of Jasper. The court of appeals reversed the judgment of the trial court and remanded the cause with instructions to render judgment for the Reddells, for the difference between the value of the property and the balance due on the note plus interest. 722 S.W.2d 551 (Tex.App.--Beaumont 1987). We reverse the judgment of the court of appeals and affirm the judgment of the trial court that the Reddells take nothing from defendant Jasper.
The Reddells financed their home through Jasper Federal Savings & Loan under a deed of trust agreement. Over the history of the note, the Reddells were in default on multiple occasions. The property was posted for foreclosure eleven times prior to final foreclosure. In June 1983, the Reddells were in default of their note and Jasper once again began foreclosure proceedings under the deed of trust. The deed of trust contained an acceleration clause which provided that upon default:
Lender prior to acceleration shall mail notice to borrower as provided in paragraph 14 hereof specifying: (1) the breach; (2) the action required to cure such breach; (3) a date, not less than thirty days from the date the notice is mailed to borrower, by which such breach must be cured; and (4) that failure to cure such breach on or before the date specified in the notice may result in acceleration of the sums secured by this deed of trust and sale of the property. The notice shall further inform borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of borrower to acceleration and sale.
By letter dated July 12, 1983, the substitute trustee sent notice to the Reddells informing them that their account was past due and they could stop foreclosure proceedings by paying the delinquency plus expenses; that if the delinquency was not paid by August 12, 1983, they would be required to pay an additional legal fee to cover the cost of foreclosure; and, that foreclosure would be for the full amount of the loan. It is undisputed that the note did not inform the Reddells of their right to reinstate after acceleration or of the right to bring a court action to assert the non-existence of a default or any other defense to acceleration and sale.
On August 12, 1983, the trustee posted notice that complied fully with the provisions of section 51.002 of the Texas Property Code 1 applicable to the sale of real property under a contractual lien. The property was sold on September 6. Jasper purchased the property for the unpaid balance of $19,962.23. Following the auction sale, Jasper offered to resell the property to the Reddells for the balance due on the note plus expenses of the sale. The Reddells did not purchase the property; however, they remained in possession of the property for over four months. Jasper resorted to eviction proceedings to regain possession of the property. In March 1984, Jasper sold the property to a third party for $39,900. The Reddells then filed suit for wrongful foreclosure under the Texas Declaratory Judgment Act.
Trial was to the court, which found in favor of Jasper. The court determined that the Reddells were estopped from asserting a damages claim for Jasper's failure to inform them of their rights to reinstate after acceleration or to bring a court action to assert the non-existence of a default or any other defense to acceleration and sale as provided in the deed of trust. The basis for this ruling was because the Reddells had actual knowledge of their rights by virtue of their prior consultation with their own legal counsel.
The court of appeals found the trial court's conclusion of law erroneous under our holdings in Ogden v. Gibraltar Savings Ass'n, 640 S.W.2d 232 (Tex.1982), and Houston First American Savings v. Musick, 650 S.W.2d 764 (Tex.1983). Since strict compliance with the terms of the deed of trust was required, the court of appeals found error in the trial court concluding that actual knowledge could be substituted for notice.
The court of appeals' reliance on Ogden is misplaced. In that case the acceleration clause in the deed of trust gave Gibraltar the option to accelerate upon default, but it was not required to do so. A letter of notice was sent to Ogden which stated that "failure to cure ... may...
To continue reading
Request your trial
-
Brush v. Wells Fargo Bank, N.A.
...of section 51.002” is to “protect the debtor by affording him a lengthy notice period in which he may cure[.]” Jasper Fed. Sav. & Loan Ass'n v. Reddell, 730 S.W.2d 672, 674 (1987). Strict compliance is required with the Texas Property Code's nonjudicial foreclosure notice requirements. See,......
-
Sam v. Wells Fargo Bank, N.A.
...of § 51.002 is to "protect the debtor by affording him a lengthy notice period in which he may cure." Jasper Fed. Sav. & Loan Ass'n v. Reddell, 730 S.W.2d 672, 674 (Tex. 1987). Here, the Property Code provision at issue focuses on both the regulated party, the mortgage servicer, and the pro......
-
James Constr. Grp., LLC v. Westlake Chem. Corp.
...in clear and unequivocal language. Shumway , 801 S.W.2d at 893. But the court later clarified Ogden in Jasper Federal Savings & Loan Association v. Reddell , 730 S.W.2d 672 (Tex. 1987), in which the court held, in a deed-of-trust dispute, that actual knowledge of the right to reinstate afte......
-
Swoboda v. Wilshire Credit Corp.
...default gave Columbia Savings the right to exercise the clause, Columbia Savings was not obligated to do so. Jasper Fed. Sav. & Loan Ass'n v. Reddell, 730 S.W.2d 672, 674 (Tex.1987). No cause of action would accrue until the clause was exercised or the note matured, despite the occurrence o......