Kaspar v. Keller
| Decision Date | 25 March 1971 |
| Docket Number | No. 4994,4994 |
| Citation | 466 S.W.2d 326 |
| Parties | Henry N. KASPAR & Aetna Insurance Co., Appellants, v. Ridgell Jackson KELLER, Appellee. |
| Court | Texas Court of Appeals |
Bailey, Williams, Weber & Allums, James A . Williams, Akin, Steinberg & Stanford, Paul H. Stanford, Dallas, for appellants.
Saner, Jack, Sallinger & Nichols, Tim Kirk, Dallas, for appellee.
This is a suit on a note and on a temporary injunction bond. Motions for summary judgment by appellee Keller against appellants Kaspar and Aetna Insurance Co. were sustained. We affirm in part, and in part reverse.
Kaspar executed an installment deed of trust note to Keller as part consideration for realty purchased under a contract of sale. Kaspar sued Keller for rescission of the contract of sale, recovery of a $75,000 down payment and cancellation of the note, alleging the sale was induced by fraud. Keller answered but filed no counterclaim on the note.
While the suit was pending Keller indicated his intention of foreclosing under the power of sale in the deed of trust, whereupon Kaspar obtained a temporary injunction restraining the foreclosure. Kaspar filed an injunction bond with Aetna as surety conditioned that Kaspar would abide the 'decision which may be made in such cause and that he will pay all sums' which 'may be adjudged against him if the temporary injunction shall be dissolved'.
In the trial of that case on the merits the jury found, in effect, that the sale was not induced by fraud, but the market value of the property at the time of the sale was $86,000. Judgment was rendered in that case that Kaspar take nothing. Sale was then completed under the deed of trust, the property being sold to Keller for $86,000 which was credited on the note.
The present suit is by Keller against Kaspar for the deficiency, and against Aetna on the injunction bond. The trial court rendered summary judgment against Kaspar for the deficiency and against Aetna on its bond.
Aetna's appeal
The summary judgment against Aetna on its bond was for $10,200.55 which the trial court assessed as interest on the $86,000 'realized at the trustee's sale for the period the temporary injunction was in force at 10%, the rate provided in the note for interest after maturity'. Aetna says its obligation as surety on the bond extends only to damages adjudged against the principal, Kaspar, in the action in which the injunction was issued; and an improper measure of damages was applied in any event.
The first contention is persuasive, but it is unnecessary to decide it. In our opinion the measure of damages applied is not applicable, and since there are no other damages for which the surety is sought to be held liable, this portion of the judgment is reversed.
Keller, the beneficiary in the deed of trust became the purchaser at the trustee's sale in a typical paper transaction by which the note executed by Kaspar was credited with the nominal purchase price of $86,000. Keller lost no interest during the period the injunction was in effect; the accumulation of interest on the note was not interrupted, but it continued to accrue. The mere fact that Keller did not bid accrued interest did not adversely affect the amount of the deficiency. Under the judgment, however, Keller would recover the amount of interest during the injunction period from both Kaspar and Aetna.
True, while the trustee's sale was enjoined the ultimate amount of deficiency on Kaspar's note was being increased by accrual of interest on the $86,000 sale price eventually credited on the note. But this was damage to Kaspar, the principal on the bond. It was not damage to Keller. See Glens Falls Insurance Co. v. First National Bank of Nevada, 83 Nev. 196, 427 P.2d 1 (Nev.Sup.1967).
Appellee urges us to follow Southland Life Ins. Co. v. Stone (Tex.Civ.App., 1938, no writ), 112 S.W.2d 336. The same fallacy, we think, exists in that case. The decision inverts the position of the parties. The court there says if the sale had not been prevented 'appellant's (the holder of the note) debt, at that time, would have been reduced' by the sale price, and the mortgagee's debt would have been increased by interest accrual without credit for the purchase price. Increase in the amount of the debt may well have damaged the mortgagor, as was failure to receive credit for the sale price, but no damage resulted thereby to the mortgagee-creditor. The court there also suggests the mortgagee (Southland) was 'deprived of the use of' the amount bid as purchase price. The mortgagee was not deprived of the use of these funds. It only advanced and credited the note with the purchase price at the time of the sale.
The cause of action and the judgment against Aetna is severed and reversed, and judgment rendered that as to Aetna plaintiff...
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