Keda Development Corp. v. Stanglin

• Decision Date: 31 October 1986
• Docket Number: No. 05-84-00052-CV,05-84-00052-CV
• Citation: 721 S.W.2d 897
• Parties: KEDA DEVELOPMENT CORPORATION, Appellant, v. Charlie L. STANGLIN, Appellee.
• Court: Texas Court of Appeals

Page 897

721 S.W.2d 897

KEDA DEVELOPMENT CORPORATION, Appellant, v. Charlie L. STANGLIN, Appellee.

No. 05-84-00052-CV.

Court of Appeals of Texas Dallas.

Oct. 31, 1986.

Timothy A. Duffy, Paul Kining, Harold J. Dollinger, Dallas, of counsel, for appellant.

Daniel J. Sheehan, Jr., Dallas, for appellee.

Before GUITTARD, C.J., and STEPHENS and DEVANY ¹, JJ.

UPON REMAND FROM THE SUPREME COURT OF TEXAS

DEVANY, Justice.

The judgment and opinion of this Court dated December 12, 1984, was heard by the Supreme Court of Texas on a writ of error from this Court. Our original opinion held that there was no evidence to support the judgment of the trial court setting aside the bulk sale of the three lots in question to satisfy an unpaid paving lien. The Supreme Court held that there is "some evidence that the bulk sale caused or contributed to cause the grossly inadequate consideration." The cause was remanded back to this court for further consideration of the other points of error. Stanglin v. Keda Development Corp., 713 S.W.2d 94 (Tex.1986). Upon such consideration we reverse the judgment insofar as it denies recovery for insurance premiums and remand with instructions to require Stanglin to reimburse Keda for the amount of insurance premiums paid. Otherwise, the judgment is affirmed.

THE FACTS

Charlie L. Stanglin, appellee, owned four parcels of land in Dallas, Texas. Sometime in 1969, the City of Dallas made assessments for paving Elam Road along three of Stanglin's parcels of land (referred to as parcels one, two and three). The fourth parcel was not affected since it does not face Elam Road. In 1974, upon Stanglin's failure to pay these assessments, the City obtained a judgment against Stanglin in the sum of $3,710.79 with interest at the rate of 5% from that date, together with paving-assessment liens on the three parcels facing Elam Road. At the trial of the present suit, there was considerable testimony about the three lots in question from several witnesses, including a surveyor and an appraiser. We summarize this testimony as to each lot.

Elam Road runs east and west, intersecting Buckner Boulevard, which runs north and south. Parcel one lies at the southwest corner of the intersection. To the west and lying next to it is parcel two. Further to the west and lying next to parcel two is parcel three. All three parcels face Elam Road, and the corner parcel, number one, also faces Buckner Boulevard. Parcel four is an inside lot lying south of parcels two and three, access to which is accomplished by passing over parcel number two.

The testimony reveals the following facts and market values as of February 3, 1981, the date of the sheriff's sale.

Parcel number three is covered mostly by a building housing a roller-skating rink, which leaves no room for parking. The market value of the underlying land was $131,300 and the depreciated value of the building, considering the lack of parking, was $237,000.

Parcel number two is paved with a driveway. It can accommodate about fourteen parked cars. Its market value was $22,900.

Parcel number one is a corner parcel covered with grass and trees. While it could be paved to accommodate thirty-three parked cars, it has no improvements. Posts are set around its perimeter to prevent cars from being driven upon it. Its market value was $31,000.

Parcel number four, which is not in issue, must nevertheless be described because it is an integral part of the roller-rink operations. It is paved and cars are driven through parcel number two to reach it. It is used to park about eighty cars. Furthermore, part of the roller-rink building actually extends onto parcel number four. Its value was $99,500.00.

On February 3, 1981, the sheriff sold in a bulk sale parcels one, two, and three for $5,282.69 to Keda Development Corporation, appellant. Stanglin filed suit to set aside that sale and tendered into court the amount paid by Keda. In a non-jury trial, the trial court found that the three parcels were advertised, bid on, and sold in bulk rather than separately; that the sheriff should have advertised the parcels, received bids, and sold each parcel separately; that parcel number one, which was not being used by Stanglin, had a market value alone in excess of the total judgment of $3,710.79. The court, on November 17, 1983, set the bulk sale aside and awarded to Keda the money on deposit with the court, representing its purchase price of $5,283.69. Keda was also awarded $10,000 in attorney's fees since it had to defend its title derived from the sheriff's sale.

Keda appealed to this court, assigning six points of error. Our original opinion addressed only Keda's second point of error, which complained that there was no evidence or insufficient evidence to support the trial court's findings that the bulk sale contributed to the inadequacy of the price. In that opinion Justice Stewart held that there was no evidence to support the trial court's findings and, therefore, reversed and rendered for Keda. Since the Supreme Court of Texas subsequently held that there is "some evidence that the bulk sale caused or contributed to cause grossly inadequate consideration," the Supreme Court has remanded the cause to this court to consider the factual sufficiency of the evidence and also the other five points of error, which we now consider. Because we disagree with all of Keda's points of error, except number five, we affirm the judgment of the trial court as provided below.

Under the circumstances of this case, we regard the Supreme Court's holding on the no-evidence point as controlling on the factual insufficiency point. Referring to evidence that the separate values of each of the lots in question greatly exceeded the amount of the judgment, that court held:

It is reasonable to infer that any of the tracts, if sold separately or in combination with one other tract, would have satisfied the judgment. There is some evidence that the bulk sale caused or contributed to cause the grossly inadequate consideration.

Stanglin, 713 S.W.2d at 95.

If the Supreme Court's opinion means that the sufficiency of one or two tracts to satisfy the judgment is in itself evidence that the bulk sale contributed to the grossly inadequate price--regardless of whether the value of the remaining tract or tracts would have been reduced in value by more than the amount of the separate sale--then we must hold that the evidence is sufficient because, clearly, the evidence of separate values is also sufficient to support a finding that sale of one or two tracts would have satisfied the judgment. Moreover, there is also sufficient evidence to show that sale of parcel number one would not have reduced the value of the remaining lots because Stanglin had a sufficient parking area for the skating rink on parcels two and four. Consequently, we hold that the evidence is factually sufficient to support the trial court's finding that the sale in bulk contributed to the gross inadequacy of the price.

In Keda's first point of error, it contends that Stanglin may not challenge the method by which the sale was conducted because TEX.REV.CIV.STAT.ANN. art. 1092 (Vernon 1963), when taken in connection with TEX.REV.CIV.STAT.ANN. art. 1059 (Vernon 1963), makes the sheriff's deed conclusive evidence of the regularity of the sale. Article 1092 provides two ways in which the holder of a paving assessment lien may enforce its lien. Article 1092 provides:

The lien created against any property, or the

personal liability of the owner thereof, may be enforced by suit or by sale of the property assessed in the same manner as may be provided by law for the sale of the property for ad valorem city taxes. The recital in any deed made pursuant to such sale, that all legal prerequisites to said assessment and sale have been complied with, shall be prima facie evidence of the facts so recited and shall in all courts be accepted without further proof. (Emphasis added.)

This statute gives the city the option to enforce its judgment either by suit, judgment, and judicial sale by the sheriff under the law governing executions, or by extrajudicial sale by the city tax assessor and collector, as provided by TEX.REV.CIV.STAT.ANN. arts. 1058 and 1059. The City of Dallas opted to enforce its liens by filing suit and securing judgment, as authorized by article 1092. The ensuing judicial sale was subject to the rules governing execution sales, and the deed was issued by the Sheriff of Dallas County, who conducted the sale, rather than by the tax assessor and collector. Thus article 1059 does not apply. Keda's argument is without merit.

In its third point of error Keda argues that the trial court erred in applying article 3806 when one of the tracts is unimproved. Article 3806, TEX.REV.CIV.STAT.ANN. (Vernon 1966) provides:

If real property situated in any town or city, taken in execution, consists of several lots, tracts or parcels, each shall be offered separately, unless the same be not susceptible of a separate sale by reason of the character of the improvements thereon. (Emphasis added.)

The evidence showed that parcels two and three had improvements, which were used in the roller-rink operation, but that parcel one was unimproved and was not used in that operation. In applying article 3806, parcels two and three might have been sold in bulk by reason of the necessity to use parcel two with parcel three, but parcel one had no improvements and thus was "susceptible of a separate sale." Under the uncontroverted evidence, parcel one by itself was capable of bringing an amount in excess of the amount of the judgment.

In the light of this evidence, the trial court correctly interpreted article 3806 in a manner that furthers the underlying policy of the statute, which appears to be to secure the highest price at an execution sale. We overrule point of error number three.

Keda's fourth point states that the trial court erred in failing to hold...