Kimsey v. Burgin, 04-89-00239-CV

• Decision Date: 23 January 1991
• Docket Number: No. 04-89-00239-CV,04-89-00239-CV
• Citation: 806 S.W.2d 571
• Parties: Roy E. KIMSEY, Jr., Appellant, v. Larry BURGIN, Appellee.
• Court: Texas Court of Appeals

Page 571

806 S.W.2d 571

Roy E. KIMSEY, Jr., Appellant, v. Larry BURGIN, Appellee.

No. 04-89-00239-CV.

Court of Appeals of Texas San Antonio.

Jan. 23, 1991.

Rehearing Denied March 15, 1991.

Pat Long Weaver, Michael B. McKinney, Stubbeman, McRae, Sealy, Laughlin & Browder, Midland, for appellant.

L.B. Trulove, Jr., Sabinal, for appellee.

Before CADENA, C.J. ^* , and CARR and STEPHENS, JJ.

OPINION

STEPHENS, Justice. ¹

This suit was brought by Larry Burgin, Appellee, against Roy E. Kimsey, Jr., Appellant, seeking to recover the unpaid balance of a promissory note given Burgin by Kimsey, and for foreclosure of the collateral security. Summary judgment was granted Burgin for a money judgment, attorney's fees, and foreclosure of Kimsey's interest in two tracts of real estate in Real County, Texas.

On appeal Kimsey brings twelve points of error, contending that the trial court erred in granting summary judgment in favor of Burgin:

1) because Burgin's interest in the property made the subject of this suit has failed.

2) because there exists a genuine issue of material fact as to whether Burgin's interest in the property made the subject of this suit was ratified after its failure.

3) by granting a right to foreclose its alleged liens when no lien existed.

4) because it applied the incorrect theory of law in determining that Burgin held a security interest with respect to the property made the basis of this suit.

5) disallowing Kimsey's counter-claim for restitution of funds paid by Kimsey to Burgin under the contractual obligations made the basis of this suit.

6) because the trial court erred in failing to grant Kimsey's Motion for New Trial where Kimsey presented newly discovered evidence that Burgin had conducted a non-judicial foreclosure sale covering the property made the basis of this suit.

7) because there was no evidence of consideration from Burgin to Kimsey to support the promissory note and deed of trust made the basis of this suit.

8) because there was insufficient evidence of consideration from Burgin to Kimsey to support the promissory note and deed of trust made the basis of this suit.

9) in the alternative, because there was evidence that the consideration from Burgin to Kimsey supporting the obligation made the basis of this suit failed as a matter of law.

10) in the alternative, because there was a genuine issue of material fact as to whether the consideration from Burgin to Kimsey supporting the contractual obligations made the basis of this suit failed.

11) because there exists a genuine issue of material fact as to the alleged indebtedness of Kimsey to Burgin.

12) because Kimsey was entitled to prevail on his counter-claim and such claim was not barred by the statute of limitations.

FACTS

In 1979, L.R. French conveyed a tract of land in Real County, known as the Rancho Real to S.O.A.W. Enterprises, Inc., retaining a vendor's lien on the property. S.O.A.W. then subdivided the ranch and conveyed the two tracts of land in question, among others, to C & D Leasing Company, Inc., not by warranty deed, but instead by contracts for deed. C & D then conveyed the two tracts in question to Burgin, by contract for deed.

On May 29, 1981 Kimsey purchased Burgin's interest in the two tracts by accepting an Assignment of Agreement for Deed from Burgin. He executed a promissory note to Burgin in the amount of $74,725.58, and a Deed of Trust to Thad H. Marsh, describing the two tracts of land, as security for the promissory note.

On September 23, 1982, evidently because of financial difficulties, S.O.A.W. Enterprises, Inc., the owner of fee title to the property, conveyed it back to L.R. French, Jr. by general warranty deed, in lieu of foreclosure. Thereafter, on September 23, 1983, L.R. French, Jr. conveyed the property in question to Martin L. Allday, Trustee, by general warranty deed. On August 15, 1984, Allday, conveyed an equitable interest in the property to Kimsey. Later, on January 6, 1983, French executed a document entitled "Ratification and Agreement" to Kimsey which stated that French ratified the Contract for Deed held by Kimsey from S.O.A.W., C & D, and Burgin.

The parties contend that the questions before this court are whether the contract between Kimsey and Burgin was a real estate transaction or a personal property transaction, and the effect of S.O.A.W. Enterprises, Inc.'s reconveyance of the real property title back to French.

The original conveyance from French to S.O.A.W. was a conveyance of real property, by general warranty deed, vesting title in S.O.A.W. S.O.A.W. then sub-divided and conveyed to C & D, by contract for deed, an interest that would ripen into full title only upon the payment of the contract price. Title to the real estate remained vested in S.O.A.W.

POINT OF ERROR NUMBER ONE

Kimsey contends, in his first point, that the trial court erred in granting summary judgment in favor of Burgin because Burgin's interest in the property failed.

We cannot agree with this point of error. Kimsey owned his interest in the property by virtue of an assignment of Burgin's contract for deed, which Burgin had acquired from C & D Leasing, who in turn had acquired its interest in the property by contract for deed from S.O.A.W., the title holder of the property. On September 23, 1982 when S.O.A.W. was experiencing financial difficulties, it entered into a written agreement with French, the original vendor of the property, to reconvey the property to French, which agreement contained the following language:

Recognizing the validity of French's 1979 liens and the existence of a continuous state of default, S.O.A.W. contacted French and offered to reconvey Rancho Real to French in lieu of the formal foreclosure proceedings available to French. French has accepted S.O.A.W.'s offer.

* * * * * *

3. French agrees to forebear his right to foreclose his liens. In consideration therefor, S.O.A.W. agrees to convey full legal title back to French of the 5,496.641 acres originally constituting Rancho Real less three tracts aggregating approximately 41.475 acres which have been deeded to third-parties previously. S.O.A.W. represents and warrants that no valid liens or encumbrances exist against the property to be reconveyed to French other than the following: (1) a first lien in favor of The Traveler's Insurance Company; (2) French's liens; (3) the equitable claims of the third-parties who have executed Agreements for Deed with S.O.A.W.; and (4) unpaid state and county ad valorem taxes.

4. S.O.A.W. agrees to assign its full right, title and interest in and to the approximately 225 Agreements for Deed covering various smaller tracts out of the Rancho Real to French. In consideration therefor, French agrees to honor the obligation of S.O.A.W. under such Agreement for Deed to deliver Warranty Deeds to the third-party purchasers when final payments for the various tracts have been received by French....

The acceptance of this agreement to reconvey the property by French, in lieu of his right to foreclosure, bound French to abide by the terms set forth in the agreement, and accordingly, the reconveyance did not extinguish the rights of Kimsey in the contract for deed which he held. Nor did it extinguish the rights of Burgin in the sale and assignment of his contract for deed from C & D Leasing to Kimsey.

Kimsey's First Point of Error is overruled.

POINT OF ERROR NUMBER TWO

In Point of Error Number Two Kimsey argues that the trial court erred in granting summary judgment because there exists a genuine issue of material fact as to whether Burgin's interest in the property made the subject of this suit was ratified after its failure.

Again, we cannot agree with this point of error. On January 6, 1983, Kimsey and French executed a document styled Ratification and Agreement, containing the following language:

WHEREAS, by General Warranty Deed, dated September 23, 1982, ... S.O.A.W. Enterprises, Inc., d/b/a Rancho Real, Seller, contracted and agreed to sell to C & D Leasing, Purchaser, and Purchaser contracted and agreed to buy from Seller, the following described land located in Real County, Texas, to-wit:

Tract No. 317, in Rancho Real, described by metes and bounds....

at the price and upon the terms set forth therein; the interest of said C & D Leasing in said Agreement For Deed being now owned by Roy E. Kimsey, Jr.; and

WHEREAS, by that certain Agreement For Deed, dated July 5, 1979, S.O.A.W. Enterprises, Inc., d/b/a Rancho Real, Seller, contracted and agreed to sell to C & D Leasing Co., Inc., Purchaser, and Purchaser contracted and agreed to buy from Seller, the following described land located in Real County, Texas, to-wit:

Tract No. 293, in Rancho Real, described by metes and bounds....

at the price and upon the terms set forth therein; the interest of said C & D Leasing Company, Inc., in said Agreement For Deed being now owned by Roy E. Kimsey, Jr.; and ...

NOW, THEREFORE, in consideration of the premises and other good and valuable considerations, ... L.R. French, Jr. hereby ratifies, confirms and adopts each of the above described Agreements For Deed, and hereby contracts and agrees to sell to the said Roy E. Kimsey, Jr.,.... the land described in each of said Agreements For Deed, at the price and upon the terms set forth therein, to the same extent and for all intents and purposes, as if L.R. French, Jr. had executed each said Agreement For Deed, as Seller.

The said L.R. French, Jr. directs said Roy E. Kimsey, Jr. to continue to make the monthly payments specified in each said Agreement, as therein directed, unless and until he is notified to the contrary by the said L.R. French, Jr....

This document expressly ratified the existing rights of Kimsey in the Contracts For Deed which he acquired from Burgin.

Kimsey's Point of Error Number Two is overruled.

POINT OF ERROR NUMBER THREE

In Point of Error Number Three, Kimsey argues that the trial court erred in granting...