Kirkman v. Amarillo Savings Ass'n of Amarillo, 8255

• Decision Date: 30 June 1972
• Docket Number: No. 8255,8255
• Citation: 483 S.W.2d 302
• Parties: Jay U. KIRKMAN, Individually and dba Hotel Operating Company of Amarillo, Appellant, v. AMARILLO SAVINGS ASS'N OF AMARILLO and Joe Bob Brown, Trustee, Appellees.
• Court: Texas Court of Appeals

Page 302

483 S.W.2d 302

Jay U. KIRKMAN, Individually and dba Hotel Operating Company of Amarillo, Appellant, v.AMARILLO SAVINGS ASS'N OF AMARILLO and Joe Bob BrownTrustee, Appellees.

No. 8255.

Court of Civil Appeals of Texas Amarillo.

June 30, 1972.

Rehearing Denied July 31, 1972.

Jay U. Kirkman, Amarillo, for appellant.

Stokes, Carnahan & Fields(O. P. Fields, Jr.), Amarillo, for appellees.

ELLIS, Chief Justice.

This is an appeal from a judgment confirming a mortgagee's title to real property acquired at a foreclosure sale under a deed of trust and denying plaintiff-appellant's claims for recovery founded upon the trustee's rejection of his bid submitted on a conditional basis.Affirmed.

Jay U. Kirkman, d/b/a Hotel Operating Company of Amarillo, appellant herein, instituted suit against Amarillo Savings Association, and Joe Bob Brown, substitute trustee, appellees herein, seeking to establish appellant's right, title and interest in and to real property designated as the Capitol Hotel property in Amarillo, Texas, allegedly acquired by virtue of his bid submitted at a foreclosure sale, along with certain claims for special and exemplary damages.

In his first amended petition, Kirkman alleged the execution and delivery of the deed of trust note and the deed of trust involved in this litigation.He further alleged that after default had occurred in the payment of such note, which was secured by the deed of trust upon the Capitol Hotel property in favor of Amarillo Savings Association, all as set out and identified in his petition, the substitute trustee, Joe Bob Brown, proceeded to conduct the foreclosure sale on March 2, 1971.Kirkman bases his cause of action upon the contention that, at the foreclosure sale, he was the high and successful bidder upon the oral and written bid of $175,000 he made subject to the federal tax lien in the sum of approximately $20,000 and the redemption period provided by law.Also, Kirkman alleged that by reason of a prior agreement between the mortgagor and mortgagee in January, 1971, Amarillo Savings Association had waived all its rights as mortgagee in connection with the foreclosure sale of the property or the terms thereof.He further pleaded that the mortgagee's representatives were in attendance from the beginning to the conclusion of the sale and made no protest concerning the appellant's bid submitted to the substitute trustee or the conditions contained therein.Also, he asserts that the mortgagee has, in effect, waived any objections to such bid and is therefore estopped to complain regarding the same.Additionally, Kirkman contends that the substitute trustee's subsequent acceptance during the day of the sale of the mortgagee's bid of $173,769.76, and the execution and delivery of the substitute trustee's deed to the mortgagee, constituted a deliberate, malicious and wanton attempt on the part of such trustee and mortgagee to vitiate the prior sale to appellant pursuant to his conditional bid submitted at approximately 11:15 a.m.By reason of this alleged conduct on appellees' part, the appellant sought exemplary damages in the sum of $385,000.

The appellant prayed that the substitute trustee be required to deliver an executory contract upon the terms of appellant's conditional bid, and for damages flowing from the breach of the contract, special damages resulting from slander of appellants title, as well as damages for the value of the property in excess of the appellant's bid.Additionally, he prayed for exemplary damages, the quieting of title in appellant and removal of cloud cast upon his title by reason of claims of the appellees and instruments of record.

The first amended answer of appellees was filed on May 21, 1971, and, as a part of such pleading, Amarillo Savings Association brought a cross-action against Kirkman seeking a judicial declaration that title to the property in question was vested in such association free and clear of any claims or interest of the appellant and for removal of cloud upon the title which may have been cast because of Kirkman's claims and suit.Kirkman answered the cross-action by general and special denials and affirmative defenses.Also, on May 21, 1971, the appellees filed their motion for summary judgment, alleging that the pleadings, attached affidavit and various interrogatories and answers thereto on file show that there is no genuine issue as to any material fact.Attached to and made a part of the motion for summary judgment was the affidavit of Joe Bob Brown, the substitute trustee.A copy of the deed of trust and the notice of sale, each setting out that sale of the property was to be made to the highest bidder for cash, were attached to and made a part of Brown's affidavit.Kirkman then filed a motion for refusal of the application for summary judgment along with exceptions to the motion and his controverting affidavit.The record also contains interrogatories and answers thereto by Kirkman, Tommy G. Lane, vice-president of Amarillo Savings Association and Joe Bob Brown, the substitute trustee.On June 9, 1971, the appellees filed their second amended answer, pleading, along with the cross-action of Amarillo Savings Association and other matters, that the claims alleged by Kirkman regarding the conditional nature of his bid were in violation of the Statute of Frauds.

Kirkman appeared at the hearing on the motion for summary judgment on June 10, 1971, but complained that since he was served with the cross-action on May 21, 1971, his answer thereto was not due and requested that the court not consider the motion for summary judgment as to the cross-action.The court granted such request and considered the motion for summary judgment only as to appellant's claims and appellees' defenses.On July 2, 1971, the court advised the attorneys of record by letter that the decision had been reached to grant the appellees' motion for summary judgment and to denythe appellant's claims for recovery in his suit.

On July 7, 1971, the cross-action of Amarillo Savings Association was heard on its merits before the court without a jury.Kirkman appeared at the hearing and announced ready for trial.In this hearing, Amarillo Savings Association, as cross-plaintiff, presented the testimony of two witnesses, the president of Amarillo Savings Association, and the substitute trustee who had conducted the foreclosure sale.Also, Amarillo Savings Association introduced and the court admitted into evidence, over Kirkman's objections, seven exhibits, including copies of the deed of trust note, the executed deed of trust, the instrument evidencing the appointment of the substitute trustee, notice of the trustee's sale, affidavit of the substitute trustee regarding posting notices of sale, the substitute trustee's deed to the mortgagee, and Kirkman's written statement of his conditional bid.The cross-plaintiff also introduced into evidence an interrogatory previously propounded to Kirkman and his reply to the effect that on March 2, 1971, he(Kirkman) did not have in his possession nor accessible to him $175,000 in cash.The cross defendant, Kirkman, offered no evidence during the trial of the cross-action.After the hearing of the evidence, the court rendered judgment for Amarillo Savings Association, vesting fee simple title to the Capitol Hotel property in it, free and clear of any interest of Jay U. Kirkman and removing any cloud on the title to the property cast by Kirkman's claim and suit.The judgment was entered on July 9, 1971, and incorporated therein the court's adjudication with respect to both the summary judgment and the cross-action.From this judgment Kirkman has perfected his appeal.

The evidence shows that after default in the payment of the indebtedness, the mortgagee exercised its option to sell the Capitol Hotel property at public sale pursuant to the terms of the deed of trust.Joe Bob Brown, who had been appointed as substitute trustee, posted notices relative to the sale of the property.The sale was set for March 2, 1971, between the hours of 10 a.m. and 4 p.m.On such date, at 11:10 a.m., the substitute trustee opened the bidding.The first bid was that of Jay U. Kirkman, who orally and in writing submitted the following bid:

'March 2, 1971

'I am authorized to bid $175,000.00, subject to Federal Tax liens and the redemption period.

S/ Jay U. Kirkman

Jay U. Kirkman, Attorney and authorized agent for Hotel Operating Company of Amarillo'

A federal tax lien in the sum of approximately $20,000 was affixed and filed against the Capitol Hotel property more than 30 days prior to February 1, 1971, the date of the posting of the notices of the deed of trust sale.In addition to the above described bid by Kirkman there was one other bid--a bid by Mr. Garland Sell, an attorney, who bid the sum of $173,795.76, the amount due on the note, on behalf of the mortgagee, Amarillo Savings Association.The substitute trustee testified that after receiving the two bids above mentioned, he determined there were no other bids and then asked Kirkman where his money was.Kirkman replied that he had some money in a bank in Dallas and that he would need some time to get his money.Also, the substitute trustee stated that before selling the property, he postponed the sale until 2 p.m. to give Mr. Kirkman the opportunity to secure the money.On cross examination of the substitute trustee by Mr. Kirkman, we note that the substitute trusee's response appears to be significant:

'Q.Now, why didn't you accept the bid of Amarillo Savings at the first sale if you stated that you asked me where my one hundred seventy-five thousand dollars was?

'A.Because it is my understanding of the law, if some one bids on a piece of property and they are a successful bidder and they indicate they can get a certain amount of money together;

'Then you need to give them a period of time during the day of the sale to see if they can get their money...