M.P. Crum Co. v. First Southwest Sav. & Loan Ass'n
| Decision Date | 30 January 1986 |
| Docket Number | No. 12-84-0051-CV,12-84-0051-CV |
| Citation | 704 S.W.2d 925 |
| Parties | 1 UCC Rep.Serv.2d 332 M.P. CRUM COMPANY, Appellant, v. FIRST SOUTHWEST SAVINGS & LOAN ASS'N, Appellee. |
| Court | Texas Court of Appeals |
Robert H. Renneker, Christopher M. Weil, P.C., Dallas, for appellant.
John H. Minton, Potter, Quinn, Minton & Roberts, Tyler, for appellee.
This is an appeal from a judgment notwithstanding the verdict awarding appellee, First Southwest Savings and Loan Association (First Southwest), the sum of $107,924.16 plus interest and attorneys' fees. The sum represents the deficiency remaining after a foreclosure sale following default on a loan by appellant, M.P. Crum Company (Crum). We reverse and render.
On April 2, 1981, First Southwest loaned approximately $280,000 to Crum. The loan was secured by the pledge of nine home mortgages owned by Crum as mortgagee. On October 1, 1981, the debt was renewed and extended by a second promissory note in the same amount. The debt was to be repaid within 180 days.
Crum defaulted on the loan and on September 30, 1982, First Southwest notified Crum that it would conduct a private sale of the collateral if the entire indebtedness was not repaid by October 15, 1982. A few months later, in January 1983, First Southwest filed suit against Crum to recover on the debt. On April 11, 1983, First Southwest bought the nine mortgages itself (rather than soliciting bids or conducting a public sale of the collateral) and credited Crum with $210,127.01, allegedly representing the fair market value of the mortgages at the time.
The case came to trial on November 30, 1983. At that time, the court allowed First Southwest to amend its pleadings to state:
After all lawful credits, payments and offsets, there remains due and owing on the note as of November 30, 1983, the sum of $107,924.16 for which sum Plaintiff hereby sues. The collateral was sold in a commercially reasonable manner. The collateral was of a type that is customarily sold in a recognized market.
After the evidence was presented, the court submitted four special issues to the jury. The jury answered three of the issues in favor of First Southwest, but responded adversely--"we do not"--in answer to Special Issue No. 3, which reads as follows:
Do you find from a preponderance of the evidence that the collateral foreclosed upon by [First Southwest] was of a type customarily sold in a recognized market, or was the subject of widely distributed standard price quotations.
Crum moved for judgment based upon the jury's answer to Special Issue No. 3. First Southwest filed a motion to disregard the jury's answer to Special Issue No. 3 and enter judgment for First Southwest. The trial court disregarded the jury's answer to Special Issue No. 3 and rendered judgment notwithstanding the verdict that First Southwest recover $107,924.16 plus interest and attorneys' fees from Crum. From this judgment, Crum appeals.
Crum presents two points of error, alleging that the trial court erred in disregarding the jury's answer to Special Issue No. 3, in granting judgment for First Southwest, and in refusing to grant judgment based upon the jury verdict. We sustain these points, because we find that the jury's answer to Special Issue No. 3 is supported by the evidence and that the answer is material to the outcome of the case.
Disposition of collateral by a creditor is governed by TEX.BUS. & COM.CODE ANN. § 9.504(c) (Vernon Supp.1986), which provides in pertinent part:
Disposition of the collateral may be by public or private proceedings and may be made by way of one or more contracts.... [E]very aspect of the disposition including the method, manner, time, place and terms must be commercially reasonable. Unless collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, reasonable notification of the time and place of any public sale or reasonable notification of the time after which any private sale or other intended disposition is to be made shall be sent by the secured party to the debtor.... The secured party may buy at any public sale and if the collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations he may buy at private sale.
In order to recover a deficiency, a creditor must prove that he has met the requirements of § 9.504(c), i.e., that he has disposed of the collateral in a commercially...
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