Mays v. Pierce

• Decision Date: 29 June 1955
• Docket Number: No. A-5000,A-5000
• Citation: 281 S.W.2d 79,154 Tex. 487
• Parties: W. A. MAYS, Petitioner, v. J. S. PIERCE et al., Respondents.
• Court: Texas Supreme Court

Page 79

281 S.W.2d 79

154 Tex. 487

W. A. MAYS, Petitioner, v. J. S. PIERCE et al., Respondents.

No. A-5000.

Supreme Court of Texas.

June 29, 1955.

Simpson, Clayton & Fullingim, Amarillo, (C. G. Clayton), Amarillo, for petitioner.

Snodgrass & Calhoun, George S. McCarthy, Amarillo, for respondents.

GRIFFIN, Justice.

This is essentially a suit involving priority of mechanics' and materialmen's liens as between a number of parties. It also involves a decision as to whether or not a note sued upon by petitioner and signed by one J. S. Pierce was tainted with usury.

In April, 1951, a certain three lots in the City of Amarillo were owned by one Klein, who had contracted to sell the same to V. L. Clynch. Clynch began the construction of a dwelling upon each of the three lots. On April 27, 1951 respondent, E. C. Cheshier, furnished to Clynch certain building material of the value of $1,313.48 which was used in the construction of the three houses. This material never having been paid for, Cheshier in due time filed in the office of the County Clerk of Potter County, Texas, the necessary papers to fix a statutory mechanics' and materialmen's lien upon the three lots and the improvements located thereon.

On May 3, 1951, J. S. Pierce, a defendant below, but who did not appeal from the trial court's judgment adverse to him, had become the owner of the three lots. On this date he executed to petitioner Mays his certain promissory note in the sum of $11,000 bearing interest at the rate of 8% per annum, due on or before six months after its date and secured the note with a duly executed, acknowledged and recorded deed of trust conveying the three lots to secure the payment of this $11,000 note. The $11,000 was advanced by Mays to Pierce in four installments of differing amounts and $10,000 was used by Pierce to pay for labor and materials used in improving the three lots. Subsequent to May 3, 1951, the other claimants besides Cheshier either performed labor or furnished material and supplies to J. S. Pierce which were used in constructing the improvements on the three lots. Some properly fixed their liens; others did not attempt to fix liens, and still others attempted to fix liens, but on account of various failures to comply with the statutes they have been held to have no lien. The details are not material to a decision of this cause due to the fact that J. S. Pierce defaulted in the payment for material and supplies and labor, and after many conferences between all parties and their attorneys it was agreed that a receiver be appointed and the property sold and the proceeds delivered into the registry of the court to be disposed of by judgment as entered herein. There is the sum of $11,926.72 so held by the clerk of the trial court to be distributed among the various claimants. That sum will not pay all indebtedness due for the lots and improvements, therefor, the question of which creditor has priority in his claim against this fund becomes highly important.

When J. S. Pierce defaulted in the payment of the $11,000 note, petitioner Mays filed suit in the proper court upon the note and for foreclosure of his deed of trust and made party defendants nearly all of those claiming to have liens upon the property. Others intervened until all interested parties were before the court, and, a jury being waived, all matters were submitted to the court. After hearing the evidence, the trial court rendered its judgment in favor of all claimants against J. S. Pierce individually, and fixed priority of the liens. In general, and as affects our decision, the trial court gave Mays judgment for the total amount due on the $11,000 note, including interest and 10% attorneys' fees. The judgment gave a first lien and claim to Mays for only $10,000, plus interest and attorneys' fees, and entitled him to be paid first out of the funds on deposit. As to $1,000, interest and attorneys' fees, judgment was given but the lien and claim were held inferior to all other claimants. The court denied some claimants any lien, and those liens which were established were held inferior and secondary to Mays' lien as above.

Certain of the defendants perfected an appeal to the Court of Civil Appeals, but due to the loss of the stenographic notes, no statement of facts on the hearing was filed in the Court of Civil Appeals and no statement of facts as to what transpired at the hearing held to develop all facts has been filed in this Court. The Court of Civil Appeals reversed and rendered the trial court's judgment. It held the lien of Cheshier in the sum of $1,313.48, plus interest, to be the first and superior lien on the fund after payment of the receiver's compensation and court costs. This holding is not complained of in the application for writ of error filed by Mays. The Court of Civil Appeals held that as to $1,000, plus interest and attorneys' fees, Mays could not recover because such sum represented usurious interest sought to be collected by Mays, and therefore was void. It established Mays' lien only to the extent of $10,000.00 plus 10% attorneys' fees, but denied any recovery for interest, or for the $1,000.00. As to the other claimants, it was held their liens were inferior and secondary to Cheshier's and Mays' liens. Tex.Civ.App., 277 S.W.2d 155.

Mays alone has filed an application for writ of error, and he complains of the Court of Civil Appeals' judgment by only one point of error and that is to the effect that the Court of Civil Appeals was in error in holding the Mays' note usurious and in denying recovery of $1,000.00 and all interest.

With reference to the usury claim the record shows that J. S. Pierce filed a written answer in which he admitted the allegations in plaintiff's petition, and did not appear further. Plaintiff's petition contained the allegations usually found in a suit upon a promissory note and for foreclosure of a deed of trust lien, and, of course, no usury allegations.

The matter of usury was raised for the first time in the answer of Roy Campbell, one of the defendants. No other defendant plead usury or attacked the note and lien on this ground.

The trial court filed the following findings of fact which are relevant to the usury issue:

'I find that the Plaintiff, W. A. Mays, thereafter advanced to and for the benefit of the Defendant J. S. Pierce the sum of $11,000.00 represented by such note, $10,000.00 of which was used by the said J. S. Pierce in paying for labor and material in erecting the improvements upon Lots 15, 16 and 17, each inclusive, in Block 5 of Denver Heights Annex, an Addition to the City of Amarillo, Potter County, Texas, with the other $1,000.00 thereof being used for extraneous purposes.

'I find that at the time the material was furnished and the labor performed by the various Defendants, the deed of trust lien of Plaintiff securing the indebtedness due the Plaintiff as evidenced by such $11,000.00 deed of trust note had been duly filed of record, and the Defendants were thereby put...