Meisler v. Republic of Texas Sav. Ass'n

• Decision Date: 15 September 1988
• Docket Number: No. C14-87-645-CV,C14-87-645-CV
• Parties: Irwin M. MEISLER, Appellant, v. REPUBLIC OF TEXAS SAVINGS ASSOCIATION, Appellee. (14th Dist.)
• Court: Texas Court of Appeals

Page 878

758 S.W.2d 878

Irwin M. MEISLER, Appellant, v. REPUBLIC OF TEXAS SAVINGS ASSOCIATION, Appellee.

No. C14-87-645-CV.

Court of Appeals of Texas,

Houston (14th Dist.).

Sept. 15, 1988.

Bertrand C. Moser, Morley W. White, Houston, for appellant.

James P. Keenan, Houston, for appellee.

Before JUNELL, SEARS and CANNON, JJ.

OPINION

SEARS, Justice.

Dr. Irwin M. Meisler appeals from a summary judgment. We affirm.

Appellant and Charles G. Shears entered into a tripartite loan agreement with Republic of Texas Savings Association ("Republic"), Bankers Capital Corp. ("Bankers") and Alison Mortgage Investment Trust ("Alison"). Alison provided interim financing for an apartment project and Republic was to provide permanent financing upon completion of the construction of the project. Bankers was to grant the permanent loan to Republic. Republic was to inspect the project on a monthly basis and Alison was to inspect it before closing and at other times as it deemed appropriate.

Appellant alleged that Alison inspected the project before closing and, finding no deviation from the plans and specifications, disbursed all interim financing. Republic did not inspect the project until after the construction was completed. Republic then alleged that there were deviations from the plans and specifications and refused to make the permanent loan upon the terms of the original loan commitment. Republic required a higher interest rate in order to make the loan. Appellant agreed to the higher interest rate and on July 10, 1974, Appellant, as president of Forest West Corporation ("FWC"), executed a first mortgage real estate note, payable to Republic, in the original principal amount of $1,475,000.00, with an interest rate of 9 1/4%. The deed of trust securing the debt provided that in the event FWC transferred the property without Republic's prior consent, Republic could, at its option, accelerate payment of the full amount of the note and require payment of a prepayment penalty. The deed of trust also provided that FWC could transfer the property with Republic's consent and that the purchaser could assume the note provided express conditions were met by the purchaser.

On September 17, 1975, and October 6, 1975, Mr. Pennington wrote to FWC on behalf of The Afton Company outlining a proposal to purchase the apartments. On November 10, 1975, the parties entered into an earnest money contract for the purchase of the apartments. FWC wrote to Republic on November 12, 1975, requesting approval of the sale and assumption of the note. Republic responded on December 1, 1975, approving the assumption subject to an increase in the interest rate from 9 1/4% to 9 5/8%. On December 10, 1975, Republic again wrote to FWC and stated that the conveyance would be approved if: 1) the loan was prepaid without penalty before December 31, 1975; or, 2) the loan was assumed by the purchasers with an increase in the interest rate from 9 1/4% to 9 5/8%; or, 3) the property was conveyed subject to the existing debt with the 9 1/4% interest rate and a transfer fee of 2% of the outstanding loan balance was paid to Republic.

At this juncture Mr. Al Rubin, agent for FWC, wrote to Republic on December 18, 1975, seeking an interpretation of the "Transfer of Property" and "Alienation Without Consent" clauses of the deed of trust. Mr. Conway Jordan of Republic responded the following day by stating: 1) the Transfer of Property clause had been modified to permit the sale of the property to an approved grantee without assumption of the first mortgage lien note; 2) he found no conflict between that provision and the Alienation Without Consent clause; and, 3) it was his opinion that the Alienation Without Consent clause would control over the Transfer of Property clause.

FWC did not comply with the conditions imposed for approval and the sale was not consummated. In January, 1976, FWC was unable to repay a loan from Appellant, Appellant foreclosed on the stock which had been pledged as security, and Appellant became the sole owner of the property. Republic later approved the sale of the property to Mr. Pennington.

On August 24, 1979, Appellant sued Republic for breach of the original loan commitment. The trial court granted Republic's Motion for Summary Judgment. This court reversed that summary judgment and remanded the case for further proceedings. Meisler v. Bankers Capital Corporation, 668 S.W.2d 828 (Tex.App.--Houston [14th Dist.] 1984, no writ). When the case was remanded to the trial court, Meisler filed a Motion for Partial Summary Judgment and Declaratory Relief on May 29, 1985, requesting construction of the provisions of the deed of trust and contending that the deed of trust was illegal and in violation of the public policy of this State.

Republic filed its Second Motion for Partial Summary Judgment on May 8, 1986, asserting that the statute of limitations barred Meisler's claim under the Declaratory Judgment Act. On July 28, 1986, the trial court granted Republic's Motion for Summary Judgment and held the statute of limitations barred the cause of action for declaratory judgment. On March 27, 1987, Meisler filed his Fourth Amended Petition naming Republic as the sole defendant and alleging, in addition to its breach of loan commitment claim, a claim that the Transfer of Property and Alienation Without Consent provisions of the deed of trust constituted an unreasonable restraint on the alienation of the property.

Meisler's Motion for Partial Summary Judgment and Declaratory Relief was overruled on April 14, 1987. The trial court found that the provisions of the deed of trust did not constitute an unreasonable restraint on alienation and that the suit for declaratory judgment was barred by the statute of limitations. On the same date, the trial court entered an Amended Partial Summary Judgment in favor of Republic on its Second Motion for Summary Judgment. The court again found that the deed of trust provisions did not constitute an unreasonable restraint on alienation and that the statute of limitations barred Meisler's action for declaratory judgment.

The parties submitted Plaintiff's and Defendant's Proposed Findings of Fact on June 22, 1987, and these findings were adopted by the trial court. Among those findings was a finding that, "There was nothing improper, wrongful or unreasonable in the manner in which [Republic] enforced the provisions in the deed of trust with regard to imposing certain conditions on FWC prior to approving the sale of the apartment project to the Afton Company by FWC." Based upon these joint proposed findings of fact, the court on June 22, 1987, entered a final take-nothing judgment holding that Meisler was not entitled to any relief on any cause of action asserted in the suit. It is from this judgment that Meisler now appeals.

Appellant asserts three points of error. In his first two points of error Appellant contends the due on sale provisions in the deed of trust are unenforceable because they are not clear and unequivocal, and because they constitute an unreasonable restraint on alienation. In his third point of error, Appellant claims that the due on sale clauses are unenforceable and that his action is not barred by the statute of limitations.

The record shows that Appellant signed the deed of trust on July 10, 1974. In December, 1975, FWC requested approval of the proposed sale. On December 18, 1975, after Appellee communicated its conditions for granting that approval, FWC requested interpretation of the terms of the deed of trust relating to transfers of the property, and they received that interpretation on December 19, 1975. However, FWC did not transfer the property and the due on sale clause of the deed of trust was never enforced by Appellee. Appellant apparently contends that his cause of action accrued when Appellee communicated its conditions of approval of the transfer.

We find that even if Appellant's cause of action accrued in December, 1975, that cause of action is barred by the statute of limitations. Appellant filed his Original Petition on August 24, 1979. However, this petition alleged a cause of action for breach of a loan commitment. It did not allege any cause of action based upon the deed of trust. Appellant contends that his Fourth Amended Petition asserting a cause of action based on the deed of trust was filed on April 5, 1985; however, the record does not support that contention.

The record before us reflects that on May 29, 1985, Appellant filed his Motion for Partial Summary Judgment and Declaratory Relief, which for the first time requested the trial court to declare the deed of trust an unreasonable restraint on alienation. This was over nine years after the proposed sale of the property. Also, Appellant's Fourth Amended Petition, based on the Deed of Trust was filed March 21, 1987, more than eleven years after the latest date upon which the cause of action could have accrued.

In a case originally filed before the expiration of the limitations period, the test for determining whether the statute of limitations bars a cause of action alleged in an amended petition is whether the cause of action alleged in the amended petition is wholly based upon and grows out of a new, distinct or different transaction or occurrence. Leonard v. Texaco, Inc., 422 S.W.2d 160, 163 (Tex.1967). Section 16.068 of the Civil Practice and Remedies Code provides that:

If a filed pleading relates to a cause of action, cross action, counter claim, or defense that is not subject to a plea of limitation when the pleading is filed, a subsequent amendment or supplement to the pleading that changes the facts or grounds of liability or defense is not subject to a plea of limitation unless the amendment or supplement is wholly based on a new, distinct or different transaction or occurrence.

TEX.CIV.PRAC. & REM.CODE ANN. § 16.068 (Vernon 1986). Whether there is a difference in the causes of action...