Minnehoma Financial Co. v. Ditto
| Decision Date | 04 May 1978 |
| Docket Number | No. 17949,17949 |
| Citation | 566 S.W.2d 354 |
| Parties | MINNEHOMA FINANCIAL COMPANY, Appellant, v. James V. DITTO, Appellee. |
| Court | Texas Court of Appeals |
As owner and holder of a retail installment contract and security agreement dated November 1, 1973, Minnehoma Financial Company obtained a judgment against James V. Ditto for $8,912.74, admittedly due thereon, plus contractual attorneys' fees of $1,336.91 and costs. The contract was secured by a lien on a mobile home purchased by Ditto. The trial court denied sequestration of the mobile home and refused to recognize and order foreclosure of Minnehoma's lien upon it. Minnehoma has limited the scope of its appeal under Tex.R.Civ.P. 353 to the issue of the trial court's failure to order foreclosure of the lien. The question presented is whether Minnehoma's lien to secure the purchase money of the mobile home is for an improvement to a homestead so as to require the signature of both spouses under Tex.Const. art. XVI, § 50 (Supp.1978) and Tex.Rev.Civ.Stat.Ann. art. 5460 (Supp.1978).
We reverse and render judgment for Minnehoma.
Minnehoma owned a 1972 Gold Crest mobile home which it consigned to Interstate Housing Corporation. On June 18, 1973, Ditto and Interstate entered into a conditional sales agreement on the mobile home. Under the contract the title was not to pass until all of the purchase price was paid. Interstate retained the right to repossess and sell the mobile home, if necessary, and to apply the proceeds to the amount due. Ditto paid Interstate $6,180.00 on the mobile home. The total purchase price was $11,180.00, the balance being due within ninety days.
There was testimony that Interstate did not disclose this transaction to Minnehoma at that time and that had disclosure been made, Minnehoma would have demanded payment in full of the invoice amount. When Ditto was unable to pay the balance due, Interstate and Ditto arranged financing with Minnehoma. On November 1, 1973, Interstate and Ditto executed a retail installment contract and security agreement. The contract was assigned to Minnehoma.
Under the November contract the cash sale price was $13,062.40 with a deferred payment price of $22,970.40. Payments were to be made over a 144-month period. Title was not to pass until all payments had been made. In the event of default, provision was also made for repossession and sale.
Ditto defaulted. It is admitted that Minnehoma is the owner and holder of the November 1, 1973 retail installment contract and security agreement. It is also admitted that the amount due thereunder is $8,912.74 plus attorneys' fees. The testimony reflects that this amount represents the outstanding balance of $16,178.72, less a rebate of $7,265.98, or the amount necessary to pay the contract off as of October 31, 1974.
Ditto's wife, Joynell Ditto, did not sign either the conditional sales contract of June 18th or the retail installment contract of November 1st. Neither contract purported to create a lien on the land itself.
It is undisputed that the mobile home was delivered and attached by Interstate to Ditto's property in late June 1973 after the first contract was signed. The wheels were removed, and it was placed on concrete blocks and anchored with eight-foot buried anchors. The mobile home has plumbing and electricity. There was testimony that it may be removed without substantial damage to the realty or to the mobile home itself.
A certificate of title on the mobile home was issued on January 14, 1974, and given to Ditto with Minnehoma's lien noted thereon.
The jury made the following findings: The mobile home was attached to the reality in a manner to indicate the intention that it be a permanent part of Ditto's real estate, and on or before November 1, 1973, the realty to which it was attached constituted Ditto's homestead. All parties intended that the November 1, 1973 agreement take the place of the agreement of June 18, 1973. The money or consideration advanced by Minnehoma was for the purchase money of the mobile home. Minnehoma was not the seller and had acquired the November contract in good faith and for value. The cash sale price in the June contract was $11,180.00 and in the November contract, $13,062.40. The difference was the result of a bona fide error between Ditto and Interstate.
Minnehoma's points of error are that the trial court erred in: (1) Refusing to order foreclosure of its alleged first lien; (2) Submitting certain special issues over the objection that the issue of whether or not the mobile home was attached to what later could be classified as Ditto's homestead was immaterial; (3) Failing to uphold and foreclose Minnehoma's purchase money lien on the mobile home which, as a matter of law, is superior to any homestead exemption claimed by Ditto; and (4) Failing to uphold and foreclose Minnehoma's lien because Ditto did not show title sufficient to support a homestead exemption in the mobile home and because Minnehoma proved an express lien under both contracts and the Certificate of Title Act, Tex.Rev.Civ.Stat.Ann. art. 6687-1 et seq. (1977) as well as an implied and equitable lien.
Ditto's counsel argues that the major issue is whether the mobile home was an improvement to a homestead so as to require the wife's signature in order to create a lien on the mobile home. Ditto's counsel concedes in her brief that Minnehoma has an express lien under both the June and November contracts and the Certificate of Title Act, but argues that the express lien claim is "inferior to the homestead exemption and invalid unless the constitutional requirements for establishing . . . improvement liens are met . . . ." Ditto's position is that Interstate did not perfect a valid lien on the mobile home because it did not obtain Mrs. Ditto's signature on the June contract even though it should have been on notice that it was to be attached to homestead. Ditto also argues that Minnehoma's lien under the November contract was likewise invalid because Mrs. Ditto's signature was not obtained even though the mobile home was thus clearly an improvement to homestead at that time. Finally, Ditto urges that Minnehoma's lien claim under the Certificate of Title Act is also inferior to the homestead claim in the absence of the wife's signature.
Minnehoma argues that it has a purchase money lien protected by Tex.Const. art. XVI, § 50 (Supp.1978) and that Ditto could have no homestead interest in the mobile home before h...
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...rights, however, may not be construed so as to avoid or destroy pre-existing rights. Minnehoma Financial Co. v. Ditto, 566 S.W.2d 354, 357 (Tex.Civ.App.--Fort Worth 1978, writ ref'd n.r.e.). It has long been held that an encumbrance existing against property cannot be affected by the subseq......
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