National Loan & Investment Co. v. L. W. Pelphrey & Co.

• Court: Texas Court of Appeals
• Writing for the Court: Leslie
• Citation: National Loan & Investment Co. v. L. W. Pelphrey & Co., 39 S.W.2d 926 (Tex. App. 1931)
• Decision Date: 13 February 1931
• Docket Number: No. 797.,797.
• Parties: NATIONAL LOAN & INVESTMENT CO. v. L. W. PELPHREY & CO.

39 S.W.2d 926

NATIONAL LOAN & INVESTMENT CO. v. L. W. PELPHREY & CO.

No. 797.

Court of Civil Appeals of Texas. Eastland.

February 13, 1931.

Rehearing Denied June 19, 1931.

Appeal from District Court, Stephens County; C. O. Hamlin, Judge.

Suit by the National Loan & Investment Company against L. W. Pelphrey & Co. From an order dissolving a temporary injunction, plaintiff appeals.

Reversed, and remanded, for trial on merits.

E. E. Solomon, of Breckenridge, and J. H. Synnott, of Dallas, for appellant.

Bailey W. Hardy, of Breckenridge, for appellee.

LESLIE, J.

This is an appeal from an order of the trial court dissolving a temporary injunction restraining the sheriff of Stephens county from selling lots 8 and 9, block 15, Hanks second addition to the city of Breckenridge, Tex., previously levied on by the sheriff under orders of sale based on judgments in favor of L. W. Pelphrey & Co. against certain defendants who are not parties to this suit. The petition for injunction, in substance, sets forth that said loan company had lent money to the original owner of said lots and taken a deed of trust thereon to secure the payment thereof. That after the loan was made, and the deed of trust duly recorded in the deed of trust records of the county, Pelphrey & Co. paved a street alongside the lots, and the city of Breckenridge issued two separate paving certificates against the lots, one for each lot, and each for $162.50, bearing interest. Such certificates were issued by virtue of the authority granted by articles 1086 to 1096, inclusive, and articles 1104 and 1105, Vernon's Annotated Texas Civil Statutes, 1925. Article 1090 provides, among other things, that: "Such assessments shall be secured by, and constitute a lien on said property, which shall be the first enforcible claim against the property against which it is assessed, superior to all other liens and claims, except state, county and municipal taxes."

The statute makes this a first lien to secure the payment of the obligation evidenced by the paving certificates, with interest and reasonable attorney's fees in case of default in payment of installments, and collection is by suit. Default was made, and the entire indebtedness was, under the option given, declared due. The paving company filed two suits, one on each obligation, and for foreclosure of the statutory lien. Each suit was against the same parties and the indebtedness evidenced by each certificate was $162.95.

The loan company, appellant here, was not made a party to either suit. The suits were tried and resulted in a judgment in each case for the amount evidenced by the certificates, plus (1) $25 attorney's fees in each case, allowed an attorney appointed by the court to represent a defendant cited by publication; (2) $100 in each case, allowed the attorney of the paving company as a reasonable attorney's fees; (3) other general costs in each suit, amounting to $121.65.

The loan company is here contesting, as unreasonable and unauthorized, such attorney's fees and costs. Its particular contention is that the purpose of the litigation could and should have been accomplished by one suit, thus eliminating all the costs and attorney's fees in an unnecessary suit. That under article 2060 of the Revised Statutes, regulating costs in suits which should have been joined, the two suits in question should have been consolidated and at least one-half of the costs saved thereby. The plaintiff states its contention concisely thus: "That being a lienholder for more than the worth of the property, it has a right to be heard as to the amount it shall pay; that this is a direct suit to set the other judgment aside; that it has shown a meritorious defense to part of the judgments, and that it is entitled to a verdict of the jury thereon."

The petition in each original suit declared on an indebtedness of $162.95, with interest, and for foreclosure, and from the foregoing it appears that the attorney's fees and costs to date in each suit aggregate $221.65. In both suits these items aggregate $443.30. From this it is obvious that it becomes imperative that the loan company, if it would protect its security, pay off the superior claims (evidenced by the certificates), together with the costs accruing in such foreclosure suits. This is the foundation of its present complaint, and, under the theory on which this injunction was sought, it is recognized that the appellant does not offer any contest of that portion of the original judgments decreeing the amount of indebtedness due for the paving itself and establishing the paving liens as first claims against the property. The object of this suit appears to be for the sole purpose of reducing attorney's fees and costs to what would be proper and reasonable, had the original suits been prosecuted as one.

In addition to the above contentions, the appellant alleges that, by an agreement between itself and the paving company, it was the duty of the latter to notify it that the paving liens were in arrears, and, before filing suit and incurring any costs, give it an opportunity to pay off and take over the superior obligations; that the paving company knew it would pay the liens and save the costs, if notified; that it was not notified of the delinquency, nor made a party to the suits.

A dissolution of the injunction was sought and had on some or all of the following grounds: (1) That the loan company was not a party to the two original suits, and, therefore, had no interest in the subject-matter of, or judgments in, said suits; (2) the proceeding was a collateral attack on said judgments; (3) no meritorious defense was shown; and (4) that there was no agreement, as alleged, not to bring the two suits in question.

We are of opinion that the contention that the paving company agreed to notify the loan company of any default in payment of these particular certificates is not supported by the testimony. This suit was instituted several months prior to the date on which it is alleged the agreement was made. Appellant's general attorney testified in the case and made no mention of such an agreement and reliance thereon.

That the paving company's lien is a first enforceable claim against the two lots, and therefore a superior lien to appellant's, seems to be conceded. Article 1090, above quoted, makes it so, and such is the holding in Marriott v. Corder et al. (Tex. Civ. App.) 4 S.W.(2d) 213.

The appellee, Pelphrey & Co., seeks to uphold the judgment dissolving the injunction on the grounds that the appellant, being a junior or subordinate lienholder, was not a necessary party to the two original suits foreclosing the paving liens, and that the appellant, after such foreclosures, merely stands in the position...