Pachter v. Woodman, 903

• Decision Date: 26 February 1976
• Docket Number: No. 903,903
• Parties: Bernard PACHTER, Appellant, v. L. L. WOODMAN, Sr., et al., Appellees.
• Court: Texas Court of Appeals

Page 940

534 S.W.2d 940

Bernard PACHTER, Appellant, v. L. L. WOODMAN, Sr., et al., Appellees.

No. 903.

Court of Civil Appeals of Texas,

Tyler.

Feb. 26, 1976.

Rehearing Denied April 8, 1976.

Jack Ware, Uvalde, for appellant.

M. Douglas Adkins, Geary, Brice, Barron & Stahl, Dallas, Ralph Graham, Corpus Christi, Kessler, Nichols & Harris, Uvalde, Jackson, Walker, Winstead, Cantell & Miller, Dallas, R. A. Taylor, Jr., Crystal City, for appellees.

Charles Schwab, Jr., Schwab & Parks, Dallas, for intervenor.

MOORE, Justice.

This is an appeal from a summary judgment. Bernard Pachter, appellant-plaintiff, filed suit against L. L. Woodman, Sr., L. L. Woodman, Jr., Gary Roberts, substitute trustee, D. Harold Byrd and Warren Wagner, Inc., to set aside a sale made under the power in a deed of trust and to cancel the trustee's deed for alleged irregularities in the sale. ¹ A temporary restraining order, pendente lite, was issued restraining appellees from taking possession of the land. Appellees answered with a general denial. The cause came on for hearing before the trial court upon the motion of appellees, Byrd and Warren Wagner, Inc., for summary judgment pursuant to Rule 166--A, Texas Rules of Civil Procedure, alleging that under the pleadings, depositions, affidavits, exhibits and admissions, there was no genuine issue as to any material fact and that the appellees were entitled to a judgment as a matter of law. At the same time, the trial court also conducted a hearing on appellant's application for temporary injunction pendente lite. After a hearing, the trial court granted a summary judgment in favor of appellees Byrd and Warren Wagner, Inc., and decreed that plaintiff Bernard Pachter and the intervenors take nothing by their suit. The temporary injunction restraining appellees from taking possession of the land was dissolved and all injunctive relief sought was denied. ² Appellant, Bernard Pachter, duly perfected his appeal.

We affirm.

By his first point appellant urges that the court erred in granting a summary judgment in favor of appellees, D. Harold Byrd and Warren Wagner, Inc. Appellant has no point of error and does not challenge the judgment insofar as it denies him any relief against the remainder of appellees. He argues that the summary judgment was improvidently granted because the summary judgment proof shows that the trustee's sale was void due to certain irregularities. Alternatively, he argues that the evidence created several issues of disputed fact with regard to whether the trustee's deed was void or voidable.

The material facts giving rise to this controversy do not appear to be in dispute. The property made the basis of the suit consists of 1.071 acres of land situated in Zavala County, Texas. The land was originally owned by appellees L. L. Woodman, Sr., and L. L. Woodman, Jr., who conveyed it to Byrd Farms, Inc. As consideration for the conveyance, Byrd Farms, Inc., and D. Harold Byrd, individually, executed a note to the grantors dated December 22, 1966, in the amount of $290,000.00 which was secured by a deed of trust containing the following covenant:

'TAXES: Grantor will pay all taxes and assessments that are or may become due and payable on the above described property under any law, ordinance or regulation whether made by federal, state or municipal authority, before any interest or penalty accrues thereon.'

The Deed of Trust further provided:

'6. Should GRANTOR fail or refuse to make prompt payment of the above described note as the same shall become due and payable or fail or refuse to perform form any of the acts, conditions, obligations and covenants herein provided, then this DEED OF TRUST shall remain in force and effect and HOLDER shall be entitled, without being under legal obligation to do so, to exercise the option of:

'(b) Declaring the whole of the note secured by this DEED OF TRUST, including principal, interest and all sums and expenses expended by HOLDER for and in behalf of GRANTOR as herein provided, immediately due and payable, with or without notice to GRANTOR and withiout presenting for payment any matured part of the indebtedness secured by this DEED OF TRUST, and cause trustee sale to be made.

'* * * It is agreed that the recitals in the conveyance to the purchaser, or purchasers, shall be full and conclusive evidence of the truth of the matters therein stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be conclusive against GRANTOR, his heirs and assigns.'

Appellant, Bernard D. Pachter, acquired title to the land from D. H. Byrd, successor in title from Byrd Farms, Inc., by a deed dated March 4, 1971, which recited that the conveyance was 'subject to' the above mentioned deed of trust securing payment of the Woodman note. On February 24, 1974, L. L. Woodman, Sr., upon discovering that the taxes due the Uvalde Consolidated Independent School District had not been paid for the years 1972 and 1973, instructed his attorney to mail notices of default and his intent to accelerate payment of the note to appellant Pachter with copies to D. H. Byrd and to Jack L. Fox, appellant's New York attorney. The letter also recited that Woodman elected to exercise his option to accelerate all remaining payments and that all remaining payments were then due and owing to him.

The record shows without dispute that no payments were due on the Woodman note at the time Woodman exercised his option to accelerate for nonpayment of taxes. The record further shows that the taxes amounting to approximately $2,500 per year were unpaid for the years 1972 and 1973 and that interest and penalties had accrued thereon. For the year 1972 the penalty and interest accruing on the past due taxes amounted to the sum of $128.30. For the year 1973, a penalty in the amount of $42.15 accrued but the taxes were paid for that year before any interest accrued. The past due taxes, penalty and interest were not paid until March 22, 1974, which was subsequent to the date Woodman exercised his option to accelerate.

Generally, where a deed of trust provides that the mortgagee is authorized to accelerate payment of the entire debt for nonpayment of taxes, the mortgagee may exercise his option to do so upon failure to pay the taxes and have the property sold under the deed of trust for nonpayment of taxes. Odell v. Commerce Farm Credit Co., 67 S.W.2d 626 (Tex.Civ.App.--Eastland 1933) aff'd 80 S.W.2d 295 (124 Tex. 538); Bazile v. Tamborello, 442 S.W.2d 923 (Tex.Civ.App.--Houston 1969, writ ref'd n.r.e.); 55 Am.Jur.2d Mortgages sec. 382, p. 428.

Appellant's attorney admits in his affidavit that he received Woodman's notice of his option to accelerate the note on March 4, 1974, some eighteen days before the taxes were paid. According to his affidavit he promptly contacted Woodman's attorney, Mr. Ralph Graham, and advised him that Pachter was negotiating a sale of the property and that the sale was eminent . He, therefore, requested a delay in the posting of the trustee's notice of sale. He stated that in response to the request Woodman's attorney advised him that if such were the case, notice of sale would not be posted so long as the sale was eminent; that sometime later when it became known that the sale was no longer eminent, negotiations were commenced with regard to increasing the rate of interest on the vendor's lien note so as to avoid the necessity of a foreclosure sale by the trustee; that the negotiations ceased when Mr. Pachter refused to pay a higher rate of interest; that in his last conversation with Mr. Graham, at a time when the only issue was the readjustment of the interest rate, Mr. Graham advised him that if and when Mr. Woodman decided to pursue the foreclosure remedy, he would be advised. As we understand his affidavit, the negotiations were broken off in the latter part of May, 1974, and there was no further contact between the parties until after the property was sold by the substitute trustee.

In the meantime the record reveals that on October 11, 1974, after the resignation of the original trustee, Woodman appointed Gary Roberts as substitute trustee and directed him to proceed with the foreclosure. The substitute trustee posted notices and subsequently sold the property at public auction on November 5, 1974, to D. Harold Byrd and Warren Wagner, Inc., for a cash...