Prudential Corp. v. Bazaman

• Decision Date: 20 June 1974
• Docket Number: No. 841,841
• Citation: 512 S.W.2d 85
• Parties: PRUDENTIAL CORPORATION et al., Appellants, v. Abe BAZAMAN et al., Appellees.
• Court: Texas Court of Appeals

Page 85

512 S.W.2d 85

PRUDENTIAL CORPORATION et al., Appellants, v. Abe BAZAMAN et al., Appellees.

No. 841.

Court of Civil Appeals of Texas Corpus Christi.

June 20, 1974.

Opinion on Filing of Remittitur July 11, 1974.

Henry Nuss, Kleberg, Mobley, Lockett & Weil, Corpus Christi, for appellants.

John Barrow, Nicolas & Morris, Corpus Christi, for appellees.

OPINION

NYE, Chief Justice.

This is a suit to set aside an execution sale. The appeal arises from a consolidation of two (2) separate lawsuits which attempted to try title to a piece of real property. The action, after consolidation and an amendment, is actually one brought by the appellees Bazaman and Woods to set aside the execution sale of a lot with improvements thereon belonging to Woods located in the City of Corpus Christi. Additionally, the appellees sought damages for certain items which were repossessed which they claimed should have been applied to reduce the amount of a prior money judgment against Woods and for exemplary damages. Trial was had before a jury. Based upon the jury's answers to Special Issues, judgment was rendered for the appellees.

At some time prior to 1970, Billy Joe Woods executed two (2) notes, one for $2,235.60 and the other for $402.00. The larger note was secured by a Buick automobile and the smaller note by color television set and four Cadillac aluminum 'Mag' wheels. The notes came into the possession of General Finance Company, one of the appellants. Woods defaulted in his payments and General Finance seized the automobile and the mag wheels and then brought suit on the notes. Judgment was entered for the Finance Company in July of 1970 for the amount of the unpaid balance of the notes, $2,282.13, and costs. This judgment was duly abstracted in September of 1970 and several executions were attempted thereon without success. In the meantime, General Finance sold the repossessed automobile of Woods and its manager, Jack Painter, gave away the mag wheels. Despite this action, no credit was given to Woods on his debt.

In June of 1971, after the judgment against Woods had been entered and abstracted, Woods sold a piece of property on Cole Street to Abe Bazaman, one of the appellees. In October of 1971, General Finance ordered another execution on its judgment against Woods. On November 23, 1971, Bazaman recorded his deed to the Cole Street property, sold to him by Woods. On December 7, 1971, as a result of the execution, the Constable sold the Cole Street property. The only bidder at this sale was Jack Painter, who bid $1,000.00 and allegedly credited the amount of the bid to the judgment. Painter was the manager of General Finance Company and a Vice President and stockholder in the Prudential Corporation, the other appellant herein. It was Prudential who allegedly purchased the Cole Street property at the sheriff's sale and, therefore, claims under the constable's deed.

Sometime after the execution sale, Painter went on the Cole Street property and changed the locks on the residence located there. This precipitated two (2) lawsuits in trespass to try title: one in which Bazaman sued Painter, d/b/a Prudential Corporation and Painter d/b/a General Finance Company; and another suit involving the same property in which the Prudential Corporation sued Bazaman. These cases were consolidated in the 117th District Court of Nueces County. Woods then intervened on the side of Bazaman and they jointly filed an amended petition, subject to their other title claims, to set aside the constable's sale because of irregularities. Since an attack was made on the sale under the execution issued pursuant to a judgment of the 105th District Court, the entire case was transferred back into the 105th for trial.

After the evidence was presented the case was submitted to the jury on 45 special issues. The relevant jury findings can be summarized as follows: Bazaman and Woods did not conspire to delay or defraud existing creditors by Woods' conveyance of the Cole Street property to Bazaman in June, 1971; General Finance Company never gave Woods credit on its judgment for the property sold; and the $1,000.00 price bid at the constable's sale was grossly inadequate since the property had a fair market value of $12,000.00 on the date of the sale. The jury found that there were irregularities in the constable's sale in that: a) Woods was never given a chance to designate property he wished levied on; b) Woods was not given written notice of the sale; and c) the constable did not endorse a levy on the property. The jury found, however, that none of these above mentioned irregularities contributed to producing the grossly inadequate price; that General Finance failed to give a credit after judgment for the automobile or the mag wheels which it repossessed, the total fair market value of which was $950.00; Painter acted maliciously and with conscious disregard for the rights of Woods and Bazaman when he: (1) gave away the mag wheels; and (2) broke into the Cole Street property and changed the locks; as a result, the jury awarded exemplary damages in two issues: 1) in the amount of $4,529.93 in favor of Woods and 2) $1,500.00 in favor of Bazaman. Finally, the jury found that Woods had offered to pay Painter the full amount of the judgment in cash at some time prior to February 21, 1972.

Final judgment was entered in favor of Bazaman and Woods. The judgment recited: 1) that the constable's sale and deed of December 7, 1971, were set aside; 2) that Prudential take nothing in its title suit against Bazaman; 3) that the original judgment of General Finance Company against Woods was to be credited with $950.00 (the value of the automobile and mag wheels), leaving a balance of $1,373.33 plus 6% Interest from July 30, 1970, until the date of this judgment (this equaled $219.73); 4) that Woods was entitled to $4,529.13 exemplary damages which gave him a net recovery against Jack Painter and General Finance of $2,936.87 plus interest; 5) that Bazaman was entitled to recover $1,500.00 exemplary damages against Painter and Prudential Corporation; 6) that Prudential Corporation, Jack Painter and General Finance were permanently enjoined from interfering with the title or possession of Bazaman on the Cole Street property; and finally, 7) the costs were adjudicated against Painter, General Finance and Prudential.

The appellants advance 26 points of error which they divide into 3 main groups for the purposes of argument. The first group complains that the trial court erred in setting aside the constable's sale because it was not void and, therefore, could only be attacked directly. In addition, they contend that the jury found that the irregularities in the sale did not contribute to the grossly inadequate price thus giving them an absolute defense to the allegations that the sale was irregular and should be set aside.

The second group relates to error of the trial court in awarding punitive damages. It is not necessary for us to consider the third group because of the result we have reached hereinafter.

The appellants contend at the outset that appellees' suit is a collateral attack on the execution sale and the judgment should be set aside accordingly. To this contention, we disagree. It is true that from the time Bazaman filed his original suit until Woods intervened, his petition set forth causes of action in tort (trespass and conversion) and trespass to try title. The execution sale could not be overturned under these pleadings since they amounted to a collateral rather than a direct attack. See Moore v. Snowball, 98 Tex. 16, 81 S.W. 5 (1904); Cameron v. Saathaff, 363 S.W.2d 884 (Tex.Civ.App.--San Antonio 1962, writ ref'd n.r.e.). 24 Tex.Jur.2d Executions § 131. However, when Woods, the original judgment debtor, intervened and Woods and Bazaman filed their joint petition, the constable's sale came under direct attack. The amended petition states that:

'Plaintiffs would further show the Court that the Constable's Sale, held on or about December 7, 1971 was wholly inadequate, both in law and in equity, to pass legal title to Defendant, Jack M. Painter, Jr., because of the following irregularities:

(enumeration of irregularities omitted)

WHEREFORE, premises considered, Plaintiffs pray . . . that on final hearing the Constable's Sale . . . be declared null and void and in all things be set aside; . . .'

The pleadings as a whole were clearly a direct attack on the constable's sale as well as a trespass to try title suit.

Our Rules of Civil Procedure give the procedures which must be followed in order to insure fairness in a sale under a writ of execution. Rules 621--656, Texas Rules of Civil Procedure. Any deviations from these rules are considered irregularities. The jury in this case found three irregularities based on ample evidence. First, they found that Woods was never given written notice of the sale; second, Woods was not given an opportunity to designate property to be sold in violation of Rule 647; and, third, the jury found that the constable did not endorse his levy of the property on the writ in violation of Rule 639. In addition to these irregularities, the jury found that the price for which the property was sold was grossly inadequate (the bid was $1,000.00 and the value of the property was $12,000.00).

There are two Supreme Court cases decided within a year of each other which are the beginning of the Texas Law in this area. The first is Kauffman & Runge v. Morriss, 60 Tex. 119 (1883) where the rule is stated as follows:

'Mere inadequacy of price is not in itself sufficient to warrant the interference of equity for the purpose of setting aside a sheriff's sale of property. . . . 'But if in addition to such inadequacy there be any appearance of unfairness or any circumstance, accident or occurrance in relation to the sale of a character tending to cause such inadequacy, then the sale will be set aside.'

(citation omitted) When the...