Ratliff v. Russek

• Decision Date: 23 March 1933
• Docket Number: No. 2802.,2802.
• Citation: 59 S.W.2d 859
• Parties: RATLIFF v. RUSSEK et al.
• Court: Texas Court of Appeals

59 S.W.2d 859

RATLIFF v. RUSSEK et al.

No. 2802.

Court of Civil Appeals of Texas. El Paso.

March 23, 1933.

Rehearing Denied April 27, 1933.

Appeal from District Court, El Paso County; Ballard Coldwell, Judge.

Action by Mrs. Clara Y. Russek and husband against R. M. Ratliff, and others, in which R. M. Ratliff filed a cross-action. From the judgment, defendant Ratliff appeals.

Affirmed.

W. E. Rogers and C. L. Galloway, both of El Paso, for appellant.

J. U. Sweeney and J. E. Quaid, both of El Paso, for appellees.

WALTHALL, Justice.

Mrs. Clara Y. Russek, joined by her husband J. Y. Russek, brought this suit against Elias Hernandez, R. M. Ratliff, R. A. Mora, and Louisa M. Gonzalez, a feme sole, to recover on two certain promissory notes numbered 3 and 5, of a series of six notes numbered consecutively from 1 to 6, each note being for the sum of $1,000, interest and attorney's fees.

The record shows substantially the following: On March 25, 1927, Louisa M. Gonzalez, by warranty deed conveyed to R. A. Mora the west one-half of the 6.34 acres of land known as the Venice place on the county road and received therefor as part consideration, six promissory notes, each for $1,000, signed by R. A. Mora and made payable to Louisa M. Gonzalez. The notes are designated by their serial number from 1 to 6 and are so referred to in the record. The notes are due and payable beginning one year after date; that is, note No. 1 is due one year after date, note No. 2 is due two years after date, and so on through the series of notes, note No. 6 becoming due six years after date.

The deed conveying the land, and the notes themselves, each retain and express a vendor's lien on the land to secure their payments. The notes each express the usual accelerating maturity clause, interest, and attorney's fee if placed in the hands of an attorney for collection. Notes numbered 1, 2, and 4, were paid, and default was made in the payment of note 5 and the series of notes were declared due by the plaintiffs, the holders of note 5.

By proper assignment, indorsement, and transfer of the lien notes Nos. 3 and 5 become the property of Mrs. C. Y. Russek.

In the assignment and transfer of notes 3, 4 and 5 and the lien, by Louisa M. Gonzalez, to the mortgage company, she inserted the following: "It is expressly agreed and understood, however, that the lien securing the payment of notes 3, 4 and 5 here transferred shall be in all things prior and superior to the lien securing the payment of the other notes of this series to-wit: Note No. 6."

The transfer bearing the above quotation was made while Louisa M. Gonzalez was the owner and holder of note 6; the transfer was duly recorded.

There was no notation on note 6 indicating the agreement as above, and nothing to indicate that the lien as to the other notes was to be prior or superior, or to take precedence over note 6.

Plaintiffs allege that Mora made some kind of conveyance of the property to Hernandez, and that Louisa M. Gonzalez is asserting some claim to the property, and that both Hernandez and Louisa M. Gonzalez, by reason thereof, are liable on the notes.

Plaintiffs, Mrs. Russek and husband, owned notes 3 and 5, and asked judgment for their debt against all defendants except R. M. Ratliff; that the vendor's lien on the property be established as against all parties as a first or prior lien and judgment foreclosing said lien to satisfy their debt and costs.

Hernandez and Mora answered by general demurrer and general denial.

R. M. Ratliff answered by general demurrer and general denial, and by special answer asserting ownership of one note (note 6), alleged that Mora and Hernandez assumed the payment of said note and have not paid same and that it is now due and payable, with interest and attorney's fees.

Ratliff further alleged that he is a bona fide purchaser of said note (note 6) for a valuable consideration "without any actual knowledge of any defects or anything that would injure said note or make it inferior to any other note, but that said note is a first lien on the property described in plaintiff's petition." Ratliff asked that Mora, Louisa M. Gonzalez, and Hernandez be cited to appear and answer this his cross-action, and that he have judgment against them for his debt, interest, and attorney's fee. Ratliff filed a motion for a continuance to get service on Mora, Hernandez, and Louisa M. Gonzalez. The court overruled Ratliff's motion for continuance.

The case was tried without a jury. The court heard the evidence and entered judgment for plaintiffs Russek and wife against Mora and Hernandez for the amount of the debt ($2,214.35), interest, and costs; that plaintiffs have a first and valid vendor's lien on said tract of land and ordered same foreclosed as to all defendants, including Ratliff; ordered that Ratliff's cross-action against Mora, Hernandez, and Gonzalez be dismissed "without prejudice."

The trial court filed findings of fact and conclusions of law.

Briefly, the court found: Plaintiffs were the owners of notes 3 and 5, and Ratliff was the owner of note 6; that the payment of the notes was secured by the land described; that while the notes were held by Mrs. Gonzalez she sold the notes now held by plaintiffs and designated and declared notes 3 and 5, to be a first lien on the property; that she later transferred note 6 to Ratliff; that her declaration of the notes (3 and 5) as first lien notes was placed of record prior to her sale and delivery of note (note 6) to Ratliff; all notes are past due; Ratliff seeks to have case continued to get service in his cross-action on the maker of the note, the payee, and indorser on the note and Hernandez who assumed to pay the note, but "the delay was denied him for no reason than that the plaintiff had a right to have his hearing on his notes without being required to delay such hearing and determination until the defendant Dr. Ratliff could prepare and present his cross action."

The court further found that "R. M. Ratliff did not have actual knowledge that the note he claims in this suit was made a second lien by the payee at or before the time the said Ratliff purchased same."

Ratliff alone prosecutes this appeal.

Opinion.

Two questions are presented.

First: Was it reversible error to refuse Ratliff's motion to continue the case until he could get service on Mora, Hernandez, and Mrs. Gonzalez, on his cross-action?

Plaintiffs filed their suit on April 18, 1932. The record does not show when defendant Ratliff was served with citation; the record shows that his original answer was filed on May 2, 1932, and his amended answer was filed on June 18, 1932. Ratliff's motion for continuance to pass the case until the September term of the court to get service on Mora, Hernandez, and Mrs. Gonzalez, was filed June 28, 1932. The motion for continuance shows that all three of the parties live in El Paso county, and were defendants in the suit and two had filed answers. At the time of filing the motion no steps had been taken to get service and no reason is stated in the motion why defendant in his cross-action had not had service on Mora, Hernandez, and Mrs. Gonzalez for the May term of the court which commenced on May 2d.

We have concluded that sufficient diligence to get service on the parties for the May term of the court is not shown to justify this court in holding that the trial court abused his discretion in overruling the motion. The parties were necessary parties to the cross-action and Ratliff was authorized to make them parties defendant in his cross-action, but "not at a time" so as to "unnecessarily delay the trial of the case." The law exacts diligence of a cross-action defendant in bringing in new parties.

Second: The record shows that when the notes were executed and delivered they were equally and alike secured as purchase-money notes of the land described in the plaintiff's petition, that is, they were all alike vendor's lien notes.

The court found, and the record shows, that after the execution and delivery of the notes to Mrs. Gonzalez, and while the notes were held by her, she sold the notes 3 and 5, now held by plaintiffs to the First Mortgage Company of El Paso, and by written conveyance transferred to the mortgage company the lien securing same; said transfer contained the...