Reisenberg v. Hankins

• Decision Date: 30 January 1924
• Docket Number: (No. 2255.)
• Citation: 258 S.W. 904
• Parties: REISENBERG v. HANKINS et al.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

258 S.W. 904

REISENBERG v. HANKINS et al.^*

(No. 2255.)

Court of Civil Appeals of Texas. Amarillo.

January 30, 1924.

Rehearing Denied February 27, 1924.

Appeal from District Court, Childress County; J. V. Leak, Judge.

Suit by Henry Hankins and another against Robert Reisenberg. Judgment for plaintiffs, and defendant appeals. Affirmed.

Whitehurst, Church, Read & Bane, and L. H. Betts, all of Dallas, for appellant.

Jos. H. Aynesworth, of Wichita Falls, and C. A. Williams, of Childress, for appellees.

HALL, C. J.

The appellees, Henry Hankins and Claude Terrell, filed this suit April 4, 1923, in the district court of Childress county, alleging in substance that they were the owners of certain lands situated in said county; that January 1, 1914, H. Smiley, who then owned said lands, executed a mortgage thereon in favor of Maxwell & Maxwell, to secure a note for about $2,000 which said note and lien had been renewed and extended by W. D. Smiley, the vendee of H. Smiley, and by such extension the note matured on the 1st day of January, 1924; that said note provided that the interest should become due and payable on the 1st day of January of each year thereafter. The mortgage provided that a failure to pay interest or any installment thereof for 5 days from the date it became due should, at the option of the holder of the note, mature the whole indebtedness. The mortgage further contained a power of sale, authorizing the mortgagee, his assigns or legal representatives, after notice as required by law, to sell the property in satisfaction of the debt, said sale to be made on the first Tuesday in some month between the hours of 10 o'clock a. m. and 4 o'clock p. m., to the highest bidder for cash at the courthouse door of the county in which the land was situated. It provided that notice should be given by posting three written or printed notices, one at the courthouse door of said county and the others at two public places in the county, 20 days prior to the date of sale. The mortgage contained the further usual stipulations that all statements or other recitals in deeds made by the mortgagee as to the breach of covenants, giving of notice, etc., should be taken as prima facie evidence that the terms of the mortgage had been fully complied with. It is further alleged that said note and mortgage had been conveyed by Maxwell & Maxwell to John Hancock Life Insurance Company, and by said company to Reisenberg; that Reisenberg and one A. P. Minchew schemed and conspired together to defraud the plaintiffs of their lands and interest therein; that the said Minchew caused the said Reisenberg to purchase and acquire the note and to sell the land without notice to appellee of unpaid interest installments; that in pursuance of said fraudulent conspiracy the land was sold on the 3d day of April, that being the first Tuesday of said month, 1923, and purchased by Reisenberg himself. They allege if they had known of the proposed sale they would have paid the interest and the note; that the land was worth about $10,000; and that Reisenberg had purchased it at his own sale for the sum of $2,450. They prayed that the sale be set aside; that Reisenberg be enjoined from recording his fraudulent deed; and that they be quieted in their title. By supplemental petition they tendered the full amount of the note, interest, and costs.

The appellant Reisenberg answered by general demurrer, several special exceptions, general denial, and specially pleaded that about the 1st day of March, 1923, he purchased the note and mortgage in question from the John Hancock Insurance Company through the Maxwell Investment Company; that at said time the interest was more than 5 days past due; that he posted notices, as required by law and by the mortgage, and at said sale purchased the land at a fair and equitable price at a sale held in accordance with the terms of the note and mortgage, and in accordance with law. He denied the allegations of conspiracy with Minchew, and alleged that there was no fraud connected with said sale. By cross-action he sued in trespass to try title, alleging his damages at the sum of $5,000. By way of further cross-action he set out the fact of the execution of the note and mortgage by Henry Smiley, the extention of the note and lien by W. D. Smiley and wife, the failure of the appellees to pay the interest; that the principal sum of $2,000, and the interest from January 1, 1922, to January 1, 1923, at the rate of 6½ per cent. per annum, was due, together with interest on the interest from January 1, 1923, and prayed that in the event the sale should be set aside that he have judgment for the amount of the note, principal, interest and attorney's fees, for a foreclosure of his lien and for costs. A plea of privilege was overruled. On final hearing the court rendered judgment for the appellees, setting aside the sale annulling the deed executed by Reisenberg as mortgagee to himself on the 3d day of April, 1923, gave Reisenberg judgment for the full amount of his note and interest, aggregating $2,248.70, decreed the title and possession of the land to appellees, and adjudged the costs against Reisenberg. The injunction restraining Reisenberg from filing his deed for record was made permanent.

The first contention to be noticed is that the appellees' petition is not sufficient to sustain the judgment. After setting out the various fraudulent acts, it is alleged:

"All of which was done in the utmost secrecy and with the particular intention that such action should not become known to plaintiffs or their attorney."

It may be that the allegations of fraud made in the petition are not specific and full enough to sustain the judgment, but the defect, if any, has been cured by the allegations of the answer, specifically denying any fraud, and declaring that the sale, and, in fact, the whole transaction, was fairly and legally made. Numerous propositions are brought forward by the appellant in his brief, which it will not be necessary to consider in detail. It is urged in substance that where the land is sold under power of sale conferred by a mortgage, and the notice stipulated for in the mortgage is given, and the statute regulating such sales is complied with, personal notice of the sale to the mortgagor, or those holding under them, are not conditions precedent to the valid sale of the property; that a failure to give personal notice does not amount to fraud; and that such a sale cannot be avoided for mere inadequacy of price alone. That all persons claiming an equity of redemption by a privity of estate with the mortgagor are considered as parties to the proceeding, and are precluded by the sale; that proof is insufficient to show a conspiracy of any such fraud as would support the court's judgment in setting the sale aside.

The findings of the court material to the consideration of the contentions here may be briefly summarized as follows: That Reisenberg, by proper transfers, was owner of the note for $2,000, and the assignee of the mortgage; that Hankins and Terrell are the owners of the land; and that H. Smiley is the common source of title; that the original note was made by H. Smiley to Maxwell; that it had been renewed and extended by W. D. Smiley by an extention agreement with the John Hancock Life Insurance Company, executed January 1, 1919, making said note payable January 21, 1924; that one of the attorneys for the appellees had inquired of H. H. Pennell, the agent of the John Hancock Life Insurance Company, at Childress, as to the interest payments during the month of March, 1923, and was informed by Pennell that he had not received any notice of default in the payment; and that, should the same be unpaid, he would get notice from the insurance company, and would notify said attorney; that the life insurance company was the record owner of the note and mortgage, and continued to be the record owner until Reisenberg sold the land under the mortgage to himself; that Reisenberg and A. P. Minchew, one of the parties under whom appellees obtained title through a judgment and attachment, were intimate friends of long standing; and that prior to to the time Reisenberg purchased the note he had several conversations with Minchew with reference to the land, in which Minchew detailed the circumstances of his litigation with appellees, and in one of said conversations Minchew informed Reisenberg that he had lost out in the suit, and would like to see him, Reisenberg, make something out of it; that Reisenberg obtained the note and mortgage by written transfer on the 6th day of March, 1923, paying full face value therefor, and on the next day wrote an attorney at Childress to post notice advertising the sale of the lands under the mortgage at the next possible date, being the first Tuesday in April, 1923, and paid said attorney $30 for writing out and posting the notices; that notices were accordingly posted; and that Reisenberg never at any time notified appellees of his purchase of the note, and did not file the assignment of said note to him in Childress county, until after the sale was made; and that he gave no notice of his election to declare the note due on account of default in the payment of the interest other than by the posted notices of sale; that A. P. Minchew went to Childress on Monday, April 2d, the day before the sale, and took with him the sum of $3,400, with which, if necessary, to bid upon the land, in the event there were other bidders against Reisenberg; that on the morning of April 3, 1923, and shortly after the arrival of Reisenberg in Childress, he, with Minchew, went in a car to the land in question north of Childress, and did not return until about 15 minutes after 12 o'clock of that day, when they immediately went to the courthouse and made the sale during the noon hour; that no one was present at such sale except Reisenberg and Minchew; and that Reisenberg made the only bid for the land;...