Rio Delta Land Co. v. Johnson

• Decision Date: 30 December 1971
• Docket Number: No. 660,660
• Citation: 475 S.W.2d 346
• Parties: RIO DELTA LAND COMPANY, Appellant, v. E. W. JOHNSON et al., Appellees.
• Court: Texas Court of Appeals

Page 346

475 S.W.2d 346

RIO DELTA LAND COMPANY, Appellant, v. E. W. JOHNSON et al., Appellees.

No. 660.

Court of Civil Appeals of Texas Corpus Christi.

Dec. 30, 1971.

Rehearing Denied Jan. 13, 1972.

Atlas, Hall, Schwarz, Mills, Gurwitz & Bland, Harry L. Hall, McAllen, for appellant.

Sonfield & Hasse, Robert L. Sonfield, Brownsville, for appellees.

OPINION

NYE, Chief Justice.

This is a suit to set aside a Sheriff's sale of land (sometimes called the third suit). The trial court granted a summary judgment against Rio Delta Land Company the plaintiff and in favor of John S. Caputa and other defendants. Rio appeals.

E. W. Johnson and wife obtained a judgment against Rio in the amount of $15,210.00, interest and costs, in a prior separate suit (sometimes called the first suit). Rio appealed to this Court wihout obtaining a supersedeas bond. During the course of the appeal of this first suit, the Johnsons levied execution on land owned by Rio. This land was sold by the Sheriff to the Johnsons who purchased the land for the amount of their judgment. Thereafter, Rio failed to file an appellants' brief in the Court of Civil Appeals in the first suit. This Court, on motion filed by the Johnsons, dismissed the appeal. In the meantime, the Johnsons sold the land to John S. Caputa, appellee. He in turn sold lots to various purchasers. Nearly two years after the subject Sheriff's sale, Rio brought this suit to cancel the Sheriff's deed, contending principally that the Sheriff's sale was irregular because of lack of proper notice; that the property was sold at a grossly inadequate price; and that Caputa the subsequent purchaser had actual knowledge or was charged with knowledge of the irregularities, making the sale voidable. Numerous affidavits have been filed by Rio in opposition to the motion for summary judgment. We believe that the facts contained in the affidavits raise a genuine issue of fact that must be tried before the trier of facts. Rule 166--A, Texas Rules of Civil Procedure.

It is uncontradicted that proper notice of the sheriff's sale as required by Rule 647, T.R.C.P., was not given by the sheriff preparatory to the execution sale. The publication of the notice was made on August 15, 1968, August 22, and the third notice on August 29. The sale was had on September 3, 1968, less than twenty days from the date of the first notice. Appellee admits that written notice to the appellant was not given until August 19, 1968. The appellants deny under oath that any notice was ever received by them.

Generally, irregularities in a sheriff's sale standing alone might not warrant the setting aside of an execution sale. However, when such irregularity is coupled with a grossly inadequate purchase price, the irregularity becomes material, giving rise to a cause of action to set aside the sale. Steffens v. Jackson, 16 Tex.Civ.App. 28, 41 S.W. 520 (1897, err. ref'd); Allen v. Stephanes, 18 Tex. 658; Nance v. Currey, 257 S.W.2d 847 (Tex.Civ.App.--Dallas 1953).

The purchase price at the sheriff's sale (by the Johnsons) was $15,900.00, the amount of the judgment. Rio's affidavits from two witnesses placed the value of the property in excess of $500,000.00. Appellees attack these affidavits as being insufficient to raise a fact issue of value because they say they are mere conclusions and opinions of the witnesses, citing Gibbs v. General Motors Corporation, 450 S.W.2d 827 (Tex.Sup.1970). However, there were other affidavits filed by two other witnesses that say that appellee Caputa had sold a number of lots out of the land in question for $1700.00 each. (Ninety lots according to one witness, and 1100 lots in the area in question by another witness). Even using the lower number of 90 lots sold out of the land in question, this would make a total sales price of $153,000.00. Appellees argue on the other hand that in a suit filed by Rio (hereafter referred to as the second suit) immediately following the sheriff's sale, Rio contended that they were damaged in the amount of $2,500.00 because of the sheriff's sale. Therefore they say that the $15,900.00 sale price was not unreasonable under the circumstances. All of this evidence indicates a conflict as to the value of the land. It is not up to us to weigh the summary judgment evidence, but only determine whether the summary judgment record establishes as a matter of law that no genuine issue of fact has been raised as to a grossly inadequate purchase price for the property in question. We hold that such an issue as to the irregularity of the sheriff's sale and to the inadequacy of the price paid for the land has been raised by the summary judgment proof.

Appellees next contend that the summary judgment evidence is sufficient to establish that appellees were innocent purchasers for value as a matter of law and that summary judgment was therefore proper. The Johnsons did not join in the motion for summary judgment. The trial court severed Rio's cause of action against the Johnsons from Rio's cause of action against the appellees. The Johnsons were the judgment creditors in the first suit and purchased Rio's land at the sheriff's sale. The sheriff's deed shows on its face the irregularity of the notice. Where a judgment creditor becomes the purchaser at an execution sale, he is deemed to have notice of all of the errors and irregularities that occurred in the proceedings or in the judgment itself. Stroud v. Casey, 25 Tex. 740 . If the judgment creditor purchased the land at an execution sale and pays the purchase price by crediting the judgment with the amount of his bid, he is not an innocent purchaser for value. 24 Tex.Jur.2d pp. 644--645, § 179, Executions, and authority cited therein. Here the appellees purchased the property in question from the Johnsons and contend that even if the Johnsons were charged with notice of the irregularities that render the sale voidable, nevertheless appellee is an innocent purchaser unaffected by the irregularity since he purchased the land in question without actual notice.

The summary judgment evidence establishes that Caputa had constructive notice of the irregularities that led up to the execution sale. The lack of sufficient notice of the sale both by publication and as to notice mailed to Rio by the sheriff, clearly appear in the deed to the Johnsons. The deed was filed for record on September 19, 1968. Caputa did not receive his deed from the Johnsons until September 26, 1968.

"Notice in law is of two kinds--actual and constructive. * * * In common parlance 'actual notice' generally consists in express information of a fact, but in law the term is more comprehensive. In law whatever fairly puts a person on inquiry is sufficient notice, where the means of knowledge are at hand, which if pursued by the proper inquiry the full truth might have been ascertained. Means of knowledge with the duty of using them are in equity equivalent to knowledge itself. * * * So that, in legal...