Skeen v. Glenn Justice Mortgage Co., Inc.

• Decision Date: 22 July 1975
• Docket Number: No. 18649,18649
• Citation: 526 S.W.2d 252
• Parties: Clyde SKEEN and Helen Skeen, Appellants, v. GLENN JUSTICE MORTGAGE COMPANY, INC., Appellee.
• Court: Texas Court of Appeals

Page 252

526 S.W.2d 252

Clyde SKEEN and Helen Skeen, Appellants, v. GLENN JUSTICE MORTGAGE COMPANY, INC., Appellee.

No. 18649.

Court of Civil Appeals of Texas Dallas.

July 22, 1975.

Rehearing Denied Aug. 19, 1975.

Steve Brutsche, Geary, Brice, Barron & Stahl, Dallas, for appellants.

Larry M. Lesh, Locke, Purnell, Boren, Laney & Neely, Dallas, for appellee.

CLAUDE WILLIAMS, Chief Justice.

Glenn Justice Mortgage Company, Inc., as assignee of Justice Mortgage Investors, Inc., brought this action against Flan Corporation, Clyde Skeen and Helen Skeen to recover the unpaid balance of a promissory note executed by Flan Corporation and guaranteed by Clyde and Helen Skeen. The trial court sustained the motion for summary judgment by Glenn Justice Mortgage Company, Inc. and rendered judgment against Flan Corporation and Clyde and Helen Skeen, jointly and severally, in the sum of $216,718.36, together with interest and costs. From that judgment, only Clyde and Helen Skeen appeal.

We hold that one of the necessary affidavits relied upon to support the motion for summary judgment was insufficient, as a matter of law, to comply with Texas Rules of Civil Procedure, rule 166--A(e) and, therefore, reverse the judgment and remand the cause to the trial court for further proceedings.

The material facts are undisputed. Justice Mortgage Investors, Inc. loaned Flan Corporation the sum of $600,000 to purchase real estate situated in Harris County, Texas. Flan, through its president Gene Sandell, executed a promissory note which was secured by a deed of trust. The deed of trust, in usual form, created a lien in favor of Justice Mortgage Investors, Inc. on the property in Harris County, Texas. The promissory note was payable 'on demand, or if no demand is made, on May 1, 1976.' As further security for the payment of the note, Clyde and Helen Skeen executed a contract of guaranty in favor of Justice Mortgage Investors, Inc. This guaranty was made in consideration of the payment of $25,000 to Clyde Skeen. The note and deed of trust, as well as the guaranty agreement, were assigned to Glenn Justice Mortgage Company, Inc. Thereafter, the mortgaged property was sold at foreclosure sale by H . M. Kearby, trustee, to Glenn Justice Mortgage Company, Inc. for the stated consideration of $450,000. This action was brought to recover the deficiency owed on the note after crediting the amount received at the foreclosure sale. After Glenn Justice Mortgage Company, Inc. filed its motion for summary judgment, supported by affidavits, the Skeens filed their answer to such motion, supported by affidavits. Following a hearing the trial court sustained the motion and rendered judgment.

In their primary point of error, appellants contend that the trial court erred in granting summary judgment because the principal and supplementary affidavits by the trustee, relied upon by appellee in support of the summary judgment, fail to comply with rule 166--A(e) in that they contain conclusions of law rather than statements of fact which would be admissible in evidence upon the trial of the case. In particular they object to the following statement in the supplementary affidavit of H. M. Kearby, trustee:

Upon the default of Flan Corporation, Inc. in the payment of the Note, the entire unpaid balance of principal and accrued interest was declared immediately due and payable; and upon the failure and refusal of Flan Corporation, Inc. to pay the Note according to the terms and conditions thereof, I was, as trustee, requested by the owner and holder of the Note to sell the Property at public auction.

Substantially the same statement is contained in Kearby's original affidavit. No other summary-judgment evidence of default appears in this record.

Tex.R.Civ.P. 166--A(e) expressly provides that '(s)upporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein.'

It is settled law that mere conclusions of law are not competent evidence and cannot support a summary judgment. The moving party must allege facts which would necessarily establish the presence of all elements of the causes of action. Through these factual allegations, the party opposing the motion is put on notice of the facts he must contradict in order to defeat the motion. Affidavits in support of a motion for summary judgment must be worded so that if the testimony were given from the witness stand during the trial it would be admissible. Hidalgo v. Surety Savings and Loan Ass'n, 487 S.W.2d 702, 703 (Tex.1972); Crain v. Davis, 417 S.W.2d 53, 55 (Tex.1967); Box v. Bates, 162 Tex. 184, 346 S.W.2d 317, 319 (1961); Fagin v. North Dallas Moving & Storage Co., 503 S.W.2d 308, 313 (Tex .Civ.App.--Waco 1973, no writ); Habern v. Commonwealth National Bank, 479 S.W.2d 99 (Tex.Civ.App.--Dallas 1972, no writ); Hutchinson v. City of Dallas, 290 S.W.2d 253, 257 (Tex.Civ.App.--Dallas 1956, no writ). The question is, therefore, whether the trustee's unsupported statement that 'upon the default of Flan Corporation, Inc. in the payment of the Note, the entire unpaid balance of principal and accrued interest was declared immediately due and payable' was proper evidence to support the rendition of a summary judgment against appellants. We have concluded that the bare statement of 'default . . . in payment' amounts to a legal conclusion on the part of the affiant and cannot support the summary judgment.

Black's Law Dictionary 505 (4th ed. rev. 1968) defines 'default' as: '(A) failure. . . . An omission of that which ought to be done. . . . (T)he omission or failure to perform a legal duty.' What was the failure or omission to perform a legal duty which would amount to 'default of Flan Corporation, Inc., in the payment of the Note,' as stated in the affidavit? An examination of the note, the guaranty agreement and the deed of trust reveals that there were numerous acts or omissions set out in the instruments which would give rise to a legal duty or duties which, if not performed, would constitute a 'default.' Several of these may be referred to as a 'default . . . in payment.' ¹ It is quite apparent that, absent a legal default pursuant to one or more of the possible contingencies, the appellants were not liable on their guaranty and the property could not be legally sold at foreclosure sale by the trustee. The affidavit of the trustee nowhere asserts or describes any specific act or omission that would constitute legal 'default . . . in payment of the Note,' or any other default specified in the note, the deed of trust or the guaranty agreement. Nowhere in the affidavit does the trustee state as a fact that the principal of the note was due. He could not do so for the simple reason that unless a demand is made, the note will not become due, according to its terms, until May 1, 1976. Nowhere in the affidavit does the trustee state as a fact that a demand was made for payment of the principal or that the interest payments on the note were not made when due. At no point in the affidavit does the trustee set forth facts which would give rise to a default and therefore acceleration as provided by any of the other provisions of the note, deed of trust or guaranty agreement, referred to in the margin. The simple statement in a trustee's affidavit that there was a 'default . . . in...