T-Anchor Corp. v. Travarillo Associates

• Decision Date: 31 October 1975
• Docket Number: T--ANCHOR,No. 8563,8563
• Parties: CORPORATION, Appellant, v. TRAVARILLO ASSOCIATES, a California Limited Partnership, Appellee.
• Court: Texas Court of Appeals

Page 622

529 S.W.2d 622

T--ANCHOR CORPORATION, Appellant, v. TRAVARILLO ASSOCIATES, a California Limited Partnership, Appellee.

No. 8563.

Court of Civil Appeals of Texas Amarillo.

Oct. 31, 1975.

Stalcup, Johnson, Meyers & Miller, David J. White, Dallas, Miller, Sanders & Baker, Dee Miller, Amarillo, for appellant.

Stokes, Carnahan & Fields, O. P. Fields, Amarillo, for appellee.

ELLIS, Chief Justice.

This is a suit for permanent injunction against interference with the right of possession claimed by plaintiff-appellant, T--Anchor Corporation, a Texas corporation, pursuant to a forfeiture provision contained in an installment contract for the sale of real property designated as Travelodge West Motel, in Amarillo, Texas, entered into between T--Anchor as seller and Young Properties Corporation, a California corporation, as buyer. After trial without a jury, the trial court rendered judgment against T--Anchor that it take nothing by its suit, and for defendant-appellee, Travarillo Associates, a California limited partnership, the assignee of Young Properties, on its cross-action for possession of the motel property. T--Anchor brings this appeal from the judgment of the trial court. Affirmed.

The right to forfeiture which T--Anchor claims and upon which it bases its suit for injunction is contained in paragraph XIII of the contract of sale. After setting out that time shall be of the essence, the contract further provided that if the buyer fails to pay any of the installments or breaches any of the conditions of the contract, the seller shall have the right, after giving written notice to the buyer, to declare the contract forfeited and cancelled and of no further force and effect.

Appellant asserts its entitlement to exercise its contractual right of forfeiture by reason of default on the part of the buyer and its assignee in making the required installment payments. We note that, among other contentions, appellee insists that appellant's claim for possession and title based on termination or forfeiture of the contract was not raised at the trial level and cannot properly be advanced for the first time and considered in this appeal. However, after reviewing the entire record, including the pleadings and the evidence admitted, we have determined to consider appellant's asserted rights concerning the alleged forfeiture and the injunctive relief sought.

After trial on the merits, the trial court rendered its judgment which decreed that: (1) certain interlocutory orders be dissolved which had restrained and enjoined Travarillo Associates, the assignee of Young Properties, the original purchaser, from the taking possession of the Travelodge West Motel, the subject of the contract of sale entered into on April 4, 1973; (2) Travarillo is the owner and holder of all rights of 'purchaser' as formerly held by Young Properties under the contract of sale; (3) the contract of sale is in full force and effect, and Travarillo with its acquired rights as purchaser is entitled to possession of the Travelodge West Motel described therein; (4) certain monies tendered into the registry of the court by Travarillo be paid to T--Anchor, the seller, and that the balance in the registry be paid to Travarillo; (5) the only real parties in interest in this case are T--Anchor and Travarillo; and (6) all other parties named as defendants have no interest in this controversy and are dismissed from the suit. Subsequent to the judgment, the trial court ordered that the agreement of the parties with respect to the payment and receipt of the monies paid out from the registry of the court would not constitute any agreement to the judgment entered in this cause by T--Anchor nor in any manner affect T--Anchor's notice and right of appeal.

Upon request, findings of fact and conclusions of law were made by the trial court. Since this appeal is determinable from competing equitable considerations necessarily based upon a series of acts and conduct of the parties, we shall set out what we deem to be the court's significant factual findings and legal conclusions.

Among other facts found by the trial court were that: on April 4, 1973, T--Anchor, the seller, entered into a contract for the sale of the Travelodge West Motel in Amarillo, Texas, with Young, the buyer; as a part of the same transaction, Young and Travarillo entered into an agreement of purchase and sale of the motel whereby Travarillo acquired all of Young's interest in the motel; T--Anchor consented to the assignment of the contract interest from Young to Travarillo upon the terms that Travarillo could acquire all of Young's interest in the motel if Young should default in its contract payments to Travarillo; and on the same date, April 4, 1973, Young was placed in possession of the motel under a leaseback agreement with Travarillo.

Although there was evidence of prior late payments and acceptance thereof by T--Anchor, the trial court found that beginning with the payment due in November, 1973, Young defaulted in its monthly payments to T--Anchor in the amount of $10,812.17 each, and in each of its monthly lease payments to Travarillo in the amount of $6,471.00. The court further found that pursuant to a proceeding brought by Young, on October 31, 1973, a bankruptcy court in California entered its order restraining all creditors of Young from accelerating or attempting to accelerate any indebtedness of Young, from enforcing any rights or remedies provided in any agreements with Young, and from cancelling any such agreements or commencing any kind of forfeiture proceeding against Young; and that throughout the restraining period ordered by the bankruptcy court, Young remained in possession of the motel, but made no payments to T--Anchor or to Travarillo.

Additionally, the court found that: T--Anchor defaulted in the first and second lien payments which it was required to make to Home Savings and Loan Association of Waterloo, Iowa, and to Amarillo National Bank of Amarillo, Texas, under the sale contract with Young; both T--Anchor and Travarillo appeared in the bankruptcy proceeding seeking relief from the bankruptcy court's restraining order, T--Anchor seeking cancellation of the sales contract and Travarillo seeking cancellation of the lease agreement and possession of the motel; T--Anchor, in its pleadings in bankruptcy court, fully recognized that Travarillo was the assignee of Young and held all of the interest of Young in the motel and that Young was only a defaulting lessee at the time of the bankruptcy; on April 2, 1974, the bankruptcy court entered an order directing Young to vacate the motel ten days after the date of the order, and dissolving the restraining orders against T--Anchor and Travarillo on or about April 12, 1974; as of the date of the dissolution of the restraining orders, Travarillo was the owner of all of the interest of Young in the sales contract with T--Anchor; immediately after the bankruptcy court entered its order on April 2, 1974, the general partner of Travarillo tendered full payment of all delinquent land sales contract installments to T--Anchor and otherwise tendered performance of all delinquent obligations of Young to T--Anchor to make performance current under the contract; and T--Anchor wrongfully refused the tender by Travarillo and assumed possession of the motel as Young vacated.

The trial court further found that: the money contributed to the purchase of the motel was principally that of Travarillo in the amount of $300,000; T--Anchor received as cash consideration for the motel $137,500; and some $200,884.32 was required to bring the obligations of Young current under the land sales contract, including delinquent interest and penalty due from T--Anchor to the first lienholder plus attorneys' fees paid by T--Anchor in attempting to secure performance of the contract or possession, all of which, ought equitably to be reimbursed to T--Anchor.

Also, the court made findings that: since T--Anchor was in possession of the motel from April 20, 1974, to the time of trial on the merits, it had realized from motel operations a profit of $113,097.09 after expenses; after deducting the profits of T--Anchor from the amount required to bring the contract obligations current, the sum of $87,787.23 was found to be owing to T--Anchor by Travarillo; Travarillo paid into the registry of the trial court the sum of $100,000, a sum sufficient to make T--Anchor whole under the land sales contract; and receipt of $87,787.23 thereof by T--Anchor would fully adjust the equities of the parties and all accounts between them up to September 5, 1974, the date of the trial on the merits.

Additionally, the trial court found that: it would be exceptionally harsh and unjust to forfeit the monies contributed by Travarillo to the motel project and an unjust enrichment to T--Anchor by allowing forfeiture of the purchaser's rights under the land sales contract in the face of unusual circumstances where a debtor in bankruptcy was continued in possession of the property while making payments to no one; it would be unreasonable to refuse Travarillo the right to pick up the obligations of Young once the bankruptcy restraining order was terminated; upon payment to T--Anchor of $87,787.23 from the registry of the trial court Travarillo would be entitled to possession of the motel as owner and holder of the land sales contract of April 4, 1973, and the contract is in full force and effect with all payments due thereunder made current through the month of September, 1974.

The conclusions of law by the trial court were that: (1) Travarillo is entitled to equitable relief from forfeiture of the purchaser's rights under the land sales contract; (2) the land sales contract is in full force and effect and that Travarillo is the owner of all the rights of purchaser thereunder; (3) T--Anchor is entitled to recover from the registry of the trial court $87,787.23; (4) Travarillo...