Terry v. Teachworth

• Citation: 431 S.W.2d 918
• Decision Date: 19 June 1968
• Docket Number: No. 115,115
• Parties: Howard TERRY et al., Appellants, v. Walter TEACHWORTH et al., Appellees. . Houston (14th Dist.)
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 918

431 S.W.2d 918

Howard TERRY et al., Appellants, v. Walter TEACHWORTH et al., Appellees.

No. 115.

Court of Civil Appeals of Texas Houston (14th Dist.).

June 19, 1968.

Rehearing Denied Sept. 4, 1968.

Raybourne Thompson, Jr., B. Jeff Crane, Jr., Vinson, Elkins, Weems & Searls, Houston, for appellants.

Will Sears, Sears & Burns, Houston, for appellees.

BARRON, Justice.

This is a suit wherein Walter J. Teachworth and Joseph C. Lampton, as plaintiffs, seek to set aside a trustee's deed to certain property located in Galveston, Texas. They further brought suit to declare the agreement between Howard Terry, Walter Mischer and the plaintiffs to be usurious, thereby seeking to void the interest provision contained in the deed of trust note executed by the plaintiffs. It was alleged further that defendants, Terry and Mischer, had been in possession of the property, an apartment project and furniture therein, since the date of the allegedly void foreclosure, receiving the rents and revenues therefrom. Plaintiffs prayed for title and possession, cancellation of the trustee's deed; declaration that the loan was usurious and void as to the amount of the interest only, and for an accounting.

The jury returned findings that the substitute trustee had not conducted the foreclosure sale; that the $15,000.00 which defendants charged plaintiffs was intended as interest; that defendants did not act as brokers and did not secure a loan for plaintiffs; and that defendants did not intend to charge usurious interest. In response to plaintiffs' motion, the trial court disregarded the latter finding as being immaterial and sustained plaintiffs' motion for judgment. The judgment awarded title to plaintiffs; declared the purported foreclosure sale void; cancelled the substitute trustee's deed as a cloud on plaintiffs' title; declared that the loan agreement was usurious, void and of no effect for the amount of the interest only; awarded title to the apartment furniture to plaintiffs; required defendants to account to plaintiffs for all sums of money collected as rents and revenues from the apartment project and the apartment furniture with provisions for the credits to be allowed to defendants as mortgagees in possession and to plaintiffs for all net profits received by defendants; for further accounting; and the trial court awarded possession of the property to plaintiffs upon their payment to defendants of the balance due on the principal of the loan, after all credits due plaintiffs had been applied.

The appellants are Terry and Mischer, and the appellees are Teachworth and Lampton. The case has been appealed properly to this court.

Appellants have assigned fourteen points of error, the substance of which is the alleged error of the trial court in submitting to the jury the issue inquiring whether the foreclosure sale was made by the substitute trustee, on grounds of no evidence to sustain the findings of the jury, or that the evidence was insufficient or against the great weight and preponderance of the evidence to sustain such finding; the alleged error in declaring the loan agreement to be usurious; the alleged error in the trial court's disregarding special issue number 8 inquiring as to the intention of appellants to charge usurious interest, and in failing to disregard issue number 4 inquiring whether the $15,000.00 charge was intended as interest on the loan; that there was no evidence to support issue number 4, and alternatively, that the trial court erred in failing to declare a mistrial on grounds of irreconcilable conflict in the findings; and the alleged error in overruling appellants' alternative motion for judgment.

We first discuss the alleged errors in connection with the substitute trustee's public sale of the property under the terms of the deed of trust. It is the claim of appellees that no such sale ever took place as required by law, and the jury made findings which support appellees' position. Douglas F. Pollard was appointed substitute trustee to conduct the sale of the property on December 3, 1963, at the Galveston County Courthouse. On the date of the sale, Sam Sterrett, Jr., who represented South Texas Building Company, a partnership composed of Terry and Mischer, accompanied Mr . Pollard to Galveston. Pollard testified that they arrived at Galveston around noon and shortly thereafter went to the courthouse to conduct the sale. The notice was posted on an open bulletin board. Mr. Pollard, after looking for the notice, took the notice from the board and read it. The sale was conducted, and Mr. Sterrett, on behalf of South Texas Building Company, was the only bidder present. He bid in at the sale for $490,812.37, though there was a dispute as to the exact amount of his bid. At and during the time of the sale there was considerable construction taking place on 20th Street outside the courthouse. The area of the courthouse doors was partly blocked, and it was difficult to go in and out of the courthouse. Mr. Sterrett and Mr. Pollard had entered by the back door of the courthouse and proceeded to the foyer where the sale was conducted, according to their testimony. Pollard and Sterrett claim the sale was publicly held, and immediately thereafter they left, retracing their steps in entering the courthouse. They testified that the sale was held at 1:20 p.m. on December 3, 1963.

Testifying for the appellees was Sam Pena who was in the general construction business for himself and who was engaged as contractor on the 74-unit apartment project, and S. H. Byerley, who had lived in Texas and was at the time of trial owner of a nursing home in Hot Springs, Arkansas. Byerley was also in the building business in 1963 at Beaumont, and was associated with Joe H. Vickers, who was to make a bid on the property at the trustee's sale on December 3rd. There is evidence in the record indicating that Vickers was financially able to make a substantial bid on the property. Vickers did not testify. The evidence shows that he was deceased at the time of trial. The testimony indicates that Vickers and Byerley met Pena in the rotunda of the courthouse on the date of the alleged sale. Their testimony shows that there was a glassed-in bulletin board on the 20th Street entrance to the courthouse, and according to the appellees' witnesses, they inspected the board to see if the notice that they were looking for was there. They found the notice of sale at that time that morning. Byerley and Pena testified that they were present at the courthouse from about 8:30 a.m. until 4:30 p.m., and that one of the three of them got up from the benches where they were sitting to watch for the sale several times an hour to determine whether the sale was taking place. They kept watch until about 12:00 o'clock. They left for a short time to get a sandwich and came back to resume their watch. The witnesses testified that they returned at about 1:00 o'clock, went to the bulletin board against and found the notice still on the board. The notice was still there at 2:30 o'clock p.m. Byerley personally continued to stay at the courthouse and continued this watch upon the door until sometime between 4:00 o'clock and 4:30 o'clock p.m. At that time Byerley and Vickers left, and Pena was still at the courthouse when Byerley left. The witnesses testified that they saw no one conduct a trustee's sale on that date, though Pena and Byerley definitely testified that they kept a close watch and would have seen the sale if one had taken place. Pena testified that he read the notice himself, and he identified Mr. Pollard's signature. Pena knew Pollard, the substitute trustee, and looked for him at the courthouse. But he testified that he did not see him on that day. They only person Pena knew and saw at the courthouse was Elmo Johnson, who saw Pena a little before noon on December 3rd in the lobby of the courthouse. He spoke to him and knew why Pena was there. Sometime around 5:00 o'clock p.m., on the same day, Johnson talked with Pena at Johnson's office and was told by Pena that the sale did not take place. At Pena's request, Johnson wrote a letter on December 13, 1963, to Douglas F. Pollard stating that Pena had engaged his firm to represent Pena in matters relating to the Ebbtide Apartment construction project since no one appeared to conduct the sale, and in the letter Johnson referred to the date of sale as December 5, 1963. Johnson, however, testified that the date December 5th was a clerical error, and that the date should have been December 3rd. He testified that December 3rd was the day he saw Pena at the courthouse.

There was evidence that on December 3, 1963, several execution and trustees' sales were actually held either inside or outside the courthouse door of Galveston County, leading to the conclusion that if Pena and Byerley were present they could have seen or detected those sales. Joe Max Taylor, a captain in the Galveston County Sheriff's Department with responsibility for the postings or notices on the bulletin board and conducting execution and tax sales, testified that there had never been a glass front on any bulletin board in the old courthouse. The witnesses testifying to other sales on that day were not specific as to times of sale and their testimony was given largely on the basis of recollection, general practice, records and custom. This testimony is, however, fairly convincing. Appellees' witnesses testified that they saw no sales on December 3, 1963. Pollard had been informed that Pena would be present with a bidder for the proposed sale, but the trustee apparently did not look for bidders. Neither did Pollard answer Elmo Johnson's letter concerning Johnson's employment to represent Pena under Pena's claim that no sale had taken place. Byerley was not a party to this suit, and the only interest he had in the case was to help Vickers in his intended bid at the trustee's sale.

The deed of trust required Pollard to...