Thomas v. McNair

• Decision Date: 28 July 1994
• Docket Number: No. 13-92-662-CV,13-92-662-CV
• Citation: 882 S.W.2d 870
• Parties: R.W. THOMAS and Kevin Kosub, Appellants, v. Winfred McNAIR, Appellee.
• Court: Texas Court of Appeals

Page 870

882 S.W.2d 870

R.W. THOMAS and Kevin Kosub, Appellants, v. Winfred McNAIR, Appellee.

No. 13-92-662-CV.

Court of Appeals of Texas Corpus Christi.

July 28, 1994.

Charles Manning, Beeville, for appellants.

Michael J. Knight, Knight & Knight, Beeville, for appellee.

Before SEERDEN, C.J., and GILBERTO HINOJOSA and FEDERICO G. HINOJOSA, Jr., JJ.

OPINION

FEDERICO G. HINOJOSA, Jr., Justice.

R.W. Thomas and Kevin Kosub appeal from a judgment ordering the sale and partition of jointly owned property and enjoining foreclosure of a mortgage lien. By seven points of error, appellants complain that the trial court erred by refusing to allow them to foreclose on the mortgage, by awarding appellee a judgment for expenditures, and by denying them a recovery for conversion and fraudulent filing of bankruptcy. Appellants also challenge the partition of sale proceeds and the finality and correctness of the judgment. Appellee asserts a single cross-point. We affirm the trial court's judgment.

Thomas and Kosub were tenants in common of 5.74 acres of land located in Bee County. Appellee, Winfred McNair, started living on the property with appellants sometime in September 1987, after he retired from Champlin Oil Company. The evidence reflects that the property was appraised at $5,250 in August 1987. At the time, the only structures located on the property were a small house, a barn, and a water well. Thomas, Kosub and McNair agreed that a larger house and an aviary for a bird business should be constructed on the property.

On October 8, 1987, Thomas and Kosub conveyed a one-third interest in the property to McNair. At the same time, McNair executed a $40,000 promissory note to NBC Bank, South Texas, N.A. The note was secured by a Deed of Trust executed by McNair, Thomas and Kosub. According to the Deed of Trust, the note was given partially in renewal and extension of the balance of $6,348.39 left owing on the purchase money note dated December 15, 1982, executed by Thomas and Kosub, and payable to Leonard J. Svajda, from whom appellants purchased the property. The parties testified, however, that at the time, the balance of the purchase money note was $3,605.91 and that the net proceeds of the loan went to construct the new house. The sum of $33,651.61 was deposited in a joint account. The parties dispute how the note was to be repaid.

McNair testified that the parties started talking about retiring and building a house in Bee County as early as 1986. McNair commuted between Corpus Christi and Bee County in July and August 1987, and in September 1987, after he retired, he moved out to the property. McNair paid between $8,000 and $10,000 to improve the small house before he moved in. McNair placed $22,000 of his own funds in a joint account with Thomas, and appellants were to borrow their share of the costs from the bank. McNair testified that he agreed to sign the note because Thomas' financial statement reflected insufficient collateral and Kosub was unemployed. According to McNair, the parties agreed 1) that McNair would finance the start-up costs for the bird business, including the construction of the aviary and the purchase of the bird stock, 2) that after McNair had been reimbursed for his expenses, the parties would share equally in the bird business profits to pay off the note, and 3) that one-half of the note would be paid from the proceeds of the sale of Thomas' Corpus Christi house.

Appellants disagree with McNair. According to appellants, McNair promised to construct the new larger residence on the property at his own expense in return for their assistance in constructing the new house and their permission to construct and operate a bird business upon the property. Thomas testified that McNair agreed to incur all the construction costs and that McNair assured him that neither Thomas nor Kosub would ever have to pay anything on the note.

Whatever agreements existed between the parties prior to October 1987 were not in writing. Appellants pleaded the Statute of Frauds, TEX.BUS. & COM.CODE ANN. § 26.01 (Vernon 1987), as a defense to McNair's claims that the parties had made certain oral agreements regarding how to repay the loan and reimburse him for costs.

The evidence reflects that disagreements arose between the parties in April and May 1988, after construction of the new house had been completed. McNair complained of having to pay all the living expenses and 75-80% of the utilities. McNair testified that Thomas and Kosub demanded he pay off the loan and reconvey his one-third interest in the property back to them. McNair also testified On September 9, 1988, the bank allowed the parties to extend the due date of the note to September 10, 1989. McNair, Thomas and Kosub agreed to pay the note according to the terms of the extension agreement. The new agreement provided that Thomas and Kosub would be primarily liable on the note even though they had not signed the original note. The new agreement required eleven monthly payments of $600.00 each, with the first payment due on October 10, 1988, and a balloon payment of $38,492.47 due on September 10, 1989. The record reflects that McNair paid half of the October payment and that appellants made the rest of the monthly payments. Appellants assert that in order to prevent foreclosure, ¹ they purchased the note on March 7, 1990 and obtained a transfer of lien from the bank. Appellants argue that they did not pay off the note.

that he was concerned about appellants' drug use on the property and that he had started to fear for his life. McNair left the property in November 1988 and returned the following month to remove the birds and his remaining personal belongings.

Appellants subsequently delivered a notice of default to McNair and demanded that he pay the balance of the note. No payment was received. On June 11, 1990, appellants notified McNair that they would seek nonjudicial foreclosure if payment was not received by June 25. On June 18, McNair sued appellants for partition and for debt (quantum meruit and quasi-contract). In order to prevent foreclosure and on the advice of counsel, McNair, on June 28, filed for bankruptcy under Chapter 13 of the Bankruptcy Act. On July 2, McNair advised the trial court of the automatic stay provisions of 11 U.S.C. § 362, and on July 18, he filed a notice of removal of this case to the bankruptcy court. Appellants answered by general denial on August 3.

On May 6, 1991, the bankruptcy court remanded the case to the district court for trial. The bankruptcy court also enjoined appellants from foreclosing on their purported lien. Appellants obtained new counsel and countersued for foreclosure of the purported lien, breach of contract, conversion, and Rule 13 sanctions.

On January 14, 1992, the cause was tried to the court. The trial court, having determined that the property was not susceptible to partition, ordered the property sold and the proceeds of the sale partitioned. The original judgment was signed by the trial judge and filed with the clerk of the court on May 12, 1992. However, the trial judge mistakenly omitted the date that he signed the judgment. On August 10, 1992, the trial judge signed a corrected judgment. The corrected judgment states as follows:

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED by the Court that the property is ordered sold, either at public or private sale, for a sales price of not less than $100,000.00, unless the parties agree to a lower price or the Court orders a lower price. The notice and advertisement or listing for sale will be made published on or before sixty (60) days after this judgment becomes final. After payment of all expenses of sale, the net proceeds up to $120,000.00 will be divided by awarding sixty (60%) percent of the proceeds to the Plaintiff, WINFRED McNAIR, and forty (40%) percent of the proceeds to R.W. THOMAS. All net proceeds in excess of $120,000.00 should be divided one-third ( 1/3) to WINFRED McNAIR, one-third ( 1/3) to R.W. THOMAS, and one-third ( 1/3) to KEVIN KOSUB.

IT IS FURTHER ORDERED that the Court costs will be assessed sixty percent (60%) against WINFRED McNAIR and forty percent (40%) against R.W. THOMAS. The parties will be denied any recovery for attorneys' fees, and all other causes of action and requests for relief or damage are denied.

IT IS FURTHER ORDERED that the Defendants, R.W. THOMAS and KEVIN KOSUB, will be enjoined from pursuing IT IS FURTHER ORDERED that the property be insured in an amount not less than the appraised tax value of the property, with the party or parties paying for said insurance to be reimbursed their pro-rata share of the costs from the proceeds of the sale.

any attempt to foreclose the purported mortgage on the property and shall commit no waste and keep the property in a good state of repair, natural wear and tear and damage by unavoidable casualty excepted.

IT IS FURTHER ORDERED that in the event the property does not sell within 12 months from the date the judgment becomes final, it will be sold at public auction on the steps of the Bee County Courthouse upon 30 days notice to the highest bidder.

All other relief not expressly granted herein is denied.

The court entered findings of fact and conclusions of law on July 27, 1992. On August 6, 1992, appellants requested but were refused additional and amended findings of fact and conclusions of law. By letter dated October 2, 1992, and in response to appellants' notice of past due findings of fact and conclusions of law filed after entry of the corrected judgment, the trial court adopted the findings of fact and conclusions of law which it had previously filed on July 27, 1992.

FINALITY OF JUDGMENT

By their sixth point of error, appellants contend that the judgment fails to determine all relief to which the parties may be entitled, in violation of TEX.R.CIV.P. 301. ² Appellants contend that the judgment fails to state whether the "purported mortgage"...