Waco Hilton Hotel Co. v. Waco Development Co.
| Decision Date | 11 October 1934 |
| Docket Number | No. 1658.,1658. |
| Citation | 75 S.W.2d 968 |
| Parties | WACO HILTON HOTEL CO. v. WACO DEVELOPMENT CO. |
| Court | Texas Court of Appeals |
Appeal from District Court, McLennan County; Sam R. Scott, Judge.
Action by the Waco Hilton Hotel Company against the Waco Development Company. From an adverse judgment, plaintiff appeals.
Affirmed.
Witt, Terrell & Witt, of Waco, for appellant.
G. B. Rogers, Clay McClellan, J. D. Williamson, and Allan McDonnell, all of Waco, for appellee.
The Waco Hilton Hotel Company brought this suit against the Waco Development Company for the purpose of securing the benefit of the present moratorium statute, Acts 1934, 43d Leg. (2d Called Sess.), p. 42, c. 16 (Vernon's Ann. Civ. St. art. 2218b note). It was alleged that in 1928 the Waco Development Company owned the lot upon which the Hilton Hotel in the city of Waco is now situated; that it conveyed same to the plaintiff, and plaintiff erected the hotel building thereon and furnished same at a cost of $776,000, paying $311,000 of such cost in cash and executing notes to a loan company for the balance in the sum of $465,000 and secured same by a deed of trust on the property; that plaintiff then reconveyed the lot and hotel building thereon to the defendant, and as a part of the same transaction the defendant leased the property to plaintiff for a period of ninety-nine years at a monthly rental of $833 per month for the first five years and a larger rental for the remainder of the rental period; that plaintiff, in addition, agreed to pay the lien indebtedness against the property; that plaintiff secured the payment of said rentals by a chattel mortgage on the hotel fixtures; that plaintiff had paid $52,000 on the indebtedness against the real property, but was behind in the payment of its rents approximately $17,000 and on account of the depression was unable to pay same; that said lease contract, according to its terms, was subject to forfeiture for the failure to pay rents; that defendant was threatening to forfeit the lease, and, if same should be forfeited, plaintiff would suffer a loss of $300,000. The plaintiff prayed for an injunction restraining the defendant from forfeiting said lease and that a receiver be appointed to take charge of said property and operate same as provided in the moratorium act.
Upon presentation of the petition in chambers on March 30, 1934, the trial judge appointed a receiver to take charge of and operate said property, and issued a temporary restraining order as prayed, subject to the future orders of the court, returnable April 9, 1934. On the last-named date the defendant filed a motion to dissolve the temporary restraining order and a cross-action praying for judgment for its unpaid rents in the sum of $17,187.48, together with interest and attorney's fees and foreclosure of its lien on the hotel fixtures, and for forfeiture of the rental contract on account of the failure to pay rents. On the same day the court heard the entire cause on its merits and entered a final judgment dissolving the temporary restraining order, denying the plaintiff all relief prayed for, and awarded judgment to defendant for its unpaid rents, with foreclosure of its lien on the hotel fixtures, forfeited the lease, and ordered the receiver to sell the fixtures in satisfaction of said debt. The plaintiff appealed.
The plaintiff's first contention is that the trial court erred in refusing to grant it an injunction restraining the cancellation of its lease and the sale of the hotel fixtures. Its contention is that the action comes within the provisions of the above-mentioned moratorium act and that the court erred in refusing to grant the relief provided for therein. After carefully considering the matter, we have reached the conclusion that the record does not present any error in this respect.
In the first place, we are of the opinion that the act in question is limited in its scope to the prevention of the sale of real estate for the purpose of satisfying a debt, and that it has no application to the forfeiture of a lease contract nor to the sale of personal property. The preamble of the act refers alone to the owners of "real property" as being unable to meet their demands, thus creating an emergency justifying legislation "for the postponement of forced sales of real estate and other relief of like character." Section 1 of the act provides that "the Judges of the several District Courts * * * are hereby authorized to grant continuances and stays of execution in all suits instituted for the purpose of foreclosing liens upon real property and to grant writs of injunction restraining the sale of real property under powers created by Deeds of Trust or other contracts and to restrain sales under executions and orders of sale issued out of any Court in this State," etc. From the terms of the act, we think it apparent that it was not intended to cover an action such as is here under consideration.
In the second place, the statute requires one seeking to secure the benefits of its provisions to make proof of the existence of certain facts. Among other things, it must be made to appear either by affidavit or evidence introduced upon the trial that the value of the property attempted to be sold is substantially in excess of the amount of the debt demanded, that a sale of the property would result in an unfair, unjust, and inequitable financial loss to the applicant, and that the applicant will not permit the property to be abused, ill-treated, or mismanaged during the delay. The act provides that upon the making of such showing the trial judge may, in his discretion, grant the relief contemplated by the statute. Whether or not the plaintiff established these facts was for the lower court to determine. We cannot reverse the judgment unless it appears that the trial court abused its discretion. No findings of fact were filed. The statement of facts consists of more than two hundred pages. The plaintiff has not undertaken to point out evidence sufficient to conclusively establish these issues. There is at least some evidence in the record tending to show that the plaintiff does not have any substantial equity in the property, and that those in charge of the hotel company might not deal fairly with the property if the relief prayed for should be granted. Under the circumstances, we must presume that the trial court found these issues against the plaintiff, and therefore properly denied the relief prayed for. Our holdings on the issues discussed make it unnecessary to determine whether or not the act in question is constitutional.
Plaintiff's second contention is that the court had...
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