Ellis v. Michigan Realty Co.

138 S.W.2d 880, 1940 Tex. App. LEXIS 176
CourtCourt of Appeals of Texas
DecidedMarch 7, 1940
DocketNo. 10947.
StatusPublished
Cited by7 cases

This text of 138 S.W.2d 880 (Ellis v. Michigan Realty Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ellis v. Michigan Realty Co., 138 S.W.2d 880, 1940 Tex. App. LEXIS 176 (Tex. Ct. App. 1940).

Opinion

MONTEITH, Chief Justice.

This is an appeal in an action in trespass to try title brought by appellants, J. H. H. Ellis and wife, Annie K. Ellis, against National Bond & Mortgage Corporation, and appellees National Debenture Corporation, Michigan Realty Company, and Keswick Corporation, for the title to and possession of Lot 2, Block 21, Brooke Smith Addition to the City of Houston.

Appellants, in addition to a formal petition in trespass to try title, alleged that appellees were claiming rights in said property by virtue of a note secured by a deed of trust on the land in controversy, and a purported substitute trustee’s sale thereof; that said loan was usurious in character, and that nothing was due thereon at the time of said sale; that said substitute trustee was never legally appointed .under the terms of said deed of trust, and that said sale was void for the reason that the property in controversy had been taken over by the payee of said note under an agreement whereby it would manage the property in question and apply the rentals and revenues received therefrom to the payment of said indebtedness; that said payee, the National Bond & Mortgage Corporation, had held said property by virtue of said agreement up to the time of said foreclosure sale, and that appellants had had no notice of said sale.

Appellees answered by general demurrer, general denial, and pleas of not guilty.

Michigan Realty Company specially pled that it was a purchaser for value in good faith and not liable to account for the rentals of said property.

Keswick Corporation pled that it had incurred various sums in connection with the renting and upkeep of said property.

National Debenture Corporation alleged that the title to said property was in the Michigan Realty Company. It denied that said loan was usurious, and pled various expenses incurred by it in connection with the upkeep of said property. By cross-action it pled that if the title thereto was not in the Michigan Realty Company, that then it, National Debenture Corporation, had .acquired said note in due course and was entitled to a foreclosure thereof; that appellants had defaulted in the payments of installments thereon and had failed to pay taxes assessed against said property, and that it, National Debenture Corporation, had removed the original trustee and appointed Wm. E. Arnold as substitute trustee and had requested him to sell said property as provided in said deed of trust; that said substitute trustee had declared said note accelerated and all amounts due thereon due and payable; that he had conducted such sale in accordance with the instructions of said appellee and in compliance with the provisions of said deed of trust and the law governing said sale. It prayed, first, that title be vested in the Michigan Realty Company, and in the alternative that it be given judgment for the balance due on the debt.

In answer to special issues submitted, the jury found that said loan was usurious in character, and the rental value of said property.

On motion of appellees the court, properly considering the usury findings immaterial, rendered judgment in their favor and that appellants take nothing by their suit. At the time the court announced his judgment and prior to the entry thereof, appellants took a non-suit without prejudice against defendant National Bond & Mortgage Corporation, and sought leave to file a trial amendment changing their prayer for relief to enable them to recover of appellee National Debenture Corporation the difference between the amount claimed to be due by them on said note and the amount paid for said property by National Debenture Corporation at said substitute trustee’s sale. The court overruled said motion to file a trial amendment.

No issues were requested or submitted on the questions of the validity of said foreclosure sale or as to an agreement or waiver by appellees of their rights to a foreclosure under the terms of said deed of trust.

*882 The record shows that on May IS, 1928, appellants executed their note for the sum of $6,000, payable to the National Bond & Mortgage Corporation, and secured by a deed of trust covering the land in controversy to Joe M. Green, trustee. By instrument . dated June IS, 1928, National Bond & Mortgage Corporation assigned said note and the liens by which it was secured to Century Trust Company of Baltimore and Henry Laith, as trustees.

Appellee National Debenture Corporation acquired said note and lien by assignment. By trustee’s deeds, one dated April 7, 1936, and one dated October 5, 1936, Wm. E. Arnold, as substitute trustee ur der said deed of trust, conveyed the land in controversy to Michigan Realty Company for a recited consideration of $5,400.

Said deed of-trust provides: “The Trustee, or any successor or Substitute Trustee, may be removed at any time by an instrument in writing under the hands of the holders of a majority in amount of said indebtedness then outstanding, and in case of any such removal a successor and substitute may be named, constituted and appointed by the holders of a majority in amount of said indebtedness without other formality than an appointment and designation in writing. * * * It is expressly agreed that the recitals in any conveyance made to any purchaser by the Trustee, or any Substitute Trustee, shall be full evidence of the matters therein stated, and no other proof shall be requisite of request by the holders of said indebtedness on the Trustee to enforce this trust, or of the amount of the indebtedness for which the sale is made, or of the advertisement or sale, or any particulars thereof, or of the removal of the Trustee or Substitute Trustee, and of the appointment of a Substitute Trustee as herein provided; and all prerequisites to said sale shall be conclusively presumed to have been performed, and the sale made under the powers herein granted shall be a perpetual bar against Grantors, their heirs and assigns.”

Said substitute trustee’s deed, ' dated October '5, 1936, contains the following recitations: “And default haying been made in the payment of said indebtedness and in the payment of taxes, I, the undersigned, having been duly appointed by the holders of said indebtedness after the refusal of the original trustee to act and his removal by the holder of the indebtedness, I, having been requested by a majority of the holders of said indebtedness, do declare the same at once due and payable and proceed to enforce said trust, did, in pursuance of said request, declare the entire indebtedness at once due and payable, and did, on the 6th day of October, A. D. 1936, (that being the first Tuesday in said month), and after all prerequisites having been complied with, * * * after having given notice of the time, place, and terms of said sale by posting notices thereof * * * and after I had complied with all terms and requisites of said deed of trust authorizing sale, * *

Appellants contend that appellees waived their option to accelerate th,e maturity of said note and to sell said property at foreclosure sale by their action in taking over said property to manage and to apply the revenues therefrom to the payment of said indebtedness. This contention cannot be sustained.

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Cite This Page — Counsel Stack

Bluebook (online)
138 S.W.2d 880, 1940 Tex. App. LEXIS 176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ellis-v-michigan-realty-co-texapp-1940.