Ferris v. SEC. S. & L. ASS'N, DICKINSON

545 S.W.2d 208
CourtCourt of Appeals of Texas
DecidedNovember 24, 1976
Docket4900
StatusPublished

This text of 545 S.W.2d 208 (Ferris v. SEC. S. & L. ASS'N, DICKINSON) 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
Ferris v. SEC. S. & L. ASS'N, DICKINSON, 545 S.W.2d 208 (Tex. Ct. App. 1976).

Opinion

545 S.W.2d 208 (1976)

M. H. FERRIS et al., Appellants,
v.
SECURITY SAVINGS & LOAN ASSOCIATION, DICKINSON, Texas, Appellee.

No. 4900.

Court of Civil Appeals of Texas, Eastland.

November 24, 1976.
Rehearing Denied December 16, 1976.

*210 Kenneth J. Peden, Childress, Port & Crady, Houston, Kenneth C. Kaye, League City, Elmo M. Johnson, Tramonte & Tramonte, Galveston, Raymond M. Hill, Dale Harville, Houston, E. M. Ammons, Texas City, Daniel E. O'Connell, Walter Wright, Houston, for appellants.

Charles R. Hancock, Hancock & Yelton, Dickinson, Claude T. Allen, Newton B. Schwartz, Rex C. Mounger, Sam L. Sterrett, Jr., Dave McNeill, Jr., Vinson, Elkins, Searls, Connally & Smith, Houston, Preston Shirley, Mills, Shirley, McMicken & Eckel, Galveston, Charles E. Casteel, Charles R. Dunn and R. Charles Stiles, Wyckoff, Eikenburg, Dunn & Frazier, Houston, Walter S. Fortney and Dennis Swift, Law, Snakard, Brown & Gambill, Fort Worth, for appellee.

RALEIGH BROWN, Justice.

This case involves claims for debt arising out of construction contract, financial arrangements pursuant thereto, foreclosure of mechanics' and materialmen's liens, and the respective priority of the liens.

Mr. and Mrs. M. H. Ferris and Dr. E. M. Ammons entered into a construction contract with J. L. Stover and L. C. Loper d/b/a Construction Associates on August 16, 1963, to construct certain improvements upon property owned by Ferris and Ammons. On August 20, 1963, Ferris and Ammons executed a mechanics' and materialmen's lien, deed of trust and note in the principal amount of $378,654, plus interest at the rate of 6% per annum to Stover d/b/a Construction Associates. The note was endorsed to League City State Bank by J. L. Stover as collateral for construction money together with the mechanics' lien contract of August 20, 1963. Subsequently, on June 18, 1964, League City State Bank assigned to Security Savings and Loan Association the note together with the collateral security.

After September 1, 1963, Ferris and Ammons contracted with York Division, Borg-Warner Corporation to furnish air conditioning units for installation in the project being constructed. The units were delivered and on June 3, 1964, York filed a materialmen's lien.

After default, Security filed suit against Ferris and Ammons, Stover and Loper for the amount due on the promissory note and for foreclosure of the mechanics' and materialmen's lien. Security also sued York and others to establish the priority of its lien. Stover and Loper and York filed actions against Ferris and Ammons for amounts due under their respective contracts.

On November 25, 1964, Security was granted a summary judgment. The judgment gave recovery on the notes against Ferris and Ammons, Stover and Loper and held that Security's lien was prior and superior to all other liens. The court ordered sale of the property owned by Ferris and Ammons to satisfy Security's money judgment. J. B. Kline, Sheriff of Galveston County, on February 2, 1965, sold the property to Security for $295,000. Security conveyed it to Ray Diamond, who transferred it to Newton Schwartz. York appealed the judgment of November 25, 1964. It was held to be interlocutory by the Court of Civil Appeals, Houston (1st Dist.) and the appeal was dismissed for want of jurisdiction. York Corp. v. Security Savings and *211 Loan Association, 391 S.W.2d 830 (Tex.Civ. App.—Houston 1965, no writ).

The trial court then modified its judgment of November 25, 1964, by eliminating the adjudication concerning the priority of liens and on August 17, 1965, severed and rendered final Security's judgment against Ferris, Ammons, Stover, and Loper. The order dismissed with prejudice the cause of action by Stover and Loper against Security and severed York's cause of action against Ferris and Ammons. Thereafter, the trial court on September 28, 1965, rendered an interlocutory money judgment in favor of York against Ferris and Ammons and held the liens of York to be valid and ordered foreclosure. On October 22, 1965, the court ordered the September 28, 1965, judgment to be severed from other causes in the action and rendered final judgment in favor of York against Ferris and Ammons for the sum of $43,239.33 plus interest at 6% per annum and foreclosure of its materialmen's lien. An execution issued and the property was sold on March 4, 1969, by sheriff's deed to York.

The trial court entered a final judgment on March 17, 1970, and on appeal, the Court of Civil Appeals, Houston (1st Dist.). 485 S.W.2d 327 (writ ref. n. r. e.) reversed the judgment and remanded the cause.

The cause has been retried and either by cross action or third-party actions, others were made parties. Disposition of such parties has been properly made and none of them have appealed.

The only portion of the judgment challenged in this third appeal decrees:

(1) the liens of Security and York are coordinate, of equal dignity and are valid and subsisting first liens on the property;
(2) the lien of Security had a value of $648,422.54 on May 26, 1975, with interest accruing at the rate of 10% per annum; York's lien had a value of $68,362.38 on May 27, 1975 with interest at the rate of 6% per annum;
(3) the sheriff's sale to Security pursuant to a November 25, 1964 judgment is void;
(4) the sheriff's sale to York is void;
(5) Ferris and wife are barred by Art. 5509, Tex.Rev.Civ.Stat., from making any claim of title to and possession of the property;
(6) Ferris and wife have no legal title to and right of possession of the property; legal title and possession are vested in Newton B. Schwartz and Perry D. Davis, effective January 1, 1968;
(7) that Ferris take nothing against parties named Security Savings, League City State Bank, W. G. Hall, Jr., Schwartz and York;
(8) Security does not have a vendor's lien against the property;
(9) Security and York have joint foreclosure of their liens;
(10) an order of sale issue to the sheriff or constable directing him to sell property and apply proceeds first to cost of receiver and then against judgment of Security and York.

York and Ferris are the only appellants in this appeal. We reverse and render in part and affirm in part.

The three issues primarily determinative of this appeal are:

(1) the priority of liens between York and Security;
(2) the validity of the sheriff's sales, one to York and one to Security; and
(3) whether Ferris is barred by limitations or the doctrine of res judicata.

PRIORITY OF LIENS

York argues the trial court erred in holding that its lien and Security's lien were of equal dignity and coordinate. York contends its lien had its inception as a result of the general construction contract and thus was prior in time to Security's.

The construction contract dated August 16, 1963, provides in part:

"I.
. . . . .
e) The `Contract' shall mean and refer to the following:
*212 1) This agreement

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