Flynn v. Moszkowicz

469 S.W.2d 303, 1971 Tex. App. LEXIS 2493
CourtCourt of Appeals of Texas
DecidedMay 20, 1971
DocketNo. 602
StatusPublished
Cited by1 cases

This text of 469 S.W.2d 303 (Flynn v. Moszkowicz) 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
Flynn v. Moszkowicz, 469 S.W.2d 303, 1971 Tex. App. LEXIS 2493 (Tex. Ct. App. 1971).

Opinions

OPINION

NYE, Chief Justice.

This is an appeal from an order granting a temporary injunction. The appellees filed suit in the trial court seeking a temporary restraining order, and a temporary and permanent injunction to prohibit the appellant F. L. Flynn from foreclosing under a deed of trust. Upon hearing, the court granted a temporary injunction, enjoining Flynn and the trustee from holding a trustee’s sale on the scheduled date and thereafter on the property in question. Flynn has perfected his appeal to this Court.

The material and relevant facts are undisputed. The appellees were owners of a building where they conducted their business. They had purchased the property for $145,000.00. Part of the consideration was the assumption and agreement to pay the remaining balance due on an original $100,000.00 note which was secured by the deed of trust in question. On April 2, 1970, [305]*305the note and deed of trust were assigned by the original owner to Flynn, the new owner and holder thereof. At the time of assignment, all of the installments under the note had been timely made, all taxes were paid when due, and the property was fully insured, including a loss payable provision protecting the original owner and holder of the note. After the assignment, Flynn advised appellees, that because he was the new owner and holder of the note, the loss payable clause on the insurance policy should be changed and that the original policy should be transferred to him. Apparently appellees made no response to this request. Appellees had heretofore kept the original policy in their safety deposit box at the bank and had furnished the original owner of the note with just a copy of the insurance policy. No objection to this arrangement was made by the original holder.

On July 24, 19/jO, Flynn advised appellees by letter that because of his own negligence he had been dilatory in requiring that the original policy of insurance be delivered to him in accordance with the terms of the deed of trust. An exchange of correspondence occurred between the parties relative to Flynn’s demand for the original policy of insurance and for a change in the loss payable clause, naming him. The ap-pellees suggested that Flynn talk with their insurance agent. Flynn went to the insurance agent’s office and told them that he was the new owner and holder of the note. The insurance agency then prepared a loss payable endorsement to the policy and back-dated it so as to be effective as of April 1, 1970. This loss payable clause endorsement was mailed to appellees so that it could be attached to the original policy.

In the meantime two other disputes arose between the appellees and Flynn. One was, that although appellees’ installment payments were current and timely made, they mistakenly denominated the payment as being a different number than the one it actually was. This dispute was finally resolved during the trial. In addition, the monthly payment paid by appellees was two cents more than it should have been. Flynn objected and appellees ultimately corrected it.

In the latter part of July, appellees’ attorney answered Flynn’s initial letters advising him that the property was actually fully insured; that a copy of the insurance policy had heretofore been furnished to him; and that the original was in the safety deposit box as had been the custom between the original parties to the note and deed of trust before Flynn had purchased the note. Two days later, on July 31, Flynn wrote appellees’ attorney insisting that he was entitled to the original policy as provided by the deed of trust. He stated that such policy should name him as lien-holder, and that in the event that appellees failed or refused to furnish him with such coverage immediately, he would take such necessary action to fully protect himself.

On August 11 Flynn purchased a new and different policy of insurance for $50,000.00 from the Flynn-Pan American insurance agency. He sent appellees a copy of the policy and a statement for the cost of such policy in the amount of $449.00. He asked that such amount be remitted to him immediately. Flynn stated if appellees refused to remit such amount, he would declare the entire indebtedness due and payable. The next day appellees mailed their monthly installment check for the correct amount to Flynn. On the same date appellees’ attorney advised Flynn that he had over-insured the property by the amount of the new policy of insurance. The attorney stated that he was advising his clients not to pay for the new policy. In the meantime, the appellees went ahead and mailed the original policy to Flynn as requested. Although it was undisputed that a loss payable endorsement covering Flynn that was back-dated to April 1, 1970 was in existence, the endorsement, inadvertently, was not attached to the original policy that was mailed to Flynn.

On August 19, 1970, Flynn’s attorneys wrote to the appellees and told them that [306]*306because they had failed to keep the property fully insured in a company approved by Flynn, the holder of the indebtedness, because they had failed to give him possession of the original policy, and because they had failed to have such policy made payable to him, he had elected to declare the entire note due and payable. They stated that in addition, Flynn had turned the note over to them for collection. Flynn’s attorneys returned the original policy to appellees stating that the policy was unacceptable because the loss payable clause endorsement was not attached. The attorneys stated further that now unless the full amount of principal and interest, plus 10% attorneys’ fees were paid, plus the $449.00 for the new insurance policy purchased by Flynn which was due, they would post notice of trustee’s sale for foreclosure on the property, in which event an additional 5% trustee fee would accrue. Upon receipt of this letter, appellees filed this suit to enjoin the trustee’s sale.

The trial court recited that for the following reasons the temporary injunction should be granted: That the appellees were current in the payment of the monthly installments due under the terms of the promissory note; that copies of the policy of insurance, with a general change endorsement and mortgage clause showing Flynn as loss payee were furnished to Flynn by which he would know that the property in question had been fully insured with a loss payable clause to him prior to the time that he undertook to accelerate the maturity of the note; that the original of said policy of insurance was tendered to Flynn and received by him prior to the notice of acceleration of maturity of the promissory note in question, although the general change endorsement and mortgage clause was inadvertently omitted from the policy; and that at all times the property in question was fully insured with the loss payable clause in defendant Flynn.

Appellant’s basis for foreclosure is set forth in the letter from Flynn’s attorneys. This letter states: “By reason of your (appellees) failure to keep said property fully insured in some company or companies approved by the holder of said indebtedness, to whom the loss, if any, shall be payable, and by whom the policy shall be kept in accordance with the provisions of the deed of trust, Mr. F. L. Flynn, the owner and holder of this note, has elected to declare same due and payable, and has turned same over to us for collection.”

At the time that Flynn elected to accelerate the note, the original policy was in his hands. This was a policy approved by the original holder of the indebtedness to whom Flynn was the successor assignee.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Swanson v. Grassedonio
647 S.W.2d 716 (Court of Appeals of Texas, 1982)

Cite This Page — Counsel Stack

Bluebook (online)
469 S.W.2d 303, 1971 Tex. App. LEXIS 2493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/flynn-v-moszkowicz-texapp-1971.