Guthrie v. Gossett

142 S.W.2d 410, 1940 Tex. App. LEXIS 565
CourtCourt of Appeals of Texas
DecidedJune 28, 1940
DocketNo. 2029
StatusPublished
Cited by2 cases

This text of 142 S.W.2d 410 (Guthrie v. Gossett) 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
Guthrie v. Gossett, 142 S.W.2d 410, 1940 Tex. App. LEXIS 565 (Tex. Ct. App. 1940).

Opinion

LESLIE, Chief Justice.

C. W. Guthrie instituted this suit against the Farmers State Bank in Merkel and Jack B. Robert to recover an undivided 7/16ths interest in an oil and gas lease on 14 acres of land in Jones County. After suit was filed the bank became insolvent and its assets were placed in the hands of Z. Gossett, Banking Commissioner, who was substituted for the bank.

Robert and Gossett each answered by general demurrer, general denial, and pleas of not guilty, and Robert further alleged he was an innocent purchaser of the property, etc. The parties will be referred to as in the trial court.

The petition first stated a suit in trespass to try title and thereafter specially alleged in detail the nature and origin of plaintiff’s rights in the leasehold.

■ The plaintiff’s specific allegations state in substance his acquisition by written lease of the property from R. N. Campbell, lessor;’ that September 12, 1934, he executed the deed of trust on the same to R. M. Wagstaff, trustee, to secure the payment to Said bank of a demand note in the sum of $1,800; that December, 1937, the cashier of the bank wrote him a letter demanding that he pay the note and stating that if he did not do so the bank would proceed to foreclose its deed of trust lien; that in response to the letter, he, Guthrie, called at the Merkel bank and discussed the indebtedness'and the. cashier of same informed him that although the indebtedness was past due it was amply secured and that he, Guthrie, might disregard the letter. That the bank then agreed with him that the property would not be sold under the deed of trust until further notice was given him.

That thereafter, without additional notice, and without allowing him' an opportunity to pay off the balance of the note then due, the bank requested the trustee to advertise and sell the property; that acting upon such request the trustee advertised the property for sale and sold the same April 5, 1938 at public auction to the said bank which later conveyed same to defendant Jack B. Robert; that this sale to the bank was void (1) because the debt originally secured had been fully paid, and (2) the bank’s agreement to give further notice of said sale had been violated by the bank, thereby rendering the conveyance void, even though, plaintiff was mistaken as to the indebtedness having been fully paid at the time of notice and sale.

Plaintiff further alleged that at the date of sale the property was worth from $5,-000 to $10,000 and that if anything was due upon the debt it was only a few hundred dollars. That the property was sold for a grossly inadequate amount.

In connection with the first allegations in trespass to try title, the plaintiff presented the formal allegation that the defendants took control of said property on April S, 1938, and were withholding the same from his possession “to his damage in the sum of $7,000, for which he here sues.”

Following the remainder of the petition stating in detail the nature of the plaintiff's cause of action, plaintiff prays as follows: “Wherefore, premises considered, plaintiff prays the court that the said sale and the deed thereunder by the said trustee be set aside, canceled, and held for naught as a cloud on plaintiff’s title to said oil and gas lease, and that defendants be required to account to plaintiff for the income received finder said oil and gas lease since the date of said deed of trust and the pledge of said oil runs, and that plaintiff recover judgment for the title and possession of said 7/16ths interest in said oil and gas lease, and for such other and further relief, at law and in equity, to which he may be entitled.”

The case was tried before the court and jury, and upon three special issues submitted, the jury found (1) that the cashier of the bank told (promised) Guthrie that before proceedings were begun to foreclose the deed of trust, he (Guthrie) would be [412]*412further notified; (2) that Guthrie relied upon the statement as made, and (3) that the market value of Guthrie’s 7/16ths interest in the leasehold on April 5, 1938 (date of sale) was $3,500. Guthrie admitted upon the trial that on date of sale an unpaid balance of $1,136.70 was due on the note.

The trial court rendered judgment refusing cancellation of the conveyances and denying plaintiff any relief against Robert, but judgment was rendered in favor of the plaintiff against the banking commissioner for -the sum of $2,363.60, the difference between what the jury found the value of the property to be on April 5, 1938, and the appellant’s admitted unpaid balance.

Guthrie appeals from the judgment denying him cancellation of the deeds in question, and the banking commissioner appeals from the money judgment in fav- or of Guthrie.

We first consider the assignments addressed to that portion of the judgment denying the plaintiff any relief as against Jack B. Robert who later purchased the property from the bank. The appellant’s first proposition is that the sale by the trustee passed no title because the bank violated its promise and agreement to notify the appellant before beginning any foreclosure proceedings, and that since the appellant relied upon said promise to his injury, the trustee’s sale passed no title. The second proposition is, in substance, that since the bank acquired no title, having caused the sale and bid in the property in violation of said agreement, the appellee Robert was put on notice of all the infirmities in the bank’s title, and, in any event, was charged with notice of any infirmity in the trustee’s sale because of a recital in the deed, namely: “ * * * and being the same property and only the same property conveyed to the grantor herein by the trustee’s deed from R. M. Wagstaff, trustee, to the Farmers State Bank in Merkel, dated April 5, 1938 * * * ”

There is no merit in the contention that the debt had been paid off when the trustee advertised and sold the property. The appellant agreed upon the trial that there was an unpaid balance of $1,136.70.

The record discloses that the holder of the note made proper request of the trustee to advertise and sell the property. It shows (by agreement of the parties) the trustee in making the sale complied with all the terms and conditions of the deed of trust which was itself in the usual and customary form.

We are of the opinion that the above and other undisputed facts conclusively show that the effect of the trustee’s sale was to place the legal title to the leasehold in the purchasing bank. On proper allegations and proof of the oral promise or agreement, its violation, etc., doubtless the sale could have been set aside and the deed canceled by the mortgagor so long as the title remained in the mortgagee bank. Nevertheless, if the title thereafter passed from the bank to a bona fide purchaser for value without notice, such conveyance could not be set aside on account of such alleged promise or fraud, if any. John Hancock Mut. Life Ins. Co. v. Howard, Tex.Civ.App., 85 S.W.2d 986 (4-6); Ward v. Scarborough, Tex.Com.App., 236 S.W. 434, 440; Schneider v. Sellers, 98 Tex. 380, 84 S.W. 417; Silverman v. Landrum, 19 Tex.Civ.App. 402, 47 S.W. 404.

Evidently the purchaser at such trustee’s sale, although made in violation of a parol agreement to extend the time of payment, etc., acquires such title as will support the plea of subsequent innocent purchaser. The inquiry now is, Was ap-pellee Jack B.

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142 S.W.2d 410, 1940 Tex. App. LEXIS 565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/guthrie-v-gossett-texapp-1940.