Murphy v. Phillips

63 S.W.2d 404
CourtCourt of Appeals of Texas
DecidedSeptember 9, 1933
DocketNo. 9278
StatusPublished
Cited by26 cases

This text of 63 S.W.2d 404 (Murphy v. Phillips) 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
Murphy v. Phillips, 63 S.W.2d 404 (Tex. Ct. App. 1933).

Opinion

MURRAY, Justice.

Appellant herein, Malachy Murphy, petitioned the judge of the Ninety-Second district court of Hidalgo county for an injunction restraining G. F. Dohrn, trustee, and E. O. Phillips from advertising for sale and selling certain real estate situated in Hidalgo county. Murphy bases his petition for injunction exclusively upon the provisions of House Bill No. 231, known as the Greathouse Moratorium Act. Acts 1933, Regular Session, 43d Legislature, chapter 102, page 225 (Vernon’s Ann. Civ. St. art. 2218b).

• On the 31st day of March, 1932, Murphy executed a deed of trust conveying the above-mentioned real estate to G. F. Dohrn, as trustee, for the benefit of E. O. Phillips, to secure the payment of a promissory note, of even date with the deed of trust, for the principal sum of $3,300, signed by Murphy, payable to the order of Phillips and due one year after date. Murphy failed to pay this note at maturity, and Dohrn, the trustee, advertised the property for sale, the sale to take place on June 6, 1933. The district judge granted a temporary restraining order on June 3d, but, after a hearing on June 5th, such restraining order was dissolved and Murphy’s prayer, in all things, denied. From the order of the trial judge dissolving the restraining order and refusing him an injunction, Murphy has prosecuted this appeal.

The essential provisions of House Bill No. 231, under the provisions of which this injunction is sought, are as follows:

Section 1 provides that, with reference to ■all suits pending in any trial court or filed within 180 days after the effective date of the act to foreclose any lien or liens on real property, the defendant should have the right to a postponement or continuance thereof on filing, a sworn statement setting forth: (a) That the defendant is unable to pay the debt, and that the property would probably sell for less than its reasonable market value or less than its intrinsic value, and that the indebtedness did not result from fraud; (b) that the rendition of a judgment as prayed for would result in an unfair, unjust, and inequitable financial injury to the defendant; (e) that the property upon which the lien is sought to be foreclosed is not being wasted, and is substantially in as good condition as when the lien was executed, and that the defendant has not, with intent to defeat or delay collection, dissipated the property or the rents and revenues thereof; (d) that defendant is not in arrears in the payment of taxes for more than four years since February 1, 1922, on the property involved; (e) that the defendant consents to the appointment of a receiver, etc.

If it be made to appear to the court that said allegations are probably true, the court shall defer rendering judgment in said cause for as long a period as 180 days, nor shall any order of sale or execution issue until after the expiration of the time fixed by the court. The court is further authorized under certain conditions to extend this time up to May 1, 1934, making in effect a year’s moratorium from the effective date of the act.

The act requires the court to -take into consideration the financial condition of both plaintiffs and defendants.

Section 2 of the act permits agreed judgments.

Section 3 authorizes the court to stay sales under execution or order of sale of real property upon the same terms and conditions as are authorized by section 1 of this act and during the life of this act.

Section 4 provides, that nothing shall prevent the court from granting such preliminary and ancillary remedies by injunction and otherwise, as may appear necessary, for the preservation of the rights of the parties pending litigation.

Section 5 provides that nothing herein shall prevent parties from litigating cases in court and appealing from the judgment with[406]*406out filing the motion mentioned in section 1, or if such motion is overruled, and that: “in cases where judgments are rendered and an appeal is taken, the appealing party shall be entitled to have execution or order of sale stayed and postponed pending such appeal without filing a supersedeas bond, if from the facts proven upon application for such stay order, it reasonably appears to the court that the appealing party is unable to execute a good and sufficient supersedeas bond or that it would be inequitable, unjust and unfair to permit his property ⅜ ⅞ ⅜ to become subjected to sale during the pendency of such appeal.”

In section 9 it is made exclusively retroactive, and in section 10 it is said that, if any section be held .unconstitutional, the remaining portion shall nevertheless be valid, and section 11 provides that all laws in conflict with any provision of this act are suspended for the period of 180 days, etc.

An examination of appellant’s petition reveals the fact that he has not alleged in his petition that he is unable to pay the debt as required by subparagraph (a) of section 1, nor does he allege that he consents to the appointment of a receiver, etc., as provided by subparagraph (e) of section 1, and in these particulars appellant’s petition is fatally defective, and, having failed to comply with the requirements of the very act on which the petition was based, appellant was clearly not entitled to the injunction, and the trial judge, for this reason alone, was justified in not granting appellant the relief which he sought.

As far as this appeal is concerned, it is not necessary to discuss this ease further, but, as many cases are being brought under this act, and, as its constitutionality is being vigorously assailed, we must either here or hereafter pass upon this all-important question, so we will proceed to do so in this case.

House Bill No. 231 was the fourth moratorium or stay law passed by the Forty-Third Legislature at its regular session staying the sale of real estate under judicial sales or trustee sales.

(1) Senate Bill No. 418 (Vernon’s Ann. Oiv. St. art. 3804 note) stayed all such sales for the month of March, 1933.

(2) 'Senate Bill No. 489 (Vernon’s Ann. Oiv. St. art. 3804 note) stayed all such sales for the month of April, 1933.

(3) House Bill No. 914 (Vernon’s Ann. Civ. St. art. 3804 note) stayed all such sales for the month of May, 1933. Thus House Bill No. 231 (Vernon’s Ann. Oiv. St. art. 2218b) became the fourth moratorium or stay law.

It is pointed out that House Bill No. 231 does not grant a stay of sale as a matter of right, but, on the contrary, a sworn written statement must be filed setting up certain facts before the stay will be granted. The facts which must be set forth are stated in subparagraphs a, b, c, d, and e of section 1 an appears above. These conditions exist In practically every forced sale of real estate, so the stay might almost as well have bfeen granted as a matter of right as to be granted under such circumstances.

It is pointed out that House Bill No. 231 provides that a receiver may be appointed or that the rents and revenues derived from the property may be applied upon the indebtedness, thus providing for compensation to the mortgagee. However, if the property is producing no rents or revenues, the mortgagee receives" nothing. Thus the mortgagee may or may not receive compensation under the provisions of this act for the indulgence he is forced to give to the mortgagor.

That this act violates the “Bill of Rights” contained in both our state and Federal Constitutions, which prohibit the passage of legislation impairing the obligation of a contract, there can be no doubt.

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63 S.W.2d 404, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murphy-v-phillips-texapp-1933.