Ryan Mortgage Investors v. Lehmann

544 S.W.2d 456, 1976 Tex. App. LEXIS 3540
CourtCourt of Appeals of Texas
DecidedOctober 28, 1976
Docket7866
StatusPublished
Cited by11 cases

This text of 544 S.W.2d 456 (Ryan Mortgage Investors v. Lehmann) 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
Ryan Mortgage Investors v. Lehmann, 544 S.W.2d 456, 1976 Tex. App. LEXIS 3540 (Tex. Ct. App. 1976).

Opinions

KEITH, Justice.

Defendant below appeals from two orders which (a) overrule its plea of privilege to be sued in Tarrant County and (b) granted a temporary injunction restraining it from foreclosing a deed of trust covering certain lands situated in Montgomery County. We will speak of the parties as they appeared in the trial court.

The record in voluminous and the fact structure is somewhat complicated; consequently, while we must make a lengthy statement, many facets of the case will escape mention.

This suit was instituted by the plaintiffs who were individual guarantors of a promissory note secured by a deed of trust upon certain land situated in Montgomery County. On December, 1,1972, Associated Mortgage Investors, a Massachusetts business trust (“AMI”), issued its commitment letter to Lake Conroe Equities, Inc., predecessor in title to Berton Land Development Corporation, a Texas corporation (“Berton”), whereby AMI committed itself to make a land acquisition loan in the amount of $7,300,000. Thereafter, on December 28, 1972, Berton executed its promissory note in such amount payable to AMI. On the same day, plaintiffs (Lehmann and Monroe), along with seven other individuals not parties hereto, executed a separate instrument entitled “Guarantee” under the terms of which they guaranteed payment of the loan made by AMI to Berton.

On January 5, 1973, Berton executed a deed of trust upon the land to secure the payment of the note mentioned. It was shown upon the trial that, although AMI was named as payee of the note, it was actually a joint participation of three real estate investment trusts with the appellant Ryan acting as the “lead” lender. Subsequently, the indebtedness was assigned to Ryan.

It is contended by the plaintiffs that Ber-ton and the other interested purchasers of the land were planning to create a recreational community around Lake Conroe with Berton being the vehicle whereby the land would be acquired and developed subsequently. Plaintiffs contended that Ryan’s agents made representations that a development loan would be made to Berton for which reason they signed the guarantee of the purchase money note now in dispute.

After the execution of the note, efforts to secure the development loan were unsuccessful and, when the land acquisition note became due one year from the date of its making, it was not paid by its maker, Ber-ton; and, under the undisputed record, the note remains unpaid and in default.

Plaintiffs, although owning no record title to the land covered by the deed of trust, and notwithstanding that they were only guarantors of payment of the note, brought suit against Ryan alleging that fraudulent misrepresentations were made which induced the execution of the note and that the note was usurious. They sought, according to the statement of the nature of the suit in the preamble of their brief:

“. . . Appellees asserted their cause of action in Usury seeking statutory damages and forfeiture of the principal balance alleged to be due on the loan contract with Appellant, and therefore, cancellation of the Deed of Trust lien securing that loan. Ancillary to the cause of action alleged, Appellees sought Temporary Injunction preventing a Trustee’s Foreclosure Sale of the Deed of Trust so as to preserve the ‘status quo’ between the parties pending resolution of this dispute in final trial.”

[459]*459Plaintiff’s original controverting affidavit filed on January 28, 1976, sought to maintain venue by invoking only subdivision 14 of Art. 1995, Tex.Rev.Civ.Stat.Ann. (1964). However, on the second day of the trial (February 20, 1976), plaintiffs filed what is styled “Plaintiffs’ Trial Amendment to Controverting Affidavit to Defendant’s Plea of Privilege” invoking subdivisions 7 and 23 as well as 14 of the venue statute.

At the conclusion of the hearing, the trial court entered orders overruling the plea of privilege and granting the temporary injunction. Further statements will be made in connection with the several points of error which we will discuss.

At the outset of our discussion, we recognize the rule enunciated in Goodrich v. Superior Oil Co., 150 Tex. 159, 237 S.W.2d 969, 972 (1951):

“The general rule of venue is, of course, that a defendant shall be sued in his own county, and however many and important are the exceptions contained in the statute, an equal doubt between the exception and the rule is to be resolved in favor of the rule. Stated differently, the application of the exception must clearly appear.”

See also, B & C Construction Co. v. Grain Handling Corp., 521 S.W.2d 98, 101 (Tex.Civ.App.—Amarillo 1975, no writ), where the continuing validity of the Goodrich rule is recognized.

Plaintiffs’ reliance upon subdivision 14 is misplaced. Under this subdivision, the venue facts are two: that his suit is for the recovery of land or for damages thereto and that a part of the land lay in the county of suit. Cowden v. Cowden, 143 Tex. 446, 186 S.W.2d 69, 71 (1945); Piazza v. Phillips, 153 Tex. 115, 264 S.W.2d 428 (1954). Ordinarily, except as to proof of the location of the land, the applicability of subdivision 14 depends wholly upon the allegations of the petition. See Harwood v. Hunt, 473 S.W.2d 287, 293 (Tex.Civ.App.—Beaumont 1971, no writ); Edgar v. Bartek, 507 S.W.2d 831, 835 (Tex.Civ.App.—Corpus Christi 1974, writ dism’d).

It is clear that plaintiffs executed only one instrument, a “Guarantee” wherein they guaranteed payment of the loan made by defendant to Berton. Their petition does not contain an allegation that they owned or claimed any interest in the lands described in the deed of trust given to secure the promissory note. It was only during the course of the trial that plaintiffs sought to introduce a deed dated February 20, 1976 (the second day of the hearing), from Berton to plaintiffs purporting to convey an undivided one-fifteenth interest in the property covered by the deed of trust.1

Not having alleged title or legal interest in and to land lying in Montgomery County, plaintiffs may not maintain venue under subdivision 14 of the statute. Harwood v. Hunt, supra.

We next consider plaintiffs’ reliance upon subdivision 23 of the venue statute, noting it is now the generally accepted rule that, in order to maintain venue under this subdivision, a plaintiff must prove a cause of action at the venue hearing. Admiral Motor Hotel of Texas, Inc. v. Community Inns, 389 S.W.2d 694, 698 (Tex.Civ.App.—Tyler 1965, no writ). See also, 1 McDonald, Texas Civil Practice § 4.30.2 — (I), p. 518 (1965 Rev. Vol.), and authorities cited in the bound volume as well as in the 1976 Cum. Supp. at p. 48. In our discussion of this subdivision, we will consider plaintiffs’ alleged claim of usury as supporting venue.

The note forming the basis of the litigation was executed only by “Berton Land Development Corporation" acting through its president and attested by its secretary. Neither signatures nor the names of the plaintiffs appear at any place on this note.

[460]

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Ryan Mortgage Investors v. Lehmann
544 S.W.2d 456 (Court of Appeals of Texas, 1976)

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544 S.W.2d 456, 1976 Tex. App. LEXIS 3540, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ryan-mortgage-investors-v-lehmann-texapp-1976.