Sara-Nec v. Slape

546 S.W.2d 703, 1977 Tex. App. LEXIS 2622
CourtCourt of Appeals of Texas
DecidedFebruary 2, 1977
Docket6587
StatusPublished
Cited by2 cases

This text of 546 S.W.2d 703 (Sara-Nec v. Slape) 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
Sara-Nec v. Slape, 546 S.W.2d 703, 1977 Tex. App. LEXIS 2622 (Tex. Ct. App. 1977).

Opinion

OPINION

WARD, Justice.

This is an appeal from the granting of a temporary injunction which prohibited the Defendants from foreclosing under a deed of trust and from holding a trustee’s sale of the encumbered properties. What is primarily involved is a factual controversy over alleged breaches in the payments and other obligations of the lien instruments. We affirm.

In February, 1976, the Defendant, A. Henry Sara-Nee, entered into a contract of sale with the Plaintiff, L. C. Slape, whereby the Defendant agreed to sell to the Plaintiff 148 separate rental homes and certain other properties in Midland for the sum of $1,110,000.00. Thereafter, the sale was completed, and, on February 24th, the Defendant executed his general warranty deed conveying the property to the Plaintiff, who paid $45,000.00 in cash, the deed reciting a further consideration of the assumption and the agreement to pay by the grantee of the then outstanding balances on ten promissory notes each in the original amount of $10,000.00, payable to the order of the First National Bank of Midland, the notes being secured by a superior deed of trust on ten of the homes, and the balance of the consideration being $963,000.00, as evidenced by a promissory note of even date, payable to the order of Mr. Sara-Nee, executed by the Plaintiff, and bearing interest at the rate of seven percent (7%) and being payable in monthly installments of $6,806.27 each, the first monthly installment being due and payable on April 15, 1976, and with a like installment being due on the 15th day of each succeeding month thereafter, said note providing for acceleration of maturity and attorney’s fees in the event of default and being secured by the vendor’s lien retained in the warranty deed, and being further secured by deed of trust of even date to William B. Smith, Trustee and a Defendant in this suit. The deed of trust provides that, upon breach of any of the conditions of the deed of trust or upon default in the punctual payment of the indebtedness or any part thereof, at the option of the holder the whole of the indebtedness will mature and become due and payable. Soon after closing of the sale, Mr. Sara-Nee complained to the Plaintiff of alleged breaches of the conditions of the deed of trust, and, on July 18, 1976, advised the Plaintiff in writing of his intention to foreclose under the power of sale. The Trustee posted notice on August 6th for sale on September 7,1976. The Plaintiff then filed his suit, secured a temporary restraining order prohibiting the sale, and, after a hearing on September 7th, the temporary injunction was granted.

Certain special conditions of the deed of trust, which are similar to provisions contained in the original contract of sale, are involved. The Plaintiff agreed that he would deposit at the First National Bank of Midland a minimum of $1,500.00 as a tax reserve account each month starting March 15, 1976, in a joint account with the seller. The Plaintiff further agreed to make the seller sole beneficiary of a life insurance policy in the amount of $100,000.00, either by an assignment or by obtaining a special policy, the policy to be non-cancellable by the Plaintiff. And finally, the Plaintiff specifically agreed to keep all the properties and premises at his own expense in good repair and condition “TO THE PERSONAL SATISFACTION” of the seller.

The hearing on temporary injunction developed into a factual dispute of five alleged breaches of obligations contained in the instruments which, according to Mr. Sara-Nee, justified his acceleration of the note and his subsequent attempt to foreclose. According to this Defendant, these were: (1) failure to furnish the policy of life insurance in the amount of $100,000.00; *706 (2) failure to execute an assumption agreement with the First National Bank assuming the indebtedness required; (3) failure to furnish prepaid hazard insurance on the properties; (4) the making of late payments on the escrow account and to the Defendant; and (5) the failure to repair and maintain the properties according to the standard prescribed.

As to the policy of life insurance, the policy was applied for on May 8th, issued on July 6th, and delivered to Mr. Sara-Nee on July 19, 1976. However, it is noted that there was no time limit within which the policy had to be obtained, no requirement that it be delivered to this Defendant, and the Plaintiff testified that the several months delay was due to his inability to obtain life insurance because of a fluctuation in his blood pressure. The fact remained that it was obtained and the Defendant was covered before the attempted acceleration on July 18th.

On the assumption agreement, it was established that the Plaintiff never executed and delivered to the bank any such agreement. However, such a separate agreement was not called for by any of the instruments, and, in the deed, the grantee assumed the balance on the ten promissory notes in question, and the obligation was obviously self-executing.

As to the prepaid hazard insurance, on May 11th, Mr. Sara-Nee wrote the Plaintiff complaining that he had failed to prepay the hazard insurance. As testified at the hearing, Sara-Nee did this as “someone had told him” that the insurance was not totally prepaid. The Plaintiff testified that he furnished the necessary policy covering the properties which he had promptly delivered; that he paid $4,100.00 down; that at the time of the hearing had paid for five months premiums; and that the policies were always on a prepaid basis.

As to the late monthly note payments of $6,806.27, Sara-Nee testified that the May payment arrived in the mail on May 17th, and he returned the payment to the Plaintiff; that the July payment arrived on July 16th; and that though he had retained the July check and the August check, he had not cashed them. The Plaintiff testified that all payments had been made on time and the checks cashed, with the exception of the July payment which had been returned, and that the cancelled checks were available for examination. As to the payments on the escrow account in the amount of $1,500.00 to cover taxes and insurance, the proof was that the first deposit had been made on or before March 15th, and the similar deposit monthly thereafter. Contrary to the assumption made by Mr. Sara-Nee as to a specific due date on this monthly deposit, the deed of trust specifies only that the payment be made “each month."

The bulk of the testimony at the hearing regarded the failure of the Plaintiff to maintain the property “TO THE PERSONAL SATISFACTION” of the seller. Without detailing the testimony, it reflects that the repairs made were not to Mr. Sara-Nee’s personal satisfaction. Dissatisfaction was expressed to the Plaintiff repeatedly, and on four occasions in writing. The properties had been acquired over a twenty-five year period, and undoubtedly needed constant repair and suffered somewhat from tenant abuse. The Plaintiff countered with his testimony that he had purchased about $2,000.00 worth of supplies for use on the properties during his nineteen weeks of ownership, and had expended $4,267.20 for outside labor for repairs in addition to his regular maintenance men who were paid $190.00 a week; that he had no vacancies at the time of the hearing; and that the properties were generating $800.00 a month more in revenues than when purchased.

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Cite This Page — Counsel Stack

Bluebook (online)
546 S.W.2d 703, 1977 Tex. App. LEXIS 2622, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sara-nec-v-slape-texapp-1977.