Stephenville Production Credit Ass'n v. Drake

226 S.W.2d 888, 1950 Tex. App. LEXIS 1869
CourtCourt of Appeals of Texas
DecidedJanuary 20, 1950
Docket2762
StatusPublished
Cited by9 cases

This text of 226 S.W.2d 888 (Stephenville Production Credit Ass'n v. Drake) 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
Stephenville Production Credit Ass'n v. Drake, 226 S.W.2d 888, 1950 Tex. App. LEXIS 1869 (Tex. Ct. App. 1950).

Opinion

COLLINGS, Justice.'

Appellant, Stephenville Production Credit Association, filed this suit in Erat-h County against T. H. Drake to recover on a note in the principal sum of $5,622.44, for interest, attorney’s fees and for foreclosure of a chattel mortgage lien against T. H. Drake and the Union Bank & Trust Company of Fort Worth, Texas. Upon a trial before the court without a jury, judgment was rendered sustaining the plea of privilege of the Bank to he sued in Tarrant County, Texas. From such judgment, this appeal is brought.

Appellant’s petition allages that both T. H. Drake and the Union Bank & Trust Company of Fort Worth are residents of Tarrant County, Texas; that Drake was indebted to appellant on a promissory note dated, executed and delivered on January 20, 1948 in the sum of $5,622.44,' and by its terms payable at Stephenville, Texas; that of even date with the note; Drake executed and delivered to appellant a chattel mortgage on certain property therein described; that said debt and mortgage were in renewal and extension of an original debt and mortgage executed and delivered by Drake to appellant on January 19, 1943 in the sum of $1,238 and for various sums loaned and advanced by appellant to Drake under the provisions of . said mortgage; that said mortgage was filed for record on January 19, 1943 in the Chattel Mortgage Records of Tarrant County, Texas, and that said debt, mortgage and advancements have been timely renewed and extended with record thereof being duly made- in the Chattel Mortgage---Records- of Tarrant County, Texas, down to the debt and mortgage dated January 20, 1948; that said ■mortgage is a first, valid and. subsisting lien on said above described property and is unsatisfied-; - that Drake sold and dis- ■ posed of certain of the mortgaged property in violation of the provisions of such mortgage and appellant elected to exercise its option thereunder to declare all such indebtedness due and payable; that during the time T. H. Drake was indebted to appellant as aforesaid, and while such chattel mortgage was of record in Tarrant County, Drake became indebted to appellee, Union Bank & Trust Company of Fort Worth, Texas, and. created a lien to the bank on the same property as described in the chattel mortgage delivered to appellant ; that both the bank and appellant claim a first lien on such property; that appellant’s lien is prior and superior to any ■lien or claim of the bank; that it was necessary that the priority of such liens be adjudicated before appellants’ lien could be foreclosed and the proceeds applied in satisfaction of said debt, the property being wholly insufficient to satisfy both. Appellant prayed for judgment against Drake for its debt, principal and interest and attorney’s fees in the sum of $6,184.68; that its lien be declared superipr to any claim, interest, or .lien asserted by the bank and that appellant’s lien against Drake be, foreclosed and' -the proceeds applied to appellant’s debt.

Subdivision 5 of Article 1995, Vernon’s Ann.Civ.St., is as follows: “If a person has contracted in writing to perform an obligation in a particular county, expressly naming suoh county, or a definite place therein, by such writing, suit upon or by reason of such obligation may be- brought against him, either in such county or where the defendant "has his domicile.”

Subdivision.29a.of Article 1995-is as follows: “Whenever there are two or more defendants in -any suit brought in - any county in this State and such'suit-is. lawfully maintainable therein under the provisions of Article 1995' as- to any of such defendants; then such suit may be maintained in such county' against 'any and all necessary parties thereto.”

*890 -Appellant introduced its note and mortgage signed by Drake showing his promise to pay “to the order of the'Step-henville Production Credit Association at its offices at Stephenville, Texas,” and there is no question but that Drake was properly suable in Erafch County under Subdivision 5 of the above Article. It is contended 'by appellant that since the trial court had venue of Drake under such exception, the court also had venue under Subdivision 29a against appellee Bank & Trust Company as a necessary party to appellant’s suit for foreclosure.

Appellant’s right to prevail on this appeal hinges upon the question of whether Union Bank & .Trust Company is a necessary party to appellant’s suit. The burden was on -appellant to allege and prove facts which would show the Bank to be a necesT sary party to its cause of action against Drake. Key v. Mineral Wells Inv. Co., Tex.Civ.App., 96 S.W.2d 804.

In the case of Union Bus Lines v. Byrd, 142 Tex. 257, 177 S.W.2d 774, 775, Judge Alexander, states as follows: “The rule is'that where, under-the exceptions contained in Article 1995,' a suit is properly maintainable against one defendant in a county other than the county of his residence, and the plaintiff therein joins another as defendant and seeks to sustain venue as to him under Section 29a, such other defendant is a necessary party within the meaning of Section 29a if the complete relief to which plaintiff is entitled under the facts of the case as against the defendant properly suable in that comity can be obtained only in a suit to which both defendants áre parties.”

Numerous cases hold that in a suit to foreclose a lien on mortgaged property, one who has purchased such property from the mortgagor after-the execution and recording of the mortgage is a necessary party under Subdivision 29a. Pioneer Building & Loan Ass’n v. Gray, 132 Tex. 509, 125 S.W.2d 284; Medford et al. v. First Nat. Bank' of Evant, Tex.Civ.App., 212 S.W.2d 485; Hamill v. Kitchen, Tex.Civ.App., 182 S.W.2d 821.

In a suit by a senior lien holder to foreclose his lien on mortgaged' property, it has been held that a junior lien holder' is a necessary, party. Pierson v. Pierson, 136 Tex. 310, 150 S.W.2d 788; Biggs v. Southland Life Insurance Co., Tex.Civ. App., 150 S.W.2d 149.

A subsequent purchaser or a subsequent lien holder acquires an interest in the identical title covered by a -prior mortgage and the title or interest of each is subject to such prior mortgage. As to such parties, a prior lien holder has the right to have the mortgaged property applied to the payment of the debt due him to the extent of the full interest owned by the mortgagor at the time his lien was created. This relief can be obtained only in a suit to which such subsequent purchaser or lien holder is a party, otherwise, such subsequent title or -lien would remain undisposed of and continue a burden to the prior and superior claim.

In an action by a junior lien holder to foreclose a mortgage, a senior lien 'holder as such is not a necessary party. The junior lien is subject to the senior one and the relief;to whioh the junior lien holder is entitled is likewise limited to the extent that it cannot encroach upon -the security of the senior lien holder.

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Bluebook (online)
226 S.W.2d 888, 1950 Tex. App. LEXIS 1869, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stephenville-production-credit-assn-v-drake-texapp-1950.