*1 and, points discussed that we have requires us
stated, found error which have judgment trial court
to reverse this cause for trial. remand new and remanded.
Reversed Kolbo, ux., Vera Street et H. KOLBO
L. Appellants, ux., Blair, Mae BLAIR et Lila
A. N. Appellees.
No. 5. Appeals of Texas. of Civil
Court
Corpus Christi.
April 1964. May 28,
Rehearing 1964. Denied Rehearing Motion Denied
Second June 1964. *3 Kolb, Fricke, Port
Mrs. Vera Davant & Lavaca, appellants. for Wilson, Phillip Brady, Drake & Wil- son, Dallas, appellees. for NYE, Justice. deficiency
This is a suit a recover judgment purported after a mort- sale of gaged property powers given under in a mortgage. appellees, wife, The A. Blair and his N. prop- mortgage personal a chattel on erty belonging appellants to the L. H. Kolbo They attempt- and his wife. foreclosed and ed to sell the to themselves and proceeds purported credited the from the Thereafter, sale to the debt. brought deficiency suit alleged for to be promissory due on the given to them as. note part purchase price of the tourist furnishings. court and its trial of The this case was to the the inter- court without jury. deficiency judgment vention of a A appellees. was rendered behalf of the filed, part trial The court the record as herein, findings of fact and conclusions of appel- supporting judgment. law assign lants error the trial the action of rendering deficiency judgment in contending purported private that the fore- personal property closure sale was invalid, that there was no evidence fairly conducted, sale was and that there was insufficient show either a evidence to personal property. fair valid sale of substantially undisputed The facts are 1959, appel- as follows: October of Corpus in lees sold tourist court located Texas, Christi, con- appellants. to the fol- paid appellants was as sideration possession $15,000.00 rangements, cash which (1) took the sum оf lows: purported through a from courts and tourist conduct appellants obtained loan private sale, Trust either that afternoon Guaranty Title and Corpus Christi, Dallas, day was secured Corpus debt the next Christi. mortgage on the Texas. The record that no notice of shows lien deed trust first or, mort- sale was lien chattel courts and a first tourist fact, any prospective purchaser. and fixtures of gage the furniture courts; con- furniture and fixtures (2) the transfer tourist appellees’ attorneys on behalf estate located to themselves veyance real of certain Texas; Dallas, the execution for the sum (3) $100.00 *4 subject Guaranty in to the first delivery promissory the amount lien of the of a note Company. $13,874.73 (the suit) which Title and Trust The was of this $100.00 basis of promissory on to deed of trust likewise credited the note. by lien was secured second thereafter, brought Shortly appellees chattel lien the a second the tourist court and promissory in this the note for the and fixtures suit on furniture mortgage on the plus to owing, lien balance due and interest and first notes courts. The the tourist attorney Judgment and fees. entered in Guaranty Trust was and the Title appellees appellees were the in the amount of the favor of lien to *5 positive alty place- not took am —a —I public at Such a sale auction instrument. place personalty sale of took sub- this object, a highest is a sale to bidder —its the it is ject or not to the first. Whether competition price means, re fair —its —its something did in we Dallas whether sale, presumed a a law sults, as matter of there, vaguest it re- we did I the have fairly to be conducted. In either myself, could be mis- collection and I type sales, attacking foregoing mortgagor a taken, mimicking what somewhat proving the them has the burden of that the (the at trustee McCulloch trustee fairly is it was con sale invalid that sale) had about ‘Gather around said Here, appellees ducted. elected to take the upon.’ The and bid those interested private possession actual and sell at in the corner said some- old man down mortgagors, under without notice to the sale or some thing to me about what power given the to them in the may, but, be as it comment that mortgage instrument. Dallas, it at there or whether occurred held, were no bids private
a was sale made, the notice to general rule and nо was is well-settled say mortgagor, power mortgagee should this state to the effect that the to —I bid our firm mortgaged property sell to satisfaction and a was $100.00 and allowed the mort Blairs of indebtedness secured behalf of * * * compliance I don’t gage against must be executed strict debt. power upon vaguest 'is I recollection the terms which such know. have with motel. Mrs. granted. Any attempted crying is there at the sale that to out compliance appellees) does not (one with the made strict Blair eye you in the it and can’t defining terms such recall I look instrument it, honestly you I did and the execution is unau and tell method Crawford, know, nothing I and there 108 Tex. don’t is thorized. Michael v. * * * was 352, 1070, says Fund Insur here that so. There Fireman’s 193 S.W. Wilson, to either of S.W. notice whatsoever ance v. 284 920 no (the appellants) any inter- A, 1926). or to pow Kolbos (Tex.Comm.App. Sec. * * * into went She private the ne ested bidder. er of not eliminate sale does ** * subsequent sale possession cessity an actual proving existence of personal property either mortgagee that sale nor it relieve the seek does premises or 6th deficiency judgment from ing to obtain afternоon of got we in Dallas when next proving day conducted. sale was 130 (Em- acting ques- at the time in drawing
around to documents.” tion, phasis was insufficient for the trial supplied.) court to finding
base a
that there was a valid sale
personal property.
of such
pri
finding
Such
The trial court found that
supported by any
proba-
is not
evidence of
day
vate sale was held on or about the 6th
tive force and
manifestly
therefore
er-
December,
recognize
the rule
1960. We
roneous.
findings
that the trial
will be
court’s
of fact
upheld
manifestly
they
errone
unless
are
The evidence is clear that the
ous,
they
only
when
will be overruled
possession
mortgaged
took
probative
they
any
are without
evidence of
property, but
is insufficient
evidence
them,
support
force to
so
оr where
place.
that an actual
took
to
sale
order
against
great weight
preponder
pass
title
mortgaged
to the
manifestly
ance of the evidence as to be
actually
place.
taking
must
alone
take
wrong.
Collins,
Banks
v.
152 Tex.
non-judicial
is not
sufficient
amount to a
97.
S.W.2d
And the further rule univer
exercising his
mortgagee
foreclosure. The
sally
state,
our
courts
right
regard for thе
to sell must have due
sufficiency
to test
of the evidence
property.
mortgagor
interest of the
in the
support
determine if it
court’s
will
the trial
He is not
to act
the owner of the
entitled
findings,
only
give
we must
credence
fiduciary
but assumes a
relation
evidence
circumstances favorable
ship not unlike that of a trustee for the
findings
and disregard all evidence and
Wood,
Lyon
benefit of
mortgagor.
contrary.
circumstances to the
Banks v.
(Tex.Civ.App.,
363 S.W.2d
n. w.
*6
Collins, supra;
Stanley,
Stanley v.
294 S. h.).
being
The
for
that the
reason
the rule
(Tex.Civ.App.1956,
W.2d 132
writ ref. n.
power
remedy
exercise of such
is a harsh
e.).
r.
concerning
All of
the evidence
only
by strictly
and that it can
be exercised
attorney
sale came
appellees’
from the
complying
conditions
with the terms and
appellants
who conducted the sale. The
imposed upon
power
by the
of sales
nothing
knew
of the actual
could
sale and
of
Sulli
maker
instrument.
supply any
not
facts
not
were
Hardin,
(Tex.Civ.
v.
van
ings.
qualified
appellees sought
witness
such
The
a defi
sale, by
direct evidence of
actual
limit-
ciency
part
an
judgment. Deficiency
that
ing and qualifying
testimony
using
his
obligation
of the
remains
secured
which
language
such
I
positive;
as:
am
I
proceeds
not
after
with
ac
crediting it
the net
vaguest recollection;
have the
cruing
by
I could be
security
from a valid sale
mistaken;
sale”;
the оld man said
deficiency judg
“what
seeking
creditor.
asked,
made;
know;
no bids
no bids
I
prove
don’t
mortgagee
ment the
must first
vaguest
out;
crying
validity
recollection of
Mrs.
sale and
of the foreclosure and
n it;
does
you
Blair
not recall
I
fairly
can’t look
such
that
sale was
conducted. Casa
eye
you
it; honestly,
and tell
I
Ward,
did
I
Company
Monte
v.
131
injury
mortgagor
as
de-
or insufficient
wеll of the
as the
was no evidence
that there
fairly-
claim;
may
feat of his
purported
sale was
own
evidence
only
discharge
fund
debt.
appellants’ conten-
for the
of his
sustain
conducted. We
mortgagee
should be entitled to enter
tion.
competition
into
sale.
v.
at the
Howard
Davis,
(1851).
San was further undis The evidence *7 1933, ref.). (Tex.Civ.App., puted, specifically wr. S.W.2d in the trial court fact
found, that without the sale was conducted soliciting inviting any bids of kind or Appellants contend further that any person character whomsoever. appellees is void because the did the sale convincing show There no evidence to express authority in the mort have the prop that the the sale was conducted where purchase no gage to at the sale. We find imposed erty legal was located. duties none point on and were Texas cases requirе upon him use mortgagee the to appellees, undisputed It is that the cited. advising diligence fair and in reasonable attorney, property through their sold the pending prospective purchasers a fore question mortgagee A in to themselves. place, giving closure to its time and sale as trustee, qualified but sense. is a prospective purchasers opportunity an such others, He not hold for the benefit does inspect property. mortgagee to the trust, que cestui but for himself. He is a use should all reasonable means in obtain an interest as well as trustee. He has be prices property the for the to ing best expressly property. pledged It is to se foreclosure, upon bid entertaining sold deprived claim; he is cure his and where competition of his own matter of and as a purchase, might to he suffer of the prevent himself. to loss to by its others at a low great loss sale to bid price. has an interest He encumbrance, us that a and It inconceivable to amount to is
should his sacrificed, in- giving mortgagee without notice of property that the be not any prospective holding In view our bidder could tended sale behalf, sеlling property long record that the a sale on his own shows is no conduct himself, asking receiv- er in the hands of the a re without for bids or bids, trial, property property ex- the value of the shall de ing having termined, hibited, appellants given and the holding at a location credit the sale located, prop property was for the reasonable market value of the other thаn where the 6, erty 1960, mortgagees’ being as of time possibly in confines of the December county, city appropriation by appellees. attorney’s office another 426, circumstances, Maupin Chaney, could, under conduct 139 Tex. 163 S.W. these 2d 380. The trial at the impartial arriving a fair and sale. subject per reasonable market value of the no evi- that there was We therefore hold 1960, property sonal December and such conducted dence of a sale will consider that there was a first lien be set aside. sale must per mortgage existing against such property sonal and at the same time it will appellees, prior to opinion, and we so likewise consider that the is our It personal prop subject hold, mortgagees, the conversion оf the that the action of the erty, purchased property subject control the real exercising dominion and taking and conducting outstanding to the same indebtedness cov property without over ered illegal conver the first lien chattel proper amounted to an subject only through property. If the of the property. It is value sion of the lien for that the valid sale .and foreclosure said considered as it was on said security merged the title to into debt, date, than then is found to be less proceeds. 12 property or its Tex.Jur.2d should be credit Mortgages, 80. Chattel § value, judgment for such deficiency, plus remaining interest and contend Appellants attorney fees. prop for the value credit should have appeal are assessed The costs of this appellees converted that the erty at the time against appellees. and that we own use their value judgment as to the should render re- judgment of the trial court is in there was hold that property. We such for a the cause is remanded versed market fair evidence of sufficient actual new trial. the date subject property as of value being no valid There of its conversion. REHEARING ON MOTION FOR evidence of sufficient and an absence *8 trial property, to the value cause reversing remanding from which data court had no and this hold intention of this Court to it is not the deficiency judgment. enter a could trial, may not appellee, on another Hardin, prior supra. A valid Sullivan personal a valid raise the issue of conducted, or a determination competent рrovided that sufficient converted, and property had been issue. to raise such evidence is available market reasonable finding of the then a new trial on This cause is remanded for the date of property as of of such value all issues. precedent to the conditions conversion rehearing is overruled. judgment. Motion deficiency entry proper of a the seсond notes $7,207.00, the together with interest at rate monthly payable in installments. being the (this of the amount of second 6% operation courts was the tourist The of $13,874.73, pay- promissory lien less note of months Some nine ten never a success. during appellants the ments made the appellants purchase, the the sold after the possession time of the tourist were in of party the name а third courts to courts, $7,500.00 credit from the less a of case) in this who (not involved Watkins sale, reality at sale the the trustee less of payment on made no both notes but assumed price being credit of the sale $100.00 default, of such them. Because either of chattel furniture and fixtures at the mort- fore- trustee to appellees their instructed sale, adding attorney based on gage fees оn deed of trust their lien close on second interest unpaid the balance’ accrued and appel- to the Pursuant the tourist courts. note). perfected appellants on The have the notice, proper after lees’ instructions and appeal their to this court. in tourist courts trustee sold the the at the public auction of at December appelleеs claim that the sale was The appellees purchased courthouse door. with valid one and was held in accordance $7,500.00 subject to courts for the tourist power chattel mort- them in the Guaranty and Title lien favor first chattel gage. pertinent part $7,500.00 crediting Company, Trust power of mortgage giving appellees the promissory note of the second lien notice, private without foreclosure at sale do attack appellants. The as follows: reads which was validity sale of this “ * * * * * * default, said in- of the trust with the terms accordance agent assigns, mortgagee, or strument. Mortgagee are representative of said by the Immediately following this sale hereby Mortgagee’s authorized op- at arrangements trustee, appellees madе tion, indebtedness to declare all said holder, Guaranty Title lien with first due, said possession take actual and any action Company, to Trust forbear and private at sale to sell same deed lien on its first several months * * *. mortgager notice to in order mortgage and first lien trust (The author- instrument then attempt to to opportunity give them an to foreclo- ized an alternate method tourist operations of the work out action) public and sale sure making ar- of these Following courts. ** equity powers should Mortgagee or The Court with *. The said rendering private before money scrutinize the sale assigns to receive have deficiency judgment. is proper- so hills of make sale said mortgagee, charged ty.” conducting with (Emphasis supplied.) private to (sometimes without notice mortgagor case), generally appellees to did not elect facts. control of the judicial by filing seek foreclosure suit sale as are under execution. Such sales facts is While statement of somewhat presumed fairly valid and conducted. lengthy, pertinent that evidence notice, There, parties pro all the have conducted, and whether it was spеctive purchasers opportunity an have testimony quite Quoting brief. from bid is con on the and the sale attorney representing ducted the court. under the direction of purportedly the sale: and who conducted Nor did the elect foreclose auction, mortgaged public sell chattels at my “My notes not real It is clear. published in the with notice as authorized person- recollection a sale of the power given subject mortgage them in the