Wallace v. Burson

McClendon, chief justice. Wallace sued Burson on a promissory note for $1,600 principal, less admitted credits, and to foreclose a chattel mortgage on 8 mules and certain farming implements. At the same time he sued out a writ of sequestration under which the mortgaged property was seized and later delivered to him under a replevy bond. The note was dated January 1, 1933, and was due January 1, 1934. The suit was filed October 16, 1933, and the note was declared due under an acceleration clause in the mortgage, alleged to read: “Said mortgage further provides that if the mortgagor should move or attempt to move, all or any of the property therein described or covered thereby, out of Coleman County, Texas, or if in the judgment of the mortgagee said property should be neglected, injured or abandoned, or if the same should be in any way mistreated or handled so as to impair the security of said mortgagee, or render the mortgagee unsafe, or if the mortgagee should in any way deem himself unsafe or insecure, that the mortgagee should at once declare said note due or take possession of said property and cause the same to be sold and applied to the payment of said indebtedness; said mortgage giving to the plaintiff herein full right and power at any time if he should feel unsafe or insecure, to declare the debt due and mature, and that said mortgagee has declared said debt due and matured and does hereby further so declare.” The ground upon which the sequestration writ was obtained is alleged in the affidavit to be: “That the affiant, plaintiff herein, fears that the defendant will injure and illtreat said property during the pendency of this suit, and that the defendant has ill-treated said property and injured the value of the same during the time he has had the -possession thereof, since the execution and delivery of said mortgage.” Burson by way both of defense and cross-action pleaded: (1) Fraud in the execution of the note and mortgage, for which he sought: (a) Cancellation and recovery of what he had paid thereon, or (in the alternative), (b) damages. (2) Wrongful procurement of the sequestration writ under allegations falsely and maliciously made, for which he sought, as a further alternative, damages both actual and exemplary. The cause was tried to a jury upon special issues covering each of the defendant's pleas, and judgment was rendered thereon canceling the note and mortgage, and awarding Burson $622.44, the amount he had paid thereon. Wallace has appealed. We -sustain Wallace’s contention that the evidence floes not support the finding of fraud in the execution of the contract. Briefly stated, the record shows in this regard: Wallace owned the mules and farming implements involved, and a 505-acre tract of land. In the fall of 1932 he made an agreement with parties by the name of Stewart to sell them the mules and implements, and rent them the land for 1933, with the stipulation that, if one-sixth of the grain and one-fourth of the cotton raised on the premises during the rental year would not discharge- the purchase-money note for the mules and implements, he would extend the note and lease until the note was satisfied from such proceeds. Upon one of the Stewarts declining to execute the contract, the negotiations fell through. Shortly thereafter a third party brought Wallace and Burson together, and in a preliminary conversation, according to Burson’s version, the same agreement was made as with the Stewarts. A few days later the lease, note, and mortgage were executed. Neither contained the extension stipulation. Burson’s fraud theory is predicated upon the allegation that Wallace represented to him that the mortgage contained this extension stipulation. There is very little variance in the evidence regarding what took place when the instruments were signed. Wallace and Burson together went to a bank in Santa Anna, and related to one Brown, who acted as scrivener in the matter, the terms of the agreement. Brown wrote the instruments, or filled in the blanks on printed forms, and they were then executed. The evidence of Burson is somewhat vague as to what specifically Brown was told to put in the mortgage, or what Wallace told him was in it after Brown had written it. His testimony in this regard was that Wallace told him the mortgage was in ac [805] cordance with their previous agreement. He testified that he did not read the mortgage before signing it, but relied upon Wallace’s above statement, and the belief, based on his reputation, that he was honest. The record shows conclusively that he had ample opportunity to read the mortgage, if he had chosen to do so, which was in duplicate, and a copy retained by him. No device or deception was practiced upon Burson to induce him not to read the instrument; no fiduciary relation of any character existed between the parties; and under well-recognized legal principles the evidence fails to support the allegations of fraud essential to cancellation or damages for deceit. However, the jury findings upon the issue of wrongful sequestration, which are amply supported by evidence, sustain the trial court’s judgment. The jury findings in this regard were in substance: That at the time Wallace made the affidavit for the writ he did not have reasonable grounds to believe that Burson would (6) injure or (7) ill-treat the mortgaged property, or (8) to fear that he would ill-treat it during pendency of the suit. That Wa.llace procured issuance of the writ for the purpose (9) of depriving Burson of the possession of the property, and (10) of securing possession of the lands which Wallace had rented to Burson. (11) That Wallace did not “act in good faith in causing the writ of sequestration to be issued.” The value of the sequestered property was found to be $1,732. The findings on exemplary damages are unimportant under the conclusions we have reached. The record shows the following: The amount due on the note, plus accrued interest and less established credits, was, on the date the writ was issued, $1,104.56, or $627.44 less than the found value of the mortgaged property. Burson’s equity in the property amounted to more than 50 per cent, of the debt it secured. Wallace’s affidavit for the writ alleged the value of the property at $1,525, or $420 in excess of his debt. Wallace had become dissatisfied with Burson as a tenant, and in the latter part of August, or early in September, rented a part of the farm to one Ford for the year 1933, “on the halves.” Wallace, under that lease, was to furnish the teams and implements with which to make the crop. As soon as Wallace got possession under his replevy bond, he turned the mules and implements over to Ford, who used them in cultivating the farm under his lease. In the meantime, . Ford had already (early in September) begun to break some of the land he had leased. Burson moved off the place shortly after the writ was served, and Ford moved into the house he had vacated. The record will amply support findings that Wallace was anxious to get possession of the implements and teaips to turn them over to Ford; and to put Ford in possession of the premises; that Burson had not ill-treated, injured, or abused any of the mortgaged property, and had no intention of doing so;' and that he had fairly met his obligations under the mortgage by delivering to Wallace one-sixth of the grain and one-fourth of the cotton covered by the mortgage, which was the source of the established credit of $622.44. In view of the wide margin (over 50 per cent.) in the value of Wallace’s security over the amount of Burson’s debt, this evidence was sufficient to support the above jury findings. Wallace’s brief contains 66 assignments of error; but no supporting propositions. We would probably be justified, under the rules, in striking out the brief altogether. We have, however, carefully read all the assignments of error and their discussion, frpm which we gather that, other than that the evidence will not support the above findings (which we overrule as without substantial merit), the point chiefly, if not entirely, relied upon, as regards the issue of actual damages for wrongful sequestration, is substantially as follows: Since the mortgage authorized Wallace to take possession of the property upon maturity of the debt for any cause, action would not lie for damages for wrongful sequestration, regardless of the existence vel non of the grounds stated in the affidavit, where the debt had been matured under a proper exercise of the right given in the acceleration clause. This proposition seems well established in this state. 38 Tex. Jur. p. 257, § 93, and supporting authorities in footnote 10. However, it is an essential element of a proper exercise of the acceleration clause • that the conditions in fact exist which authorize its exercise.. Where, as here, the right is predicated upon the usual insecurity clause, the general rule is thus stated in 11 C. J. p. 555: “Although the ordinary wording of [806] the insecurity clause is that the-mortgagor (mortgagee) may take possession whenever he ‘deems’ himself insecure, the prevailing doctrine is that he must act reasonably and have probable cause to apprehend the loss of his claim to justify a taking, for an arbitrary power is not conferred. * * * In determining whether a mortgagee had reasonable ground to believe that he was in danger of losing his security, any competent relevant evidence may be admitted, and where the evidence is conflicting, the question of the mortgagee’s good faith and the existence of reasonable grounds for his action are for the jury.” Cleveland State Bank v. Turner (Tex. Civ. App.) 278 S. W. 1107, is directly in point in support of this text. In considering this question, we have assumed, as both parties appear to have assumed, that the acceleration clause is correctly copied in the above quotation from Wallace’s petition. The copy of the mortgage embodied in the statement of facts, however, does not contain the specific provision relied upon in that pleading. The wrongful sequestration of Bur-son’s property constituted its conversion; and since its found actual value ($1,732) was slightly in excess of the amount of Wallace’s debt plus the amount of the trial court’s judgment against him ($1,104.56 +$622.44==$1,727), the error of the- trial court in predicating his judgment upon the cancellation theory is harmless, so far as Wallace is concerned. He, therefore, cannot, and Burson does not, complain. The trial court’s judgment is affirmed. Affirmed.