Opinion ID: 2373111
Heading Depth: 1
Heading Rank: 3

Heading: Rents

Text: Prior to the June 5, 1984 foreclosure, Consolidated collected rents for the entire month of June. On the day of foreclosure, EVA took possession of the property and purchased it at a foreclosure sale. EVA then brought an action seeking to collect the rent proceeds from Consolidated, claiming that the rentals had been assigned to EVA as security under the deed of trust. Consolidated asserted that EVA failed to take the necessary steps to collect the rents. The trial court granted summary judgment for EVA, awarding it $66,917.00 for both rents and security deposits. Texas law addressing rentals assigned as security states that an assignment of rentals does not become operative until the mortgagee obtains possession of the property, or impounds the rents, or secures the appointment of a receiver, or takes some other similar action following a mortgagor's default. See Taylor v. Brennan, 621 S.W.2d 592, 594 (Tex.1981). The court of appeals, holding that as a matter of law EVA was prohibited from collecting the disputed rents, stated that EVA took no affirmative steps pursuant to its right of entry following Consolidated's default. 737 S.W.2d at 333. As to rents, it is difficult to imagine what EVA could have done beyond foreclosing on the property, purchasing it at the sale and promptly taking possession of it. The trial court was correct in awarding EVA as a matter of law the rents collected prior to the foreclosure but attributable to a time after the foreclosure. We therefore reverse the judgment of the court of appeals. The cause is remanded to the trial court for a determination of the amount of rents to be awarded. Findings are necessary on this issue because EVA subsequently abandoned its claim for security deposits. The trial court is directed to render judgment in accordance with this opinion. MAUZY, J., files a dissenting opinion in which SPEARS and RAY, JJ., join.