Court Opinion

ID: 3965098
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:24:48.564229+00
Date Added: 2024-06-11T13:47:38.931510
License: Public Domain

Considering the disclosures of the record, the judgment of the court below should be affirmed. The basis of this suit, according to plaintiff's petition, is the failure of the defendants S. Topletz and M. Saffir to repair the buildings on property, damaged as the result of a fire occurring May 30, 1935, out of the proceeds of fire insurance carried on the property.
Plaintiff alleged that S. Topletz and M. Saffir agreed to repair the buildings in accordance with the agreement and understanding of the parties. She alleged that "during the month of June, 1935, she called at the office of the said S. Topletz and M. Saffir, and stated to them that it would cost Twelve Hundred ($1200.00) Dollars to put the buildings back in repair, but that the said S. Topletz and M. Saffir declined to lether make the repairs but stated to her that they desired to collect the insurance and repair the buildings themselves, after the proper adjustment of loss was made. Petitioner (Susie Woods) declined to allow the said S. Topletz and M. Saffir to make said repairs, but stated shedesired to make the repairs herself." (Italics mine.) Plaintiff does not in any manner allege that defendants agreed to advance to her $1200 with which to repair the burned buildings, and there is no testimony conveying the idea that M. Saffir and S. Topletz, the holders of the notes, agreed to do so. The testimony is in line with the above pleadings.
Plaintiff testified that Saffir and Topletz offered to repair the buildings after the fire and she declined to accept their offer, but insisted that they deliver to her $1200 in cash, "as she desired to make the repairs herself". She further testified that Levi Topletz (a son of S. Topletz and bookkeeper in the office of Saffir and Topletz) told her: "If I would sign them (drafts), he would let me have the $1200.00 to replace the building; then after I signed them he told me to come back in two weeks, then he said he was not going to let me have it and was going to foreclose, his father (S. Topletz) was not going to carry the note any longer." If the agreement of Levi Topletz to advance the $1200 *Page 787 
under the related circumstances was a controlling factor in this case, which, evidently it is not, such was not binding on M. Saffir and S. Topletz. They made no such agreement, and there is neither pleadings nor proof that Levi Topletz was empowered to bind the holders of the notes, who were the legal owners of the drafts, on promise to let her have $1200 of the insurance money. Furthermore, no consideration whatever passed for such undertaking. It was plaintiff's legal contracted duty to sign the drafts, thus putting the mortgagees in possession of their property. She did only that which the law requires her to do, in furtherance of her contract.
The record in this case shows that on May 24, 1927, the plaintiff Susie Woods, a negro woman, borrowed $14,000 for the purpose of constructing an apartment on the property in controversy; and, simultaneously therewith, executed a note in the sum of $8,500 to S. Topletz, secured by a first lien deed of trust on the property in question, and to M. Saffir a note for the sum of $5,872.62, secured by a second lien deed of trust, secondary only to the above note and lien of S. Topletz. The Topletz note was due and payable five years after its date, and, by an extension agreement, the due date extended for three years; and the Saffir note was due and payable to the tenor following: "$150.00, plus interest from March 15th, 1927, shall be due and payable June 1st, 1927; and, thereafter, the maker hereof shall deposit with the holder hereof monthly, for six consecutive months, the sum of $178.77, and thereafter monthly the sum of $150.00, said deposits to be made on the first day of each calendar month, beginning with the first day of July, 1927, out of which payments the holder hereof shall pay, first, the interest as it accrues on one note of even date herewith for $8,500.00, executed by me and payable to the order of S. Topletz five years after date and set out and described in deed of trust of even date herewith to L. Topletz, Trustee, upon the above described property; second, to the interest as it shall accrue on this note; third, the balance to be applied to the payment of the principal of this note."
Each of the above mentioned notes makes express provision for acceleration of maturity, at the option of the holders thereof, on default in the punctual payment of the indebtedness or interest; the Saffir note further providing that "failure to make the monthly deposits as hereinafter provided, shall, at the option of the holder hereof, mature the entire indebtedness secured by the hereinafter mentioned lien". The two deeds of trust simultaneously executed with the aforesaid notes make the usual provisions to include payment of taxes, insurance against fires loss payable to the holder of the indebtedness, and to keep said improvements in good condition and repair.
The insurance policies were issued to the insured, with loss payable to the lien holders, as their interest in the property might appear.
On May 7, 1932, a fire occurred, damaging the building, for which the insurance company paid the sum of $3,704.81; and, Susie Woods, the owner, then being in arrears in payment of the aforesaid notes and other obligations — installments, interest, taxes, and insurance — authorized payment of the insurance money to M. Saffir to repair the fire damage and to secure the renewal and extension of the S. Topletz note of $8,500 to May 24, 1935.
On May 30, 1935, six days after the maturity of the Topletz note, the owner again being in arrears in the payment of the installments on interest and principal of said notes, a second fire occurred; whereupon, both Topletz and Saffir declared their notes due according to their terms and conditions; and Topletz, exercising the option and power of sale conferred by his deed of trust, posted notices of sale and sold the property in accordance therewith.
Appellant bases her right of recovery upon three propositions: (1) That the debt was not due; (2) that S. Topletz told her she could pay the debt out of rents collected by her from the property; and (3) that she endorsed the insurance drafts because Topletz agreed to let her have $1200 of the insurance money with which to repair the improvements, so as to obtain a loan to pay the Topletz and Saffir notes.
The evidence shows without controversy, that the notes were past due: The Topletz note became due May 24, 1935; and the Saffir note was payable in installments at specific dates and amounts, which were not paid. There was no written or verbal agreement either pleaded or proven, to extend the maturity dates beyond the expressed terms of the notes. At the time of the fire, May 30, 1935, both notes being *Page 788 
past due, the entire amount of the insurance loss was payable to the holders of the notes. They were the owners of the drafts given in payment of the insurance loss; and, under all of the authorities, Saffir and Topletz had the right to apply the insurance to the payment of their indebtedness, and enforce collection for the balance.
In Panhandle Nat. Bank v. Security Co. et al., 18 Tex. Civ. App. 96,44 S.W. 15, 20, the Security Company sued the Delaware Insurance Company and the Pan Handle National Bank and the Wichita Falls Milling Company, alleging it held a lien upon certain real property; the insurance had been effected on the property with loss clause payable to it; and the bank had fraudulently obtained the policies and had the loss clauses changed in favor of the bank. There was a fire and the bank collected the money. Judgment was against the bank. The court said: "As the petition shows that the plaintiff held a mortgage on the property for an amount in excess of the policies sued on, and does not show that the mortgage debt had been paid or the property released, we think it shows such an interest in the property as will entitle the plaintiff to sue for and collect the entire amount of the policies in controversy". See, also, Walter Connally  Co. v. Hopkins et al., Tex. Civ. App. 195 S.W. 656, 659, affirmed Tex.Com.App., 221 S.W. 1082, holding: "`An agreement * * * between the mortgagor and mortgagee, by which the mortgagor is charged with the duty of taking out insurance for the benefit of the mortgagee, will charge the proceeds of any insurance taken out by the mortgagor with a lien in favor of the mortgagee.' And in the Wheeler Case [Wheeler v. Ins. Co., 101 U.S. 439, 25 L. Ed. 1056] the Supreme Court said: `It is settled by many decisions in this country that if the mortgagor is bound, by covenant or otherwise, to insure the mortgaged premises for the better security of the mortgagee, the latter will have an equitable lien upon the money due on a policy taken out by the mortgagor to the extent of the mortgagee's interest in the property destroyed."' In Zeigler et al. v. Federal Land Bank of Houston et al., Tex. Civ. App. 86 S.W.2d 864, 867, Zeigler and wife executed notes to the Federal Land Bank, payable in installments and effected fire insurance with loss payable to the bank. The property was damaged by fire; the insurance was paid to the bank; Zeigler requested that the funds be applied to past due installments, to taxes, etc., thus leaving the principal not due. The bank refused to do this, and applied the money on the installments delinquent and the balance on the principal of the debt, and, then foreclosed under the terms of the deed of trust for the balance. The El Paso Court of Appeals, writ of error dismissed, held: "The funds paid over to the bank being the proceeds of a policy on the 150-acre tract, it became the duty, unless the owner of the land agreed otherwise, to apply them to the payment of the past-due installment and retain the balance to be applied upon the remaining indebtedness as it fell due. 26 C.J. § 589, p. 441; Thorp v. Croto et al., 79 Vt. 390, 65 A. 562, 10 L.R.A., N.S., 1166, 118 Am. St. Rep. 961, 9 Ann.Cas. 58, and cases cited." So is the case at bar: The owner agreed for the insurance money to be paid to Saffir and Topletz, the holders of the notes as their interest might appear, thus, after the fire, the notes being past due, she had no right to direct the application of the money, other than to the payment of the notes.
It is an untenable conclusion that Topletz waived his right to enforce the terms and conditions of his note and deed of trust, because, forsooth, of failure on the part of the maker, Susie Woods, to meet the payments on the Saffir note, and Saffir's failure to exercise his option to declare his debt due and enforce his lien prior to the fire; and, that Saffir waived his rights by deferring payment and foreclosure. It is not contended that either agreed to any extension of their notes; the notes were due, and each had a right to exercise the rights extended to them in the transactions. The record does not reflect that the holders of the notes said or did anything to lull the obligor, Susie Woods, into security, to her hurt and damage or waive or estop them in the exercise of their rights under their contracts to cause the intervention of a plea in equity. The principles of law abound in this case.
The judgment of the court below should be affirmed; accordingly, I respectfully enter my dissent. *Page 789