Cyril J. Smith, Jr. v. Saihat Corporation ( 2015 )

Affirmed and Memorandum Opinion filed July 9, 2015.
In The
Fourteenth Court of Appeals
NO. 14-14-00185-CV
CYRIL J. SMITH, JR., Appellant
V.
SAIHAT CORPORATION, Appellee
On Appeal from the 152nd District Court
Harris County, Texas
Trial Court Cause No. 2011-09044
MEMORANDUM OPINION
Appellant Cyril J. Smith, Jr. sued appellee Saihat Corporation to declare
invalid two deeds that conveyed property to Saihat. The trial court ordered that
Smith take nothing on his claims against Saihat and declared that Saihat was the
owner of the property. We affirm.
BACKGROUND
This case involves a dispute over title to an interest in a tract of real property
located in Harris County, Texas, containing approximately 330 acres (the
Property).1
The Property was originally owned by Smith’s father, Cyril Smith, Sr. In
1981, Smith had a business called Ware-Con, which took out vehicle and
equipment leases from Leasing Associates. On May 4, 1982, Smith, Sr. himself
executed a deed of trust (Deed of Trust) on the Property to secure the leases.
Smith, Sr. died later that year and Ware-Con failed to pay the leases. A probate
proceeding was initiated and Barbara Christley, Smith, Sr.’s daughter and Smith’s
sister, was appointed to be the Independent Executrix of the Estate of Smith, Sr.
(the Estate).
Christley filed a lawsuit on behalf of the Estate against Leasing Associates
and Smith, seeking to invalidate the Deed of Trust, among other claims. When the
case was appealed, the court held that Christley “shall take nothing in her action to
declare the deed of trust and lease agreements invalid.” Smith, 755 S.W.2d at 533.
The case was remanded back to the probate court and the probate court granted a
summary judgment in favor of Leasing Associates. The probate court signed a final
judgment, providing that “[t]his cause came on to be considered following remand
from the Fourteenth Court of Appeals, that Court having rendered judgment that
the deed of trust dated May 4, 1982 was valid, and remanding for trial on the
question of whether Leasing Associates properly declared the leases in default and
for other proceedings consistent with the Court’s opinion.” The final judgment
ordered that Leasing Associates was entitled to recover $294,232.28, plus interest,
from Christley, as Independent Executrix of the Estate. The probate court’s
1
Smith and the Property have previously been involved in several lower courts and have
visited this court twice. See Smith v. Christley, 755 S.W.2d 525 (Tex. App.—Houston [14th
Dist.] 1988, writ denied); Christley v. Leasing Assocs., Inc., No. 14-00-00095-CV, 2002 WL
1489211 (Tex. App.—Houston [14th Dist.] July 11, 2002, pet. denied) (not designated for
publication).
2
judgment was affirmed on appeal. Christley, 2002 WL 1489211, at *3.
On March 19, 1992, Christley and Smith executed an Agreement and
Release, in which they agreed to dismiss their claims in the probate court (the
Family Settlement Agreement). Christley agreed to convey to Smith the Estate’s
interest in the Property and $30,000.00 in cash. Christley died and Catherine Wylie
was appointed to be the representative of the Estate.
Leasing Associates began seeking various writs of execution to enforce its
judgment. Wylie filed an estate inventory, which disclosed that the Estate owned
five separate tracts of real property, one of which was the Property. In 2010,
Leasing Associates caused a writ of execution to be issued and asked that the five
properties be sold pursuant to the writ of execution in collection of the judgment.
On June 1, 2010, the Harris County Constable sold all five tracts of properties at
five public auctions. Saihat purchased the Property and one other tract of property.2
On September 20, 2010, the Harris County Constable executed and delivered a
deed to Saihat (the Constable’s Deed). The Property was described as “330.72
Acres, Abstract 85, W. Whitlock, Crosby, Harris County, Texas.” Because the
deed described both properties purchased by Saihat, the Constable executed and
delivered two corrected deeds.
On February 11, 2011, Smith sued Saihat, seeking to have the Constable’s
Deed set aside and cancelled.3 To avoid the Constable’s Deed being potentially
cancelled, Leasing Associates assigned a portion of the obligation secured by the
Deed of Trust to Saihat. Saihat sold and purchased the Property at a trustee’s sale
and received a substitute trustee’s deed. The case proceeded to a bench trial in
2
The other tract of real property Saihat purchased at the auction is not at issue in the
underlying case or this appeal.
3
On April 9, 2012, Smith amended his original petition to add Saihat’s attorney, Jerry
Schutza, as a party to the lawsuit. Before the case proceeded to trial, the trial court granted
summary judgment in favor of Schutza and ordered that Smith take nothing against him.
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which the trial court found in favor of Saihat. The trial court signed a final
judgment on November 27, 2013, ordering that Smith take nothing on his claims
against Saihat based on his claim of title to the Property. The trial court also
declared Saihat owner of the Property. Smith moved for a new trial, which was
denied by operation of law.
STANDARD OF REVIEW
The record does not contain findings of fact or conclusions of law. In a
nonjury trial, where findings of fact and conclusions of law are neither filed nor
timely requested, it is implied that the trial court made all the necessary findings to
support its judgment. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex.
1992). When a reporter’s record is brought forward, these implied findings may be
challenged by factual or legal sufficiency points, the same as jury findings or a trial
court’s findings of fact. Id. at 84. If the evidence supports the implied findings, we
must uphold the judgment of the trial court on any theory of law applicable to the
case. In re W.E.R., 669 S.W.2d 716, 717 (Tex. 1984) (per curiam).
When a party attacks the legal sufficiency of an adverse finding on which he
has the burden of proof, he must demonstrate on appeal that the evidence
establishes, as a matter of law, all vital facts in support of the issue. Dow Chem.
Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001). In reviewing a matter of law
challenged, we first examine the record for evidence that supports the findings,
while ignoring all evidence to the contrary. Id. If there is no evidence to support
the finding, then we will examine the entire record to determine if the contrary
proposition is established as a matter of law. Id. The issue should be sustained only
if the contrary proposition is conclusively established. Id.ANALYSIS OF SMITH’S ISSUE
Smith contends that the trial court erred by ruling in favor of Saihat because
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(1) the description of the Property in the Constable’s Deed is defective; (2) Saihat
was not authorized to hold a trustee’s sale; and (3) Leasing Associates released
Smith from liability by entering into a written release with Wylie, as representative
of the Estate.
I. Sufficiency of Legal Description
Smith first argues that the legal description of the Property in the
Constable’s Deed is defective and as a result, the deed should be declared void.
The sufficiency of the legal description in any instrument transferring a
property interest is a question of law and subject to a de novo review. Dixon v.
Amoco Prod. Co., 150 S.W.3d 191, 194 (Tex. App.—Tyler 2004, pet. denied). To
be valid, a conveyance of real property must contain a sufficient description of the
property to be conveyed. AIC Mgmt. v. Crews, 246 S.W.3d 640, 645 (Tex. 2008).
A property description is sufficient if the writing furnishes within itself, or by
reference to some other existing writing, the means or data by which the particular
land to be conveyed may be identified with reasonable certainty. Id. Whether
conveyed voluntarily or involuntarily, a sufficient description must allow an
individual to locate the conveyed property with reasonable certainty. See id.; see
also Ardmore, Inc. v. Rex Group, Inc., 377 S.W.3d 45, 56 (Tex. App.—Houston
[1st Dist.] 2012, pet. denied) (“The purpose of a description in a written
conveyance is not to identify the land, but to afford a means of identification.”). If
enough appears in the description so that a party familiar with the locality can
identify the premises with reasonable certainty, it will be sufficient. Ardmore, Inc.,
377 S.W.3d at 56. The writing does not have to contain a metes and bounds
property description to be enforceable. Reeder v Curry, 426 S.W.3d 352, 359 (Tex.
App.—Dallas 2014, no pet.).
A conveyance of property which fails to describe a definite tract of land is
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void. Id. A deed should not be declared void for uncertainty if it is possible, by any
reasonable rules of construction, to ascertain from the description, aided by
extrinsic evidence, what property the parties intended to convey. Teledyne
Isotopes, Inc. v. Bravenec, 640 S.W.2d 387, 389 (Tex. App.—Houston [1st Dist.]
1982, writ ref’d n.r.e.); see also AIC Mgmt., 246 S.W.3d at 645 (“Texas law does
not require courts to scrutinize the proceedings of a judicial sale with a view to
defeat them; instead, ‘every reasonable intendment will be made in their favor, so
as to secure, if it can be done consistent with legal rules, the object they were
intended to accomplish.’”). Every presumption should be indulged to reach the
conclusion that some interest should be passed by a deed. Hahn v. Love, 394
S.W.3d 14, 25 (Tex. App.—Houston [1st Dist.] 2012, pet. denied).
The parties stipulated at trial that the proper legal description to the Property
is the description contained in the Deed of Trust and the substitute trustee’s deed.
This description identifies the Property as follows:
330.7242 acres of land situated in Harris County, Texas out of the
William Whitlock League, Abstract 85 and the Absolom Reeves
Survey Abstract 60 (also known as the Hannah Nash Labor, Abstract
599), said 330.7242 acres being more particularly described by metes
and bounds as follows . . . .
The description in the Constable’s Deed, however, identifies the Property as:
330.72 ACRES ABSTRACT 85 W. WHITLOCK, CROSBY,
HARRIS COUNTY, TEXAS.
The corrected deed also contains this description of the Property.
According to Smith, the description in the Constable’s Deed is defective
because it places all of the Property in Abstract 85, rather than both Abstract 85
and Abstract 60. Smith argues that this renders the deed void because the
description provides no means of distinguishing the Property from the other tracts
of land located within Abstract 85.
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Dr. Nick Bagia, the president of Saihat, testified that he purchased the
Property at a constable’s sale in 2010 and also at a trustee’s sale in 2012. Bagia
stated that when he saw the Property posted for sale by the Constable, he looked at
the Property in the Whitlock Survey and found the Deed of Trust which contained
the metes and bounds description. Bagia stated that the description in the
Constable’s Deed allowed him to find a proper legal description of the Property
and locate the Property. Bagia testified that he looked to see if the Estate owned
any other property in the William Whitlock Survey and found that it only owned
the Property. He also testified that Smith, Sr. did not own any other 330-acre tracts
of land.
We conclude that the legal description in the Constable’s Deed is sufficient
to identify the Property. The description references a survey of the Property. Bagia
testified that the survey led him to the Deed of Trust, which provided a metes and
bounds description of the Property. The parties stipulated that the Deed of Trust
contained an adequate description of the Property. Bagia stated that he was able to
locate the Property by using the description in the Constable’s Deed. See Ardmore,
Inc., 377 S.W.3d at 56. A reasonable certainty is all the law requires. Dixon, 150
S.W.3d at 195. There was sufficient evidence in the record for the trial court to
give effect to the legal description in the Constable’s Deed. Thus, Smith did not
meet his burden to establish the insufficiency of the legal description in the
Constable’s Deed.
II. Deed of Trust
Smith asserts that Saihat did not have the authority to foreclose on the
Property under the Deed of Trust. Smith contends that the Deed of Trust requires
that a substitute trustee be designated in writing and that there is no written
authority by Leasing Associates appointing Schutza as the substitute trustee. In
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response, Saihat argues that Smith’s pleadings admit the Deed of Trust was
assigned to Saihat.
A judicial admission is a formal waiver of proof usually found in pleadings
or the stipulations of the parties. Hennigan v. I.P. Petroleum Co., Inc., 858 S.W.2d
371, 372 (Tex. 1993) (per curiam) (citing Mendoza v. Fid. & Guar. Ins.
Underwriters, Inc., 606 S.W.2d 692, 694 (Tex. 1980)). A judicial admission must
be a clear, deliberate, and unequivocal statement. See Horizon/CMS Healthcare
Corp. v. Auld, 34 S.W.3d 887, 905 (Tex. 2000). It occurs when an assertion of fact
is conclusively established in live pleadings, making the introduction of other
pleadings or evidence unnecessary. Id.Smith’s live pleading provides, in relevant part:
SAIHAT and SCHUTZA have acted in concert together and have
obtained an assignment of a deed of trust previously executed in favor
of Leasing Associates, Inc. to secure payment of certain lease
payments owed by The Estate. The assignment designated SAIHAT
as assignee beneficiary. SAIHAT in turn appointed SCHUTZA as
substitute trustee. The assignment was filed in the Harris County Deed
Records on December 16, 2011 under Film Code RP080240299.
Smith’s pleadings clearly state that Leasing Associates assigned the Deed of Trust
to Saihat and that Schutza was appointed to be the substitute trustee. Because
Smith judicially admitted that an assignment occurred, he is barred from disputing
it on appeal. See id.III. Release
Smith argues that on the date the substitute trustee’s deed was issued, the
Deed of Trust was satisfied and the power of sale was extinguished because
Leasing Associates released its claims against the assets of the Estate.
In construing a written contract, the primary concern of the court is to
ascertain the true intentions of the parties as expressed in the instrument. J.M.
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Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003). To achieve this
objective, we must examine and consider the entire writing in an effort to
harmonize and give effect to all the provisions of the contract so that none will be
rendered meaningless. Id. No single provision taken alone will be given controlling
effect; rather, all the provisions must be considered with reference to the whole
instrument. Id. A contract is unambiguous if it can be given a definite or certain
legal meaning. Id. However, if the contract is subject to two or more reasonable
interpretations after applying the pertinent rules of construction, the contract is
ambiguous, creating a fact issue on the parties’ intent. Id.After the Property was sold to Saihat, Leasing Associates and Wylie, as
representative of the Estate, entered into a release (the Release), in which Leasing
Associates agreed to release the Estate and Wylie from liability regarding a
possible breach of fiduciary duty by Christley. The Release provides, in relevant
part:
Furthermore, I acknowledge that my Client releases the Estate of
Cyril J. Smith and Catherine N. Wylie, the Administrator of the Estate
of liability regarding any breach of fiduciary duty by Barbara
Christley as to the following:
1) On March 19, Barbara Christley acting as the Executrix of
the Estate entered into an “Agreement and Release” with
Cyril J. Smith, Jr. and gave to him, without consideration to
the Estate $30,000 in cash; and
2) “all of the estate’s interest in the tract of land consisting of
approximately 330.72 acres situated in Harris County,
Texas”. [sic] The Estates [sic] portion represents at least a
25% interest in that real property.
NOW, THEREFORE, I hereby RELEASE the Estate of Cyril J.
Smith and Catherine N. Wylie in her capacity of the Administrator of
the Estate and Individually of any further liability regarding the
above-mentioned items.
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Smith asserts that this language indicates that Leasing Associates released its
claims against the Estate for title to the Property.
We disagree with Smith’s proposed interpretation of the Release. The
Release states that Leasing Associates releases the Estate of “liability regarding
any breach of fiduciary duty by Barbara Christley as to the following: . . . .” The
Release then refers to the Family Settlement Agreement between Christley and
Smith, in which Smith received an interest in the Property. A portion of the
Release is handwritten at the bottom of the page and states: “This release shall not
be construed as an admission that the transfers are valid, or as a release against any
assets of the Estate of Cyril J. Smith to pay the Client’s Judgment.” The express
language of the Release makes clear that Leasing Associates only intended to
release the Estate for liability regarding a potential breach of fiduciary duty by
Christley for conveying the Property to Smith. The handwritten portion of the
Release supports this conclusion by providing that the Release does not apply to
any assets of the Estate.
CONCLUSION
We overrule Smith’s issues and affirm the judgment of the trial court.
/s/ Ken Wise
Justice
Panel consists of Justices Christopher, Donovan, and Wise.
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