Pacific Finance Corp. v. Donald

On Motion for Rehearing

Pacific has filed a motion to clarify a statement in our original opinion, and the statement has been changed so as to express our intention more accurately. The rights of the parties should be determined in the trial court by whatever facts are in existence at the time the trial court comes to decide those rights.

Pacific has also filed a motion for rehearing and to tax costs against the plaintiffs. That part of the motion which alleges grounds for rehearing and prays for a rehearing and for changes in our judgment other than such as only concern the matter of costs is overruled. Pacific has a decree from us setting aside the trial court’s injunction and we adhere to our conclusion that the proceeding should 'be remanded, for reasons stated in our original opinion. Further, it may be said that a remand is necessary to avoid determination of matters put in issue by the pleadings which the parties filed on the injunction proceedings now under review and which may be involved in proceedings y.et to be had in the trial court. However, we will add these comments because of Pacific’s argument under Ground 2 of its motion, and we mean these comments to bind the parties and the trial court. It is not impossible that plaintiffs may be entitled, while this suit is pending, to injunctive relief against performance of a writ based on Pacific’s first judgment. Such a writ, if drawn as that judgment provides, and as the writ levied was drawn, would direct sale of the land on which plaintiffs claim a lien and would direct payment .of the proceeds of sale to Pacific, to be applied on both of Pacific’s judgments if an excess above the first one resulted. According to the facts before us, the writ would give authority to sell which would pass title. See: Simmons v. Arnim, 110 Tex. 309, at page 330, 220 S.W. 66, at page 73 (Headnote 12). And such a sale, under the doctrine of lis pendens, would divest the land in suit of plaintiffs’ judgment lien, if plaintiffs have a judgment lien on the land, and would limit plaintiffs’ rights to the excess above the attachment, of which, as we stated, the writ directs payment to Pacific. There is no place for the plaintiffs in this process; plaintiffs have to interrupt it at some point unless they are willing to take what is left over, or Pacific is entitled to have them do that, and except in the situations mentioned below, we think that plaintiffs are entitled to a judicial determination of what rights, if any, they may have against the land and against Pacific respecting the land before the land is sold to pay Pacific’s second judgment. But if the writ based on Pacific’s first judgment is drawn as that judgment directs, any sale under it would be one to enforce the second judgment — as well as one to enforce the first judgment— because, as we have stated, the writ would order an application of proceeds of sale on the second judgment. So, injunctive relief against a sale under such a writ might be proper as being necessary to protect the trial court’s jurisdiction over plaintiffs’ dispute with Pacific’s second judgment, regardless of the fact that such relief would also interfere with Pacific’s first judgment.

However, since Pacific’s first judgment, to the extent that it is secured by the attachment, has priority over the judgment lien claimed by the plaintiffs, and since said judgment lien, if it exists, could only, under the facts before us, attach to the proceeds of sale exceeding the sum secured by the attachment, plaintiffs would not be entitled to enjoin a sale under the writ based on Pacific’s first judgment, and drawn as that judgment provides, unless they proved that such an excess actually would result; and! if they did not make this proof, or if it were proved that all of the proceeds of sale would have to be applied on Pacific’s first judgment, a sale under this writ should not be enjoined. Further, if the evidence did show that an excess would result, it might be possible for the trial court to order an injunction which would permit a sale under the writ and payment of the sum secured 'by the attachment but would hold the excess subject to the trial court’s determination of plaintiffs’ contest with Pacific’s second judgment, and if circumstances permitted such an order to be made, the injunction granted should go no further, for this would give the plaintiffs all of the protection to which they are entitled.

Pacific’s request to tax costs against the plaintiffs is granted as regards the costs of the injunction proceeding, both in the trial court and in this court, but is denied as regards other items.

Judgment will be entered in accordance with the opinions on file.