LEXSEE 609 s.w.2d 754
Land Title Company of Dallas, Inc., et al., Petitioners v. F.M. Stigler, Inc., et al.,
SUPREME COURT OF TEXAS
609 S.W.2d 754;
1980 Tex. LEXIS 420;
24 Tex. Sup. J. 117
December 10, 1980
Rehearing Denied January 21, 1980.
From Dallas County, Fifth District.
Cowles, Sorrels, Patterson & Thompson, R. Brent
Cooper, Dallas, DeLange, Hudspeth, Pitman & Katz,
Eugene J. Pitman, Sellers & Berg, Michael G. Tapp,
Houston, for petitioners.
Storey, Armstrong, Steger & Martin, Hugh L.
Steger, Robert S. Addison and Frederick W. Addison,
III, Dallas, for respondents.
This priority of liens case involves the question of
ratification by a principal of the unauthorized act of its
agent. Floyd M. Stigler, Inc. and others sued Leon D.
Hogg, Jr. for recovery on its note and for judicial
foreclosure of its deed of trust. Stigler also sued HNC
Realty Company to set aside the foreclosure sale, to
declare the subordination agreement invalid, and to
declare its prior deed of trust lien superior to HNC's deed
of trust. Hogg and HNC filed third-party actions against
Land Title Company of Dallas, Inc., d/b/a Southwest
Land Title Company, for indemnity and contribution.
The trial court found that plaintiff Floyd M. Stigler, Inc.
ratified the action of its agent, R. B. Russell, by retaining
the benefits of an unauthorized transaction
executed by Russell subordinating the Stigler's first lien
to that of HNC Realty Company. The trial court rendered
judgment that Stigler take nothing against HNC. The
court of civil appeals reversed the judgment of the trial
court and remanded the cause.
595 S.W.2d 158.
reverse the judgment of the court of civil appeals and
affirm the judgment of the trial court.
In 1972, Floyd M. Stigler, Inc. and other heirs of the
Lively estate contracted to sell forty-three acres of land,
situated in Dallas County, to Leon D. Hogg, Jr. Closing
was set for February 15, 1973. Stigler executed a
warranty deed to Hogg dated February 12, 1973 and
delivered it to its agent R. B. Russell. Hogg executed a
deed of trust and note payable to Stigler for $
1,418,332.76. A provision was included in the deed of
trust that it could be subordinated to a lien for
construction and improvements. On February 9, 1973,
Stigler executed a power of attorney authorizing Russell
to subordinate Stigler's first lien to a subsequent lien for
construction and improvements. This power of attorney
was filed of record in Dallas County on February 23,
Because Hogg had difficulty obtaining funds for the