Texas Commercial Law Firm
Foreclosure
Any sale conducted where a substitute trustee was not appointed in strict compliance with the deed of trust and Texas law is void, as if it never occurred. Faine v. Wilson, 192 S.W.2d 456 (Tex. Civ. App.--Galveston 1946, no writ); Wilson v. Armstrong, 236 S.W. 755 (Tex. Civ. App.--Beaumont 1922, no writ); Austin v. Carter, 296 S.W. 649 (Tex. Civ. App.- -Eastland 1927, writ dismissed, w.o.j.); Johnson v. Koenig, 353 S.W.2d 478 (Tex. Civ. App.- -Austin 1962, writ ref'd n.r.e.). A foreclosure sale held by one not authorized is void as to purchasers at the sale and subsequent purchasers with notice. Fuller v. O'Neil, 69 Tex. 349, 6 S.W. 181 (1888); Kennedy v. First Trust Joint Stock Land Bank, 41 S.W.2d 1030 (Tex. Civ. App.--Amarillo 1941, writ dismissed, judg't corr.). This includes a sale by an agent appointed by a substitute trustee where the deed of trust does not authorize appointment of an agent. Randolph v. Citizens National Bank, 141 S.W.2d 1030 (Tex. Civ. App.--Amarillo 1940, writ dismissed, judgment cor.).
Where a substitute trustee has not been properly appointed the sale is void and the statute of limitations does not run to bar an attack on the trustee's deed. Wilson v. Armstrong, 236 S.W. 755 (Tex. Civ. App.--Beaumont 1922, no writ). Only those expressly authorized in the deed of trust may appoint the substitute trustee. For example, if the deed of trust specifically names the original mortgagee as the one empowered to appoint a substitute trustee, even a subsequent holder of the note is not authorized to appoint the substitute trustee. Rawlings v. Lewis, 191 S.W. 784 (Tex. Civ. App.--Amarillo 1917, writ ref'd); Hart v. McClusky, 118 S.W.2d 1007 (Tex. Civ. App.-- Amarillo 1938, writ ref'd); Faine v. Wilson, 192 S.W. 456 (Tex. Civ. App.--Galveston 1946, no writ). Unless the deed of trust provides otherwise, all parties having an interest in the indebtedness are required to join in the appointment. Rogers v. Boykin, 298 S.W.2d 199 (Tex. Civ. App.--Eastland 1956, writ ref'd n.r.e.); George v. Riverside Royalties Corp., 99 S.W.2d 418 (Tex. Civ. App.--El Paso 1936, writ dismissed, w.o.j.).
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