Johnson v. Smith

697 S.W.2d 625, 1985 Tex. App. LEXIS 11696
CourtCourt of Appeals of Texas
DecidedJune 20, 1985
DocketC14-84-524-CV
StatusPublished
Cited by19 cases

This text of 697 S.W.2d 625 (Johnson v. Smith) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Johnson v. Smith, 697 S.W.2d 625, 1985 Tex. App. LEXIS 11696 (Tex. Ct. App. 1985).

Opinion

OPINION

CANNON, Justice.

This appeal originates in a lawsuit brought on behalf of the estate of Reginald J.C. Hamilton to recover amounts due under a promissory note payable to him by appellant Eric Johnson. Appellant discontinued payments after Hamilton’s death, believing his liability to be extinguished by a “death clause” contained in the note. Appellee sued alleging various instances of fraud, and a lengthy jury trial followed. Based on the jury’s answers to special issues, the trial court entered judgment ordering appellant to fulfill the terms of the note and assessing actual and punitive damages for fraud. Appellant now brings twenty-three points of error. We believe there are four dispositive issues on appeal: (1) whether the probate court had jurisdiction of the cause; (2) whether the decedent ratified the note; (3) whether the evidence and pleadings supported findings of fraud; and (4) whether the amount of damages was proper. After reviewing the record and the applicable law, we believe the judgment of the trial court is correct.

Because of the lengthy and sometimes confusing record, we will first present a comprehensive summary of the facts. Reginald J.C. Hamilton (Hamilton or decedent), a 75 year old widower, owned a large home in an exclusive Houston residential area. Over the years, his house had become quite run down. It was filled with so many newspapers, boxes, hardware and junk, that it was necessary to make trails to permit passage from one room to another. Hamilton himself was described as a senile alcoholic; he was forgetful and had memory black-outs.

Hamilton tried for several years to sell his home. In the summer of 1979, appellant noticed the “for sale” sign in front of the house. He called the number on the sign and arranged an appointment to view the house with a Mrs. Ruth Powell, a friend of Hamilton’s and the broker with whom the house was listed. Although Powell had a real estate salesman’s license, she was relatively inexperienced and had limited knowledge of real estate transactions. Appellant visited the house on this and two other occasions, and on September 5, 1979, submitted an earnest money contract for the purchase thereof. This contract was rejected; however, a second earnest money contract prepared by Mrs. Powell was accepted by Hamilton. This contract called for a $552,582.00 purchase price to be paid over five years.

Appellant then contacted an attorney who drafted the promissory note and deed. At appellant’s direction this note included the following clause:

It is [also] expressly understood and agreed in the event the Payee (Hamilton) dies at any time during the existence of this Promissory Note, the debt evidenced hereby shall automatically be extinguished, and the Maker (appellant) shall have no further liability for the payment of this Note.

Mrs. Powell refused to include this unilateral death clause, but agreed to present the note to Hamilton if it contained a mutual death clause to Hamilton’s benefit. Ac *629 cordingly, the following clause was included:

[I]n the event the Maker dies during the existence of this note, the real property and improvements purchased by the Maker described hereinabove, shall revert back to the Payee.

At the time the note was executed, appellant was 28 years old, while Hamilton was 75 years of age. The deed and note were executed in Hamilton’s home on October 18, 1979, with only appellant, Hamilton and Mrs. Powell present. The original note was retained by appellant and decedent was never given possession of the original or a copy of the note.

Approximately one year after purchasing the home, appellant decided to sell the property. He was approached by, and entered into an earnest money contract to sell the home to Michael Flynn and Richard Mater. Various documents concerning the sale, which were produced at trial, contained several noteable additions to and deletions from the original documents. First, the earnest money contract included an addendum which required that Flynn and Maier not communicate with Hamilton regarding the sale. Secondly, appellant provided them with a copy of the note which deleted two provisions: the one which provided the note could not be transferred or assigned without Hamilton’s written consent, and the second of the death clauses which provided that the property would revert to Hamilton if appellant died during the term of the note. Johnson admitted at trial that he made these alterations.

Appellant made a total of three $50,-000.00 payments to Hamilton, two before, and one after the subsequent sale. Hamilton died in February, 1981, and appellant refused to make further payments on the note, claiming that the death clause extinguished his liability. Appellee, executor of Hamilton’s estate, brought suit to recover the remainder of the amount due, alleging various wrongdoings, including fraud, undue influence, and breach of contract. After entry of judgment favorable to appellee on each of these issues, appellant perfected this appeal.

In his first two points of error appellant alleges that the statutory probate court did not have jurisdiction of this cause, and the action should have been tried in the district court. He initially contends that the controlling issues, namely the decedent’s mental condition, appellant’s intent, and the relationship between decedent and appellant, are not matters “incident to an estate”, and therefore not within the purview of sections 5(d) and 5A(b) of the Probate Code.

As appellant suggests, section 5(d) provides that “[a]ll courts exercising original probate jurisdiction shall have the power to hear all matters incident to an estate.” Tex.Prob.Code Ann. § 5 (Vernon 1980). Where the jurisdiction of the statutory probate court is concurrent with the district court, section 5A(b) directs that the statutory probate court has original probate jurisdiction over “any cause of action appertaining to estates or incident to an estate.” Tex.Prob.Code Ann. § 5A(b) (Vernon 1980). Consequently, the resolution of appellant’s challenge to the statutory probate court’s jurisdiction turns on the scope of matters “appertaining to estates and incident to an estate.” This issue is statutorily clarified with a definition of “incidental causes of action.” They are:

[T]he probate of wills, the issuance of letters testamentary and of administration, and the determination of heirship, and also include, but are not limited to, all claims by or against an estate, all actions for trial of title to land and the enforcement of liens thereon, all actions for trial of the right of property, all actions to construe wills, the interpretation and administration of testamentary trusts and the applying of constructive trusts, and generally all matters relating to the settlement, partition, and distribution of estates of wards and deceased persons.

Tex.Prob.Code § 5A(b) (Vernon 1980).

Appellant’s entire argument rests on a single portion of that definition, namely *630 whether this action constitutes a claim by or against the estate. He relies on the recent supreme court holding in Seay v. Hall that survival and wrongful death actions are not incidental claims. Seay v. Hall, 677 S.W.2d 19 (Tex.1984).

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Cite This Page — Counsel Stack

Bluebook (online)
697 S.W.2d 625, 1985 Tex. App. LEXIS 11696, Counsel Stack Legal Research, https://law.counselstack.com/opinion/johnson-v-smith-texapp-1985.