Rice v. Lipsitz

211 S.W. 293, 1919 Tex. App. LEXIS 508
CourtCourt of Appeals of Texas
DecidedApril 3, 1919
DocketNo. 941.
StatusPublished
Cited by8 cases

This text of 211 S.W. 293 (Rice v. Lipsitz) 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
Rice v. Lipsitz, 211 S.W. 293, 1919 Tex. App. LEXIS 508 (Tex. Ct. App. 1919).

Opinion

HARPER, C. J.

This suit was instituted by the children of Lois E. Rice, deceased wife of J. R. Rice, against said J. R. Rice and his second wife, Mrs. Kathlyn Rice, A. M. Barrett, trustee, in deed of trust, and Louis Lipsitz, trustee for J. R. Rice’s creditors, to recover a half interest in 19 tracts of land, described; and for cause of action alleged: That the lands sued for were acquired with the community funds of J. R. Rice and Lois E. Rice. That certain of the property described was the business homestead and exempt. That the plaintiffs are the children and only children of the said J. R. Rice and L.ois E. Rice. That said Lois E. Rice died intestate about March 22, 1909. That on March 2, 1911, pursuant to a petition filed, the county court of Palo Pinto county, Tex., appointed said J. R. Rice administrator of the community estate. That an inventory was filed and bond executed and approved in the sum of $20,000. That there was no list of debts inventoried or filed. That December I, 1913, J. R. Rice executed a deed of trust to A. M. Barrett, trustee, to secure certain of blis individual indebtedness. That if any community debts existed at that time they had been paid, or else were barred by the statute of limitations. That this deed of trust was executed without consideration, but to secure pre-existing debts of said J. R. Rice; therefore it did not create a valid lien upon aforesaid homestead, nor did it convey any lien upon their half interest in the other property described.

• And further alleged: That April 5,1915, said J. R. Rice for himself and as administrator, together with his then wife, Kathlyn Rice, and A. M. Barrett, trustee, in the above deed of trust, executed a certain instrument in writing to the defendant Louis Lipsitz, as trustee, for the creditors, whereby they undertook to convey all the property described to said Lip-sitz for the purported consideration of $15,-000, but that in fact the real consideration therefor was the aforesaid pre-existing individual debts of said J. R. Rice. That at the ■ time said last-named instrument was executed, the said Barrett, trustee, and said .Lipsitz, trustee, and all and each of the beneficiaries named, knew that the property described therein was the community estate of said J. R. Rice and Lois E. Rice, at the time of the latter’s death, and that one-half of it belonged.to plaintiffs. And further pleaded that the attempted qualification as surviving administrator was void because the sureties upon the bond filed were at the time insolvent.

Defendants answered by special and general exceptions, plea. of. not guilty, general denial, and for special answer pleaded:. That the appointment and qualification of ’ J. R. Rice as surviving community administrator were regular, and that by the order of the probate court he was authorized to dispose of the community property in accordance with law. That with full authority said J. E. Rice executed the instrument conveying the property in controversy, in fee simple, to said trustee, but in trust for the creditors of the said Rice for the actual consideration of $15,000. Therefore the plaintiffs have no right or title to the property, etc.

By amendment plaintiff alleges that by false and fraudulent misrepresentations, made by said Lipsitz and other creditors, to the effect that the entire property sued for could be subjected to his (J. R. Rice's) debts, and that in case of forced salé it would not bring as much as $15,000, and by the threat that the said property would be subjected to forced sale if the said instrument was not executed, said J. R. Rice was deceived into its execution, etc.

And, further, that the defendants knowing that said property was community property, and that one-half interest rested in the plaintiffs upon the death of their mother, they all conspired together to defraud them, and between themselves prepared the instrument sought to be canceled, etc.

A jury being impaneled to try the cause, but 'the court, after hearing the evidence, instructed a verdict for the defendants, upon which judgment was accordingly entered; from which this appeal.

Undisputed facts:

The lands in controversy were acquired with the community funds of J. R. Rice dnd Lois E. Rice, the father and mother of plaintiffs. One of the plaintiffs is a minor.

Lois E. Rice died intestate, March 22, 1909.

March 2, 1911, J. R. Rice qualified as administrator of the community estate by filing inventory and bond in the sum of $20,000. No list of the debts or liabilities of the estate was filed.

December 1, 1913, Rice executed a deed of trust to A. M. Barrett trustee, to secure all of his creditors, share and share alike, covering all of the 19 parcels of land in controversy, including the homestead, and all stock of merchandise, book accounts, and dioses in action, etc.

There is no recital in this instrument that any of the debts secured were contracted prior to the death of the mother; no possession was given, the mercantile business being conducted as before. J. R. Rice was *295 married to his present wife, Kathlyn, April 26, 1911.

This instrument contains the usual power of sale in part or bulk, with provision that the proceeds of any sale be paid to the creditors pro rata. No sale was made by virtue of this instrument except as next indicated. On April 5, 1915, an instrument was executed \yhieh is designated “Deed Conveying Certain Lands in Palo Pinto and Other Counties in Texas,” by J. R. Rice as surviving administrator and Kathlyn Rice, and A. M. Barrett, trustee, to Louis Lipsitz, as trustee, which contains the following recitals:

“Whereas, * * * on the 1st day of December, 1913, * * * J. R. Rice executed * * * deed 0f trust * * ⅜ with power of sale * * * conveying in trust to Barrett, as trustee, the lands hereinafter described for the benefit of said Rice’s creditors, the said trustee being authorized to sell the property and make disbursements of the proceeds equally without preference to said creditors; * * * and whereas, the real estate * * * has not been disposed of * * * and the creditors beneficiaries therein have now agreed with said Rice and with said trustee that same be properly conveyed to Louis Lipsitz as trustee for said creditors, at an agreed Valuation. The amount whereof shall be credited pro rata upon the respective amounts of indebtedness hold by said creditors against the said Rice, said lands when so conveyed to said Lipsitz, trustee, to be held, controlled, managed, and disposed of by him as he may think best for the interest of the creditors, with express authority to make proper sales and conveyances thereof, in bulk or in parcels, as to the said Lipsitz may seem best, the -net proceeds of any such sales to be applied equally and without preference to the claims and debts of the said creditors, beneficiaries in said original trust deed: Now, therefore, know all men by these presents: That the said J. R. Rice, as administrator, etc., * * * joined by his present wife and also A. M.

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211 S.W. 293, 1919 Tex. App. LEXIS 508, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rice-v-lipsitz-texapp-1919.