Smith v. New Waverly State Bank

76 S.W.2d 201
CourtCourt of Appeals of Texas
DecidedNovember 19, 1934
DocketNo. 2603
StatusPublished
Cited by7 cases

This text of 76 S.W.2d 201 (Smith v. New Waverly State Bank) 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
Smith v. New Waverly State Bank, 76 S.W.2d 201 (Tex. Ct. App. 1934).

Opinions

WALKER, Chief Justice.

In 1906 appellants, Lucy Smith and husband, Monroe Smith, acquired 75 acres of the John Saddler donation and Rodney Hostetter survey in Montgomery county, and since that date have continuously cultivated, occupied, used, and enjoyed it as their homestead. In 1915, being indebted to Dr. Charles Spiller in the sum of approximately $1,000 for supplies, they executed to him' a mortgage on their homestead in the form of a general warranty deed, reciting a consideration of $750. After the execution of this instrument, they continued to occupy and claim the property as their home and to assess it for taxes and pay the taxes thereon, as they did prior to the execution of the mortgage to Dr. Spiller. On the 16th day of February, 1920, Dr. Spiller reconveyed the property to Monroe Smith by special warranty deed, for the recited consideration of $2,000, paid as follows: $1,049.32 paid in cash, and the balance in four promissory vendor’s lien notes each for the sum of $237.67, with interest from date at 10 per cent.-per annum, maturing November 1, 1920, November 1, 1921, November 1, 1922, and November 1, 1923, respectively. Each of the notes contained the statement that it was given in part payment of the land in controversy; that a vendor’s^ lien was retained in the deed to secure its payment; and that it was “one of a series of four similar notes, payable to .Charles Spiller, this day given by Monroe Smith, as part of the purchase price .for said above mentioned property.” It was further stipulated in each of the notes that a vendor’s lien was retained against the land to secure its payment.. The entire transaction between appellants and Dr. Spiller from the [202]*202execution of the first instrument in 1915 to the execution of the deed by Dr. Spiller to Monroe Smith, and the execution of the vendor’s lien notes by Monroe Smith to Dr. Spiller, on the 16th day of February, 1920, was intended by appellants and Dr. Spiller as a mortgage to secure Dr. Spiller in the original indebtedness due him by the Smiths. " On the 13th of June, 1922, Dr. Spiller executed his note in the sum of $989.45 to appellee, New Waverly State Bank, and placed with appel-lee the Monroe Smith notes as collateral to secure the payment of his note. At that time the Smith notes, Nos. 1 and 2, were past due. Dr. Spiller died soon after the execution of his note to appellee. After appellee secured the Smith notes, Monroe Smith paid off notes Nos. 1 and 2. On the 16th day of October, 1926, Monroe Smith executed to appellee an extension and renewal of notes 3 and 4, reciting that these notes were the property of appellee and that they had not been paid. Lucy Smith was not a party to the transaction between her husband and Dr. Spiller, nor to the extension of the notes, and it was not shown that she was consulted in relation to these transactions, but, in fact, knew of them and consented to the payment of notes Nos. 1 and 2, contributing to their payment from her earnings as a school teacher. In 1930 ap-pellee filed suit against Monroe Smith to foreclose the vendor’s lien retained in notes 3 and 4 and in the Spiller-Smith deed. Lucy Smith was not a party to that suit. Smith answered that suit by general demurrer, general denial, and a special plea that the land against which appellee was claiming its vendor’s lien was his homestead, and that the claimed vendor’s lien was void by reason of that fact. On the 16th day of December, 1930, the court entered judgment against Monroe Smith reciting “plaintiff appeared in person and by attorney, announced ready for trial, and defendant came not, although having 'been duly cited in the manner required by law and fur-cher having answered herein but wholly made default,” etc. The judgment foreclosed the vendor’s lien. Smith filed motion for new trial, setting up in some detail his defenses to the action. This motion was controverted and, on hearing, overruled. No appeal was prosecuted, and the judgment became final as originally entered. Under order of sale, the property was sold to appellee. On the 17th day of July, 1931, Lucy Smith and her husband, Monroe Smith, filed this suit against appellee, New Waverly State Bank, to recover the title and possession of their homestead of 75 acres, for cancellation of the outstanding deeds against them, for costs of suit, etc. On the 19th day of September, 1933, on trial to the court without a jury, judgment was entered against the plaintiffs and in favor of the defendant for the land in controversy. From that judgment plaintiffs have duly prosecuted their appeal to this court.

Opinion.

The fact that the deed executed in 1915 by appellants to Dr. Spiller and the deed executed by Dr. Spiller to Monroe Smith in 1920, together with the vendor’s lien notes executed by Monroe Smith to Dr. Spiller, were mutually intended by all parties to be nothing more than a mortgage to secure the indebtedness of the Smiths to Dr. Spiller, made the entire transaction null and void, in so far as it attempted to create a lien against appellants’ homestead. Article 16, § 50, state Constitution. Appellee does not controvert that proposition, but in answer thereto advances the following counter proposition: “The continued possession of the property by Monroe and Lucy Smith was not notice as a matter of law, to New Waverly State Bank, that the deed from Monroe and Lucy Smith, to Dr. Spiller, was in fact a mortgage.” The following authorities support, generally, the principle of law asserted by this proposition: 22 Tex. Jur. § 122; Alstin’s Ex’r v. Cundiff, 52 Tex. 453; Martin v. Granger (Tex. Civ. App. 1918) 204 S. W. 666; Eylar v. Eylar, 60 Tex. 315; Love v. Breedlove, 75 Tex. 649, 13 S. W. 222; Sanger Bros. v. Brooks, 101 Tex. 115, 105 S. W. 37 (1907); Little v. Shields (Tex. Com. App.) 63 S.W.(2d) 363. But appellee’s counter proposition does not control the facts of the case, for the reason that, having acquired the four notes after the maturity of notes Nos. 1 and 2, it was not a holder in good faith. That was the very point decided by the Supreme Court on identical facts in Harrington v. H. B. Claflin & Co., 91 Tex. 294, 42 S. W. 1055.

Not being a holder of the notes in good faith, appellee acquired no rights against Lucy Smith’s claim of homestead by its judgment against Monroe Smith, to which she was not a party, foreclosing the Spiller-Smith vendor’s lien notes. Appellee has so clearly stated the rule of law voiding that judgment as against Lucy Smith that we quote its proposition : "The rule in Texas is that a wife is a necessary party to a foreclosure suit brought against the husband alone, provided there is any defense that the wife could: have urged growing out of her homestead rights which would have defeated the action," (Italics by appellee.)

[203]*203See Mexia v. Lewis, 3 Tex. Civ. App. 113, 21 S. W. 1016, 1017 (Galveston); Jergens v. Schiele, 61 Tex. 255; Citizens’ State Bank v. Jeffries (Tex. Civ. App.) 2 S.W.(2d) 317; Martin v. Astin (Tex. Com. App.) 295 S. W. 584; Cooley v. Miller (Tex. Com. App.) 22S S. W. 1085; Gates v. Pitts (Tex. Civ. App.) 291 S. W. 948; Seay v. Pennell, 15 Tex. Civ. App. 261, 39 S. W. 181; Broadland v. City National Bank (Tex. Civ. App.) 15 S.W.(2d) 112. Certainly Lucy Smith’s claim of homestead would have been an absolute defense to ap-pellee’s suit.

As the judgment foreclosing the vendor’s lien against the homestead was absolutely void as against Lucy Smith, it was also absolutely void as against her husband, Monroe Smith; so no estoppel was created against either of them by reason of that judgment. Mexia v. Lewis, supra; Martin v. Astin, supra; Harper v. Stewart (Tex. Civ. App.) 179 S. W. 277; Seay v. Fennell, 15 Tex. Civ. App.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Wilson v. Mitchell
299 S.W.2d 406 (Court of Appeals of Texas, 1957)
Kirby Lumber Corporation v. John W. Williams
230 F.2d 330 (Fifth Circuit, 1956)
Clark v. Puls
192 S.W.2d 905 (Court of Appeals of Texas, 1946)
Anglin v. Cisco Mortgage Loan Co.
141 S.W.2d 935 (Texas Supreme Court, 1940)
Dillard v. Duke
107 S.W.2d 414 (Court of Appeals of Texas, 1937)
Mauritz v. Bell
81 S.W.2d 730 (Court of Appeals of Texas, 1934)

Cite This Page — Counsel Stack

Bluebook (online)
76 S.W.2d 201, Counsel Stack Legal Research, https://law.counselstack.com/opinion/smith-v-new-waverly-state-bank-texapp-1934.