Clark v. Scott
Clark v. Scott
Opinion of the Court
Appellee sued the appellant to recover lands situated in the city of Dallas, Tex., which are particularly described in the petition. Samuel Peay is the common source of title. The petition is in the general form of trespass to try title, and in addition thereto contains allegations purporting to set forth appellee’s chain of title and the title of the appellant hack to the common source. The appellee specially alleged that from the 6th day of June, 1912, to the death of Samuel Peay, which occurred about March 16, 1914, the said Samuel Peay was a married man living with his wife, Maude Peay, upon the land in controversy as his homestead; that after the death of the said Samuel Peay his wife, Maude Peay, continued to occupy, use, and enjoy said property until the same “was sold by her and against her” and until her possession was delivered to appellee and those under whom he claims; that during the time the land was the homestead of Samuel Peay and his said wife they executed a “deed of trust lien thereon” to W. H. Hall, trustee, dated December 30, 1913, to secure Will Waltz in the payment of a note which was, prior to December 7, 1915, transferred by Waltz to appellant, and that appellant induced a substitute trustee, on the 7th of December, 1915, to sell under said deed of trust, at which sale the appellant became the purchaser, and is claiming the property under said trustee’s deed; that at the time said trustee’s sale was made an administration was pending upon the estate of Samuel Peay, deceased,, and that O. D. King was administrator; that the defendant had not presented his claim to the probate court for approval or allowance, and therefore his power of sale given in said deed of trust was suspended and said sale ineffective and void; that subsequent to the death of Samuel Peay the said Maude Peay brought suit against the brothers and sister of Samuel Peay, who were his only heirs, and his administrator and recovered judgment on the 15th day of May, 1915, vesting the title to the land involved in her, the said Maude Peay; that she thereafter sold the land to R. P. Wofford, who conveyed to plaintiff Scott; that on the 27th of March, 1915, Maude Peay executed a deed of trust to David Murry, trustee, to secure appellant in the payment of a note, and that on the 3d of August, 1915, David Murry, trustee, sold the land under said deed of trust, at which sale the appellant was present, and induced the appellee, Scott, to buy the land and agreed that he should buy it; that ap-pellee bought the lanid and at his instance and for him the deed was made to R. P. Wofford; that said sale was made prior to the sale under the deed of trust to Hall, trustee, without notice that appellant would rely upon and foreclose the Hall deed of trust, and that the latter sale was fraudulent as to the appellee and that appellant was estopped to claim title under last sale; that Samuel Peay and his wife claimed and owned said land under a deed dated May 20, 1913. The appellant, as defendant below, *730 filed and presented a plea of nonjoinder of necessary parties, on the ground that the administrator of the estate of Samuel Peay was not made a party plaintiff, general and special demurrers, and motions to strike out parts of. the petition, and the appellant also pleaded a general denial and a plea of not guilty. These pleas, demurrers, and motions were all overruled, and appellant reserved his exception. The case was tried before a jury, and was submitted upon special issues. Upon the findings of the jury both the plaintiff and the defendant filed motions for judgment. The court overruled defendant’s motion and rendered judgment for the plaintiff as prayed for in his petition, to which the defendant reserved his bill of exception. The defendant’s motion for new trial was overruled, and he perfected an appeal to this court.
It is sufficient to say in answer to this contention that it was alleged, and the jury found from the evidence, that the land in controversy constituted the homestead of the deceased, Samuel Peay, and his wife, Maude Peay, at the date of the former’s death, and that his creditors and administrator had no interest in it. It was not liable for the payment of the debts of Samuel Peay, and formed no part of his estate subject to administration. Again, Maude Peay, as, the surviving wife of Samuel Peay, deceased, sued and recovered, in a court of competent jurisdiction before the present suit was filed, the land in controversy from the administrator of the estate of Samuel Peay, deceased, and from the brothers and sister of the said Samuel Peay as his only heirs at law. This being true, it was not essential to ap-pellee’s right of recovery, he claiming under the said Maude Peay, that the administrator of the estate of Samuel Peay, deceased, be made a party to this suit, and the right of said administrator to administer said property be again determined under the facts. He was neither a necessary nor a proper party to the suit.
“Where a husband and wife own land as community property, and the husband executes a mortgage on the land and afterwards dies without issue, leaving surviving him his said wife and also his brothers and sister as his only heirs, and an administration is opened upon his estate, and the brothers and sister of the deceased husband claim said land as against the wife, and the wife brings suit in trespass to try title against the brothers and sister of her deceased husband and the administrator of his estate for the title and possession of the land, to which suit the said mortgagee of the husband was not a party nor privy to any party thereto, and the wife recovers a judgment for the title and possession of the land from such de *732 fendants, and the wife afterwards sells the land, and the said mortgagee thereafter, forecloses his mortgage on said land and buys it in, and the purchaser from the wife brings suit in trespass to try title against the said mortgagee, the judgment obtained by the wife in her suit against the brothers and sister of her deceased husband and his administrator is not admissible in evidence in behalf of the purchaser from the wife in his said suit against the said mortgagee.”
The appellant not being a party to the suit and judgment mentioned, his rights under the deed of trust executed by Samuel Peay in his lifetime, and under which he claims, are not affected thereby, but we think the judgment was admissible in evidence to show title in Maude Peay, under whom ap-pellee claimed, as against the surviving brothers and sister of Samuel Peay, deceased, and as against his administrator. The contention of appellant, as shown by the proposition advanced, is to the effect that the judgment was inadmissible for any purpose under the facts alleged and proved. In this contention we do not concur.
“You are instructed that on the 30th day of December, 1913, Samuel Peay executed a deed' of trust to W. H. Hall, trustee, to secure $175 note, covering the land sued for, and that another deed of trust was executed by Maude Peay to David Murry, trustee, on the 27th day of March, 1915, to secure a note for $.111.70, covering the land sued for. On the 3d of August, 1915, both of said deeds of trust and notes were owned by the defendant, A. M. Clark, and on the said 3d of August, 1915, said David Murry, trustee, acting by request of said Clark, foreclosed said last deed of trust and the land was then struck off to plaintiff, Ross M. Scott,, upon his bid for the sum of $117.50, which was paid by him to said trustee. Under this issue, you are instructed to find from the evidence whether or not, prior to making his bid, the said Ross M. Scott was notified or informed that this sale was made subject to the deed of trust herein mentioned, then held by the defendant, Clark. You are further instructed that the simple knowledge of the existence of the first deed of trust is not what is herein referred to, but such knowledge or information as would reasonably indicate to said Scott that he, as purchaser, would be required to pay first deed of trust, else the same would be foreclosed. If you find that he was so notified or informed, your answer shall be ‘Yes.’ If you-find that he was not so notified or informed, your answer shall be ‘No.’ ”
The jury answered this issue “Yes.” The-proposition of appellant under this assignment is that one who purchases property incumbered with a lien and assumes its payment, or takes subject to the lien, or deducts the amount of the lien from the purchase-price, recognizes the lien and is estopped from denying the validity of the same. The-findings of the jury are to the effect that on and prior to December 30, 1913, the date of the execution of the deed of trust under which appellant claims title to the property in controversy, Samuel Peay and Maude Peay, in virtue of a common-law marriage, were husband and wife and occupied and used said property as their homestead, and the question here presented is whether or not, under the evidence and the answer of the jury to the fourth issue just quoted, ap-pellee is estopped to deny the validity of said deed of trust under which appellant claims, it having been executed and taken upon the homestead of said Samuel and Maude Peay. The following general principle of law seems to be well established: When a party buys mortgaged property, and, in the purchase thereof, assumes or purchases subject to the mortgage, he is, broadly speaking, estopped to deny the validity of the mortgage on any grounds whatsoever. If he expressly eon- *733 tracts to take the property incumbered with the lien he is not thereby personally bound for the debt; but he cannot be heard to dispute the validity of the lien, and the property is bound for the debt. Michigan Savings & Loan Ass’n v. Attebery, 16 Tex. Civ. App. 222, 42 S. W. 569; 1 Jones, Mortg. §§ 736, 744, 749; 19 Ruling Case Law, § 140; Shepherd v. May, 115 U. S. 505, 6 Sup. Ct. 119, 29 L. Ed. 456; Association v. Bostwick, 100 N. Y. 628, 3 N. E. 296; Chadwick v. Beach Co., 43 N. J. Eq. 616, 12 Atl. 380; Dean v. Walker, 107 Ill. 544, 47 Am. Rep. 467. It is said the difference between the purchaser’s assuming the payment of the mortgage and simply buying subject to the mortgage is that in the one case he makes himself personally liable for the payment of the debt and in the other he does not assume such liability. In both eases, however, he takes the land charged with the payment of the debt, and is not allowed to set up any defense to its validity. Hancock v. Fleming, 103 Ind. 533, 3 N. E. 254. It has also been held, though there is authority to the contrary, that an oral promise of assumption made to 'the grantor of land at the time of the conveyance is sufficient and may be enforced in equity by the grantor or the holder of the mortgage; that such promise is independent of the deed, and not contradictory thereof nor merged therein; that it is not within the provision of the statute of frauds prohibiting proof by parol of a contract not to be performed within one year or to answer for the debt or default of another. 19 Ruling Case Law, § 152. In the case at bar all the testimony bearing upon the question whether appellee assumed the payment of appellant’s debt or bought subject to appellant’s deed of trust, and under which he claims, was oral and is conflicting. As heretofore shown, the appellee purchased the property in controversy at a public sale thereof by David Murry, trustee, under and by virtue of the power and authority given in the deed of trust executed by Maude Peay on the 27th day of March, 1915, to secure a debt due by her to the appellant, and claimed title to said property by virtue of said purchase and deed executed to him therefor by R. P. Wofford; and the appellant purchased the property at a subsequent sale thereof by H. Dooley, substitute trustee, by virtue of a deed of trust executed by Samuel Peay, dated December 30, 1913. The appellee testified that before and at the time he purchased the property nothing whatever was said about another deed of trust having to be foreclosed before he got title to the land; that he never heard of any deed of trust on the property except the one under which he bought until after the sale was made; that before the sale by the trustee Murry no one notified him (appellee) of the existence of the deed of trust under which appellant bought and claimed, or that the land was being sold by Murry subject to the deed of trust under which appellant claimed; that he had no suspicion that it would be so sold; that he thought when he bought at sale under deed of trust executed by Maude Peay that concluded the matter; that the first he heard of the deed of trust under which appellant claimed was after the sale had been made to him (appellee) and the purchase money paid; that he certainly would not have bought the property had he known it was going to he sold again under a prior mortgage. On the other hand David Murry, the trustee named in the deed of trust under which appellee bought, testified in substance that he sold the land under that deed of trust to the highest bidder; that appellee was the highest bidder; that the sale was made at the instance of Mr. Clark, the appellant; that it was well understood by appellant and appellee that the sale' then being made by him was made subject to other indebtedness due appellant and the deed of trust under which appellant claims title to the property in this suit. He further said that after he posted the notices of the sale at which appellee bought he told appellee that he was to pay off the first deed of trust; that appellee came to see him a day or two before the sale and he then told him that the land was to be sold subject to the other deed of trust — the deed of trust under which appellant claims. The appellant, A. M. Clark, testified in substance that it was certainly agreed and understood at the time the sale was made at which appellee bought the land in controversy that such sale was made subject to the deed of trust under which he (appellant) bought and claimed; that on the morning of the sale he saw ap-pellee in Mr. Murry’s office; that appellee said, “Clark, I haven’t got enough money to pay but one of these notes, and if you will let it wait awhile until we sell the property I will pay the other one;” that he (ap-pellee) said to Murry, “I want you to help me sell it, and when we sell it I will pay the note; if I get the money beforehand I will pay it beforehand.” He further said: “The Blurry trustee sale was made subject to the other note ftfid deed of trust. I am sure that the statement was made that the sale was to be made subject t'o the Waltz indebtedness. It was made before we went down there and after we went down there, too.”
As has been seen, the jury found that ap-pellee, prior to his bid and purchase of the property in controversy, was notified or informed that the sale of said property wa,s made subject to the deed of trust under which appellant claims title; that the knowledge or information he then had was sufficient to reasonably indicate to him that he as purchaser would be required to pay the *734 first deed of trust-rthe one tinder which appellant claims — else said deed of trust would be foreclosed. Does this finding of the jury, in the light of the evidence, entitle appellant to judgment upon the theory that appellee assumed or bought subject to the prior mortgage under which appellant claims, and therefore estopped to deny that said mortgage was void because given upon the homestead of Samuel and Maude Peay? We conclude that it does not. The reasonable construction or interpretation of this portion of the jury’s special verdict is , that they simply concluded,' and so found, that appellee, with knowledge of the existence of the prior deed of trust held by appellant, and with information that appellant would seek to foreclose it or require appellee to discharge the lien created thereby, by paying the debt which it was given to secure, bought at •the sale made under the junior deed of trust executed by Maude Peay, and iS’ not a finding to the effect that appellee purchased subject to the prior deed of trust under which appellant claims, in the sense that he assumed the payment of said- deed of trust or recognized its validity. A grantee or purchaser of mortgaged premises who has not assumed the mortgage, and has purchased without any deduction from the price on account thereof, may dispute its validity. If, on the other hand, one purchases property subject to a mortgage and withholds from the purchase price the amount of the debt secured, he is estopped to deny the validity of the mortgage. But it is not incumbent upon such purchaser to pay a mortgage or deed of trust on the land which constituted no part of the consideration for the purchase. Again, it has been held thát the rule that the grantee or purchaser of property incumbered with a mortgage or deed of trust lien is estopped to deny the validity of such instrument applies only where the instrument assumed is described in the deed of conveyance, and the agreement or assumption is made in the nature of a contract and for a valuable consideration. So a conveyance of real estate subject to a deed of trust executed by the vendor to secure the payment of a note does not, without words importing that the vendee assumes the payment of the note, subject the latter to any liability to pay it. Shepherd v. May, 115 U. S. 505, 6 Sup. Ct. 119, 29 L. Ed. 456. It does not appear that there were words in the deed executed by Murry, trustee, to appellee from which by fair import an agreement to pay appellant’s debt or that appellee bought subject to the deed of trust given to secure the same. Nor is there any evidence that the appellee deducted the amount of said debt secured, or any part thereof, from the amount of his bid, or that there was any consideration to support a purchase by appellee subject to said deed of trust or a verbal promise on his part to pay the debt secured mereby. The issue whether appellee orally agreed to assume or pay the debt secured by the deed of trust given by Samuel Peay to appellant was not submitted to the jury, and no request for Tts submission seems to have been made or exception taken to the failure of the court to submit it. There was ample evidence to authorize a finding that no such agreement was made by appellee, and the presumption will be indulged in support of the judgment rendered that such was the conclusion and finding of the trial court. But it will be found, we think, that almost every case in which it has been held that an oral agreement on the part of one buying property incumbered with a mortgage or deed of trust to pay off and discharge such incumbrance was not a promise to answer for the debt of another within the statute of frauds involved a debt of one of the immediate parties to the transaction or contract. Thus, in the case of Enos v. Anderson, 40 Colo. 395, 93 Pac. 475, 15 L. R. A. (N. S.) 1087, cited in 19 Ruling Case Law, § 152, to support the proposition that an oral promise of assumption made to the grantor at the time of the conveyance is not within the provisions of the statute of frauds prohibiting proof by parol of a contract to answer for the debt or default of another is such a case. There the debt assumed was owed to one of the immediate parties to the contract, and it appeared that in consideration for certain property conveyed to them the defendants agreed to pay notes of the plaintiffs. In other words, it was the “defendant’s” debt. No such ease is here presented.
Our conclusion is that the record before us shows that appellee bought the property in controversy simply with knowledge of the existence of the prior deed of trust under which appellant claims and not expressly subject to said prior deed of trust; that, especially in view of the presumptive findings of the trial court, we conclude that appellee did not, before or at the time of his purchase, orally promise or agree to pay the debt secured by the trust deed under which appellant claims and upon which he relies for title, and that therefore appellee is not es-topped to deny the validity of said deed of trust.
The other assignments of error fail to disclose reversible error, and will be overruled. The evidence, though conflicting, justified the jury’s findings that prior to the death of Samuel Peay the relation of husband and wife, by virtue of a common-law marriage, existed between him and Maude Peay, that the property in controversy was their community property, and that at the time of the execution of the deed of trust by Samuel Peay, and under which appellant claims, said property constituted the homestead of Samuel Peay and his wife. Said deed of *735 trust was therefore void, and appellee, not being estopped to deny its validity, was entitled to recover.
The judgment is affirmed.
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