American Savings & Loan Ass'n of Houston v. Musick

• Citation: 517 S.W.2d 627
• Decision Date: 11 December 1974
• Docket Number: No. 971,971
• Parties: AMERICAN SAVINGS & LOAN ASSOCIATION OF HOUSTON, Appellant, v. Mary Ann MUSICK, Individually and as Administratrix of the Estate of LeVoy Musick, Deceased, et al., Appellees. (14th Dist.)
• Court: Court of Appeals of Texas. Court of Civil Appeals of Texas

Page 627

517 S.W.2d 627

AMERICAN SAVINGS & LOAN ASSOCIATION OF HOUSTON, Appellant, v. Mary Ann MUSICK, Individually and as Administratrix of the Estate of LeVoy Musick, Deceased, et al., Appellees.

No. 971.

Court of Civil Appeals of Texas Houston (14th Dist.).

Dec. 11, 1974.

Rehearing Denied Jan. 8, 1975.

Nelson Jones, Anderson, Brown, Orn & Jones, Ralph B. Lee, Dermot Rigg, Charles B. Wolfe, Lee, Brown, Moss & Wylie, Houston, for appellant.

Joe G. Roady, Marcel F. Gremillion, Cox, Pakenham & Roady, C. B. Stephenson, Jr., Meyer Jacobson, Houston, for appellees.

CURTISS BROWN, Justice.

This is a trespass to try title case.

American Savings & Loan Association (American Savings) brought this suit for the title to three tracts of land against Mary Ann Musick, individually and as administratrix of the estate of her husband, Levoy Musick, deceased, and others (the Musick parties). At the close of all the evidence, the trial court withdrew the case from the jury and rendered judgment awarding title to one tract, 618 .7 acres, to American Savings and title to the other two tracts, 41.4305 acres and 16.6 acres, to the Musick parties. Both American Savings and the Musick parties have appealed.

During his lifetime Levoy Musick was the sole shareholder of T.W.I . Development Company (T.W.I.), a Texas corporation. T.W.I. owned the two tracts of 618.7 acres and 16.6 acres. Levoy Musick owned the third tract of 41.4305 acres in his own name. In 1964 Musick and T.W.I. conveyed these three tracts to Harry Holmes, Jr., and W. H. Wheless, Sr., with an option to repurchase. Levoy Musick died shortly thereafter and his wife Mary Ann Musick became the owner of the T.W.I. stock, as well as of the repurchase options. She decided to exercise the options and arranged a financing plan with T. S. Kent and Meyer Jacobson to raise the necessary money.

In accordance with this plan, on December 18, 1964, Mary Ann Musick, as president of T.W.I., conveyed to Kent and Jacobson by general warranty deed the following property:

618.7 acres of land, more or less, out of the WILLIAM WHITE SURVEY, Abstract No. 829, Harris County, Texas, more particularly described by metes and bounds in deed of trust of even date herewith from T. S. Kent and Meyer Jacobson to Ralph B. Lee, Trustee, recorded in the office of the County Clerk of Harris County, Texas.

Mrs. Musick testified that this conveyance was made solely for Kent and Jacobson to acquire a loan to exercise the options. She further stated that it was her intention to convey Only the 618.7 acre tract and that she understood she would retain the other tracts free and clear. On that same day Kent and Jacobson executed a deed of trust to Ralph B. Lee, Trustee, for American Savings. As recorded, the deed of trust conveyed all three tracts, setting out acreage and metes and bounds descriptions for each. The deed of trust secured a note for $150,000. The note recited that its payment was secured by the deed of trust, described above, covering 676.7305 acres of land. It is obvious that the figure '676.7305' was written over the erasure of what seems to have been '618.7.' None of the note payments were made, and in February 1966 American Savings purchased the three tracts at a trustee's sale for $25,000.

The Musick parties' first claim on appeal is that American Savings failed to prove title from the sovereign or by superior title from a common source. These are two of the methods by which title can be established, in addition to limitation title and by prior possession that has not been abandoned. See Land v. Turner, 377 S.W.2d 181 (Tex.Sup.1964). It is a well-established principle, however, that when a plaintiff in trespass to try title claims under a deed from the defendant, the defendant serves as the common grantor. The plaintiff does not have to prove title in the defendant at the time of the deed, and the defendant is estopped to deny it. Richardson v . Pavell, 83 Tex. 588, 19 S.W. 262 (1892). As to the 618.7 acres and 16.6 acres, American Savings introduced the deed from T.W.I. to Kent and Jacobson, the deed of trust, and the trustee's deed. As to the 41.4305 acres, the doctrine of estoppel by deed could have served to pass the title of Mary Ann Musick individually in the T.W.I. deed which she signed as president. Carothers v. Alexander, 74 Tex. 309, 12 S.W. 4, 12 (1889). Nevertheless, the T.W.I. deed was not sufficient to prove a chain of title from the defendants as to the 16.6 acre and 41.4305 acre tracts. American Savings argues that the metes and bounds description in the deed of trust was incorporated by reference in the T.W.I. deed. Since a metes and bounds description prevails over an inconsistent call for acreage, American Savings contends that the T.W.I. deed passes title to all tracts in the deed of trust which are owned by the grantors and fall within the general description in the deed, i.e. being out of the William White Survey, Abstract No. 829, Harris County, Texas. Although the premise is correct and well-supported by numerous authorities, it has no application to this case. The T.W.I. deed conveys 618.7 acres of land more particularly described by metes and bounds in the deed of trust. The deed of trust contains a metes and bounds description of the 618.7 acre tract. There is no inconsistency. The other two tracts in the deed of trust were not incorporated in the T.W.I. deed and were not conveyed thereby. Contrary to American Savings' reasoning, this is not a case in which a deed refers to a tract as being 'all the land' conveyed in another instrument. Neither is it one in which the metes and bounds description contains a different amount of land than is indicated by the call for acreage. When one instrument conveying real property refers to a second instrument for a more particular description of the tract conveyed and that description is consistent with the land conveyed in the first, the presence of additional tracts in the second instrument does not effect the amount of property granted in the first. See Winters v. Slover, 151 Tex. 485, 251 S.W.2d 726 (1952). American Savings failed to establish a claim of title to the 16.6 acre and 41.4305 acre tracts. The judgment of the trial court giving title to the Musick parties was therefore correct.

The Musick parties next claim that American Savings failed to prove the authority for the foreclosure sale. The powers conferred upon a trustee in a deed of trust must be strictly followed. Slaughter v. Qualls,139 Tex. 340, 162 S.W.2d 671 (1942). The deed of trust creates a true fiduciary relationship between the grantor and trustee, and the trustee may not delegate his duties without strict compliance with the express terms of the trust. Fuller v. O'Neal, 69 Tex. 349, 6 S.W. 181 (1887); Hart v. McClusky,118 S.W.2d 1077 (Tex.Civ.App.--Amarillo 1938, writ ref'd). A sale made without such compliance is void and passes no title. Slaughter v. Qualls, Supra.

A deed of trust can authorize the trustee or a duly authorized substitute trustee to recite the facts of a sale in a trustee's deed . This recital is prima facie evidence of the facts stated and gives rise to a presumption of validity of the sale. This is only an evidentiary presumption, however, and the deed can be voided by a rebuttal of the presumption. Tarrant Savings Association v. Lucky Homes, Inc., 390 S.W.2d 473 (Tex.Sup.1965); Burrow v. McMahan, 384 S .W.2d 124 (Tex.Sup.1964); Hart v. Eason, 159 Tex. 375, 321 S.W.2d 574 (1959); Slaughter v. Qualls, Supra; Terry v. Teachworth, 431 S.W .2d 918 (Tex.Civ.App.--Houston (14th Dist.) 1968, writ ref'd n.r.e.).

The deed of trust in this case provides in part:

In the case of the absence, death, inability, refusal, or failure of the Trustee herein named to act, a successor and substitute may be named, . . .

It also provides:

(I)t shall . . . be the duty of the Trustee, and of his successor or substitute, . . ., on the request of the Association (American Savings) (which request is hereby presumed), to enforce this Trust; . . ..

Ralph B. Lee was named as trustee in the deed of trust. Mr. Lee was the president and dominant stockholder of American Savings. There is in evidence a written instrument signed by Mr. Lee, Trustee, reciting that American 'has requested' said Trustee to make sale of the property and 'that I, the said Ralph B. Lee do hereby decline to act as Trustee.' The instrument appointing Andrew D. DeFiore substitute trustee, executed by the Executive Vice-President of American, Joel H. Berry, Jr., recites that Lee 'has resigned and/or refused' to act as said trustee. These provisions in the deed of trust and the recitations in the instruments set out above created a presumption of the validity of the appointment of the substitute trustee and the sale he thereafter conducted.

The Musick parties contend, however, that under the authorities cited above that this presumption was rebutted by the clear, direct, uncontested testimony of Mr. Lee that no demand or request was made upon him personally to enforce the trust. He testified that, as a matter of course, a request to collect a debt in default would have been sent to his law firm by American Savings. As a matter of policy established by him, one of his associates would then prepare the papers to appoint himself substitute trustee, because Lee never acted as trustee in enforcing a deed of trust.

It is clear, as the Musick parties contend, that the substitute trustee could not have been appointed here because of 'absence, death, inability, or refusal' because Mr. Lee had not been requested to act. However, we cannot say as a matter of law that the practices and procedures established between the association, Lee, and his law firm did not amount to a 'failure of the trustee herein named to act.' A question of fact as to whether the presumption created by the instruments were rebutted by Mr. Lee's testimony may have been presented. Perry v. Teachworth, 431...