Anglin v. Cisco Mortg. Loan Co.

• Decision Date: 26 June 1940
• Docket Number: No. 7472.,7472.
• Citation: 141 S.W.2d 935
• Parties: ANGLIN et al. v. CISCO MORTG. LOAN CO.
• Court: Texas Supreme Court

Page 935

141 S.W.2d 935

ANGLIN et al. v. CISCO MORTG. LOAN CO.

No. 7472.

Supreme Court of Texas.

June 26, 1940.

Error to Court of Civil Appeals of Eleventh Supreme Judicial District.

Action by the Cisco Mortgage Loan Company against W. W. Anglin and another, to recover on notes and to foreclose a vendor's lien on land, wherein Joe B. Anglin and another intervened. Judgment for plaintiff was affirmed by the Court of Civil Appeals, 118 S.W.2d 817, and named defendant and interveners bring error.

Judgments of the Court of Civil Appeals and of the District Court reversed and cause remanded.

Turner, Seaberry & Springer, of Eastland, for plaintiffs in error.

F. D. Wright, of Cisco, for defendant in error.

MOORE, Chief Justice.

On June 2, 1936, Cisco Mortgage Loan Company, a Texas corporation, filed suit against W. W. Anglin and Phillips Petroleum Company, defendants. The allegations with respect to the Petroleum Company become immaterial, as that company was dismissed from the case on the trial in the district court, and no complaint is here made with respect to that action.

Plaintiff alleged that on October 23, 1931, D. M. Anglin and wife, Mary E. Anglin, conveyed to W. W. Anglin a tract of land in Eastland County, and as part consideration therefor the grantee executed and delivered to D. M. Anglin nine vendor's lien notes, dated October 23, 1931, for $100 each, providing for interest and attorney's fees, and due, respectively, on or before November 1 of each year from 1933 to 1941, inclusive, payable to D. M. Anglin or order, and containing a provision for accelerating their maturity at the option of the holder in the event of the maker's failure to pay the principal and interest when due; and that it had become the owner in due course of these notes, which defendant had failed to pay, except certain interest and a small amount on the principal, and for which reason plaintiff had elected to mature all of the notes. Plaintiff prayed judgment against defendant, and for foreclosure of the lien against the land described in the petition.

The defendant by his answer alleged that at the time of the execution of these notes D. M. Anglin and his wife, Mary E. Anglin, were his father and mother; that the land in question, which contained less than 200 acres, was their homestead; that at the time of the execution of the notes, D. M. Anglin was indebted to the Cisco Banking Company in a named amount, and that the officials of the bank conceived the idea of securing a lien upon such homestead by having D. M. Anglin and wife execute a pretended conveyance of the same to the defendant, and by having the deed to recite the execution and delivery of notes by defendant, to be secured by a vendor's lien upon the land, and to be transferred by D. M. Anglin to the bank; that D. M. Anglin and wife never sold said land to the defendant, and that the purported conveyance from them to him evidenced a pretended and simulated sale for the purposes aforesaid; that defendant never received a deed to the land, never paid any consideration therefor, and never went into possession of the same; that D. M. Anglin and wife were at the time of such pretended sale in possession of the land, and continued to use and enjoy the same as their homestead so long as they lived; and that such facts were known to the Cisco Banking Company and the plaintiff and their officers, or that they had notice of such facts as were sufficient to put a reasonably prudent person upon inquiry as to the homestead rights of D. M. Anglin and wife; and further that no consideration was paid to the defendant for the execution of said pretended notes, and having no title to or interest in the land by virtue of such void and pretended sale, he was not liable on the notes.

It was further alleged by defendant that D. M. Anglin died intestate April 9, 1934, and his wife, Mary E. Anglin, died intestate July 6, 1935; that no administration was had upon the estate of either of them; that they left surviving as their heirs their children, the defendant, W. W. Anglin, Joe B. Anglin, Nellie Anglin, Bertha Anglin Wilson, and D. M. Anglin, Jr.; that Joe B. Anglin, a minor, and Nellie Anglin, unmarried, both resided with their parents on the land in question, and continued to live thereon after the death of their parents, using and enjoying the same as a homestead until a short time prior to the bringing of this suit, when for causes unnecessary here to state, they were compelled to temporarily move from said premises. Defendant prayed that plaintiff take nothing by its suit, and that the deed and vendor's lien notes be cancelled and the title to the premises be quieted in the heirs of D. M. Anglin and wife, Mary E. Anglin.

Joe B. Anglin and Nellie Anglin, by leave of court, filed their petition of intervention, in which they alleged in substance the same facts pleaded by defendant, and they likewise prayed that the pretended deed and vendor's lien notes be declared to be a cloud upon the title to said land, and that the same be cancelled.

Plaintiff by replication pleaded matters by way of estoppel against defendant and intervenors.

At the trial, and after the close of the testimony, the district court instructed a verdict in favor of plaintiff and against defendant and intervenors on all issues, and judgment was accordingly rendered on the 7th day of December, 1936, for the amount of the notes, interest, and costs, and for a foreclosure as against defendant and intervenors of the vendor's lien on the land described in plaintiff's petition. From this judgment defendant and intervenors perfected an appeal by writ of error to the Court of Civil Appeals for the Eleventh Supreme Judicial District, and that court affirmed the judgment of the district court. 118 S.W.2d 817. The case has come to this Court by writ of error to the Court of Civil Appeals, granted upon the application of defendant and intervenors as plaintiffs in error here.

Section 50 of Article XVI of the State Constitution, Vernon's Ann.St., provides, in part, as follows: "Sec. 50. The homestead of a family shall be, and is hereby protected from forced sale, for the payment of all debts except for the purchase money thereof, or a part of such purchase money, the taxes due thereon, or for work and material used in constructing improvements thereon * * *. No mortgage, trust deed, or other lien on the homestead shall ever be valid, except for the purchase money therefor, or improvements made thereon, as hereinbefore provided, whether such mortgage, or trust deed, or other lien, shall have been created by the husband alone, or together with his wife; and all pretended sales of the homestead involving any condition of defeasance shall be void."

If the instrument under consideration is of the character denounced by the Constitution, it is void, regardless of its form. Therefore, it became the duty of the trial court, in the first instance, to look beyond the language of the purported deed and to consider, if from the facts and circumstances surrounding its execution, and in evidence, an issue of fact was created which showed or tended to show that the intent of the grantors was to fix a lien upon the homestead in contravention of the Constitution. It is immaterial in the consideration of this case whether the purpose of the grantors was to further secure the bank in the payment of D. M. Anglin's existing indebtedness, or to transfer these notes to the bank in cancellation of such indebtedness, in whole or in part, if there was an understanding, express or implied, between the grantors and the grantee that when the purported notes and deed had served their purpose, the homestead should be reconveyed to the grantors.

The effect of the quoted constitutional provision is well stated by Critz, J., in the case of Sisk v. Randon, 123 Tex. 326, 70 S.W.2d 689, 693, as follows: "Under the above constitutional provision it is permissible to prove that a deed was in fact intended as a mortgage. The pretended sale, with condition of defeasance, prohibited by the Constitution, includes any character of pretended sale, having for its purpose the placing of a lien on the homestead, other than those expressly permitted by the Constitution, and it is immaterial whether or not the condition of defeasance is expressed in the instrument. In this regard the latter portion of the above-quoted provision of the Constitution is an enlargement of the prohibition against mortgages, deeds of trust, and other liens on the homestead. It is not the condition of defeasance that is condemned, but the pretended sale. Astugueville v. Loustaunau, 61 Tex. 233; Hardie v. Campbell, 63 Tex. 292. When it is shown that the conveyance was in fact intended as security for debt, with a condition of defeasance upon the payment of the debt, a pretended sale within the inhibition of the Constitution is shown. Hardie v. Campbell, 63 Tex. 292. In such instances it is not necessary to show fraud, accident, or mistake, and the constitutional prohibition against pretended sales cannot be defeated by reciting a contractual consideration."

Under the present Constitution the fact that the homestead owners may have removed from the homestead or that they died subsequent to the execution of such a mortgage or pretended deed, will not in either instance make that valid which the Constitution has expressly denounced as being forever void. Inge v. Cain, 65 Tex. 75; Hays v. Hays, 66 Tex. 606, 1 S.W. 895; Madden v. Madden, 79 Tex. 595, 15 S.W. 480; National Bond & Mortgage Co. v. Davis, Tex.Com.App., 60 S.W.2d 429; Kearby v. Cox, Tex.Com.App., 211 S.W. 932; Toler v. Pertitta, Tex.Com.App., 67 S.W.2d 229; Rich v. Walker Smith Co., Tex.Com.App., 57 S.W.2d 1098.

The first and principal question, therefore, which this Court must decide is as to whether the evidence raised an issue which should have been submitted to the jury, tending to show that the purported deed from D. M....