Barber v. Federal Land Bank of Houston

• Citation: 204 S.W.2d 74
• Decision Date: 28 May 1947
• Docket Number: No. 6271.,6271.
• Parties: BARBER et al. v. FEDERAL LAND BANK OF HOUSTON et al.
• Court: Texas Court of Appeals

Page 74

204 S.W.2d 74

BARBER et al. v. FEDERAL LAND BANK OF HOUSTON et al.

No. 6271.

Court of Civil Appeals of Texas. Texarkana.

May 28, 1947.

Rehearing Denied June 12, 1947.

Appeal from District Court, Panola County; R. T. Brown, Judge.

Action by Jim Barber, as next friend of Edward Letcher Barber, and others against the Federal Land Bank of Houston and others to set aside a sale of land under deed of trust and to cancel deed given pursuant to foreclosure and other relief. From an adverse judgment, plaintiffs appeal.

Affirmed.

Collins, Dies, Williams & Garrison, of Lufkin, James & Lee, of Tyler, and Fred Whitaker, of Carthage, for appellants.

Brachfield, Wolfe & Williams and C. L. Brachfield, all of Henderson, Harry A. Berry, of Houston, Long & Strong, of Carthage, Vinson, Elkins, Weems, Francis, Thomas Fletcher and R. K. Batten, all of Houston, for appellees.

HALL, Chief Justice.

This action was instituted by Jim Barber, as next friend of Edward Letcher Barber, and numerous other parties at interest against the Federal Land Bank of Houston, hereinafter referred to as Land Bank, and other claimants to (a) set aside a sale of land under deed of trust given by R. B. Armstrong (now deceased) and his wife, Lula Armstrong, to the Land Bank and to cancel the deed given pursuant to said foreclosure, (b) to reform said deed of trust by omitting therefrom the 100-acre tract out of the northeast corner of the first tract described therein and to include a 100-acre tract out of the northwest corner of said first tract, and decreeing said deed of trust as so reformed to be a lien upon the land described as it existed on June 4, 1935, (c) to reform the deed from R. B. Armstrong and wife, Lula, to Edward Letcher Barber and wife, Illa Lee, so that the land described therein corresponds to that set out in the deed of trust as reformed; for judgment in favor of Barber and wife against all parties herein claiming said 100 acres omitted from the deed of trust as originally written, and canceling the deed from the substitute trustee to the Land Bank; the deed from the Land Bank to the appellee R. F. Shaw, and all oil interests subsequently conveyed by Shaw to the Land Bank as a cloud on appellants' title, (d) judgment in favor of Lula Armstrong, widow of R. B. Armstrong, deceased, and their heirs for the 100 acres in the northeast corner of the first tract described in the deed of trust as originally executed, and (e) judgment for the value of the oil, gas and other petroleum products purchased, removed and appropriated from said property. The trial court sustained certain exceptions directed by appellees to appellants' pleadings. Appellants refused to amend and the cause was dismissed by the court.

The record reveals that on March 13, 1922, R. B. Armstrong and wife, Lula, executed and delivered to the Land Bank a deed of trust describing among other lands a tract of 369 acres less 100 out of the northwest corner, to secure their note to the Land Bank for $5,900. On November 4, 1929, R. B. Armstrong, Sr., and wife, Lula, conveyed the land described in the deed of trust to Illa Lee Barber and husband, Edward Letcher Barber, two of the appellants, in consideration of $489.38 cash, and the assumption by them of the indebtedness due at the time by R. B. Armstrong, Sr., and wife to the Land Bank. Barber and wife became delinquent in their payments to the Land Bank during the year 1934; the Bank exercised its option contained in the deed of trust, declared the whole indebtedness due, and on May 2, 1935, advertised the land to be sold on June 4, 1935. The land was sold on June 4, 1935, to the Land Bank, as highest bidder, for $4,000 which sum was credited on the indebtedness due by the Barbers to the Bank. On June 10, 1935, the land was conveyed to the Bank by A. C. Williams, substitute trustee, and on May 6, 1936, the Land Bank conveyed the land to R. F. Shaw, one of the appellees, for a consideration of $827.35 cash, and one vendor's lien note for the sum of $3,000, retaining for a period of five years one-half of the minerals in and under said land. It is also provided in said deed to Shaw that after the expiration of the 5-year period the Land Bank's mineral interest in the land (no production having occurred) was automatically reduced to one-sixteenth interest in the minerals. The other appellees hold mineral interests from and under Shaw and the Land Bank.

By their first point appellants complain of the action of the trial court in sustaining exception to paragraph five, subdivision one, of their second amended original petition wherein it is alleged that Edward Letcher Barber was, on the date of the foreclosure of the deed of trust lien, and for several years prior thereto, a person of unsound mind. In their second amended original petition appellants allege "at the time of said attempted foreclosure and for several years prior thereto the plaintiff, Edward Letcher Barber, was of unsound mind, notoriously insane, and mentally incompetent to transact any character of business or to understand the nature and effect of any business transaction, and was wholly incompetent mentally to take any steps to prevent a foreclosure of said deed of trust lien and conveyance of said land." In their trial amendment appellants alleged "Edward Letcher Barber became of unsound mind, that is to say became insane, on January 1, 1930, and continued thereafter to be an insane person and a person of unsound mind until January 1, 1944." Among others, appellees directed the following exception to the above allegations of insanity, "That said allegations, if true, could not be or become at law or in equity a predicate for the cancellation of a foreclosure sale conducted in accordance with the contractual power contained in the deed of trust from Armstrong and wife to the Federal Land Bank at Houston." It is obvious that the rights of the Land Bank were in no wise abridged or diminished by the sale of the property described in the deed of trust to the Barbers and the assumption by them of the indebtedness due by the Armstrongs to it. Hampshire v. Greeves, 104 Tex. 620, 143 S.W. 147. Neither would the insanity of Barber at the time of the sale of the property under the power contained in the deed of trust enlarge his rights. Quoting from Moye v. Goolsbee, Tex.Civ.App., 124 S.W.2d 925, 927 (writ refused): "It is not believed that she being mentally incompetent in any way increased her right, but same remained as if she had at all times been in full possession of her mental faculties, and the default in the payment of the notes had occurred, as it did, and the rescission had followed such default." In our opinion the foregoing statement is equally applicable to a foreclosure and sale under a power contained in a deed of trust. After Barber's default the Land Bank could foreclose its deed of trust lien and sell the property in satisfaction of the indebtedness due it without regard to his mental condition. "The right of sale given in a mortgage is a valuable right acquired by contract inuring to the mortgagee, and cannot be impaired by any subsequent act of the mortgagor with regard to such property." Hampshire v. Greeves, supra [104 Tex. 620, 143 S.W. 150]. If insanity of the original mortgagor would not prevent a sale under the power contracted for in the deed of trust, certainly the position of his grantee who had assumed the obligation of the deed of trust, and later became insane, would not be improved. Furthermore, Barber's act in assuming the indebtedness secured by the deed of trust lien as a part of the purchase price of the land had the effect of giving to said lien the quality of a vendor's lien in favor of the Land Bank and "such lien could not be rescinded (by his grantor) without the consent of the Land Bank." Etter v. Tuck, Tex.Civ.App., 101 S.W.2d 843; James v. Chaney, Tex.Civ.App., 154 S.W. 679 (writ refused); Kern v. Smith, Tex.Civ.App., 164 S.W.2d 193 (writ refused); see also 41 C.J., p. 928, Sec. 1348½c. Appellants' first point is overruled.

By several points appellants complain of the action of the trial court in sustaining certain exceptions to their allegations attacking the foreclosure and sale of the land by the substitute trustee and the attorney in fact appointed by him.

It is alleged by appellants that "A. C. Williams, who purported to act as substitute trustee in the attempted foreclosure and sale of said land and in the execution of the said deed to the Federal Land Bank of Houston, acted without authority in that he had never been legally appointed substitute trustee in keeping with the provision of said deed of trust. The provisions of said deed of trust required that the appointment of a substitute trustee shall be `by written instrument, duly recorded in said (Panola) county.'" From the exhibits attached to appellants' petition it appears that A. C. Williams was appointed substitute trustee on May 2, 1935, to succeed M. H. Gossett, deceased. On the same date Williams as substitute trustee advertised the property...