Bell v. Ramirez

Citation299 S.W. 655
Decision Date27 July 1927
Docket Number(No. 7106.)<SMALL><SUP>*</SUP></SMALL>
PartiesBELL v. RAMIREZ et al.
CourtTexas Court of Appeals

Appeal from District Court, Travis County; George Calhoun, Judge.

Suit by Jesus Ramirez and wife against Harris Bell and another. From the judgment, defendant named appeals. Affirmed in part, and in part reversed and remanded.

O. Dickens, Warren W. Moore, Cofer & Cofer, and D. J. Pickle, all of Austin, and Marshall Bell, of San Antonio, for appellant.

Hart, Patterson & Hart and Garrett, Brownlee & Goldsmith, all of Austin, for appellees.

McCLENDON, C. J.

Jesus and Refugia Ramirez, husband and wife, sued Harris Bell and Charles Wendlandt, Jr. (1) to cancel appellees' deed of June 25, 1925, conveying to Bell their homestead of 121.64 acres of farm land in Bastrop county; and (2) to cancel Bell's deed of trust to Wendlandt of August 6, 1925, securing $5,000 by lien upon the same property.

Trial to jury; directed verdict; judgment: (1) As to Bell, canceling his deed and awarding appellees $3,136.15 against him; and (2) as to Wendlandt, establishing and foreclosing his trust deed lien. Separate appeals (1) by Ramirez and wife against Wendlandt, and (2) by Bell against Ramirez and wife.

In the Ramirez appeal we are reversing the judgment establishing and foreclosing the trust deed lien and remanding that branch of the case for a new trial. See opinion, 298 S. W. 924.

Appellees rely upon the two following propositions (both of which we sustain) as supporting the direction of verdict canceling Bell's deed and awarding appellees damages:

(1) The deed was in fact a mortgage to secure Bell in his fees and expenses as attorney for Ramirez, and not a conditional sale, as appellant contends.

(2) The relation of attorney and client existed between Bell and Ramirez when the deed was executed, which fact raised the presumption of constructive fraud and cast upon Bell the burden of showing utmost good faith, a full and fair price, absence of pressure of influence by the confidential relation, and that no advantage was taken of his client, which burden Bell failed to discharge.

Appellant contends that the record presents these propositions only as issues of fact.

We summarize the pertinent facts from Bell's viewpoint:

Bell, an attorney, 25 years old, of 2 years' practice, was engaged by Ramirez to obtain bail and defend him in four felony indictments in Bastrop county for violations of the liquor law. Bell made several trips to Bastrop and obtained the desired bail. Ramirez paid Bell $75 to cover expenses, and on June 20, 1925, he agreed with Ramirez on a fee of $1,000, which Ramirez claimed was to be in full, and Bell claimed was only a retainer, the balance to be later agreed on. Ramirez executed his note for this $1,000 and agreed to secure it by lien on the land in question, which then constituted his homestead, the value of which was variously estimated at from $9,000 to $15,000. At the same time Bell had him execute an instrument designating as his homestead an unimproved lot in Austin, which he had never occupied. Bell also prepared a trust deed on the farm for execution by Ramirez and wife to secure the note. Bell later consulted Senator Page, of Bastrop, with a view of engaging him to assist locally in the cases, and was informed by him that $500 was the usual fee in such cases, and that a total of $2,000 for the four cases, to be divided equally between them, would be ample.

Senator Page's version differs from Bell's in that his best recollection was he told Bell "that $1,200 or $1,500 split between our firms would be a good big fee, and I would be willing to split it." He also testified to the following conversation, which Bell did not deny:

"I said, `The thing I am interested in is the matter of fee, what shape is he in?' He said, `He has a valuable farm out here'he might not have used the term valuable, but a good farm; and I said, `How much has he got on it?' and he said, `He is a married man, living on the farm.' I said, `That's a homestead, how are you going to secure it?' and he said, `I am going to get a deed to that farm — get the place.' And I said, `Well, what is it worth?' According to my recollection now, he said six or seven or eight thousand dollars — something like that; and I said, `Well, you mean you are going to get a straight deed to the farm?' And my recollection is he said, `Yes.' I said, `Well, you know a deed, if you agree to deed it back to him, will be valueless, will be no more than a mortgage.' He said, `He is going to give a straight deed in consideration of this fee.' I said, `Well, that would be too much fee, you are overcharging him,' and, I said, `You are a young man and ought not to start out with big fees like that.' I said the fee would be too large for the transaction involved. * * *

"He left my office, and according to my recollection I saw him one time after that, whether in Bastrop or Austin I don't know, but anyhow he said he hadn't made arrangements with the Mexican, and would see me later; but he didn't see me later, and I haven't seen him except casually. And that is all that occurred."

Ramirez and wife signed the deed in Bell's office and acknowledged it before a notary in his employ on June 25, 1925. They claimed that the contents of the deed were fraudulently misrepresented to them by Bell as a mortgage to secure the $1,000 note. Bell denied this and testified that he then agreed with Ramirez upon a total fee of $3,000, out of which he was to bear all expense in preparing and trying the cases, including payment of associate counsel fees; that the deed was executed with the understanding that Bell was to obtain a loan upon the property or sell it, pay off the back taxes and an amount due Seeing for balance of purchase money, and, if he realized additionally more than enough to pay the $3,000 fee, he would turn it over to Ramirez. The following extracts are from Bell's testimony on this point:

"At that time I told Jesus that the only way I would handle his cases would be for me to pay all the expenses, the expenses of the trial, the expense of employing a lawyer in Bastrop to help me, and all the incidental expenses, and that my fee to represent him would be $750 a case, out of which I would pay all the expenses. I told him the debts and back taxes would have to be paid. As to what they told me when I said my fee would have to be $2,000 in addition to the $1,000 retainer, or $3,000 in all, including another lawyer, they objected; they thought it was high. I told them to go and get somebody else, that I would not handle it for anything less, and they finally said, `All right.' They agreed to it. * * * I told them the only way I would handle the cases would be for them to deed me the property, and outlined to them what they owed and my fee, and that it would take $5,000 to pay what they owed and pay my fee, and if I had to sell the property I would give them all over $5,000 I got. * * * As to what they said in reference to the proposal, it was all right."

Bell first made application, through Whitis, of Austin, to the Southwestern Mortgage Company, of Dallas, for a loan of $6,500, at 6½ per cent. on the property. He signed a written application on July 8, 1925, in which he gave the value of the property as $16,750, of which $250 was improvements, and stated he had paid for it $15,000 in cash and assumption of notes. The company sent Lynch to Austin to inspect the land, which he did, accompanied by Whitis and Bell. While there Lynch talked in Spanish to a Mexican woman on the place, and on the way back stated in Bell's hearing (according to Whitis) "that he could not make the loan, because he thought it would be an evasion of the homestead law." Lynch's version of this statement was "that there was a homestead feature, and that if the Mexicans moved off we probably could consider it, but as long as they were in possession we could not make the loan." Lynch placed a value on the property of $10,500. In explanation of this application for a $6,500 loan Bell testified he intended to pay over to Ramirez the $1,500 excess over the incumbrances and his fee.

Bell obtained a loan of $5,000 on the property from...

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