Brooks v. O'Connor

• Decision Date: 04 March 1931
• Docket Number: No. 5440.,5440.
• Parties: BROOKS v. O'CONNOR.
• Court: Texas Supreme Court

39 S.W.2d 14

BROOKS v. O'CONNOR.

No. 5440.

Supreme Court of Texas.

March 4, 1931.

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

Suit by William J. O'Connor against R. E. Brooks. A judgment for plaintiff was affirmed by the Court of Civil Appeals [15 S. W.(2d) 182], and defendant brings error.

Judgments of the district court and Court of Civil Appeals reversed, and cause remanded to the District Court.

See, also, 39 S.W.(2d) 22.

R. H. Ward, Morris, Sewell & Morris, and A. M. John, all of Houston, for plaintiff in error.

H. W. Wallace, of Cuero, and J. T. Linebaugh, of Victoria, for defendant in error.

CRITZ, C.

On February 13, 1913, J. M. Rosborough conveyed, by general warranty deed, to E. F. Booty, the land in controversy in this suit, being all of Farm Tract No. 31, J. M. Rosborough Subdivision of the Valentina Garcia Four League Grant, in Jackson county, Tex., retaining the vendor's lien to secure four notes for $1,050 each, due on or before one, two, three, and four years from date, respectively, all payable to J. M. Rosborough. The vendor's lien was retained in the deed in the usual and customary language. In legal effect the deed also retained in Rosborough the superior title in the land to secure the payment of the notes.

On March 28, 1914, Rosborough, for a recited consideration of $4,528.03, conveyed and assigned the above four notes to Wm. J. O'Connor, executor of the estate of Thos. M. O'Connor, deceased. This transfer was by written instrument, and expressly conveyed the vendor's lien and superior title in the land to the above grantee.

On the same date that Rosborough assigned these notes to O'Connor, March 28, 1914, E. F. Booty and wife, Gertrude Booty, executed to James McDonald, as trustee for Wm. J. O'Connor, executor, a deed of trust on the land in question to secure a note of even date with the deed of trust in the sum of $4,528.03, the amount paid to Rosborough by O'Connor for the four original notes. This last note matured March 28, 1919, and bore 8 per cent. interest. This deed of trust recited the fact that the $4,528.03 note thereby secured was given to take up and extend the four original vendor lien notes above described, and expressly preserved and carried forward the original lien, equities, and superior title as they theretofore existed.

Later, on October 5, 1915, E. F. Booty and wife Gertrude Booty, executed to L. W. O'Connor, trustee for Wm. J. O'Connor, executor, a deed of trust to secure a note for $4,890.27, maturing October 5, 1923, bearing 7 per cent. interest. This last note and deed of trust recites the fact that it is to take up and extend the note of March 28, 1914, for $4,528.03. Also this last deed of trust preserves and brings forward the original vendor's lien and superior title in the land in question.

Both of the deeds of trust before mentioned cover the 160 acres of land conveyed to E. F. Booty by Rosborough above described.

Later, on January 20, 1920, E. F. Booty and wife, Gertrude Booty, executed and delivered to L. W. O'Connor, trustee for Wm. J. O'Connor, executor, a blanket deed of trust on eight tracts of land in Jackson county, Tex., and one tract of land in Victoria county, Tex. The acreages of the Jackson county land are as follows: 213.1 acres, 160 acres, 160 acres, 127.3 acres, 160 acres, 187.3 acres, 279½ acres. and 80 acres. The Victoria county tract contained 251.3 acres. The 160-acre tract involved in this suit is one of the Jackson county tracts. This last deed of trust was given to secure a note for $4,500, dated of even date with the deed of trust, due December 20, 1920, and bears 8 per cent interest. This deed of trust recites the fact that it is second and inferior to nine several deeds of trust that are held by O'Connor, executor, against the nine several tracts included in the last blanket deed of trust. In other words, we conclude from the wording of this last deed of trust that the O'Connor estate already held a separate and independent indebtedness secured by a separate and independent deed of trust against each of the nine tracts included in the last blanket deed of trust, and that the last blanket deed of trust was second and inferior to each of these nine former deeds of trust.

It seems that after the execution of the blanket deed of trust for $4,500 hereinabove mentioned, E. F. Booty became involved in considerable financial difficulties, and failed to meet the interest on the several indebtednesses held by O'Connor, executor, and also failed to pay the taxes on the several tracts of land involved in the several deeds of trust and liens held by O'Connor, executor, and appealed to R. E. Brooks, his brother-in-law, for aid. Later, after considerable negotiations between O'Connor, executor, and Brooks, Brooks purchased the $4,500 note last above described, and the deed of trust lien securing same. O'Connor transferred this note and deed of trust to Brooks by written instrument, the transfer from O'Connor executor, to Brooks contained the following provision:

"The said Deed of Trust hereinabove referred to and herein assigned creates a blanket lien upon same eight parcels of land in Jackson County, Texas, and one parcel of land in Victoria County, Texas, and in making this transfer and assignment of the lien created by the Deed of Trust aforesaid the lien of said deed of trust is here declared to be secondary to and inferior to the liens described and defined and fixed by nine deeds of trust executed by L. W. O'Connor, Trustee, to secure Wm. J. O'Connor, Managing Executor under the will of Thos. M. O'Connor, deceased, in the payment of nine several notes; and in making this transfer and assignment grantor distinctly limits the lien of said deed of trust here assigned so that said lien is a lien secondary to the lien of said nine deeds of trust on said nine several parcels of land to the extent of the principal of said nine notes and the interest to accrue on said nine notes from the 1920 maturities of said interest on the principal of said notes and any and all future interest to accrue on said nine notes, and all interest on past due interest on said nine notes; and reserves the right to extend the time of payment of any interest that is now due or may become due on said nine notes or any of them and to enter into agreement with the said E. F. Booty and his wife, or E. F. Booty alone to receive from the said E. F. Booty interest at the rate of eight per cent per annum, on all past due interest that may accrue on said nine notes or any of them, and to grant such extension and to charge interest at the rate of eight per cent per annum on all past due interest due and to become due on said nine notes or any of them without consulting the said R. E. Brooks; and any extension of the indebtedness represented by the note here now assigned shall contain a provision recognizing the right of grantor herein to extend the payment of interest and to charge interest at the rate of eight per cent per annum on all past due interest on said nine notes or any of them.

"At the time of executing this assignment the interest on all of said nine notes has been paid to the 1920 interest maturity date thereon and interest on interest on sums accruing as interest to 1920 interest maturity dates, leaving due upon the notes held by grantor herein the principal of said nine notes and interest, and interest upon interest, accruing from 1920 interest maturity dates on said nine notes."

It will be noted that this transfer expressly discloses that O'Connor, executor, retained a separate and distinct first lien against each of the nine tracts included in the blanket deed of trust, which was conveyed to Brooks. Furthermore, the transfer to Brooks expressly limits the prior rights of O'Connor, executor, to a first and superior lien and says nothing about retaining a superior title to each of the above nine tracts. Also it seems that about the time that Brooks took over the above $4,500 note from O'Connor, executor, by the written transfer above mentioned, he, as a part of the same general transaction paid to O'Connor, executor, several thousand dollars to be applied to interest, and taxes due by Booty on the nine tracts of land covered by the several individual deeds of trust retained by O'Connor, and the blanket deed of trust purchased by Brooks.

After the above transactions had transpired, E. F. Booty died intestate on June 30, 1922, leaving surviving him his wife, Mrs. Gertrude Booty, and two minor children. Mrs. Booty, on October 30, 1922, duly qualified as administratrix of the estate of E. F. Booty, deceased. Also in January, 1923, Mrs. Booty qualified as guardian of the estates of the two minor children of herself, and E. F. Booty, her deceased husband. Also it is admitted that Wm. J. O'Connor is the duly qualified and acting managing executor of the estate of Thos. M. O'Connor, deceased.

After the happening of the above events, O'Connor, executor, filed suit in the district court of Jackson county, Tex., against Mrs. Booty, individually, and as executor and guardian, and against the two minor children of E. F. Booty, deceased, and also against Brooks in trespass to try title to recover the title and possession of the 160 acres of land here involved. In this suit O'Connor, executor, asserted his superior title to the 160 acres of land by virtue of being the holder of the original vendor lien notes, and superior title securing same. In this connection it will also be noted that O'Connor, executor, has refused to submit his claim to the probate court. Also in this first suit the other eight tracts, and several liens and deeds of trust covering them, were not brought into litigation, but O'Connor, executor, only brought into litigation this one 160-acre tract, and asserted a superior title therein as against all of the Bootys, the Booty estate, and Brooks.

The Bootys, the Booty estate, and Brooks answered in the above...