Caldwell Nat. Bank v. O'Neil
| Decision Date | 17 January 1990 |
| Docket Number | No. 08-88-00254-CV,08-88-00254-CV |
| Citation | 785 S.W.2d 840 |
| Parties | CALDWELL NATIONAL BANK, Appellant, v. Lois O'NEIL, et al., Appellees. |
| Court | Texas Court of Appeals |
Lawrence R. Scroggins, Joan E. Scroggins, Caldwell, for appellant.
Robert B. Snell, Lamesa, for appellees.
Before OSBORN, C.J., and FULLER and KOEHLER, JJ.
Appellant, Caldwell National Bank, brings this appeal from a judgment in favor of Appellees, Lois O'Neil, Karen Brazier, Donna Lynd and Linda Chapman, Individually and as Independent Executors and Trustees under the will of Truman O'Neil, deceased, and Robert B. Snell, Independent Executor and Trustee under the will of Truman O'Neil, deceased, declaring void a Collateral Transfer of Note and an Owner's Consent to Pledge held by Appellant and declaring a tract of land and a deed of trust against such land, owned by Appellees in their representative capacities, free and clear of any claim by Appellant. Trial was to the court. We affirm.
In its first point of error, Appellant, Caldwell National Bank, "the Bank," asserts error in the trial court's denial of its motion to transfer the suit from Ward County to Burleson County.
The Bank has its principal place of business in Caldwell, Burleson County, Texas. Truman O'Neil and wife, Lois O'Neil, were owners of a vendor's lien note in the amount of $350,000.00, secured by a deed of trust, against a tract of land located in Ward County, containing approximately 621 acres, which they had conveyed in 1975 to Barstow Park Acres, Inc., a Texas corporation owned by the O'Neils, for development and financing purposes. At the time, they were experiencing financial difficulties. Shortly thereafter, on October 6, 1975, they signed and acknowledged a collateral transfer of the vendor's lien note described above, to the Bank, ostensibly for the purpose of borrowing $80,000.00 from the Bank in the event it was needed. At the same time, the O'Neils also signed an "Owner's Consent to Pledge" to the Bank, the name of the debtor being left in blank. The two documents were delivered to the O'Neils' son-in-law, Lawrence R. "Bob" Lynd, a bank officer at another bank, for safekeeping until such time as the loan might be needed. Unknown to the O'Neils and the Bank, Bob Lynd altered the documents and utilized them to secure two notes he had with Appellant Bank. The Bank had the collateral transfer document in its altered condition placed of record in Ward County on October 20, 1975.
Truman O'Neil died in February 1976. His will was subsequently probated in Midland County, at which time Appellees became executors and trustees under the will. In 1979, the Appellees foreclosed the deed of trust lien on the Barstow Park Acres note, the trustee's deed conveying the property to Appellees being recorded on June 20, 1979, in Ward County. In April 1986, after a number of renewals and extensions of the Lynd notes, which were in default, the Bank obtained judgment against him in Burleson County. The Bank then notified Appellees of its judgment against Lynd and its position as to the Barstow Park Acres note and deed of trust under the collateral transfer and consent to pledge documents. On July 11, 1986, the Bank made a demand on Appellees for cancellation of the trustee's deed. On September 12, 1986, Appellees filed this suit in Ward County seeking declaratory relief from the collateral transfer and consent to pledge documents and to quiet title. The Bank then filed a motion to transfer the case to Burleson County and subsequently, its counterclaim asking that the trustee's deed be declared void and cancelled. The motion to transfer was overruled.
The Bank contends that venue was neither proper nor mandatory under Section 15.011 of the Texas Civil Practice and Remedies Code. It is the position of the Bank that Appellees brought the suit for the purpose of determining the validity of the Collateral Transfer of Note and the Owner's Consent to Pledge. Appellees counter that the filing of the collateral transfer in the records of Ward County created an encumbrance or "cloud" on their title and that the primary purpose of their suit was to quiet title by removing the encumbrance. Section 15.011 requires that "[a]ctions ... to remove encumbrances from the title to real property, or to quiet title to real property shall be brought in the county in which all or a part of the property is located." Tex.Civ.Prac. & Rem.Code sec. 15.011 (Vernon 1986). Such "clouds" on legal title include any deed, contract, judgment, lien or other instrument, not void on its face, which purports to convey any interest in or makes any charge upon the land of the true owner, the invalidity of which would require proof. Fajkus v. First National Bank of Giddings, 654 S.W.2d 42 (Tex.App.--Austin 1983, writ dism'd).
The plaintiff has the burden of proving that venue is maintainable in the county in which the land is located, by showing that: (1) the nature of the suit comes within the terms of exception; and (2) the land is situated in the county of suit. Drury v. Lehmann, 602 S.W.2d 314 (Tex.Civ.App.--San Antonio 1980, no writ); Tex.R.Civ.P. 87. Since it is undisputed that the land is located in Ward County, the sole issue is whether this suit is one to remove an encumbrance or quiet title to land. Not only did Appellees seek to remove a lien or claim against the land to which they had legal title, but the Bank by its counterclaim sought to have the trustee's deed declared void as a cloud on its equitable title.
The Bank relies on Clingingsmith v. Cook, 347 S.W.2d 279 (Tex.Civ.App.--Fort Worth 1961, no writ) and Scarth v. First Bank & Trust Co., 711 S.W.2d 140 (Tex.App.--Amarillo 1986, no writ) in support of its position. Such reliance is misplaced. In Clingingsmith, the appellant, one of several defendants, was the only one to seek a change of venue and was the only one who neither held nor claimed any interest in the plaintiff's land. The court of appeals, in reversing the trial court's order overruling the plea of privilege, held that the suit as to appellant did not come within the mandatory purview of Exception 14, Tex.Rev.Civ.Stat.Ann. art. 1995 (the predecessor of Section 15.011), and he was entitled to be sued in the county of his residence. Clingingsmith, 347 S.W.2d at 281. In Scarth, the judgment of the trial court overruling appellants' motion to transfer the suit to Sherman County where the land was located was affirmed because the relief sought by appellee was a declaration that the deed of trust lien was superior to the homestead rights asserted by appellants. The Court said that Scarth, 711 S.W.2d at 142. We agree with the trial court's determination that the dominant purpose of this suit was to quiet title by removing an encumbrance. Point of Error No. One is overruled.
In the Bank's second and third points of error, it complains that there was no evidence to support the trial court's findings that Appellees were entitled to have the Collateral Transfer of Note and the Owner's Consent to Pledge and any rights of the Bank thereunder declared null and void and cancelled. In its sixth point, the Bank avers that the court erred in overruling its motion for judgment based on the insufficiency of the evidence in support of Appellees' cause of action.
When reviewing a "no evidence" challenge, an appellate court must consider only that evidence and the reasonable inferences drawn therefrom, which when viewed in their most favorable light, support the court finding. The no evidence challenge fails if there is more than a scintilla of evidence to support the finding. Stafford v. Stafford, 726 S.W.2d 14, 16 (Tex.1987). When an "insufficient evidence" point is raised, the Court must first examine all of the evidence; Lofton v. Texas Brine Corporation, 720 S.W.2d 804, 805 (Tex.1986); and after considering and weighing all of the evidence, the Court may set aside a finding or verdict only if it is so contrary to the overwhelming weight of the evidence as to be clearly wrong. Cain v. Bain, 709 S.W.2d 175, 176 (Tex.1986). The appellate court is not a fact finder and thus, may not pass upon the credibility of witnesses or substitute its judgment for that of the trier of fact.
The trial court made extensive findings of fact and conclusions of law, the more pertinent of which are as follows:
FINDINGS OF FACT
1. On or about October 6, 1975, Truman and Lois O'Neil executed a Collateral Transfer of Note, by which they intended to transfer to defendant bank a $350,000 vendor's lien note and the liens, rights, titles, equities and interests securing same in order to provide a basis for future loans by the bank to themselves, which note had been executed and delivered to them by Barstow Park Acres, Inc.
2. At about the same time, the O'Neils also executed a form for an Owner's Consent to Pledge, intending same also to be used for their own benefit in reference to loans they might procure from defendant bank.
6. At or prior to the time of such delivery, the Collateral Transfer was altered, or caused to be altered, in material respects by Bob Lynd, to convert the document into a form for his own use and benefit.
7. At or prior to the time of such delivery, the form for the Owner's Consent to Pledge was completed, or caused to be completed, by Bob Lynd in a certain material respect, i.e., the filing in [sic] of his own name on the face of the document, not intended by the O'Neils.
13. The alterations and unintended completions in the documents were sufficiently obvious on the face of the documents and of sufficient...
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...the legal effect of the note and thus was not a material alteration under section 3.407. Id. In Caldwell Nat'l Bank v. O'Neil, 785 S.W.2d 840, 845 (Tex. App.—El Paso 1990, writ denied), the court held that a person had materially altered documents relating to a lien by "whiting out" the nam......