Closner v. Chapin

• Decision Date: 10 June 1914
• Docket Number: (No. 5308.)<SMALL><SUP>†</SUP></SMALL&gt
• Citation: 168 S.W. 370
• Parties: CLOSNER et al. v. CHAPIN.
• Court: Texas Court of Appeals

168 S.W. 370

CLOSNER et al. v. CHAPIN.

(No. 5308.)^†

Court of Civil Appeals of Texas. San Antonio.

June 10, 1914.

On Motions for Rehearing by appellants and appellee, July 1, 1914.

Appeal from District Court, Bexar County; S. G. Tayloe, Judge.

Action by Clark & Bliss against D. B. Chapin and against John Closner and another, in which defendant Chapin filed an answer admitting the claim against him and filed a cross-action against codefendants John Closner and another. From a judgment for defendant D. B. Chapin against codefendants, both parties appeal. Affirmed in part, and reversed and rendered in part.

Jas. B. Wells, of Brownsville, Ball & Seeligson, of San Antonio, Joseph K. Wells, of Brownsville, and C. W. Trueheart and T. T. VanderHoeven, both of San Antonio, for appellants. T. J. Newton, of San Antonio, John T. Duncan, of La Grange, and Don A. Bliss, of San Antonio, for appellee.

FLY, C. J.

Clark & Bliss, attorneys at law, filed suit against D. B. Chapin, who will be designated as appellee, although he is also an appellant, John Closner and W. F. Sprague, known herein as appellants, and the Chapin Townsite Company, to recover a fee of $2,000 and $66.90 expenses; said fee and expenses accruing in connection with a receivership case in Fayette county, Tex. Chapin filed an answer admitting the claim against him and filed a cross-action against Closner and Sprague for damages in the sum of $646,276 and for a foreclosure of a lien on certain property described therein. The court sustained special exceptions to 8 of the 26 paragraphs of the cross-action. The court, having tried the cause without a jury, recited in the decree that Clark & Bliss had been paid in full and adjudged that appellants should pay appellee $100 damages arising out of the forced sale of a tract of appellee's land, and that the Chapin Townsite Company should be dismissed from the suit.

The greater portion of the cross-action is devoted to a narrative of the relations existing between appellants and appellee which led up to certain written instruments whereby appellee sold and conveyed to appellants his interest in certain lands in Hidalgo county, all of his stock in the Chapin Townsite Company and in the Valley Reservoir & Canal Company, and all of his interest in a certain railroad property known as the San Antonio & Rio Grande Railway Company. In consideration of that conveyance, appellants bound themselves to pay all of Chapin's indebtedness "incurred either individually or jointly with others in connection with said properties at any time and bind ourselves and each of us to save and hold harmless the said Chapin as to said indebtedness"; and, after the indebtedness and all reasonable expenses had been paid, they agreed to pay appellee his proportion of the profits arising from the property. A list of the debts for which they became liable was set out in the agreement; one of them being a note for $2,000 in favor of J. W. Johnson. The contracts were executed separately at the same time and place.

On May 1, 1913, appellants paid the full amount of the attorney's fee sued for by Clark & Bliss, and it was accepted by them in full for all of their claims. Before the money was paid and accepted, the court had sustained demurrers to a cross-action by Chapin against Closner and Sprague, and there was, at the time of payment of the money and its acceptance, no further cause of action on the part of Clark & Bliss pending against appellants, which fully appears from an order of the court which recites all the facts concerning the matter. After this full settlement appellee filed what is denominated "Defendant D. B. Chapin's First Amended Original Answer and Plea Over Against his Codefendants, John Closner and W. F. Sprague." Appellants were in court on the cross-bill as well as on the petition, and as the amended cross-bill did not set up a new cause of action, but merely repleaded the old one, the plea of privilege to be sued in Hidalgo county was properly overruled. Kendall v. Hackworth, 66 Tex. 499, 18 S. W. 104.

It is somewhat difficult to ascertain the true nature of the cross-action. There is a prayer for damages, but it is clearly indicated in the pleading that appellee desired a rescission and did not pray for "his interests in the properties in specie" because they had been incumbered with mortgages. The effect of the pleadings would be a rescission, for there is a prayer for the full value of the property, less the debts that had been paid and the expenses that had been incurred. It not only had the effect of rescinding the contract, but of forcing a cash payment for property that had been sold to appellants, incumbered with the burden of paying for an indefinite time a certain proportion of the profits realized from the property. We are of opinion that the suit is, to all intents, one for rescission.

The deed given by appellee was unconditional in its terms, conveying the property to appellants; the consideration recited being $1 and the assumption by appellants of all the indebtedness of the grantor. It had the effect of investing the title to the property in the grantees and creating an equitable lien on it in favor of the creditors of the grantor at the same time that the grantees became personally liable for the debts. This would be true although the grantees had not signed the deed as contracting parties, but had taken possession of the property. In this case, however, there was the execution of a contemporaneous agreement by which appellants bound themselves to pay all debts connected with or arising out of the property, and this of course made the grantees liable for such debts. The two instruments must be construed together. Courts are inclined to construe such provisions in deeds as covenants rather than conditions, whenever it can be done so, because forfeitures are not favored, and the violation of a covenant results in a recovery of damages, while the breach of a condition forfeits the estate. If the deed was made on the conditions set out in the agreement, the failure of any one of the conditions, however trivial it might be compared to the property conveyed, would work a forfeiture of the estate. The law would not favor such a construction unless it was plainly designated or clearly inferable from the language of the two instruments. Rawson v. School District, 89 Mass. (7 Allen) 125, 83 Am. Dec. 670; Ayer v. Emery, 96 Mass. (14 Allen) 67. In the case last cited the Supreme Judicial Court of Massachusetts held:

"Taking the deed and the lease as one instrument, intended to embody the agreement of the parties as to the possession and enjoyment of the premises therein described, they are susceptible of the construction that the grantor of the tenant intended to rely on the personal covenants of the latter to fulfill the various stipulations set out in the two instruments, and not make his grant conditional on their performance. It certainly is not reasonable to suppose that the parties intended that a failure to fulfill any one of the many stipulations which entered into the consideration of the grant, however trivial or unimportant, should work a forfeiture of the estate; and yet such would be the result, if the deed is construed as a grant on condition."

That was said in a case in which it was stated in the deed that the consideration was certain cash and the performance by the grantee of "all the agreements on his part contained in an indenture hereto annexed or written on the other half of this sheet."

In this case the deed contains no conditions and does not reserve any lien, but is a plain, unequivocal deed to the property; the consideration being the promise of payment of the debts of the grantor.

The vendor's lien not being expressly retained in the deed, it evinced an executed sale, and the title to the property passed to the grantees therein. Baker v. Compton, 52 Tex. 252. In that case, after stating that all the cases cited by the appellees were those in which a vendor's lien was expressly retained, the court said:

"In the opinion of the writer, the decisions of this court show a broad line of demarkation between such case and the one at bar, holding that the former are executory contracts, in which the superior title remains in the vendor, but classing the latter as executed contracts, in which the vendor has parted with his title, and has only the implied vendor's lien for the unpaid purchase money."

The case has been often approved. Rindge v. Oliphint, 62 Tex. 682; Ransom v. Brown, 63 Tex. 188; Railway v. Titterington, 84 Tex. 218, 19 S. W. 472, 31 Am. St. Rep. 39; Lipscomb v. Fuqua, 55 Tex. Civ. App. 535, 121 S. W. 193; Buckley v. Runge (Civ. App.) 136 S. W. 533.

It follows, from the authorities cited, that appellee could not prosecute a suit for rescission, and, while he did not in terms institute such a suit, his action, to all intents and purposes, amounted to an action to rescind, because he sued for the full value of the property and represented that he would have sued for the property in specie, had it not been for the creation of certain mortgages. It was in effect a suit for the forfeiture of the deed.

The immense damages sought to be recovered had no basis whatever in the pleading. Appellee did not allege that he had been compelled to pay any of the debts against which he was indemnified by appellants, but, on the other hand, it is apparent from the pleadings that he had not paid off any of the debts. The assumption by appellants of appellee's debts gave him no right of action against them, unless they had refused to pay the debts and appellee had paid them or some of them. This principle is established, not only in Texas, but in other states. Gunst v. Pelham, 74 Tex. 586, 12 S. W. 233; Thomas v. Ellison, 102 Tex. 354, 116 S. W. 1141; Lappen v. Gill, 129 Mass. 349; Ayers v. Dixon, 78 N. Y. 318; Gregory v. Green (Civ. App.) 133 S. W. 481; and same case 142 S. W. 999. The case...