Cosgrove v. Nelson

• Decision Date: 29 January 1925
• Docket Number: (No. 84.)<SMALL><SUP>*</SUP></SMALL&gt
• Parties: COSGROVE et ux. v. NELSON.
• Court: Texas Court of Appeals

269 S.W. 891

COSGROVE et ux. v. NELSON.

(No. 84.)^*

Court of Civil Appeals of Texas. Waco.

January 29, 1925.

Rehearing Denied February 26, 1925.

Appeal from District Court, McLennan County; James P. Alexander, Judge.

Action by Anna Foss Nelson against Frank J. Cosgrove and wife. From a judgment for plaintiff, defendants appeal. Affirmed in part, and reversed and remanded in part.

W. L. Eason, of Waco, for appellants.

Bryan & Maxwell, of Waco, for appellee.

GALLAGHER, C. J.

This case is before us on motion for rehearing. The motion is granted. All former opinions are withdrawn, and this is substituted as the opinion of the court in this case. Appellee, Mrs. Anna Foss Nelson, sued appellants, Frank J. Cosgrove and wife, Mrs. Shelby Cosgrove, to recover a balance due on four certain promissory notes in the sum of $500 each, with interest and attorney's fees as therein stipulated, and to foreclose a vendor's lien on a certain quarter block of land in the town of Crawford. Appellants alleged that the said quarter block of land upon which appellee sought to foreclose the vendor's lien claimed by her was at that time, and had been continuously for more than 20 years prior thereto, their homestead, upon which they had continuously resided, and upon which they had reared their family; that the transaction in which the notes sued on were given was a simulated sale of said property to one T. C. Jenson and a retransfer of said property to them, and that the same was in fact and on the face of the record an attempt to mortgage their said homestead; that the lien sought to be foreclosed was on that account void and nonenforceable. Appellee pleaded in reply thereto that she bought the notes sued on before maturity for a valuable consideration, without notice that the property by which they purported to be secured was the homestead of appellants; that appellants and said Jenson in the execution and delivery of said notes and in the transactions connected therewith intended to perpetrate a fraud on the First National Bank at Crawford; that appellee purchased said notes without any notice of such fraud; and that appellants were therefore estopped to set up their own fraudulent conduct as a defense to the foreclosure sought. The case was tried before the court and judgment rendered in favor of appellee against appellant Frank J. Cosgrove for the balance due on the notes in the sum of $2,667.50, and for foreclosure of lien to secure the same on said quarter block of land. The case is before us for review on appeal.

There is considerable confusion and contradiction in the evidence concerning matters of minor relevancy, but there are, in our opinion, undisputed facts sufficient to control the disposition of the case. Appellants were husband and wife. They had lived together as such for many years, and for 18 years prior to the transaction under consideration had occupied this particular quarter block of land in the town of Crawford as a homestead. At this particular time Mrs. Cosgrove was in Crawford and Mr. Cosgrove was in Dallas. Mrs. Cosgrove testified, omitting repetitions and irrelevant statements, concerning this transaction substantially as follows:

"Our house was in bad repair. We needed a new one or something done to the old one. I went and asked Mr. Jenson to borrow some money, and he told me he could let me have the money, or I could get it, if I would make it like this, and I did that, that he might use it to borrow money. I didn't know where he was going to get it. * * * I signed both the deed and the notes at the same time. * * * Mr. Sherrill didn't take my acknowledgment which is on this deed. I never appeared before him on the transaction whatever. I didn't talk to any one except Mr. Jenson when I signed these notes. * * * Mr. Jenson knew we owned the house we was in, and I asked him to get the money to build, and he said he could get the money, and he did. He said he could borrow the money from the Temple Building & Loan Company. * * * When I signed those papers he said, `Now you can tear your house down and fix it any way you want to.' The purpose of the deed was to secure the money to build the new house with. With reference to what was said about selling the house and borrowing money he knew and I knew that was only to borrow the money. I asked him to borrow the money or lend it to me, and he said he could get it for me but it would be easier if I would deed the place to him. He knew and I knew that I wasn't selling it, but only to get the money from the Building & Loan Company that I made the deed. Mr. Cosgrove was in Dallas at the time. Mr. Jenson sent the deed to Mr. Cosgrove. The first time I ever saw the deed from Jenson and wife to me and my husband was a few months ago. I got it from Mr. Jordan. He phoned and told me he had the deed. When I went by I got the papers to show to my attorney. I don't know anything about a fire insurance policy on the house. I have never seen such policy."

This is substantially all the evidence tending to show any direct connection with the transaction on the part of Mrs. Cosgrove. Mr. Cosgrove testified that he was in Dallas when the transaction was had, and had no personal knowledge of it; that he signed the deed to Jenson and mailed it back to Jenson after signing; that he knew the notes had been executed, but supposed Jenson had them; that he thought it was strange to execute vendor's lien notes on a homestead, but he had never raised any question as to the validity of the notes.

The deeds and notes referred to in the above testimony of Mrs. Cosgrove were introduced in evidence by appellee. She first introduced a deed from F. J. Cosgrove and wife to T. C. Jenson, conveying said property. It was in the ordinary form of a warranty deed. It recited a consideration of $1. It was dated August 12, 1919, and was signed by both of appellants. It bore an acknowledgment by Frank J. Cosgrove before a notary public of Dallas county, dated August 23, 1919, and the genuineness of such acknowledgment is not questioned. It also bore a purported certificate of acknowledgment by Mrs. Cosgrove. Such certificate purported to show an appearance by her before "W. M. Sherrill, a Notary Public and J. P. ex officio." It was in proper form for an acknowledgment by a married woman, and was dated August 12, 1919. It was shown by said Sherrill that he did not make or sign said certificate nor authorize the same to be signed. He further testified that Mrs. Cosgrove never appeared before him; that he never took her acknowledgment to said deed; and that he never saw such deed until a short time before the trial of this case. This deed was filed in the office of the county clerk of McLennan county, Tex., for record on the 15th day of June, 1920.

Appellee also introduced in evidence a deed from T. C. Jenson and wife to Francis J. Cosgrove and wife, Shelby Cosgrove. The consideration recited therein was $250 cash and the further consideration of four vendor's lien notes, bearing even date with said deed, and due one, two, three, and four years after date, respectively, each for the sum of $500, with interest and attorney's fees. This deed was dated August 12, 1919, and was acknowledged by both grantors on the 1st day of July, 1921. It was turned over to appellee some time in August, 1921, and filed in the office of the county clerk for record by her or at her direction on the 23d day of August, 1921. Appellee also introduced in evidence the four notes described in said last-mentioned deed. They were all dated August 12, 1919, and payable as recited in said deed. Each of said notes acknowledged a vendor's lien on the land involved in this case to secure the same, and each was payable to T. C. Jenson and signed by Frank J. Cosgrove and Mrs. Shelby Cosgrove. Each of said notes had indorsed thereon a transfer from T. C. Jenson to the First National Bank of Crawford and an indorsement in blank by the First National Bank of Crawford by T. C. Jenson, cashier. These indorsements were not dated.

Appellee acquired these notes from T. C. Jenson; but whether he was acting in his own behalf or in behalf of the bank at that time is not specifically shown. At the time he sold her the notes he showed her an insurance policy on the house and on the furniture of appellants situated therein, and told her that if the house burned down she would get her money. The date of this transaction is involved in some confusion, but the great preponderance of the evidence shows that it was on or about the 20th day of October, 1919. Appellee had known T. C. Jenson all her life. On the 8th of September he wrote her a letter, stating in substance that. both she and her mother had accounts in said bank, and that he knew of four vendor's lien notes for $500 each, drawing 10 per cent., and considered them perfectly safe, He further stated he would be glad to show the notes and explain things to her fully. What transpired at the time she purchased the notes seems to be shown by her testimony only. Such testimony, omitting irrelevant statements and repetitions, is substantially as follows:

"After the receipt of this letter I saw Mr. Jenson at the First National Bank of Crawford and talked with him with reference to the notes here sued on. I bought the notes on that visit and paid for them. He told me they were safe. I asked him for security, and he said I had the house, had been a deed, and the deed was recorded. He said they were good notes. I told him if they were good notes and had security I would buy and he said he had the house for security. He said he had a lien on the house. He told me what house. They were just building the house. I had the notes put in my box at the bank. Jenson gave them to me and I told him to leave them in the box at the bank where I had all my papers. I did not have a conversation with Mrs. Cosgrove about the notes for nearly two years. * * * I did not know at the time I bought the notes that...