D. Sullivan & Co. v. Ramsey

• Decision Date: 12 March 1913
• Citation: 155 S.W. 580
• Parties: D. SULLIVAN & CO. et al. v. RAMSEY et al.
• Court: Texas Court of Appeals

155 S.W. 580

D. SULLIVAN & CO. et al. v. RAMSEY et al.

Court of Civil Appeals of Texas. San Antonio.

March 12, 1913.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Bexar County.

Action by Aggie Fant Ramsey and others against D. Sullivan & Co. and others. From a judgment for plaintiffs, defendants appeal. Reversed and remanded.

Denman, Franklin & McGown, of San Antonio, for appellants. Francis J. Kearful, of Mexico City, Mexico, Reagan Houston, Jr., George R. Thomson, and Reagan Houston, all of San Antonio, for appellees.

FLY, C. J.

This suit was instituted by Aggie Fant Ramsey and husband, L. O. Ramsey, and Lucille Fant South and husband, James B. South, against D. Sullivan, W. C. Sullivan, J. C. Sullivan and D. Sullivan & Co., a copartnership composed of D. Sullivan and W. C. Sullivan, to require an accounting on their part of the amount of rents or profits received by them, or either of them, from a certain building in San Antonio, known as the Wright building, also the amounts paid by them or either of them for the taxes and other lawful charges thereon for the preservation and management thereof, and upon said accounting and final trial of the cause to recover the sum of $175,000, the reasonable market value of a certain lot or parcel of land in the city of San Antonio, Bexar county, Tex., being lot 15, in block 17, new city block No. 407, on the north side of East Houston street at the corner of and on the west side of Navarro street, commonly known as the Wright building. It was alleged in the petition that on April 19, 1904, D. R. Fant, the father of the female appellees, owned and possessed the property described, which had been mortgaged by him to the State Life Insurance Company, of Indianapolis, Ind., on March 27, 1902, to secure his promissory note for $30,000, bearing interest at the rate of 6 per cent. per annum, which interest was represented by 10 separate promissory notes, each for $900 and due, respectively, every six months from the date of the principal note, which was due and payable on March 27, 1907; that on April 19, 1904, the said D. R. Fant, for a good and valuable consideration, by warranty deed, conveyed the Wright building to his said daughters, Aggie and Lucille, subject to the aforesaid mortgage. It was further alleged that during the years 1903 and 1904 D. R. Fant was heavily indebted to D. Sullivan & Co., which indebtedness he had secured by mortgages on various ranch properties owned by him, that he was in failing health, and it was proposed that D. Sullivan & Co. should foreclose the mortgages and take title to all the ranch properties, and to so administer the same that the greatest amount of money might be realized from them.

It was further agreed that from the sale of the property D. Sullivan & Co. should be paid, and the surplus returned to Mrs. D. R. Fant; that a trust was thereby created, and the utmost reliance was reposed in the trustees by Fant and wife, and the said D. Sullivan & Co. proposed, and it was acceded to by the Fants, that D. Sullivan & Co. should purchase the indebtedness secured by the Wright building from the insurance company, and foreclose the lien thereon and take title to the same and hold it in trust for the said Aggie and Lucille Fant; that the main trust agreement was referred to and used as the basis of the understanding, and it was agreed that a sufficient amount realized from the ranch properties should be used to clear the indebtedness against the Wright building, and that no attorney's fees were to be included in that indebtedness.

It was further alleged that Dr. Amos Graves, Sr., was the authorized agent of Sullivan & Co., who generally negotiated with the Fants in the trust agreement; that the agreement in regard to the Wright building was made by said Graves, as agent of Sullivan & Co., and by their attorney, J. C. Sullivan; that the agreement was ratified and repeatedly confirmed until finally breached by Sullivan & Co.; that the notes were sold to D. Sullivan & Co. by the insurance company, and they foreclosed the mortgage and sold the property and bought and took title to the same in the name of D. Sullivan, paying about half its value, and from time to time, through Graves and J. C. Sullivan, the Fants were assured that the trustees would faithfully execute their trust according to their agreement. It was further alleged that appellants procured from one Garcia a claim to the said building, obtained by the latter through a sale under execution, which title inured to the benefit of appellees.

It was further alleged that on or about July 7, 1906, D. Sullivan, who held title to the property, for the purpose of defrauding appellees, Aggie and Lucille Fant, out of their equity in the property, made a pretended sale of it to Jot Gunter for about the amount of the mortgage debt, interest, attorney's fees, and other items charged against the property, and made a warranty deed to said Gunter, which was recorded, but on the same day, as a part of the same transaction, at the instance of D. Sullivan and his son and attorney, J. C. Sullivan, said Gunter executed and delivered to J. C. Sullivan, for the use and benefit of D. Sullivan & Co., a deed to said Wright building, which deed was kept secret and was not placed on record until July 31, 1909, and appellees had no knowledge of such deed until about November, 1909, when J. C. Sullivan, without knowledge or consent of appellees, contracted to sell said building to third parties for $100,000, and placed the deed from Gunter to him on record, in order to consummate said sale. It was charged that the repudiation of the trust agreement occurred at the time of the execution of the deed to Gunter by D. Sullivan, and the conspiracy was formed to defraud D. R. Fant and wife out of the net surplus of their estate, which was of the reasonable value of $500,000, and they were, in 1906, compelled to resort to the courts for redress, and recovered a judgment against D. Sullivan & Co. in about the sum named, from which judgment an appeal was prosecuted to the Court of Civil Appeals of the Fourth Supreme Judicial District of Texas, where the judgment was affirmed and a writ of error refused by the Supreme Court of Texas.

Appellees further represented that in pursuance of their agreement D. Sullivan & Co. took possession of the Wright building, and except for the year 1905 collected the rents from the same; that for the purpose of confusing matters they have set up divers claims to the building, J. C. Sullivan claiming that he owns it, and D. Sullivan claiming that it is his property; that they have made sundry contracts in connection therewith, one by J. C. Sullivan to I. and A. Lang, a contract of sale, and one to Lupe & Taylor, in which one J. F. Ryan claims to have contracted for the property; that Lupe & Taylor have sued the Sullivans, Mrs. Gunter, and Lang to enforce the contract; that appellants have refused to make an accounting to appellees, or to recognize their rights in connection with the property, and they prayed for $175,000, the reasonable market value of the property, and $100,000, exemplary damages.

Appellants answered by general and special exceptions and general denial and pleaded not guilty, and specially denied the trust, the agency of Graves and J. C. Sullivan, pleaded two and four years' limitations, and claimed to have bought the lot in good faith at the sale under the mortgage, and to have sold in good faith to Jot Gunter, and to have repurchased from him in good faith.

The cause was submitted on nine special issues, in answer to which the jury found that John C. Sullivan was authorized to and did act for D. Sullivan or D. Sullivan & Co., and agreed that one or the other should acquire the mortgage on the Wright building and hold the same in trust for Aggie and Lucille Fant, subject to the debt; that Dr. Amos Graves, Sr., was authorized to and did act for D. Sullivan or D. Sullivan & Co., and agreed that the property should be acquired and held in trust by D. Sullivan or D. Sullivan & Co. for Aggie and Lucille Fant; that the title to the property was placed in D. Sullivan, to be held for Aggie and Lucille Fant; that D. R. Fant made the deed to his daughters, Aggie and Lucille, in consideration of insurance money he owed them; that at the time the deed to the property was executed to Jot Gunter by D. Sullivan it was understood between them that Gunter should convey the property to J. C. Sullivan in trust for D. Sullivan; that D. Sullivan, on or about June 6, 1906, repudiated the trust agreements made by his son and Dr. Graves; and that the reasonable cash value of the property in controversy at the time of trial was $2,750 for each front foot. In addition the court embodied in the judgment his conclusions that D. R. Fant owned the property, being a lot at the northwest intersection of Houston and Navarro streets, fronting 56.6 feet on Houston street, and extending back between parallel lines to an alley 158 feet, more or less; that on March 27, 1902, he executed and delivered to the State Life Insurance Company of Indianapolis, Ind., a deed of trust on the property to secure a promissory note for $30,000, principal, and several notes, each for $900, for the interest; that D. Sullivan acquired from the insurance company the several promissory notes, paying therefor $30,900; that the trustee named in the deed of trust resigned, and J. C. Sullivan was appointed in his stead by D. Sullivan & Co.; that the substitute sold, under the deed of trust, on July 4, 1905, and D. Sullivan bought, the property, and on July 7, 1906, conveyed it to Jot Gunter, and the deed was immediately recorded; that on the same day, July 7, 1906, Jot Gunter conveyed the property to J. C. Sullivan, but the deed was not recorded until July, 1909, and neither of the appellees had any notice of any kind of the existence of the deed until the date last named; that in 1911, while this suit was...