Appeal from District Court, Harris County; J. D. Harvey, Judge.
LANE, J.
This suit was brought by appellee, Gus Schultz, against appellant, Presley K. Ewing, independent executor of the
estate of John Lovejoy, deceased, to recover upon a certain indebtedness alleged to have been contracted by John Lovejoy before his death; for a foreclosure of a lien given to secure payment of said indebtedness on certain lands belonging to said estate, and for a sale of such lands for the purpose of paying said indebtedness.
Plaintiff alleged the execution and delivery by John Lovejoy to him of a certain deed by which Lovejoy conveyed to him the land involved in this suit. It is further alleged, among other things, as follows:
"That said instrument (referring to the deed set out in the fourth paragraph) while upon its face an absolute deed was not in fact such, but was a mortgage or lien on said land and was executed and delivered by the said John Lovejoy and received and accepted by plaintiff as security for various sums of money then and theretofore loaned and advanced by plaintiff to the said John Lovejoy, and as security for interest at the legal rate upon the sums so advanced from the dates of such advancement, and was further intended as, and was security for, any other sums of money that might thereafter be loaned and advanced by plaintiff to the said John Lovejoy, and such understanding and agreement was had and made between them at the time of the execution and delivery of said instrument. And in this connection plaintiff alleges the facts to be that the land described in said conveyance was in what was then and afterwards thought by the said John Lovejoy, and now believed by plaintiff, to be in or near oil producing land near West Columbia in said Brazoria county, and believed by the said John Lovejoy to be of great value and ample security for any sums of money then due and owing by him to plaintiff and for any other sums that thereafter might be loaned and advanced by plaintiff to him, and so believing it was agreed by and between him and the plaintiff that the said conveyance should be a perpetual security for any and all sums of money that thereafter should be advanced by plaintiff to him, and for interest at the legal rate from the date of the loan and advancement of each of said sums, and it was then and at the time of the various loans and advancements then and thereafter made agreed that the same should be paid to plaintiff from proceeds of the sale of the lands described in said conveyance, or parts thereof, when the same should be sold, and from the proceeds of the sales of oil thereafter to be produced from said land when produced, and from the proceeds of royalties or bonus paid for the leases of said lands or parts thereof, when paid.
"That acting under said agreement plaintiff, prior to the death of the said John Lovejoy, advanced to and paid for and on account of the said Lovejoy various and sundry sums of money at the times and as per the items shown on the itemized statement hereto attached marked `Exhibit A' and made a part hereof, aggregating the sum of $3,410.65, which includes interest calculated up to December 17, 1914, subject to credits for payments made in the following sums at the following dates: January 20, 1915, $761.64; April 24, 1915, $500; December 17, 1917, $1,587 (the last sum being paid by defendant Presley K. Ewing as independent executor) — aggregating $2,848.64, leaving a balance due thereon of $562.01, with interest thereon from December 17, 1914.
"That in the latter part of the year 1913 the said John Lovejoy and plaintiff entered into an enterprise or business venture, whereby they undertook to acquire the title to or holdings in certain lands in California, to accomplish which required a large expenditure of money from time to time by them, it being agreed at the time that each should own an equal interest in the property and should become responsible for equal amounts of the consideration to be paid therefor; and it was contemplated that plaintiff might be called upon by said Lovejoy to advance for him from time to time certain sums of money to enable the said Lovejoy to pay his part of the purchase consideration. That thereafter there was paid in on said enterprise by plaintiff and the said John Lovejoy the sum of $28,415.29, of which sum the plaintiff paid the sum of $17,769.53, and the said Lovejoy paid the sum of $7,123, whereby plaintiff paid for the said Lovejoy over and above the sum for which he, plaintiff, was responsible the sum of $10,645.76, which sum was owing by the said Lovejoy to the plaintiff at the time of his death, and in addition thereto interest at the legal rate upon each of the sums so paid by plaintiff for or to said Lovejoy from the date of payment. An itemized statement of the items paid by both plaintiff and the said Lovejoy showing the date upon which each item was paid is hereto attached, marked `Exhibit B,' and an itemized statement showing which of the items and sums shown in Exhibit B were paid by the said Lovejoy is hereto attached, marked `Exhibit C,' and both said exhibits are attached hereto and made parts hereof. And in this connection plaintiff avers that the said sums so paid by him for and to the said John Lovejoy were secured by the execution and delivery of the mortgage or lien in the form of an absolute deed hereinbefore referred to upon the land hereinbefore described, by the agreement hereinbefore alleged, which was made at the time of the execution and delivery of said instrument."
The account as shown by Exhibit A attached to the petition is not involved in this suit, and will not be further mentioned except in so far as it may become necessary to do so in discussing the assignments of error presented by appellant.
Answering plaintiff's petition, the defendant alleged as follows:
"(a) That with respect to the demand counted on in paragraphs 8 and 9 of plaintiff's petition herein, and in the Exhibits B and C thereof, such was not, nor was any part thereof, within the contemplation of the parties to the alleged security agreement when the same was made, if made, nor within their mutual intention, nor was such demand, or any part thereof, within the scope of such agreement, nor was such agreement applicable thereto; that the items of such demand, and each of them, were and are obligations and disbursements for and on account of a copartnership, joint-stock company or corporation, not in contemplation
when such alleged security agreement was made, if made, and not entered into until many years thereafter, and in which plaintiff Gus Schultz, the deceased John Lovejoy, and a third party, one Monta J. Moore, were equally interested, with holdings and operations in the state of California, involving among other interests a ranch, known as Pauma ranch, which enterprise has never been wound up, and no adjustment has ever been made of its affairs or among the parties at interest therein.
"(b) That said demand, so based on said Exhibits B and C as aforesaid, did not, nor did any item thereof, accrue within two years before the commencement of this suit, after deducting the period between the death of said John Lovejoy, to wit, October 4, 1916, and the qualification of this defendant as aforesaid independent executor of his estate, to wit, on November 10, 1916, and is barred by limitation under the statute in such case made and provided.
"(c) That it is not true that the alleged demand based on said Exhibits B and C was presented to this defendant as independent executor aforesaid within 12 months after his qualification as such, but the fact is that such was never presented to him as a claim or demand before suit; that plaintiff presented in regular course the demand paid and satisfied as aforesaid, claiming that the alleged security applied thereto, and making no claim of its otherwise applying; that in connection with other papers pertaining to said California copartnership, plaintiff handed to this defendant copies of memoranda similar to the items of said Exhibits B and C, but without the headlines thereof, and with headlines reading, `Statement of Moneys Paid Out by Gus Schultz of Galveston, Texas, on Account of Pauma ranch transaction,' and without any claim or demand for allowance, approval or payment thereof, and which naturally would be understood by this defendant as furnishing information of disbursements as to said California copartnership, and which were so understood, accepted and retained, and not otherwise, and therefore this defendant submits that such demand, if otherwise valid, is to be postponed in payment in accordance with the statutes in such case made and provided.
"(d) That numerous unsecured creditors of said John Lovejoy have in due course presented their claims to this defendant as independent executor aforesaid, which have been allowed, amounting to thousands of dollars, but same remain unpaid, and his said estate has not sufficient money or assets in hand or capable of being realized on to pay the same, and there are no such money or assets belonging to said estate sufficient to pay the same in full, and the amounts receivable by them will be, more or less, according to the allowance and classification of the plaintiff's demand in this behalf."
The case was tried before the court without a jury, and judgment was rendered in favor of plaintiff for the sum of $13,633.26, same being the amount shown by Exhibits B and C, together with legal interest...
