Federal Life Ins. Co. v. Martin

• Decision Date: 23 October 1941
• Docket Number: No. 5841.,5841.
• Parties: FEDERAL LIFE INS. CO. v. MARTIN et ux.
• Court: Texas Court of Appeals

Page 149

157 S.W.2d 149

FEDERAL LIFE INS. CO. v. MARTIN et ux.

No. 5841.

Court of Civil Appeals of Texas. Texarkana.

October 23, 1941.

Rehearing Denied December 18, 1941.

Appeal from District Court, Franklin County; Newman Phillips, Judge.

Suit by W. R. Martin and wife against the Reynolds Mortgage Company and the Federal Life Insurance Company for title and possession of an undivided interest in certain realty, wherein the Federal Life Insurance Company filed a cross-action. From a judgment in favor of the plaintiffs, the Federal Life Insurance Company appeals.

Judgment affirmed in part and reversed in part and judgment rendered in accordance with opinion.

See, also, Tex.Civ.App., 116 S.W.2d 912.

McGown, McGown, Godfrey & Logan and B. E. Godfrey, all of Fort Worth, for appellant.

R. T. Wilkinson, Sr., of Mt. Vernon, R. T. Wilkinson, Jr., of Dallas, and J. A. Ward, of Mt. Pleasant, for appellees.

HALL, Justice.

The statement made by appellant in its brief is admitted by appellees to be correct, and same, summarized, is substantially as follows: Appellees, W. R. Martin and wife, Willie Lee Martin, instituted this suit against the Reynolds Mortgage Company and the Federal Life Insurance Company in the Franklin County District Court for title and possession of an undivided 1/2 interest in 230 acres of land situated in Franklin County. They alleged that they were the owners of an undivided 1/2 interest in the land in 1918 by virtue of a verbal conveyance or partnership agreement between W. R. Martin and his father, C. S. Martin. It was alleged also that the whole 230 acres was conveyed by C. S. Martin to one F. J. Joyce, but that F. J. Joyce held an undivided 1/2 interest therein in trust for appellees; that appellees had lived upon this property and were living upon same, claiming it as their homestead, at the time F. J. Joyce gave a deed of trust covering same and executed certain notes in favor of the Reynolds Mortgage Company; that Reynolds Mortgage Company was charged with the homestead rights of appellees by virtue of their possession. It was alleged further by appellees that shortly after the execution and delivery of the deed from C. S. Martin to F. J. Joyce, said Joyce entered into a contract with appellee W. R. Martin, by the terms of which W. R. Martin paid to F. J. Joyce the sum of $13,250 in cash and assumed the payment of 1/2 of a $2,500 lien against said land in favor of one Wm. McGeorge and son; that by the terms of said contract Joyce obligated himself to execute a deed to appellee W. R Martin, upon demand by him, conveying an undivided 1/2 interest in this property with full covenants of general warranty upon payment by the said W. R. Martin of 1/2 the $2,500 Wm. McGeorge and son indebtedness; that this contract had been executed by Joyce and delivered to appellee W. R. Martin prior to the time of the execution of the note and deed of trust by Joyce to the Reynolds Mortgage Company; that on January 11, 1929, Joyce conveyed the entire tract of land to appellees, they assuming the indebtedness originally due Reynolds Mortgage Company, then held by Federal Life Insurance Company; that, while the deed of trust covers the whole of said land, in truth and in fact at the time of its execution and delivery, the said Joyce had title to only an undivided 1/2 interest therein; that appellees' homestead claim to an undivided 1/2 interest in said land at the time of making the deed of trust was either known to the Reynolds Mortgage Company, or by exercise of ordinary diligence could have been ascertained by it; on February 20, 1932, appellees executed a deed of trust covering this entire tract of land in favor of Federal Life Insurance Company to secure the balance due on the Joyce note to Reynolds Mortgage Company which was assumed by them in 1929. It was alleged that this last deed of trust was void because the property covered by same was the homestead of appellees. It was alleged further by appellees that appellee W. R. Martin was adjudged a bankrupt in 1923; that his wife, appellee Willie Lee Martin, was not a party to said bankruptcy proceedings, and that the property involved herein was not listed as exempt by appellee W. R. Martin; that same was sold to the Federal Life Insurance Company by the Trustee in Bankruptcy in liquidation of its claim against appellees secured by said deed of trust; and that such deed was void because the wife was not bound by said bankruptcy decree. It was alleged further by appellees that the Federal Life Insurance Company had obtained a judgment in a forcible entry and detainer suit in justice's court of Franklin County, and an injunction was sought against the sheriff to prevent the execution of said justice's court judgment. Appellees sought an adjudication of their title to an undivided 1/2 interest in the property and removal of the cloud cast thereon by the trustee's deed and the notes and deed of trust executed by Joyce to the Reynolds Mortgage Company, later assigned to appellant.

The Federal Life Insurance Company, the only appellant herein (and which will be hereafter referred to simply as appellant), answered by a plea of not guilty, and by cross action alleging that the property in question was, prior to the date of the conveyance of same by C. S. Martin and wife to F. J. Joyce, the homestead of C. S. Martin; that there was no written conveyance from C. S. Martin to appellees, neither was there an acknowledgment of any instrument in writing by the wife of C. S. Martin as required in the conveyance of homesteads; that appellee W. R. Martin could not acquire any interest in this property by verbal conveyance; that C. S. Martin and wife in fact never did convey the property to appellees, but, on the contrary, conveyed said property on September 10, 1918, to F. J. Joyce by warranty deed in the form required by law to convey homestead property, which deed was duly and properly recorded in Deed Records of Franklin County, Texas, shortly after its execution and delivery; that the Reynolds Mortgage Company was a holder in good faith for value without notice of any claim of appellees; that if any title was retained in the deed from C. S. Martin and wife to F. J. Joyce, it was retained in C. S. Martin and wife and not in appellees for the purpose of preventing certain judgment creditors of appellee W. R. Martin from levying upon said property; that in December 1920, F. J. Joyce informed appellee W. R. Martin of his desire to obtain a loan from Reynolds Mortgage Company and that the said W. R. Martin undertook and did assist Joyce in obtaining said loan. It was alleged further that F. J. Joyce represented himself to the Reynolds Mortgage Company to be the sole owner of said property, which representation was known to appellee W. R. Martin, and W. R. Martin connived, consented and assisted said Joyce to procure said loan; that appellee Willie Lee Martin, wife of W. R. Martin, knew that said loan was being obtained and remained silent, "connived and acquiesced" in the same when she was under duty to speak; that appellee W. R. Martin executed an instrument in writing and delivered same to Reynolds Mortgage Company, stating that appellees were tenants of F. J. Joyce as renters for the current year, and claimed no other right, title or interest in the premises. It was alleged that the loan was made under such representations of facts and under the existing record title then in Joyce. That on January 23, 1921, Reynolds Mortgage Company for a valuable consideration transferred said note and lien to appellant which it purchased for value without notice of any claim of appellees. Appellant alleged further the transfer of the whole tract of land by Joyce to appellees, the assumption by appellees of the debt due appellant; that appellees were estopped in law to deny the interest of their grantor, Joyce, by the recitations in the instrument under which they held. Appellant also alleged that it purchased, by authority of the bankruptcy court, the entire 240 acres of land from the trustee in bankruptcy in...