Gore v. Citizens State Bank

• Decision Date: 07 November 1935
• Docket Number: No. 1622.,1622.
• Citation: 88 S.W.2d 721
• Parties: GORE et al. v. CITIZENS STATE BANK et al.
• Court: Texas Court of Appeals

Page 721

88 S.W.2d 721

GORE et al. v. CITIZENS STATE BANK et al.

No. 1622.

Court of Civil Appeals of Texas. Waco.

November 7, 1935.

Rehearing Denied December 5, 1935.

Appeal from District Court, Leon County; S. W. Dean, Judge.

Suit by Sady Gore and husband against the Citizens State Bank and others. Judgment for defendants, and plaintiffs appeal.

Affirmed.

Walter T. Thomason, of Wortham, for appellants.

Jack A. Newsom, of Buffalo, and M. L. Bennett, of Normangee, for appellees.

ALEXANDER, Justice.

W. M. Gore and wife, Sady Gore, brought this suit against Citizens State Bank of Buffalo and W. D. Recknor to cancel certain conveyances theretofore executed by plaintiffs and in trespass to try title to recover 100 acres of land in Leon county. The plaintiffs alleged, in substance, that they previously owned and occupied as their homestead two tracts of land of 50 acres each in Leon county; that one of said tracts was encumbered by a lien to secure the payment of notes in the sum of $1,977.66 held by the Buffalo State Bank and the other tract was free and clear of liens; that on December 5, 1922, while said property was so occupied by them as a homestead, they executed a pretended conveyance thereof to the Buffalo State Bank in cancellation of the indebtedness held by it and that thereafter on December 15, 1922, said bank reconveyed the land to them and retained a purported lien on the entire 100 acres to secure the payment of notes for the total sum of $2,000; that said transactions were simulated merely for the purpose of placing the lien on the entire homestead and were void; that on November 21, 1925, the defendant Citizens State Bank of Buffalo, as the holder of the above-described vendor's lien notes for $2,000 previously held by the Buffalo State Bank, procured a deed from plaintiffs by which said land was conveyed to said bank in cancellation of said notes; that said conveyance was without consideration and was void for the reason that the contents of the deed were not fully explained to Mrs. Gore at the time she executed and acknowledged the same. They further alleged that the defendant Recknor was claiming some interest in the land.

In addition to a general denial, the defendants pleaded the three, four, five, and ten-year statutes of limitation and alleged that they had purchased the land in good faith for value and without notice, and that the plaintiffs were estopped to set up the alleged defects in said conveyances. At the conclusion of the evidence, the court gave an instructed verdict in favor of the defendants. The plaintiffs appealed.

The evidence discloses that plaintiffs conveyed the land to the Citizens State Bank of Buffalo by deed dated November 21, 1925, for a recited consideration of $1 and the cancellation of notes in the sum of $2,000 then held by said bank, being the notes formerly held by the Buffalo State Bank. Said deed appears on its face to have been properly acknowledged by both Gore and wife. The plaintiffs were temporarily residing in Hopkins county at the time they executed said deed. Shortly thereafter they returned to Leon county, rented the land from the bank, paid rent for the use thereof for the years 1926 and 1927, and moved off of it again in the fall of 1927. On September 15, 1927, the bank conveyed the land to W. D. Recknor for the sum of $225 cash and vendor's lien notes for $675, and he has occupied the land continuously since said date. He had paid the balance of the purchase price prior to the filing of this suit on the 11th day of October, 1932. It is not contended that Recknor had notice of any of the defects in any of said conveyances.

It is apparently conceded by appellants that the notes for $1,977.66 formerly held by the Buffalo State Bank represented a valid indebtedness owing by W. M. Gore to said bank, and that such indebtedness was secured by a valid lien on 50 acres of the land in question. It is their contention that this indebtedness could not be made a valid encumbrance on the balance of the homestead and that the attempt to do so by their conveyance to the Buffalo State Bank and the reconveyance to them was a nullity. For several reasons, we do not deem it necessary for us to determine the correctness of appellants' contention in this respect. In the first place, the Citizens State Bank, as the successor of Buffalo State Bank, held a valid indebtedness against W. M. Gore. Gore and wife had a right to convey the homestead to the bank in cancellation of said indebtedness, as they did by their deed dated November 21, 1925, although the indebtedness forming the consideration for the conveyance was not secured by a lien on the homestead. Hiner v. Meyer (Tex.Com.App.) 44 S.W. (2d) 961. In the second place, the conveyance from appellants to the Citizens State Bank appears on its face to be regular. The evidence was without dispute that Recknor purchased the property in good faith and for value and there is no contention that he or said bank had any knowledge of any irregularities in such conveyance. Under such circumstances, Recknor acquired a good title to the property even though the conveyance to the Buffalo State Bank and the reconveyance to appellants was in fact a fictitious transaction made for the purpose of placing a lien on the homestead. 22 Tex.Jur. 162; Graves v. Kinney, 95 Tex. 210, 66 S.W. 293.

The fact that the deed from appellants to the Citizens State Bank was not fully explained to Mrs. Gore before she executed same does not alter the case. Admittedly, she signed the deed and appeared before the notary for the purpose of acknowledging same. The notary's certificate is in statutory form and the appellees, Recknor and the bank, were without notice that the deed had not been fully explained to Mrs. Gore or that she did not fully understand the contents of the same when she signed it. Since Recknor purchased the property in good faith for value and without notice, the certificate of the notary, under the circumstances above set out, is conclusive of the facts stated therein. Sanger v. Calloway (Tex.Com.App.) 61 S.W.(2d) 988, par. 3; Wheelock v. Cavitt, 91 Tex. 679, 45 S.W. 796, 66 Am. St.Rep. 920; Blankenship v. Stricklin (Tex.Civ.App.) 77 S.W.(2d) 339, par. 3, and authorities there cited; 1 Tex.Jur. 585.

We are further of the opinion that appellants' cause of action, if any they ever had, was barred by limitation at the time this suit was filed. Chicago, T. & M. C. Ry. Co. v. Titterington, 84 Tex. 218, 19 S.W. 472, 31 Am.St.Rep. 39; Groesbeck v. Crow, 91 Tex. 74, 40 S.W. 1028; Dean v. Dean (Tex.Civ.App.) 214 S.W. 505, par. 12.

The judgment of the trial court is affirmed.

STANFORD, Justice (dissenting).

Not being able to agree with my associates, I hereby file the following dissenting opinion:

Statement of the Nature and Result of the Suit:

This suit was an action for the cancellation of three deeds to appellants' homestead of fifty acres of land, on account of a simulated transaction, failure of consideration, and fraud in procuring the wife's signature to one of the deeds, which was brought by appellants against the appellees. The case was tried below on November 10, 1933, before a jury. The court below found that one of the appellees was an innocent purchaser and gave an instructed verdict in favor of appellees. Judgment was rendered for the appellees, that appellants take nothing by their suit, and that appellees go hence with their costs. The case has been properly brought to this court by appeal.

Parol evidence is admissible to show that a written instrument is void for illegality, want or failure of consideration, or on account of fraud or mistake.

W. M. Gore, on direct examination, testified as follows: "My name is W. M. Gore. I live in Leon County. I have lived in said county about 38 years. I am a farmer and have been all of my life. My wife's name is Sady Gore. * * * On or about the 5th day of December, 1922, I owned 50 acres of land in Leon County, Texas. I couldn't hardly tell you when I bought that land. I had that land eight or ten years, I guess. Yes sir, I owned 50 acres of land in 1922. I lived on that land at that time. It was cultivated land. * * * The way I bought that second tract, it involved both tracts, I sold out to the bank with the understanding that they would sell it back to me. They did not sell it back to me, but the bank kept both tracts, the one that I originally owned and also the one that I had bought from the bank. The Buffalo State Bank was in process of liquidation, and it was understood that my wife and I would get a loan of $2000.00 on the land that I owned, together with the 50 acres that I already had. * * * I got an abstract and they got up their papers and I have never seen a deed or note or anything that they made back to me. I never was able to get said Federal loan. * * *"

Sady Gore, wife of W. M. Gore, testified as follows: "I am the wife of W. M. Gore, and live in Leon County, Texas, and have lived here all by life, except one year when I lived in Hopkins County. Yes sir, me and my husband owned 50 acres of land in Leon County in 1922, and were living on it at that time. Yes sir, that was our homestead and we were using it and cultivating it as a homestead. * * * We sold them our 50 acres for our indebtedness and they were going to sell the 100 acres back to us. Yes sir, the 50 acres that we were living on was paid for. There was nothing at all against it. No sir, Mr. Newsom did not get a Federal Loan for us. I did not have any further conversation with him about the Federal loan. No sir, there was not anything against our land at that time."

The court, after hearing the evidence of W. M. Gore in reference to the transaction with the Buffalo State Bank showing the simulated transaction, ruled that such evidence was not admissible, because after the simulated transaction plaintiffs had conveyed the land to the Citizens State Bank in cancellation of the vendor's lien...