Gregg v. Texas Bank & Trust Co.

• Decision Date: 25 November 1921
• Docket Number: (No. 721.)
• Court: Texas Court of Appeals
• Parties: GREGG et al. v. TEXAS BANK & TRUST CO. et al.

Page 689

235 S.W. 689

GREGG et al. v. TEXAS BANK & TRUST CO. et al.

(No. 721.)

Court of Civil Appeals of Texas. Beaumont.

November 25, 1921.

Rehearing Denied December 7, 1921.

Additional Findings of Fact December 13, 1921.

Appeal from District Court, Jefferson County; W. H. Davidson, Judge.

Suit by the Texas Bank & Trust Company against D. A. Gregg and others. From an adverse judgment, defendants D. A. and Lorene Gregg appeal. Affirmed.

A. L. Love, of Austin, and Sam C. Lipscomb, of Beaumont, for appellants.

I. W. Lawhon, of Beaumont, for appellee.

O'QUINN, J.

The Texas Bank & Trust Company, of Beaumont, Tex., sued D. A. Gregg and wife, Lorene Gregg, and J. M. Gregg in the district court of Jefferson county, Tex., as joint makers of three notes of date November 1, 1917, and payable to plaintiff or its order at Beaumont, Tex., the first note being for $344 and payable May 1, 1918, the second for $300, payable November 1, 1918, and a third for $500, payable May 1, 1919, with interest at the rate of 8 per cent. per annum, and containing the usual 10 per cent. attorney's fee clause.

Plaintiff alleged that J. M. Gregg was an accomodation signer as to D. A. Gregg, but that, as to plaintiff, he was a joint maker and principal, and primarily liable; that the first two of said notes had been paid by said J. M. Gregg, and that he (J. M. Gregg) had paid the interest on the third note up to November 1, 1919, but that said note was past due and unpaid; that said D. A. Gregg and wife, Lorene Gregg, on October 30, 1917, for the purpose of securing the payment of said three notes, executed and delivered to plaintiff a certain deed of trust, wherein they conveyed to one D. K. Woodward, Jr., for the use and benefit of plaintiff, the middle tier of lots facing on Park Row street, in what is known as the Gregg addition to the city of Austin, Tex.

Plaintiff also sued D. A. Gregg on five certain promissory vendor's lien notes, each for the sum of $500, alleged to have been executed by the said D. A. Gregg on November 1, 1917, payable to plaintiff at Beaumont, Tex., and given as payment for lots 2, 3, 4, 5, 6, 7, 8, and 10 in said Gregg addition to the said city of Austin, the first due on November 1, 1919, the second May 1, 1920, the third November 1, 1920, the fourth May 1, 1921 and the fifth November 1, 1921, each of said notes bearing 8 per cent. per annum interest, payable annually, and containing the usual 10 per cent. attorney's fee clause, and also retaining a vendor's lien on said lots to secure the payment of said notes, and also providing that failure to pay any one of said notes when due, or any installment of interest thereon, should, at the option of the holder of said notes, make all of said notes due and payable, and that two of said notes were past due, and that defendant had failed to pay any portion of said notes or the interest due thereon, by reason of which plaintiff elected to mature all of said notes.

Plaintiff further alleged that on November 1, 1917, it conveyed by special warranty deed said lots 2, 3, 4, 5, 6, 7, 8, and 10 in the said Gregg addition to the city of Austin, in payment for which defendant D. A. Gregg executed the aforesaid notes, and that the execution and delivery of each and all of both series of said notes, and said deed, and said deed of trust, were made and done in pursuance to a settlement of a certain suit that on October 30, 1917, was pending on the docket of the district court of Travis county, Tex., in which the title to and possession of five acres of land, more or less, the same being a part of outlot No. 6, in subdivision E of the city of Austin, except a roadway through same, was in question, and that the said Gregg addition to the said city of Austin was located on said five acres of land, and that in said suit the Texas Bank & Trust Company, plaintiff herein, was plaintiff, and said D. A. Gregg and wife, Lorene Gregg, and the Port Arthur Rice Milling Company were defendants, and that, under the terms of said settlement, as made on said October 30, 1917, it was agreed by all the parties that said lots 2, 3, 4, 5, 6, 7, 8, and 10 of said Gregg addition should be decreed to plaintiff, Texas Bank & Trust Company, and that defendants, D. A. Gregg and wife, Lorene Gregg, should recover title and possession of the north tier of lots in said addition and that the middle tier of lots in said addition should be decreed to defendants, D. A. Gregg and wife, Lorene Gregg, but that said lots should be subject to a lien in favor of plaintiff, Texas Bank & Trust Company, to secure the payment of $1,144, to be evidenced by said D. A. Gregg's and Lorene Gregg's three promissory notes for $344, $300, and $500, respectively, to be of date November 1, 1917, the first to be due and payable May 1, 1918, the second November 1, 1918, and the third May 1, 1919, each to bear interest at the rate of 8 per cent. per annum, payable semiannually, and to contain the usual 10 per cent. attorney's fee clause, and which said notes were to be indorsed by the said J. M. Gregg, and the said D. A. Gregg and wife, Lorene Gregg, were to execute a deed of trust upon said middle tier of lots to secure the payment of said notes, and the said plaintiff, Texas Bank & Trust Company, was to execute a deed to said D. A. Gregg to the said lots Nos. 2, 3, 4, 5, 6, 7, 8, and 10 in said Gregg addition to said city of Austin, and the said D. A. Gregg was to execute in payment therefor his five vendor's lien notes each in the sum of 500, of date November 1, 1917, the first to be due and payable November 1, 1919, the second May 1, 1920, the third November 1, 1920, the fourth May 1, 1921, and the fifth and last November 1, 1921, each of said notes to bear interest at the rate of 8 per cent. and to contain the usual 10 per cent. attorney's fee clause, and each retaining the vendor's lien on the said lots to secure their payment.

Plaintiff further alleged that said agreement to settle said suit was made on October 30, 1917, and that in pursuance thereof judgment was duly entered in said district court of Travis county, Tex., under the terms of which title to said lots were set apart and vested in the parties as per said agreement, and giving to plaintiff herein, Texas Bank & Trust Company, a judgment lien on said "middle tier" of lots to secure the payment of said first three notes, and that said deed of trust was also executed by the said defendants therein for the benefit of plaintiff to secure the payment of said notes.

Plaintiff further alleged that, by reason of defendant's failure to pay the five vendor's lien notes given plaintiff for the purchase of said lots 2, 3, 4, 5, 6, 7, 8, and 10, and by their failure to pay interest thereon, plaintiff had elected to mature all of said notes, and had elected to declare said conveyance from it to said defendants forfeited, and plaintiff entitled to recover the title and possession of same, and, in the alternative, that, if not entitled to recover the title and possession to said lots, then that it would be entitled to recover judgment upon said vendor's lien notes and to a foreclosure of its lien.

Defendants D. A. Gregg and Lorene Gregg plead in abatement misjoinder of parties, in that said defendants and J. M. Gregg were sued on one note for $500, and to foreclose a deed of trust, and that plaintiff was also suing defendant D. A. Gregg on five notes for $500 each, and for foreclosure of lien. They also answered by general denial and plea of non est factum as to the notes for $344, $300, and $500, and the deed of trust upon the "middle tier" of lots in said Gregg addition, and also pleaded that the land on which said deed of trust was alleged to have been given by them, the "middle tier" of lots in said addition, was a part of their homestead at the time of the alleged execution of said three notes and said deed of trust, and was such long before and ever since said time, and not subject to being mortgaged, except for payment of purchase money, or mechanic's lien for improvements, and denied that said notes were given as any part of the purchase money for said lots, or for said homestead, or for any improvements thereon, and specially denied that plaintiff had any enforceable lien of any character upon said lots. Said defendants further pleaded that, while they had no recollection of having executed said deed of trust, as alleged by plaintiff, yet they admitted that the records of said Travis county showed that such deed of trust was executed for the alleged purpose of securing the payment of said three notes, and, without admitting the execution of said deed of trust, they alleged that said deed of trust provided that, on the payment of as much as $250 on said notes, a tract or parcel of land 100 feet by 135 feet in said tract (the said "middle tier") was to be released from the lien thereon, and that under plaintiff's pleading $644 had been paid upon said notes, and that the said defendants had not received any release to any part of said tract or lots, and therefore plaintiff had breached its said contract, and by reason thereof was not entitled to a foreclosure of its lien. The said pleas of said defendants were sworn to be true "to the best of their knowledge and belief."

Defendant J. M. Gregg answered, denying all the allegations in plaintiff's petition, except such as were specifically admitted, and, further answering, complained of D. A. Gregg and wife, Lorene Gregg, admitting the execution of said first three notes for $344, $300, and $500 respectively, as alleged by plaintiff, and that he signed same as surety for said D. A. Gregg and Lorene Gregg; that he had paid off and discharged the first two of said notes, the one for $344 and the one for $300, together with all interest due on the third note up to November 1, 1919, and that by so doing he was subrogated to all the rights of plaintiff therein, and therefore entitled to demand and receive of and from...