Hensarling v. Southern States Life Ins. Co.

• Decision Date: 03 June 1954
• Docket Number: No. 3168,3168
• Citation: 269 S.W.2d 555
• Parties: HENSARLING et al. v. SOUTHERN STATES LIFE INS. CO. et al.
• Court: Texas Court of Appeals

Page 555

269 S.W.2d 555

HENSARLING et al. v. SOUTHERN STATES LIFE INS. CO. et al.

No. 3168.

Court of Civil Appeals of Texas, Waco.

June 3, 1954.

Rehearing Denied June 29, 1954.

Pierce E. Holmes, Houston, for appellants Chas. E. Montgomery et ux.

Julia Mae Anderson, Houston, for appellants Hensarling and wife.

De Lange, Hudspeth & Pitman, Houston, for appellees.

TIREY, Justice.

This action is in the nature of a suit in trespass to try title. It does not yield to a simple statement.

When appellants rested, the Southern States Life Insurance Company and R. L. Cowling presented their motion for peremptory instruction, or, in the alternative, for the court to withdraw the cause from the jury and render judgment (such motion being presented subject to their right to proceed with their defense and their cross action) and the court granted such motion and withdrew the cause from the jury and found for the Southern States Life Insurance Company and R. L. Cowling, individually and as trustee. The recitals in the decree are quite lengthy. We think it is sufficient here to state that the court found and decreed that appellants take nothing against Southern States Life Insurance Company and R. L. Cowling, and taxed all costs against them, and further found that the Southern States Life Insurance Company recover from the appellants and all other parties to this action the fee simple title to and possession of Lot 443 in Block 24, Kashmere Gardens, fully described in the decree, together with writs of possession and all other necessary writs. The decree disposed of all the parties, but owing to the fact that only the Hensarlings and the Montgomerys perfected their appeal and filed briefs, the disposition made as to the other parties is not pertinent. The decree further awarded to Sourthern States Life Insurance Company a joint recovery against Charles Harrison Jones and wife, Gertrude Jones, and Charles E. Montgomery and wife, Maxine Montgomery, in the sum of $1,868.22, with legal interest from date of judgment until paid. Appellants here, Malcolm E. Hensarling and wife, Altie Mae Hensarling, excepted to the action of the court and gave notice of appeal to the Galveston Court of Civil Appeals. They seasonably present their motion for a new trial and were joined in this by Mr. and Mrs. Montgomery, which motion was overruled, and the Hensarlings and the Montgomerys seasonably perfected their appeal by filing a cost bond to the Galveston Court but they have filed separate briefs. The cause is here on transfer by order of our Supreme Court.

Perinent to this discussion, the judgment of the trial court is assailed on two grounds. They are substantially: (1) in holding that parol evidence was inadmissible to show that the deeds were intended as mortgages; (2) in granting a peremptory instruction because the uncontradicted evidence showed that the property constituted the homestead of appellants and as such was occupied continuously by them and their children, and was so occupied as such at the time of the transaction in question, of which defendants had notice, and that the deeds tendered in evidence were executed for the purpose of fixing a lien on appellants' homestead, and therefore void.

Appellees' counter-points are to the effect that the undisputed evidence shows: (a) that Southern States Life Insurance Company is subrogated to the original vendor's lien and the subsequent liens held by Houston First Federal Savings & Loan Association and those acquired from Carrie D. Kerr, and that no attack had been made on these liens; (b) that appellants are estopped by their conduct and acts to assert the invalidity of the sale relied upon by appellee in advancing purchase money; (c) that the Southern States Life Insurance Company advanced purchase money to C. H. Jones and wife without knowledge of any infirmities in his purchase; (d) that appellee is a bona fide purchaser for value under the trustee's deed. We are in accord with each of the foregoing counter points.

We quote substantially from appellee's brief a statement of the nature and result of this suit. Appellants, in their action in trespass to try title, made and Southern States Life Insurance Company and R. L. Cowling, individually and as trustee for such Insurance Company, defendants, and also joined Charles Montgomery and wife, C. H. Jones and wife, and Mrs. E. W. Falvey, a widow. Appellants, in their second amended original petition, in addition to the statutory trespass to try title count, made further allegations to the effect that certain conveyances executed by appellants and appellees, including the liens retained in such conveyances, were simulated for the purpose of fixing a lien on the homestead of appellants, and they prayed for cancellation of each of these instruments, and also for the setting aside of the foreclosure sale which had theretofore been made under a deed of trust. Charles Montgomery and wife filed a disclaimer in the suit, as did the legal representative of Mrs. Falvey, who died while the suit was pending. The Insurance Company and Cowling answered by pleas of not guilty, general denial, estoppel of the appellants to assert the homestead character of their property because of their own representations, and claimed that all loans were bona fide and that in any event they had no notice of any infirmities, if the sales and transactions were in fact simulated, and had no notice that such sales were not what they were purported to be, as shown by the instruments placed in evidence. Appellees further claimed rights of subrogation and in the event the foreclosure under the deed of trust sale was for any reason invalid that in such event they asked for judicial foreclosure and for deficiency judgment and general relief.

We have previously stated the effect of the decree as it relates to the property and to the appellants Hensarling. Since the Montgomery filed a disclaimer, and since the Southern States Life Insurance Company has agreed that the deficiency judgment rendered in its behalf against the Montgomerys may be stricken, the case here before us on appeal involves only the claims of Mr. and Mrs. Hensarling, which are to the effect that they made two simulated sales of their homestead and committed the monies received to uses other than those which would create a valid lien against a homestead. The two sales claimed to be simulated are the ones from Mr. and Mrs. Hensarling to Mr. and Mrs. Montgomery and the sale from Mr. and Mrs. Montgmery to Mr. and Mrs. C. H. Jones. The deed from Mr. and Mrs. Hensarling to Mr. and Mrs. Montgomery was dated January 17, 1946. This deed recites as consideration the sum of $10 and other valuable considerations, and the further consideration of the execution and delivery by the Montgomerys of a note bearing even date with the deed in the principal sum of $3,000, payable to the order of Malcolm E. Hensarling on or before thirty days after date, bearing interest from date until maturity at the rate of six per cent per annum, interest payable at maturity, with the usual contingencies as to attorney's fees, and in the deed we find this further recital: ' * * * and I, the said Malcolm E. Hensarling, in consideration of the sum of $3000.00 to me in hand paid by Houston First Federal Savings & Loan Association, a corporation, the receipt of which is hereby acknowledged and confessed, have bargained, sold, transferred and delivered and by these presents do bargain, sell, transfer and deliver unto Houston First Federal Savings & Loan Association the note hereinabove described in the sum of $3000.00, together with the vendor's lien and superior title securing the same. This assignment acknowledges payment of full consideration herein recited and Houston First Federal Savings & Loan Association is subrogated to all of my rights, title and interest securing said note. This assignment is made without recourse but I warrant that the full amount of said indebtedness represented by said note is unpaid. Grantees acknowledge the receipt from grantor of grantor's pro rata part of taxes for the current year and grantees assume payment of taxes for the year 1946.' Contemporaneously with the execution of the deed from the Hensarlings to the Montgomerys, the Montgomerys executed their promissory note to the Houston First Federal Savings & Loan Association in the principal sum of $3,000 and also contemporaneously therewith a deed of trust on the property described in the deed aforesaid as further security for the $3,000 note described in the deed from Hensarlings to the Montgomerys. On the 6th of January, 1948, the Montgomerys executed and delivered their certain warranty deed to C. H. Jones and his wife and in his deed we find that a consideration of $10 is recited, together with other good and valuable considerations, and the further consideration of the grantees assuming a note in the sum of $3,000 described in the deed of trust held by the Houston First Federal Savings & Loan Association. Thereafter, on the 19th day of January, 1948, C. H. Jones and wife executed and delivered their certain deed of trust on the above described property to R. L. Cowling, trustee, to secure...