Holmes v. Tennant

• Citation: 231 S.W. 313
• Decision Date: 01 June 1921
• Docket Number: (No. 220-3349.)
• Parties: HOLMES et al. v. TENNANT.
• Court: Supreme Court of Texas

231 S.W. 313

HOLMES et al. v. TENNANT.

(No. 220-3349.)

Commission of Appeals of Texas, Section A.

June 1, 1921.

Error to Court of Civil Appeals of First Supreme Judicial District.

Suit by Mrs. I. R. Holmes and others against Jos. A. Tennant. From a judgment of the Court of Civil Appeals (211 S. W. 798) affirming a judgment for defendant, plaintiffs bring error. Judgments of trial court and Court of Civil Appeals reversed, and cause remanded for another trial.

A. B. Wilson, A. O. Blackwell, and Andrews, Streetman, Logue & Mobley, all of Houston, for plaintiffs in error.

Moody & Boyles and Wm. W. Anderson, all of Houston, for defendant in error.

TAYLOR, P. J.

Mrs. I. R. Holmes, widow, A. N. McKay, Flora B. Lee, Margaret St. John Lee, James H. Lee, and Caroline Lee Hoskinson and husband, plaintiffs in error, sued J. A. Tennant, defendant in error, to recover 500 acres of land out of the Richardson Pearsall one-third league in Harris county, Tex. Plaintiffs in error are the assignees and legal representatives of T. W. Lee, I. R. Holmes, and A. M. and J. H. York. Defendant in error is the son of J. H. Tennant, and acquired whatever title he has directly through his father's will.

The first count in the petition states a cause of action in trespass to try title. The second alleges in detail the facts on which claim of title is based. Defendant in error pleaded the three, five, and ten year statutes of limitation, and not guilty.

The court instructed a verdict in favor of defendant in error, and judgment was rendered accordingly. The Court of Civil Appeals affirmed the judgment. 211 S. W. 798.

The following rather full chronological statement of the facts is necessary to a clear understanding of the first question presented: John L. Carson was the common source of title. In February, 1893, he conveyed to T. W. Lee. On August 3, 1893, a written contract was entered into between J. H. Tennant, La Porte Wharfage & Improvement Company, and La Porte, Houston & Northern Railway Company, by which the Wharfage & Improvement Company agreed to cause to be conveyed to Tennant, together with other property, the land in question, with full power of sale, as collateral security for certain advances in money made by Tennant to the railway company for the purpose of completing the railroad. On September 11, 1893, T. W. Lee, at the request of the Wharfage & Improvement Company, deeded the land to Tennant. On the same date, and as a part of the same transaction, a second contract was made between the Wharfage & Improvement Company, the railway company, and Tennant, reciting, among other things, that Tennant should have power to sell the land in case the indebtedness owing him was not paid, but further that on payment thereof within the time agreed Tennant should reconvey the land to A. M. York, I. R. Holmes, T. W. Lee, and J. H. York, or to such persons as they might direct. On August 2, 1894, the railway company, T. W. Lee, I. R. Holmes, the two Yorks, and J. H. Tennant made another contract in which it is recited that the advances made by Tennant under the prior contracts of August 3d and September 11th amounted at that time to about $20,000. By the terms of the agreement other property was added to the security already held by Tennant on condition that the time of payment be extended to January 1, 1895. It was stipulated that on payment of the indebtedness Tennant should, among other things to be done by him, reconvey to the Wharfage & Improvement Company, or its order, all lands which were conveyed to him as collateral by the original contract. The contracts of August 3d and September 11th were by express provision made a part of the last contract, which was signed as follows:

"The La Porte, H. & N. R. R. Co., by A. M. York, Prest.; A. N. York, T. W. Lee, J. H. York, I. R. Holmes, J. H. Tennant."

On February 4, 1896, there was an execution sale of the land under a judgment against Lee, J. H. York, and others to the judgment creditor, American Tube & Iron Company, which is not a party to this suit. On February 28, 1896, J. H. Tennant sued the Wharfage & Improvement Company, the railway company, and T. W. Lee in the district court of Harris county, seeking foreclosure of a mortgage lien on the land here in controversy, alleged to have been created by virtue of the contracts of August 3d and September 11th, and the deed made by Lee to Tennant. The petition sets out the terms of the contracts, and alleged the amount due Tennant thereunder on January 1, 1895, was $21,500; that by virtue of various credits made on the indebtedness between that time and April 1, 1895, the balance due on January 1, 1896, including principal and interest, was $5,388.60. Foreclosure of the mortgage lien was prayed for. On October 8, 1897, Tennant amended his petition. He set out, in addition to the transactions alleged in the original petition, the contract of August 2, 1894, making the two Yorks and I. R. Holmes additional parties defendant, and alleging that they were personally liable to pay the debt sued on. Judgment and foreclosure were prayed for against them also. By a third amended original petition filed October 14, 1897, the Galveston, La Porte & Houston Railway Company, and its receivers, were made parties defendant as successors of the La Porte, Houston & Northern Railway Company. On April 20, 1898, J. H. Tennant, father of defendant in error, conveyed to O. C. Drew, trustee, by special warranty deed, the land in controversy. On the same date a contract was executed in duplicate between J. H. Tennant, O. C. Drew, and T. W. Lee, conditioned as follows:

"That the said J. H. Tennant has this day by the agreement and consent, and at the request of T. W. Lee sold and conveyed to said O. C. Drew, trustee, the following described land and premises: [Here follows a description of the land involved in this suit.]

"The said T. W. Lee is desirous of purchasing said land, and the said J. H. Tennant hereby agrees and binds himself to sell the said land to the said T. W. Lee for the sum of $6,608.61, with 8 per cent. interest from this date, and the taxes on said land for the years 1894, 1895, 1896, 1897, 1898.

"It is agreed that, if at any time up to the 1st day of May, 1899, but not thereafter, the said T. W. Lee shall pay the said J. H. Tennant the said sum of $6,608.61 with 8 per cent. per annum interest from this date to the date of conveyance, and shall also pay the taxes for 1894, 1895, 1896, 1897, and 1898, with 8 per cent. interest on said taxes from the date said Tennant may have paid the same, then the said O. C. Drew, trustee, shall convey said property to the said T. W. Lee, or any one to whom the said Lee may direct said conveyance to be made to.

"It is further agreed that in the event the said T. W. Lee does not pay the amount hereinbefore provided for on or before the 1st day of May, 1899, that then, on or after said date, the said trustee shall convey said land to the said J. H. Tennant, his heirs or assigns, in fee simple, and it is expressly understood and agreed that time is of the very essence of this contract, and that this contract of sale of said land shall be of no force or effect beyond said 1st day of May, 1899, and said Lee's option to buy the same on the terms hereinbefore stated shall absolutely cease and expire on said date; that when such deed is made by said trustee it shall bind the parties hereto, their heirs and legal representatives, to warrant and forever defend against any and all claims whatsoever arising by, through, or under them, or either of them. * * *"

On May 2, 1898, the foreclosure suit brought by Tennant was continued by consent. On October 25, 1898, it was continued generally by agreement, and on December 5, 1898, was again continued generally. On May 13, 1899, the case was dismissed for want of prosecution, and on March 20, 1899, a motion to reinstate was sustained. On May 18, 1899, O. C. Drew as trustee conveyed the land to L. E. Brown, a feme sole, by special warranty deed. On November 14, 1899, the case was again dismissed for want of prosecution. On November 17, 1899, L. E. Brown conveyed the land to J. H. Tennant by deed recorded March 3, 1904. J. H. Tennant, now deceased, bequeathed the land to his son, defendant in error, who leased it in 1906 to W. E. Gay. Defendant in error claims that he has subsequently been continuously in possession of the land through his tenants, paying taxes thereon. The two Yorks in 1910 deeded the land to one of the plaintiffs in error. The other plaintiffs in error are the legal representatives of Lee and Holmes, deceased. There is evidence that the fair market value of the land was largely in excess of the amount specified in the contract of April 20th.

The first question presented is whether the conveyance of April 20, 1898, together with the contract of the same date, set out above, was a conditional sale or mortgage.

It is stated in the brief of defendant in error, filed in the Court of Civil Appeals that on April 20, 1898, Tennant already had a mortgage on the land in suit, concerning the validity of which there was no question, and that a suit was then pending to foreclose it; that there is no evidence of a claim of indebtedness by Tennant against Lee, or any one else, thereafter.

It is not necessary to discuss the evidence further, in view of the fact the contract is set out in full, than to point out that subsequent to its execution the foreclosure suit was continued by agreement, was dismissed, and later reinstated, all subsequent to the execution and delivery of the conveyance and contract under consideration.

It is stated in Ruffier v. Womack, 30 Tex. 332, that—

"When the transaction grows out of a preexisting debt or loan of money, it must clearly appear that such debt is...