Home Owners' Loan Corporation v. Cilley, 4965.

• Decision Date: 09 January 1939
• Docket Number: No. 4965.,4965.
• Citation: 125 S.W.2d 313
• Parties: HOME OWNERS' LOAN CORPORATION v. CILLEY et al.
• Court: Texas Court of Appeals

Page 313

125 S.W.2d 313

HOME OWNERS' LOAN CORPORATION v. CILLEY et al.

No. 4965.

Court of Civil Appeals of Texas. Amarillo.

January 9, 1939.

Rehearing Denied February 20, 1939.

Appeal from District Court, Cameron County; A. M. Kent, Judge.

Suit in the nature of an action in trespass to try title by the Home Owners' Loan Corporation against Dwight Cilley and others, wherein defendants E. H. Cilley and Laura Cilley filed a cross-action. From a judgment awarding two-thirds interest in the realty to defendants E. H. Cilley and Laura Cilley, plaintiff appeals.

Affirmed.

F. C. Davis, Jesse I. Edwards, and E. L. Early, all of San Antonio, for appellant.

H. L. Faulk, of Brownsville, for appellees.

FOLLEY, Justice.

The appellant, Home Owners' Loan Corporation, filed this suit in the nature of an action in trespass to try title against Dwight Cilley and wife, Franca Cilley, and E. H. Cilley and wife, Laura Cilley. The suit involves title to Block No. 15, Parker Tract, containing 44.55 acres out of Partition Share No. 15, Espiritu Santo Grant, in Cameron County, Texas. Since the appellant is not complaining in this court of any action with reference to Dwight Cilley and his wife Franca Cilley, hereinafter when we refer to the appellees we mean to refer to E. H. and Laura Cilley.

The land in question was deeded to Laura Cilley by the Interstate Finance Company on February 23, 1920. The testimony shows such land was purchased out of the funds of the separate estate of Laura Cilley. The consideration expressed in the deed of conveyance was $9,010 in cash paid by the grantee and her assumption of six vendor's lien notes of even date with the deed, the first in the sum of $500 and the other five in the sum of $498, signed by the Interstate Finance Company and payable to the order of Fresnos Land and Irrigation Company. Such notes were numbered one to six and became due in their numerical order from one to six years after their date. Notes numbers 5 and 6, the only two material to this law suit, were originally due respectively on February 23, 1925 and February 23, 1926. The record shows that the first four notes of the series were fully paid and released prior to the institution of this suit. On February 14, 1924, notes numbers 5 and 6 were transferred by the Fresnos Land and Irrigation Company to J. G. Fernandez.

On March 27, 1928, E. H. Cilley and wife, Laura Cilley, deeded to Dwight Cilley, their son, an undivided one-third interest in the above land. The consideration expressed in their deed to the son was $1 in cash and the assumption by the grantee of the payment of one-third of the indebtedness then outstanding against such land as evidenced by notes numbers 5 and 6. The deed further provided that Dwight Cilley had agreed to pay one-third of all taxes then due or to become due on the property. On January 18, 1929, E. H. Cilley and wife executed an extension agreement in favor of J. G. Fernandez extending the maturity date of note number 5 to February 23, 1931. Although note number 6 was long past due at such time, it was neither included nor mentioned in this extension agreement.

On December 6, 1929, J. G. Fernandez transferred both the notes in question to the Southland Life Insurance Company. Simultaneously with such transfer Dwight Cilley executed his note in the sum of $2,000 payable to the Southland Life Insurance Company. In connection therewith Dwight Cilley, then a bachelor, also executed a deed of trust in favor of the Southland Life Insurance Company to secure the payment of the $2,000 note. The property conveyed in such deed of trust was described as follows: "Being all of Block No. 15 of the Parker Tract, containing 44.55 acres of land; * * * and being the identical land conveyed to Dwight Cilley by E. H. and L. J. Cilley by warranty deed dated March 27th, 1928, recorded in Book 185, pages 525-526 of the Deed Records of Cameron County, Texas."

This deed of trust also provided that the proceeds of the loan therein involved had been used to extend and renew a balance due upon said notes numbers 5 and 6 in the total sum of $1,074.88, plus the sum of $925.12 advanced to the borrower to be applied upon the payment of "ad valorem taxes now owing against the herein above described property."

On June 13, 1934, the Southland Life Insurance Company transferred and assigned to the appellant, Home Owners' Loan Corporation, the balance of the indebtedness due by Dwight Cilley in the sum of $1,794.65, together with the lien securing the same, reciting that the indebtedness and lien were more fully described in the deed of trust from Dwight Cilley to the Southland Life Insurance Company of record in the deed of trust records of Cameron County, Texas. Simultaneously with this transfer and assignment Dwight Cilley and wife, Franca Cilley, executed and delivered to the Home Owners' Loan Corporation their promissory note in the sum of $2,133.65, payable in monthly installments. By deed of trust they also purported to convey for the benefit of appellant, "all of the following described real estate, situated in the County of Cameron, State of Texas, to-wit: Block Numbered Fifteen (15) Parker Tract, containing 44.55 acres out of Partition Share #15, Espiritu Santo Grant, Cameron County, Texas." This deed of trust represents that the note was given in lieu and in extension of the balance due upon the note of Dwight Cilley to the Southland Life Insurance Company as evidenced by the deed of trust to the Southland Life Insurance Company, and for $220.10 in taxes due upon the property. On April 6, 1937, after default in the payments on the note, the duly appointed substitute trustee, under the authority of the deed of trust to the appellant, sold the lands involved to the Home Owners' Loan Corporation for the sum of $1,400 and executed his deed therefor to the appellant.

Thereafter, on May 5, 1937, the appellant filed this suit. In this connection it should be stated that the appellant in its pleadings did not attempt to foreclose under the provisions of the two deeds of trust outlined above and asked for no affirmative relief for the money advanced by it to Dwight Cilley, but stood only on its trespass to try title action, asserting that the title to all the property had passed to the appellant by reason of the sale under its deed of trust.

Dwight Cilley and wife, Franca Cilley, made no appearance, but the appellees, E. H. Cilley and Laura Cilley, answered by the general issue and a plea of not guilty. They alleged that the property constituted their homestead, and that the notes in question, as far as they were concerned, were barred by the statute of limitations. They also set up a cross-action for the recovery of the title and possession of an undivided two-thirds interest in the property, basing such cross-action upon their title as shown by the record and their failure to join in the execution of the instruments above mentioned. By trial amendment the appellees further asserted that the two-thirds undivided interest in the land constituted the separate property of Laura Cilley.

All matters of fact as well as of law were submitted to the court. A default judgment was rendered in favor of the appellant against Dwight Cilley and his wife, Franca Cilley, for title and possession of an undivided one-third interest in the property. Judgment was rendered against the appellant and in favor of E. H. Cilley and Laura Cilley as to the remaining undivided two-thirds interest in the property, and decreed a partition as between the appellant and the appellees E. H. Cilley and Laura Cilley. The court further adjudged that the undivided two-thirds interest of the appellees was the separate property of Laura Cilley and had constituted the homestead of the appellees since 1920. From the judgment as to the undivided two-thirds interest awarded to E. H. Cilley and Laura Cilley, the appellant prosecutes this appeal.

The testimony is undisputed that the undivided two-thirds interest of the appellees, E. H. Cilley and Laura Cilley, constituted their homestead, and that they had resided upon such property as such since its purchase in 1920 by Mrs. Cilley. It is equally uncontroverted that the property was purchased by Mrs. Cilley out of the funds of her separate estate and that the undivided two-thirds interest in such property was a part of her separate estate. The record further reveals that she was married at the time such property was conveyed to her. It is also conceded that, as against the interest in the land of E. H. and Laura Cilley, note number 6 became barred by limitations on February 23, 1930 and note number 5 became barred by limitations on February 23, 1935, unless their maturity dates were extended by the above instruments executed by Dwight Cilley.

The trial court concluded that under the facts as above stated, Dwight Cilley was without authority to extend the whole of the indebtedness as against Laura Cilley by the renewal notes and deeds of trust above mentioned. It is our opinion that the language of the deed of trust executed by Dwight Cilley to the Southland Life Insurance Company precludes the contention of the appellant that more than an undivided one-third interest in the property was included in such transfer. Although the instrument describes the property as "Being all of Block 15 of the Parker Tract * * *." such description is limited by the further language: "and being the identical land conveyed to Dwight Cilley by E. H. and L. J. Cilley by warranty deed dated March 27th, 1928, recorded in Book 185, pages 525-526 of the Deed Records of Cameron County, Texas." The deed thus referred to is very definite that only an undivided one-third interest had passed to Dwight Cilley. The deed of trust to the appellant, however, does purport on its face to transfer all of the property in question. At the time of its execution, however, note number 6 was barred by limitation as far as Laura Cilley's interest in...