Hurt v. Cooper

• Decision Date: 20 February 1885
• Docket Number: Case No. 2025.
• Citation: 63 Tex. 362
• Parties: JOHN H. HURT v. B. P. COOPER ET AL.
• Court: Texas Supreme Court

63 Tex. 362

JOHN H. HURT

v.B. P. COOPER ET AL.

Case No. 2025.

Supreme Court of Texas.

Feb. 20, 1885.

APPEAL from Galveston. Tried below before the Hon. Wm. H. Stewart.

On the 17th of March, 1877, Thos. D. Gilbert borrowed from the plaintiff Hurt a sum of money which appears to have been secured as follows: Thos. Gilbert and his wife Annie made a deed of conveyance to B. P. Cooper for lots 6 and 7 in block 626, and lot 11 in block 143, in the city and county of Galveston, Texas. The deed recited a consideration of $4,500 as paid and the further consideration of said Cooper's promissory note of same date for the sum of $5,500, payable twelve months after date and bearing twelve per cent interest, payable quarter-yearly, and to secure this note a trust deed of even date therewith was executed by said Cooper, giving H. M. Truehart and Lucien Minor, trustees, power to sell said property in default of payment of said note. Plaintiff's petition alleged that after the execution of said note on the 17th of March, 1877, Cooper delivered the same to Thos. Gilbert and Catherine Gilbert, and that they, on the day and year aforesaid, indorsed it in blank and delivered it so indorsed to plaintiff Hurt, who thereby then and there became and was and still is the lawful bearer and owner thereof. Cooper reconveyed by deed dated July 13, 1877, the same property to Catherine and Thos. Gilbert, the consideration recited being that Gilbert assumed the payment of the promissory note. These papers were all prepared in the office of Truehart & Co., and the property, lots 6 and 7 in block 626, was placed in the hands of Truehart & Co. by Thos. Gilbert at the time of the delivery of the note to Hurt, with instructions to collect the rents therefrom and apply same towards the payment of that note. Hurt paid no money at the time of receiving the note and trust deed, but afterwards, on the 27th day of March, 1877, made an agreement the original of which was attached to the transcript. This agreement authorized Hurt to pay off all incumbrances upon the property, which consisted of a judgment in the district court of Galveston county against Gilbert, amounting then to the sum of $3,442.66, and taxes due to the city of Galveston and to the county and state. Plaintiff testified that he paid the judgment and also taxes on this and other property. On the 27th day of December, 1879, the lots 6 and 7 in block 626, with the buildings and improvements thereon, and lot 11 in block 143, were sold by Truehart and Minor, trustees under the trust deed, and bid in by Hurt for the sum of $3,350, and a credit as of the same day was placed by them on the note for the proceeds of sale, less $96.50, as trustees' commissions, leaving credit of $3,253.50. Afterwards, on the 27th day of September, 1880, Hurt brought suit against Cooper as maker, and Thos. and Catherine Gilbert as indorsers, and claimed in his petition the full $5,500, with twelve per cent. interest thereon from date of note, less $4,222.51, admitted as a credit on the note. Lot 11, in block 143, had always remained in the possession of Gilbert and wife, and was claimed by them as forming a part of their homestead. After December 27, 1879, Hurt took possession of lots 6 and 7 in block 626, and continued to appropriate the rents, issues and profits therefrom to his own use.

The pleadings are lengthy, but the case can be understood sufficiently from this statement in connection with the opinion.

Gresham & Jones, for appellant, cited: Levy v. Gray, 56 Miss., 318;Carpenter v. Arnold, 10 C. E. Green, 194;Wright v. Arnold, 14 B. Mon., 645;Anderson v. Armistead, 69 Ill., 452; Story's Equity Jurisp., vol. I, secs. 384-389; Bigelow on Estoppel, 479, n. 2; 513, n. 1; Kerr v. Hitt, 75 Ill., 51; Greenl. on Ev., vol. 1, §§ 192, 275, 277, 297; Jones v. Foxall, 13 Eng. Law & Eq., 140, 145.

Wharton Branch, for appellees, cited: Phil. on Ev., vol. II, p. 279; Story on Agency, secs. 68, 69, 76 and 83; 1 Story's Eq. Jur., sec. 64f; 2 Id., secs. 697, 1047, 1047a, 1227.

STAYTON, ASSOCIATE JUSTICE.

That part of the answer of Catherine and Thomas D. Gilbert contained in the fifth paragraph presented no defense to this action, and the demurrer thereto should have been sustained.

The inquiry or proposition for settlement, contained in the letter of H. M. Truehart & Co., of date January 26, 1881, was probably offered to support the part of the answer before referred to, was inadmissible, and should have been excluded.

At most it amounted to no more than a proposition for a settlement of the matters in controversy, not shown to have been in any way accepted or complied with, and hence not binding on either party.

It was claimed in the answers that the lots on which the trust deed was given were conveyed by Catherine and Thomas D. Gilbert and his wife to B. P. Cooper, for the sole purpose of procuring a note, in form a purchase money note, on which appellant was willing to lend money, and that, in fact, Cooper made the note and accepted the deed solely for the accommodation of the Gilberts, who, as between themselves and Cooper, were the real debtors, and also the owners of the lots, which, in accordance with the original understanding between them, he soon afterwards reconveyed. The evidence shows very fully that this was the real nature of the transaction between the Gilberts and Cooper, and it is alleged that of this Hurt had notice at the time he contracted to lend money to the Gilberts on the security of the note and trust deed executed to them by Cooper.

While there is a conflict of evidence as to whether Hurt knew the real nature and purpose of the transaction between the Gilberts and Cooper, and the weight of the direct evidence may be in favor of the negative of this proposition, yet it cannot be denied that there is circumstantial evidence from which a jury might come to the conclusion that Hurt did have notice of the nature and purpose of that transaction.

If he had such notice, then he could not rely upon the deed from the Gilberts to Cooper for the divestiture of such homestead rights as the former had in lot 11, block 143; for he would stand charged with notice that Cooper held the legal title to the lot in trust for the...