Jackson v. Hernandez
| Citation | 285 S.W.2d 184,155 Tex. 249 |
| Decision Date | 14 December 1955 |
| Docket Number | No. A-5121,A-5121 |
| Court | Supreme Court of Texas |
| Parties | Dora JACKSON, Petitioner, v. Minnie J. HERNANDEZ et vir., Respondents. |
James DeAnda, Corpus Christi, Philip M. Shafer, Houston, for petitioner.
R. O. Kenley and H. C. Davidson, Houston, for respondents.
On the principal question involved in this case, we hold that where real estate is conveyed by deed which recites a contractual consideration but which does not stipulate, either expressly or by necessary implication, that the grantee named therein shall take the equitable as well as the legal title, the parol evidence rule does not preclude the establishment of a parol trust in favor of a third person based upon a prior agreement between the grantee and such third person.
Petitioner instituted suit against respondent for the partition of real estate, and the latter filed a cross-action seeking to establish a parol trust in the property. After a trial before the court, judgment was entered denying petitioner any relief and awarding title and possession of the property to the respondent. This judgment has been affirmed by the Court of Civil Appeals. 274 S.W.2d 131.
Petitioner and respondent are sisters, and are the sole heirs of their mother, Calletana Castro, who died intestate on March 3, 1950. Mrs. Castro was a widow at all times relevant to this controversy, and there is no administration or necessity for administration on her estate. In 1927 the mother was unable to work and had no income, and was dependent upon respondent for her support. Prior to the purchase of the property in question, Mrs. Castro and respondent orally agreed that the property would be purchased in the name of the mother, but that respondent would pay for it, and that when the purchase price had been paid the mother would convey the property to respondent but would have the right to live there the rest of her life.
Pursuant to this agreement, Mrs. Castro on November 7, 1927, contracted in writing to purchase the property from J. H. Swope for the total consideration of $1,600 payable as follows: $100 in cash upon the execution of the contract, as additional $500 to be paid by the purchaser in installments of not less than $25 per month, and the assumption of a note for $1,000 theretofore executed by Swope to Miss Gussie Howard and which matured September 19, 1930. The contract stipulated that the property would be conveyed to the purchaser when the additional $500 had been paid. Respondent paid the initial $100 as well as the additional $500 to Swope under the contract. Thereupon Swope conveyed the property to Mrs. Castro by warranty deed dated July 31, 1930, which recited a consideration of $600 paid in cash and the assumption by the grantee of the payment of the Howard note. By instrument dated August 13, 1930, executed by Mrs. Castro and Miss Howard, the note was renewed and extended to mature in semi-annual installments of $100 each. The indebtedness evidenced by the note was paid entirely by respondent, and on January 2, 1936, the note and all liens securing same were released. The name of respondent does not appear in any of the written instruments. The prior agreement between respondent and her mother was not reduced to writing, and no deed or other instrument supporting or establishing respondent's claim to the property was ever executed by Mrs. Castro.
The Texas Trust Act, Vernon's Ann.Civ.St. art. 7425b-1 et seq., which requires that an express trust in land be evidenced by an instrument in writing, was adopted after the occurrence of the events involved in this suit and has no application here. It is also well settled by a long line of decisions beginning with James v. Fulcrod, 5 Tex. 512, 55 Am.Dec. 743, that our Statute of Frauds does not prevent the engrafting of an express parol trust upon a deed absolute in form. Petitioner does not rely upon either of these statutes but by her first and second points asserts that since the consideration for the conveyance to the mother was contractual, the parol evidence rule precludes the establishment of a trust in respondent's favor. It is clear of course, that the contract and deed to Mrs. Castro do recite a contractual consideration, and there is no allegation of fraud, accident or mistake.
Petitioner relies primarily upon Kidd v. Young, 144 Tex. 322, 190 S.W.2d 65; Loeb v. Wilhite, Tex.Civ.App., 224 S.W.2d 343, Writ Ref.N.R.E.; Lindsay v. Clayman, 151 Tex. 593, 254 S.W.2d 777; and Knox v. Long, 152 Tex. 291, 257 S.W.2d 289. The principles of law announced and applied in these cases can be traced back to the decision of this court in Kahn v. Kahn, 94 Tex. 114, 58 S.W. 825, where the husband, after conveying real estate to his wife by a deed which recited a consideration of $500 paid by the wife "out of her separate funds, and for her separate use and benefit", sued to recover his community interest in the property, contending that he did not intend to convey his interest in the property to the wife in her separate right. It was held that 'without proof of fraud or mistake in the insertion of the recitals in the deed, parol evidence was not admissible to show that the maker of it did not intend to convey the property to his wife as her separate property, and this for the reason that the deed on its face clearly expressed such intent.' It is apparent that the decision rests, not upon a recital of contractual consideration, but upon the fact that the instrument stipulated, in effect, that the beneficial ownership of the property was conveyed to the wife for her separate use.
The rationale of the decision is even more clearly stated in McKivett v. McKivett, 123 Tex. 298, 70 S.W.2d 694, 695, where community realty was conveyed by a husband to his wife as her separate property by deeds which recited a contractual consideration. After the death of the husband, his heirs sought to recover an undivided one-half interest in the property upon the theory that the deeds were executed pursuant to a prior agreement between the husband and wife that she would hold the title in trust for the community. After discussing the Kahn case and stating that the principle upon which that decision rests is the same as that which controls the cases holding that parol evidence may not be admitted, in the absence of fraud or mistake, to prove another or different consideration when the consideration expressed in the written instrument is contractual or executory, it was said:
(Emphasis supplied.)
The effect of the recitals of contractual consideration was not discussed in the opinion, and the same result apparently would have been reached if the consideration stated in the instrument had not been contractual or executory. The case stands for the proposition that where a conveyance declares that the grantee is to take for his own benefit, extrinsic evidence is not admissible, in the absence of grounds for reformation or rescission, to show that he was intended to hold the property in trust. The authors of the Restatement regard this as a sound proposition of law, but state that if the instrument does not declare that the transferee is to take the property for his own beenfit or that he is to hold it in trust, extrinsic evidence may be admitted to show that he was intended to hold the property in trust either for the transferor or for a third party. Restatement of the Law of Trusts, Vol. 1, page 122, sec. 38.
The effect of a recital of contractual consideration in the absolute deed-parol trust situation was considered by this Court in Kidd v. Young, 144 Tex. 322, 190 S.W.2d 65, 66. A father and mother, who had conveyed land to their children by a deed which recited a contractual consideration, attempted to show by extrinsic evidence that the property was conveyed to the grantees in trust for their mother under an agreement that the legal title would thereafter be conveyed at her request either to her or to any person to whom she might sell the land. In holding that the parol evidence rule precluded proof of the extrinsic agreement, we said:
'The rule has been announced and applied many times in this state that when the consideration expressed in a deed or other contract is contractual and there is no allegation of fraud, accident or mistake, parol evidence is not admissible to contradict or vary the consideration so expressed, if the result would be to change or defeat the legal operation and effect of the instrument. * * *'
After making this assertion and citing authorities in support of same, the opinion continues with the following statement:
'* * * The rule stated applies to any attempt to impose on the grantee in a deed a parol trust in respect to the property conveyed. * * *'
The rule just stated was that in the absence of fraud, accident or mistake, parol evidence is not admissible to contradict or vary contractual consideration expressed in a deed or other contract. In support of the last quoted statement, we cited the Kahn case, the McKivett case, Hillman v. Graves, Tex.Civ.App., 134 S.W.2d 436, No Writ, and Small v. Brooks, Tex.Civ.App., 163 S.W.2d 236, Writ Ref.W.M. In the Hillman and Small cases, as in Kidd v. Young, a grantor who had conveyed by absolute...
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