Jasper State Bank v. Braswell

• Decision Date: 18 May 1937
• Docket Number: No. 3116.,3116.
• Parties: JASPER STATE BANK v. BRASWELL et al.
• Court: Texas Court of Appeals

107 S.W.2d 681

JASPER STATE BANK v. BRASWELL et al.

No. 3116.

Court of Civil Appeals of Texas. Beaumont.

May 18, 1937.

Rehearing Denied June 30, 1937.

Appeal from District Court, Jasper County; F. P. Adams, Judge.

Suit in trespass to try title by Mrs. Ethel Braswell and Kern L. Braswell, her husband, against the Jasper State Bank, wherein defendant filed a cross-action. From the judgment, defendant appeals.

Affirmed.

Richardson & Lanier, of Jasper, and Williams, Lee, Sears & Kennerly, of Houston, for appellant.

Synnott & Smith, of Jasper, for appellees.

WALKER, Chief Justice.

On the 8th day of June, 1932, the partnership of J. M. Orton & Son and its individual members, J. M. Orton, Robert Orton, and Kern L. Braswell, doing a drug business in the city of Jasper, Jasper county, were adjudged bankrupts by the District Court of the United States in and for the Eastern District of Texas, and J. W. Shotwell was duly appointed trustee and qualified and administered the bankrupt estate, as such trustee. On the 20th day of June, 1932, Jasper State Bank filed in that bankrupt proceeding its claim against the bankrupts, on that day amounting to $18,673.30, evidenced by four promissory notes as follows: First note dated December 26, 1930, due six months after date for $6,500, with interest at 10 per cent. from maturity, executed by J. M. Orton, Robert Orton, Kern L. Braswell, and Mrs. A. D. Wagley; second note dated January 21, 1931, for $1,725, due six months after date, bearing 10 per cent. interest from maturity and executed by the same parties who executed note No. 1; third note dated February 18, 1931, for $1,450, due four months after date, bearing interest at 10 per cent. from maturity, executed by the same parties who executed notes 1 and 2; fourth note dated April 4, 1931, for $7,900, due six months after date, interest at 10 per cent. from maturity, executed by the same parties who executed notes 1, 2, and 3, and also by Mrs. Ethel Braswell, wife of Kern L. Braswell, who subsequently became a party to all the notes. Though Mrs. Braswell was a party to all four notes, she was in no way a party to the bankrupt proceedings. These four notes were secured as follows: (a) By deed of trust dated the 7th day of July, 1931, duly filed for record in Swisher county, wherein bankrupts Robert Orton and Kern L. Braswell, joined by his wife, Mrs. Ethel Braswell, conveyed to L. J. Fortenberry, trustee for Jasper State Bank, the following described land: "Section No. 59, Block B-2, Certificate 1/802, original grantee Beaty, Seale & Forwood, patented to Emily Smyth October 27, 1880, by patent No. 553, Vol. 2, Abst. No. 119, in Swisher County, Texas, and being the same land described as first tract in a certain deed executed by A. D. Wagley to the grantors herein July 1931, to which deed reference is here made for description as well as all other purposes," hereinafter referred to as the Swisher County land. This tract was owned one-half by Robert Orton and one-half by Mrs. Ethel Braswell, who held under deed from Mrs. A. D. Wagley on consideration of $10 and the assumption by the grantees of her liability on the four above-described notes. (b) By deed of trust dated the 4th day of April, 1931, duly recorded in Jasper county, wherein the bankrupts J. M. Orton, Robert Orton, and Kern L. Braswell, joined by his wife, Mrs. Ethel Braswell, conveyed to L. J. Fortenberry, trustee for Jasper State Bank, the following described property:

"* * * lying and being in the County of Jasper and State of Texas, viz:

"Being a part of Lot No. 33 of the Town of Jasper, according to the original map thereof, recorded in Vol. 3, page 302 of the Deed Records of Jasper County, Texas, situated on the North side of the Court house square and bounded as follows:

"Beginning on the South side of said Lot No. 33 77 ft. West of the South East corner thereof, being 22 ft. west of the South west corner of a part of said lot sold by J. M. Orton to W. E. Lanier. Thence North 150 ft. Thence West 46 ft. Thence South 150 ft. to the south line of said lot; Thence East 46 ft. to the place of beginning,"

hereinafter referred to as the city of Jasper property. The two Ortons owned an undivided seven-eighths interest in this property and Mrs. Braswell owned the remaining one-eighth interest. The claim of the Jasper State Bank was duly approved by the federal court, both as to amount and as to security.

On the 3d day of October, 1925, the three bankrupts, joined by Mrs. Ethel Braswell, conveyed the city of Jasper property to T W. Bardell, trustee, to secure Southwestern Life Insurance Company in the payment of a note executed to it by all four of the makers of the deed of trust dated the 3d day of October, 1925, with interest at 7 per cent. per annum from maturity; this claim was duly filed in the Orton & Son bankruptcy proceedings and on the 21st day of June, 1932, was allowed in the sum of $6,600, together with its security. In due course of administration of the bankrupt estate, under orders of the federal court regularly made and entered, J. W. Shotwell, as trustee, sold and by separate deeds dated the 30th day of August, 1932, conveyed the two tracts of land as above described to Jasper State Bank, on the following consideration: (a) For the Swisher County land $6,400, to be credited by the Jasper State Bank on its secured claim, represented by the four notes above described; (b) for the city of Jasper property $5,000, to be credited on the four notes, and the further consideration that the Jasper State Bank assume and pay the claim of the Southwestern Life Insurance Company; as a further consideration it was recited in the order that neither Jasper State Bank nor Southwestern Life Insurance Company should make any further claim against the bankrupt estate. The Jasper State Bank duly paid to the Southwestern Life Insurance Company the full amount of its claim, and on the 11th day of January, 1934, the Southwestern Life Insurance Company executed a formal release of its lien against the city of Jasper property. When the Jasper State Bank purchased the two tracts of land at the bankrupt sale, it knew in fact of the note and lien in favor of Southwestern Life Insurance Company and voluntarily accepted the deed from the trustee on the recited consideration that it would pay the notes to the Southwestern Life Insurance Company. Immediately after the execution to it of the two deeds to the two tracts of land by the trustee in bankruptcy, the Jasper State Bank took possession of both tracts of land and was continuously in possession from that date, claiming to own both tracts of land in fee simple, basing its claim on the deeds executed to it by the trustee in bankruptcy.

On the 23d of May, 1936, Mrs. Ethel Braswell, joined by her husband, Kern L. Braswell, sued the Jasper State Bank in trespass to try title for an undivided one-fourth interest in the city of Jasper property and an undivided one-half interest in the Swisher county property. Jasper State Bank answered by pleading general and special demurrers, general denial, and specially the facts as detailed above, and further that it took possession under the two deeds executed to it by the trustee in bankruptcy; that it paid the taxes against the land; that it had made improvements thereon and had collected certain rents, these items being itemized in the plea. On the facts pleaded it prayed for title to both tracts of land in fee simple or, in the alternative, that it be declared to be a mortgagee in possession as against Mrs. Ethel Braswell and her husband, with equitable relief under that plea. Mrs. Braswell replied by supplemental petition, pleading general and special exceptions to the answer and cross-action of the Jasper State Bank, general denial, limitation, etc.

On trial to the court without a jury on the 17th day of August, 1936, judgment was entered in favor of Mrs. Braswell against the Jasper State Bank, denying its claim to be mortgagee in possession and awarding Mrs. Braswell title and possession to an undivided one-eighth interest in the city of Jasper property and to an undivided one-half interest in the Swisher county property, and awarding to her an accounting against the Jasper State Bank for the rents and revenues collected by it on the two pieces of property. In support of the judgment fact conclusions were filed finding the facts as detailed above, and the following additional facts: The last of the four notes due the Jasper State Bank matured on October 4, 1931, and since this suit was filed on the 23d of May, 1936, all four notes were barred by limitation at the time the suit was filed; at no time after the institution of the bankruptcy proceedings did the Jasper State Bank recognize or deal with Mrs. Ethel Braswell as its mortgagor, nor did it recognize that she owned any interest in the two tracts of land; the Jasper State Bank did not go into possession of the two tracts of land or any part thereof with the consent or under any agreement with Mrs. Braswell, nor as her mortgagee, but it "went into possession" solely as owner under the deed from the trustee in bankruptcy; the Jasper State Bank did not occupy the land "in recognition or by virtue of any mortgage, deed of trust or claim any right under a mortgage or deed of trust" (as against Mrs. Braswell) but its entire possession was by virtue of the bankruptcy proceedings against J. M. Orton & Sons and the individual members of the firm, and such title in fee as it obtained by virtue of the deed from the trustee in bankruptcy; the Jasper State Bank never recognized that Mrs. Braswell was the owner of any interest in the two tracts of land; that it was her mortgagee, or that its possession as to her was for the purpose of collecting its debt out of her interest in the land.

On the undisputed facts we find, in addition to the facts found by the trial court, that the Jasper State Bank took possession of the two tracts of...