Kiel v. Staber, 4883.

• Decision Date: 18 April 1938
• Docket Number: No. 4883.,4883.
• Citation: 116 S.W.2d 809
• Parties: KIEL v. STABER et al.
• Court: Texas Court of Appeals

116 S.W.2d 809

KIEL v. STABER et al.

No. 4883.

Court of Civil Appeals of Texas. Amarillo.

April 18, 1938.

Rehearing Denied May 9, 1938.

Appeal from District Court, Wichita County; Ernest Robertson, Judge.

Action by O. B. Kiel, executor, against Fred Staber and others, on a series of notes and to foreclose a vendor's lien. Judgment denying foreclosure of the vendor's lien, and plaintiff appeals.

Affirmed.

T. R. Boone and Kearby Peery, both of Wichita Falls, for appellant.

Harris & Martin, of Wichita Falls, for appellees.

STOKES, Justice.

On the 1st of October, 1923, John F. Kiel, now deceased, conveyed to Charles E. Pfeifer a tract of land in Wichita county and retained a vendor's lien to secure five notes in the sum of $500 each, due one to five years, respectively, after date. On January 23, 1925, he conveyed to Charles E. Pfeifer another tract in Wichita county and reserved a vendor's lien to secure a note executed by the purchaser in the sum of $127.50, due January 23, 1929. On April 9, 1926, Pfeifer sold and conveyed both tracts of land to appellee, Fred Staber, who, as part of the purchase price, assumed the notes executed by Pfeifer, and on October 26, 1936, more than four years after the last note of the series of five notes was barred by limitation and more than two years after the $127.50 note was so barred, Pfeifer, the original vendee of John F. Kiel and the maker of all of the notes, executed and delivered to the executor an extension agreement whereby all of the notes and both liens were extended to November 4, 1936. Staber was not a party to the contract of extension. On December 6, 1934, after all the notes were barred by limitation, and before the extension contract was executed, O. B. Kiel, executor, instituted a suit against appellee, Fred Staber, in which he sued upon the notes and sought a foreclosure of the vendor's lien under Staber's assumption of the indebtedness. Before judgment or any sort of hearing or trial, that suit was dismissed, after which Pfeifer executed and delivered to O. B. Kiel, executor, the extension contract above mentioned.

This suit was filed March 15, 1937, by appellant, O. B. Kiel as executor of the estate of John F. Kiel, deceased, against Charles E. Pfeifer. Fred Staber and his wife were made parties to the suit so their rights, if any, could be determined, but no personal judgment was asked against either of them.

The case was submitted to the court without the intervention of a jury and judgment rendered in favor of appellant against Charles E. Pfeifer for the sum of $5,000, with interest from the date of the judgment at the rate of 10 per cent per annum, and costs of suit, but denying appellant any recovery against Staber and wife for foreclosure of the vendor's liens.

The principal question presented by the appeal is whether or not Staber was bound by the extension contract executed by Pfeifer and delivered to appellant after the notes sued on had become barred by the statute of limitations, Staber having purchased the land from Pfeifer and assumed the payment of the notes before they became barred. The trial court held he was not, and this holding is made the subject of the first two of the three propositions presented by appellant.

Article 5520, R.C.S.1925, Vernon's Ann.Civ.St. art. 5520, provides, among other things, that upon the expiration of four years from and after the date of maturity of the last of a series of notes or installments, payment shall be conclusively presumed to have been made of each note and installment and the lien for the security of same shall cease to exist unless it is extended by an agreement in writing by the party or parties primarily liable for the payment of the indebtedness. The rule is well established in this state that when the original vendee of land, the consideration for which is evidenced by vendor's lien notes, conveys the land to a third party who, in turn, assumes the payment of the notes, such third party, as between himself and the original vendee, becomes the principal, and the original vendee the surety, upon the notes. This arrangement does not change the effect of the original vendee's obligation to the owner of the notes, however, until he accepts such third party as the principal. Chapman et al. v. Crichet, 127 Tex. 590, 95 S.W.2d 360, 96 S.W.2d 64; Dansby v. Stroud, Tex. Civ.App., 48 S.W.2d 1018; Ewing et al. v. Carter et al., Tex.Civ.App., 70 S.W.2d 277. It has been held, however, that, before rights of the third party who has assumed the indebtedness become vested, the original vendee and maker of the notes may extend the time of their payment by a proper contract between him and the holder of the notes. Holford v. Patterson, 113 Tex. 410, 257 S.W. 213.

After the notes have become barred by the statute of limitations, however, an entirely different situation exists and it has been held from an early day that, after the lien is lost through the operation of the statute of limitations, the original vendor and maker of the notes cannot restore the lien upon property which has ceased to be his through his conveyance of it to another. Hodges v. Taylor et al., 57 Tex. 196; Riggs v. Hanrick, 59 Tex. 570; Cason v. Chambers, 62 Tex. 305; Holford v. Patterson, supra, and authorities there cited; Holcroft et ux. v. Wheatley et al., Tex.Civ.App., 112 S.W.2d 298.

Appellant strenuously contends that this rule applies only in cases where the subsequent...