Locke v. Thigpen, 13784

• Decision Date: 07 December 1961
• Docket Number: No. 13784,13784
• Citation: 353 S.W.2d 249
• Parties: Robert C. LOCKE et ux., Appellants, v. J. W. THIGPEN et al., Appellees.
• Court: Texas Court of Appeals

Page 249

353 S.W.2d 249

Robert C. LOCKE et ux., Appellants, v. J. W. THIGPEN et al., Appellees.

No. 13784.

Court of Civil Appeals of Texas, Houston.

Dec. 7, 1961.

Rehearing Denied Jan. 11, 1962.

Second Motion for Rehearing Denied Feb. 1, 1962.

Dougal C. Pope, Houston, for appellants.

Fulbright, Crooker, Freeman, Bates & Jaworski, B. J. Bradshaw, Houston, for appellees.

WERLEIN, Justice.

This is an appeal by appellants, plaintiffs in the trial court, from a judgment instructing a verdict in favor of appellee, J. W. Thigpen, in a suit brought to set aside two deeds executed by appellants conveying to appellee Lot 303, Block 12 of Pelham Place No. 1, an addition to the City of Houston, Harris County, Texas, and also to recover title and possession of said lot and revenues derived therefrom in excess of the amounts expended by appellee in connection with the property and the payment of certain indebtedness of appellants.

Appellants in their first Point contend that the deed executed by them on July 8, 1949, is void because intended as a mortgage on their business homestead. Since such deed is not relied upon by appellee and is not material in arriving at a decision of the case, it need not be discussed.

Appellants assert that for several years proceding January 2, 1951, the date of the second deed, they had many business transactions with appellee and as a result thereof a confidential relationship had sprung up between them and appellee, who was a trust officer in the Bank of the Southwest. Appellant Robert C. Locke, who conducted the transactions for himself and his wife, testified that in 1947 appellee assisted appellants in borrowing some money needed in connection with making improvements on the property in question. In 1949 appellee lent appellants $5,000.00 for which a $6,000.00 note was given, and at such time appellants executed said deed dated July 8, 1949, with the understanding that when the indebtedness was paid appellants would get the property back. Appellants were to pay $75.00 per week on the note. During the same year appellee helped appellants incorporate Locke's Super Market, Inc., a grocery business, which appellants had been operating on the property in question since 1947. Appellee suggested the lawyer to draw up the incorporation papers and signed the same as an incorporator. He advanced $1,000.00 to assist in obtaining the charter for the company, which sum was later returned to him. He was issued two shares of stock in the company, served as one of its directors and had in his possession some of its records, and for awhile did the bookkeeping for the corporation.

Following the incorporation of the company, appellee continued to advance money from time to time to appellants or the corporation, and on one occasion guaranteed a credit account of the corporation up to $1,000.00. By January 2, 1950 appellants were indebted to appellee in the sum of approximately $10,000.00. Appellants operated the grocery store until December, 1950, or January, 1951, and according to appellant Locke they moved away from the property in May, 1951. Mr. Locke further testified that in November or December of 1950 he and appellee had an oral agreement relative to paying back to appellee the money which he had gotten from him, as follows:

'The Corporation was going to continue to operate the store; the Corporation was going to give Mr. Thigpen the right to collect the rent off of my property and apply such rent that was collected against the indebtedness I owed him or the Bank of the Southwest, whichever it was, and that is what I thought I was executing when I executed. * * *'

Appellants' counsel interrupted appellant and these questions and answers followed:

'Q Just a minute. Now, that was the agreement, was that the agreement you had with Mr. Thigpen?

'A Yes, sir.

'Q That you were going to turn your property over to him?

'A Yes, sir.

'Q That you were going to stay in business on the property?

'A Yes, sir.'

He further testified in effect that the agreement was that appellee would collect the rent from the property, and apply it on appellants' indebtedness; make payments on a loan held by a third party which was secured by the property, pay taxes, insurance, expenses on the property, and that when appellee was paid in full, appellants would get the property back and pay some other indebtedness; and that appellee said it would take between five to six years to get his money back.

The original exhibits introduced in the trial are before us. They include: (1) general warranty deed dated January 2, 1950, signed by appellants and duty acknowledged by them on January 18, 1951 before Helen Johnston, a notary public, filed for record January 24, 1951 and duly recorded in the Deed Records of Harris County, Texas, on February 6, 1951, (2) bill of sale from Locke's Super Market, Inc., Robert C. Locke and Cleo B. Locke, to J. W. Thigpen, dated January 2, 1951, duly acknowledged January 18, 1951 before said Helen Johnston filed January 24, 1951 in the Chattel Mortgage Records of Harris County, selling and transferring to appellee an itemized list of all the equipment and fixtures in the grocery store, and (3) a five year lease between appellee as lessor and appellants as lesses of the premises in question, dated January 2, 1951, including all the fixtures and equipment as set out in said bill of sale.

Said appellant testified that he signed the foregoing instruments at appellee's office January 2, 1951, but never read any of them; that he had not had any trouble and didn't anticipate any; that he had confidence in appellee; that he told appellee he might take bankruptcy, and appellee replied that he would lose all his money if appellant did take bankruptcy; that after he signed the papers he moved to Hempstead and began selling chickens; that in the latter part of 1957, he asked appellee to give him his property back and was told that he had signed the property over to him; that nothing occurred between January 2, 1951 up until the first part of 1955 that would have caused him to support he had signed a deed to his property to appellee in January, 1951; and that it was his understanding that he was leasing the property to appellee who was to apply rentals to the indebtednesses.

There is also among the exhibits a bill of sale signed by both appellants, dated June 13, 1951, and duly acknowledged before J. C. Bogard, a notary public in and for Shelby County, Texas, transferring to appellee all merchandise in the grocery store in satisfaction of past due rent on the grocery store from January 29, 1951 to June 11, 1951. Appellant testified that his brother operated the store for him until May or June, 1951. He also testified that he did not recall reading such bill of sale which he and his wife had signed and duly acknowledged, but he did recall appellee explaining that he could sell the goods and apply the proceeds to the debts appellants owed.

Appellee asserts that the only relationship between the parties was that of creditor and debtor; that appellant and not appellee was in a position to take advantage of the other, and that appellant by threats of taking bankruptcy caused appellee to change his position for the worse. Appellee points to the testimony of Mr. Locke to the effect that in December, 1950 he was obligated to pay appellee $75.00 per week on his indebtedness, and the only difference under the new arrangement was that the payments were to be called rent; that appellee would receive no more under the alleged new arrangement than under the old, but he would have to pay under the new arrangement for repairs and upkeep of the property, taxes and insurance, and pay off other creditors of appellants. When appellant was asked why appellee would enter into such an agreement, he stated, 'He was trying to collect his money.' Appellant was asked, 'What was Mr. Thigpen to get on this new arrangement that he didn't already have?' Appellant answered, 'I can answer that by saying that I could have taken bankruptcy and cut him off from getting anything like all the rest of the creditors and he would have gotten about 5 cents on the dollar if I had taken bankruptcy.'

At another point Locke testified, 'I didn't have anything to give him but my homestead and I wasn't goint to give him that.'

In determining whether there was a confidential relationship between the parties which might give rise to a constructive trust, and also in deciding whether any fact issues were raised in connection with appellants' other Points, we must view the evidence in the light most favorable to appellants against whom the verdict was instructed. White v. White, 1943, 141 Tex. 328, 172 S.W.2d 295; Thomas v. Postal Telegraph-Cable Co., Tex.Com.App.1933, 65 S.W.2d 282. If there is any evidence of probative force in favor of the losing party, we must hold the instruction improper. A peremptory instruction is warranted only when the evidence is such that no other verdict can be rendered. Stevens v.Karr, Tex.Sup.1930, 119 Tex. 479, 33 S.W.2d 725.

In applying these rules of law, we are compelled to hold that the testimony of appellant Locke raises a fact issue as to a confidential relationship between the parties. Locke's testimony shows that a friendship had sprung up between appellee and appellants; that appellee had not only assisted appellants in making a loan in 1947, but had over a period of years lent money to them and the corporation; that appellee had advised appellants in connection with organizing the corporation and was a director and vice president of the company; that he owned two shares of stock in the company and appellants owned 58 shares; that appellant called on appellee several times a month; that appellee guaranteed a credit account of the corporation up to $1,000.00; that for awhile he kept the corporation books and then later his son kept the books for a time; that he had advanced to or for appellant nearly...