Loeb v. Wilhite

• Decision Date: 07 October 1949
• Docket Number: No. 14102.,14102.
• Parties: LOEB et al. v. WILHITE et al.
• Court: Texas Court of Appeals

224 S.W.2d 343

LOEB et al. v. WILHITE et al.

No. 14102.

Court of Civil Appeals of Texas. Dallas.

October 7, 1949.

Rehearing Denied November 4, 1949.

Otis Bowyer, Jr., Dallas, for appellants.

Eades & Eades and Eric Eades, Jr., Dallas, for appellees.

BOND, Chief Justice.

This is a suit in trespass to try title brought by plaintiffs (appellees) Marilyn Wilhite and her husband John C. Wilhite, Jr., against defendants (appellants) Sylvia Loeb and her husband Alvin Loeb, to recover a one-half undivided interest in and to a certain designated lot and premises in the City of Dallas; and for reasonable annual rental value of the premises. The defendants answered by plea of "not guilty."

The cause was tried to a jury and, over the objections and exceptions timely urged by defendants, the court submitted special issues which the jury answered as follows: 1. That the money paid on the purchase price of the real estate in question prior to the death of John O. Newcom (husband of the appellant Sylvia Loeb) was the community funds of John O. Newcom and his then wife Sylvia Newcom; and (2) that at the time of the execution of the deed John O. Newcom did not intend to make a gift to his wife Sylvia Newcom of any community interest he may have had in the real estate. Accordingly, as against defendants' motion non obstante veredicto, the court entered judgment in favor of the plaintiffs for title and possession of an undivided one-half interest in and to the described land and for the sum of $455 net rentals for said premises.

The land in controversy on January 21, 1944 was conveyed by general warranty deed, under circumstances hereinafter related, by Leila M. McMurray to Sylvia Newcom (now Sylvia Loeb) "as her separate property." The grantee was then the wife of John O. Newcom. The consideration recited in the deed is $3,500 paid and secured to be paid by Sylvia Newcom "out of her separate funds" — $1,000 cash in hand paid and "the assumption and agreement to pay an unpaid balance of $2,035.54 remaining unpaid on that certain note originally in the sum of $3,250, dated October 26, 1943, executed by Leila M. McMurray, a feme sole, and payable to the order of the Dallas Federal Savings & Loan Association * * *; and the execution and delivery of a second vendor's lien note in the principal sum of $464.46, executed by Sylvia Newcom, joined by her husband John O. Newcom, and payable to the order of Leila M. McMurray * * *." The deed contains the usual habendum clause with words of conveyance to "Sylvia Newcom, as her separate property, her heirs and assigns forever"; accordingly warrants the title in Sylvia Newcom, her heirs and assigns.

In August 1946, John O. Newcom died intestate, leaving surviving his said wife, Sylvia Newcom, and his only child, Marilyn Newcom (since married to John C. Wilhite, Jr.), a daughter by a former marriage, as his sole heirs.

Plaintiffs' (appellees) contention is that the property so conveyed by the deed became community of the grantee and her husband John O. Newcom, irrespective of the deed recitals, and, as such, a resulting trust exists in plaintiffs' favor in and to one-half undivided interest therein and a like proportion in the annual rentals therefrom. In support of plaintiffs' contention plaintiffs offered evidence to the effect that John O. Newcom, husband of Sylvia Newcom, authorized and sanctioned the execution of the deed by Leila M. McMurray to place title to the property in his wife, purportedly to become her property; that the cash consideration paid was community and not his wife's separate funds; that the separate property recitals in the deed were motivated by Mr. Newcom, deceased, in fraud of his creditors; and that the payment on the deferred contractual consideration as recited in the deed, was derived from the joint savings of Newcom and his wife Sylvia from their labors during coverture, thus community, given to his wife only to be deposited in a Dallas National Bank in her name in fraud of his creditors. Defendants' (appellants) contention is that the language of the deed, in legal effect, shows the intention of the parties and shows the character of the right created; and, being contractual in nature, estops all parties from denying its legal import; further, the transaction having been conceived in fraud to defraud creditors, the courts will accord no relief to the parties, — leaving it as they made it.

It will be seen that this suit hinges on the effectiveness of the deed to confer absolute title in the grantee, to the exclusion of the community estate of John O. Newcom, deceased. The contention presented here is on three points of error germane to appellants' proper assignments of error: (1) The deceased John O. Newcom having caused to be made a conveyance by a third party to his wife as her separate property, with the consideration being contractual, payable and to be paid out of her separate funds, oral evidence was inadmissible to alter such consideration or the estate thereby created, absent pleadings of fraud, accident, or mistake. (2) Where deceased John O. Newcom caused a conveyance to be made by a third party to his wife, Sylvia Newcom, as her separate property, and the consideration being contractual and payable out of her separate funds, evidence consisting of ambiguous declarations, opinions, and conclusions of such deceased, without proof of fraud, accident, or mistake, was insufficient to overcome the presumption that it was the wife's separate property. (3) The undisputed evidence showing that the property in question was caused to be conveyed by deceased John O. Newcom to his wife in order to defraud his creditors, the heirs of deceased should not be allowed to disturb such conveyance or alter the estate thereby created.

The evidence introduced over the objection of defendant is uncontroverted that the deed to Sylvia Newcom was caused to be executed and delivered to her in pursuance of a prior agreement between her and her husband purporting to convey the real estate to the wife as her separate property because of fear that his creditors would subject the property to the payment of his debts. In conversation with the husband's father and two of his sisters, as related by the sisters, Mr. Newcom stated that he was going to put the deed in his wife's name to protect himself and his property from his creditors; that he was heavily in debt, with suits pending against him; and that, to preserve the property, he was going to put the title in his wife's name; that he then caused the grantor to execute the deed to his wife in furtherance of such secretive arrangement to defraud his creditors.

The deed, as executed, on its face shows purportedly that Mr. Newcom intended to convey the property to his wife for her separate use, and the consideration expressed in the deed is, for the most part, contractual; hence in the absence of pleadings and proof that the recitals in the deed were inserted by fraud or mistake, extrinsic evidence was not admissible to vary the recitals therein which manifestly are contractual in nature. Kahn v. Kahn, 94 Tex. 114, 58 S.W. 825, reversing, Tex. Civ.App., 56 S.W. 946; East...