Miles v. Kelley

• Decision Date: 28 April 1897
• Citation: 40 S.W. 599
• Parties: MILES et ux. v. KELLEY.
• Court: Texas Court of Appeals

40 S.W. 599

MILES et ux. v. KELLEY.

Court of Civil Appeals of Texas.

April 28, 1897.

Error from district court, McLennan county; L. W. Goodrich, Judge.

Action by M. B. Kelley against J. W. Miles and Rosa Miles, his wife. There was a judgment in favor of plaintiff, and defendants bring error. Reversed in part and affirmed in part.

W. S. Baker and A. C. Prendergast, for plaintiffs in error.

COLLARD, J.

This suit was brought February 24, 1891, by defendant in error, M. B. Kelley, against plaintiffs in error, J. W. Miles and his wife, Rosa Miles, for $800, and interest at 12 per cent. per annum, advanced by plaintiff to J. W. Miles, at his special instance and request, to take up the following two promissory notes:

"$1,300.00. Waco, Texas, July 7, 1884. On or before the first day of November, A. D. 1887, we promise to pay to the Waco Building Association, or order, at its office in Waco, Texas, eleven hundred and thirty dollars, with interest after maturity at the rate of one per cent. per month, value received."

"$290.00. Waco, Texas, Sept. 1, 1884. On or before the first day of January, A. D. 1888, we promise to pay to the Waco Building Association, or order, at its office in Waco, Texas, two hundred and ninety dollars, with interest after maturity at the rate of one per cent. per month, value received."

Each of the notes stipulated as follows: "This note is given for labor and material furnished us by the Waco Building Association under a contract this day entered into between said building association and us, and is secured by a mechanic's lien on a lot or parcel of land, with the improvements thereon, in the city of Waco, county of McLennan, state of Texas. We further promise to pay this note off in monthly installments" of $28.50 for the larger note, and $7.25 for the smaller one, commencing August 1, 1884, for the larger note, and October 1, 1884, for the smaller note. "And it is agreed and understood that, if we fail to pay any one of said monthly installments as it becomes due, the same shall bear interest from the time of such default at one per cent. per month until paid, and the whole of this note may be then collected, at the option of the holder thereof; and we promise to pay ten per cent. additional on this note as attorney's fees, should it become necessary to collect the same by law." The notes were signed by Miles and his wife.

At the time of the execution of the notes the parties—the Waco Building Association and Miles and wife—entered into a contract in writing, whereby the association agreed to furnish labor and material of value equal to the amount of the notes to enable defendants to make improvements on the lots, defendants binding themselves to accept the same. Defendants acknowledged the contract before James I. Moore, a notary public, at the time of its execution, and it was duly recorded in the proper records of McLennan county. The contract gave the association a mechanic's lien on the lots to secure the payment of the notes. Plaintiff, the indorsee of the notes, sued on them, and to foreclose the lien on one of the lots, defendants not having title to the other, for attorney's fees, etc. The petition shows that defendants had a settlement with the association July 2, 1888, having paid on the notes, December 31, 1884, $115.70; December 31, 1885, $26; December 31, 1886, $78.75; in 1887, $261.18; and in 1888, $123.70; and by such settlement it was ascertained that there was a balance due on the notes of $800, and defendants, being pressed for payment, requested plaintiff to take up the notes and have them transferred to him for his indemnity; whereupon he, at their special instance and request, advanced the amount found to be due on July 2, 1888 ($800), and took the assignment of the notes to himself, with a distinct understanding with defendants that he was to be repaid the same according to the tenor and legal effect of the notes, at the rate of 12 per cent. interest per annum thereafter, and that the security by mechanic's lien should inure to his benefit; that the association, on the same day (July 2, 1888) indorsed the notes to him, as follows: "Pay to M. B. Kelley, without recourse on the Waco Building Association. Waco, July 2, 1888. [Signed] James I. Moore, Sec." The lien is asked to be foreclosed on only lot No. 8, described.

June 11, 1891, defendants answered, by general demurrer and special exceptions, that a large part of the claim due by the notes was barred by limitation of four years, as shown by the petition, and that it does not show any liability on the part of Rosa Miles. The answer specially set up the marriage of defendants; that the debt is a community debt, for which the wife's separate estate is not liable. They further averred that on July 7, 1884, they borrowed $800 from the Waco Building Association, for which they gave the note for $1,130, the amount being made up by adding 40 months' interest to the sum borrowed, which $1,130 was to be paid in monthly installments of $28.50, the first to be paid August 1, 1884, and the same on the 1st day of each month thereafter; that on September 1, 1884, they borrowed from the association $200, and gave the note for $290, which amount was made up by adding interest on the $200 for 40 months, at 12 per cent. per annum, to be paid in monthly installments; that they paid at divers times $990.75, pursuant to the terms of the notes; that it was agreed that, if the installments were not paid as stipulated, they were to bear 12 per cent. interest per annum, and the association reserved the right to collect the whole of each note upon default of payment of each installment; wherefore defendants pleaded usury. Defendants also pleaded the statute of limitation of four years as to a great part of the debt, upon the ground that the installments fell due at such time as to bar their collection at the time of suit. They pleaded payment of $894.75 to the building association, and $96 to plaintiff, aggregating $990.75. They set up homestead in the premises upon which the lien is sought to be foreclosed, and that the homestead existed at the time the notes were executed, and has been so continuously to the present; that before the execution of the notes and liens defendants had contracted with W. S. Martin to build the house on the lot, and they had placed lumber and material thereon, and claimed the lot as their homestead, wherefore the liens were nullities; that the alleged liens are not such contracts in writing as are required by law to create a lien on the homestead; that the acknowledgments to the contracts were taken before James I. Moore, a notary public, who was at the time secretary of the association, and interested in the transaction to the extent of 10 per cent. as commissions on the amount loaned, and he was a large stockholder in the association, holding at least $50,000 of its stock, wherefore he was disqualified to take the acknowledgments, and the liens were of no force or effect. March 7, 1896, plaintiff filed a supplemental petition, containing a general denial, and in reply to the plea of limitation set up a written acknowledgment of J. W. Miles that the debt was just, and an express promise to pay it, of date July 26, 1890. Defendants, by supplemental answer, excepted to the averment of new promise of J. W. Miles to pay, upon the ground that it showed the promise was barred by the statute of limitation of four years. On March 19, 1896, the court, trying the case without a jury, rendered judgment for plaintiff against J. W. Miles for the sum of $1,346.50, to bear interest at 12 per cent. per annum, foreclosed the lien on lot No. 8 against both defendants, and directed issuance of an order of sale.

We find the facts as follows: Defendants executed the notes at the time and for the amounts alleged, and at the same time executed the alleged contracts of lien, which were duly acknowledged by Miles and wife before James I. Moore, a notary public in McLennan county, her acknowledgment being in due form, as required by statute in the conveyance of the homestead, and the contracts were duly recorded and in time. Moore was secretary of the association, and its manager, and had an interest as commissions of 10 per cent. upon all its gross earnings as his fixed compensation, and owned a large part of its stock,—$30,000. Defendants were and are husband and wife, as by them alleged, at the time the written contracts of lien were executed. Defendant Miles, not...