Mitchell v. Morgan

• Decision Date: 07 March 1914
• Citation: 165 S.W. 883
• Parties: MITCHELL v. MORGAN et ux.
• Court: Texas Court of Appeals

165 S.W. 883

MITCHELL v. MORGAN et ux.

Court of Civil Appeals of Texas. Amarillo.

March 7, 1914.

Rehearing Denied April 11, 1914.

Appeal from District Court, Hale County; L. S. Kinder, Judge.

Action by Choc Morgan and wife against T. S. Mitchell. From a judgment for plaintiffs, defendant appeals. Affirmed.

C. D. Russell, of Plainview, and Cooper, Merrill & Lumpkin, of Houston, for appellant. Fred C. Pearce and Y. W. Holmes, both of Plainview, for appellees.

HENDRICKS, J.

The appellees, Choc Morgan and wife, Willie Morgan, sued the appellant, T. S. Mitchell, in the district court of Hale county, Tex., for the purpose of canceling a deed of trust, executed by them on December 4, 1909, embracing certain residence property in the town of Plainview, as well as to cancel a warranty deed of date January 20, 1912, executed and acknowledged by appellees, and on its face conveying the property in controversy to the appellant, Mitchell, the same property embraced in the mortgage and deed of trust and executed and delivered in 1909. The deed of trust and mortgage were executed by appellees for the purpose of securing the appellant in the payment of a certain note for the sum of $650, bearing interest from date at the rate of 10 per cent. per annum, and stipulating for the usual attorney's fees. The subsequent warranty deed was in the usual form, reciting a cash consideration of $725, and, as a part of the same transaction of the execution and delivery of said deed, the appellant, T. S. Mitchell, executed and delivered to Morgan the following instrument: "The State of Texas, County of Potter. Know all men by these presents, that we, T. S. Mitchell, of Potter county, Texas, and Choc Morgan, of Tarrant county, Texas, have made and entered into the following contract and agreement, to wit: Whereas, heretofore, to wit, on the 20th day of January, 1911, the said Choc Morgan, joined by his wife, Willie Morgan, made, executed, and delivered to the said T. S. Mitchell, their certain warranty deed of conveyance, conveying lot No. 3, in block No. 34, in the town of Plainview, Hale county, Texas for and in consideration of $725.02; and whereas, as a part of the consideration for said conveyance, it was understood and agreed between the said T. S. Mitchell and the said Choc Morgan that the said Choc Morgan should have and be entitled to the privilege of repurchasing the property so conveyed at any time within twelve months from this date: Now, therefore, know all men by these presents, that I, T. S. Mitchell, for and in consideration of the recitals hereinabove mentioned, do hereby contract, obligate, and bind myself to reconvey the above-described property to the said Choc Morgan, or to any person selected by him, at any time within twelve months from this date upon the repayment to me of the said $725.02, together with all accrued interest at the rate of 10 per cent. per annum, which may have accrued on said amount at the time and at the date of said request; and I do hereby contract, obligate, and bind myself, my heirs, executors and administrators, to carry out the provisions of said contract and agreement so made and entered into with the said Choc Morgan. Witness my hand at Amarillo, Texas, this 20th day of January, A. D. 1912. T. S. Mitchell."

The appellees contended in the trial court, and repeat here, that the property embraced in the mortgage and purporting to have been conveyed in the deed was their homestead, and that both of said instruments were mortgages, and consequently void. The appellant, in the main, contends that the evidence was insufficient to go to the jury; that the deed of conveyance did not constitute a mortgage, and was, in fact, what it shows on its face to be, a conditional sale.

Of course, it is well settled that the form of the instrument does not preclude testimony to show that it was a mortgage. The supreme test with the real character of the instrument is whether the relation of debtor and creditor continued to exist between Morgan and Mitchell after the execution of the purported deed and the instrument providing for a reconveyance. Mrs. Morgan testifies that, at the time the deed of trust was executed by her, she notified the attorney representing Mr. Mitchell in the preparation of the instrument that the property was their homestead, and that she was reluctant to sign the mortgage on the home. The attorney was upon the stand, and this statement is not denied. This is adverted to for the reason that at this particular time Morgan and his wife executed a designation of a lot in the town of Mineral Wells as a homestead, with reference to which the appellant Mitchell testifies he relied upon when the mortgage was given.

If the attorney representing Mitchell in the transaction had notice that the particular property was the homestead, such notice would be imputed to...