Nevels v. Harris

• Decision Date: 24 February 1937
• Docket Number: No. 7171.,7171.
• Citation: 102 S.W.2d 1046
• Parties: NEVELS et al. v. HARRIS.
• Court: Texas Supreme Court

Page 1046

102 S.W.2d 1046

NEVELS et al. v. HARRIS.

No. 7171.

Supreme Court of Texas.

February 24, 1937.

Error to Court of Civil Appeals of Third Supreme Judicial District.

Suit by H. H. Harris against W. D. Nevels, W. B. Slaton, F. E. Redwine, and others. A judgment for plaintiff was affirmed by the Court of Civil Appeals [95 S.W.(2d) 1315], and defendants named bring error.

Judgments of the Court of Civil Appeals and of the district court affirmed.

Lockhart & Brown, of Lubbock, and C. H. Cain, of Tahoka, for plaintiffs in error.

Edwin H. Yeiser and Coleman Gay, both of Austin, for defendant in error.

CRITZ, Justice.

This suit was filed in the district court of Travis county, Tex., by H. H. Harris against J. H. Newsom and wife, Audrey Newsom, W. B. Slaton, F. E. Redwine, W. D. Nevels, and G. E. Lockhart to recover on a note for $6,400 executed by the Newsoms as principals, and by Slaton, Redwine, and Nevels as sureties. Also, in Harris' petition he seeks foreclosure of a deed of trust lien given by J. H. Newsom and wife to Lockhart as trustee to secure the above note. This deed of trust covers 640 acres of land in Lynn and Dawson counties, Tex. Lockhart is the trustee named in this deed of trust, and is sued only as such. The case was finally submitted to the court in the district court without the intervention of a jury and judgment rendered awarding Harris a recovery against J. H. Newsom, W. D. Nevels, W. B. Slaton, and F. E. Redwine for the principal, interest, and attorney's fees alleged to be due on the note sued on. Judgment was also rendered for Harris against all the defendants foreclosing the deed of trust lien on the land above mentioned. No personal judgment was rendered against Mrs. Newsom. The judgment contains other matter not necessary to mention here. All the defendants excepted to the above judgment and gave notice of appeal. Slaton, Nevels, and Redwine, however, were the only defendants to perfect such appeal. On final hearing in the Court of Civil Appeals the judgment of the district court was in all things affirmed. 95 S.W.(2d) 1315. Slaton, Nevels, and Redwine, jointly, have prosecuted writ of error to this Court.

We shall not attempt to detail the pleadings. It is enough to say that we will assume that they are sufficient on both sides to raise the questions of law which we shall decide. We will note, however, that the defendants in the district court urged the defense of usury to the note here sued on.

It appears that on November 27, 1926, one Otto Stolley was engaged in business in the city of Austin, Travis county, Tex. Generally speaking, his business was that of a loan broker, and he had followed such vocation in Austin many years prior to such date. On the date just named J. H. Newsom and his wife, Audrey Newsom, applied in writing to Stolley to either loan them $6,400 for five years at 8 per cent. interest per annum or secure some one else to make such loan. This application stated that the applicants would pay Stolley "for making or securing said loan for us, five per cent on the amount of the same as your fees, two and one-half per cent of the same for your inspector, and one per cent on the amount of the same for attorney's fees," or a total of $544. This application offered a section of land in Lynn and Dawson counties as security for such loan. It appears that this application was mailed to Stolley by G. E. Lockhart from Lubbock, Tex., with a letter signed "Lockhart & Garrard. By G. E. Lockhart." This letter was dated December 23, 1926, and in substance informed Stolley that the above application was inclosed; that the land offered as security was situated about four miles west of O'Donnell; that it was worth $20 per acre; that the application was to take up prior liens on the land; that F. E. Redwine, W. B. Slaton, and W. D. Nevels would also sign the note; and that the land and additional personal security would make a first-class loan.

We will not attempt to detail all of the transactions that occurred regarding the above application. It finally culminated in a loan, and, for the purposes of this opinion, we will assume that it culminated in a loan made by Otto Stolley, represented by a note executed by J. H. Newsom and wife, Audrey Newsom, W. B. Slaton, F. E. Redwine, and W. D. Nevels, and a deed of trust executed by J. H. Newsom and wife to G. E. Lockhart as trustee to secure such note.

The note in question is set out in the record. It is dated November 27, 1926; it is for the principal sum of $6,400; it was due five years after date; it bears 10 per cent. interest from maturity; it provides for 10 per cent. attorney's fees; it recites that it is secured by deed of trust on 640 acres of land in Lynn and Dawson counties, Tex.; and it, by its terms, is payable "to the order of Otto Stolley." Also attached to said note, as a part thereof, were five interest coupon notes in the principal sum of $512 each, representing 8 per cent. interest on the above principal note of $6,400 for each of the five years it was to run. The deed of trust securing such note is, in the main, the ordinary form of deed of trust wherein the above land was conveyed to G. E. Lockhart as trustee to secure the above note and interest coupons. We, however, deem it necessary to quote the following portions of the deed of trust:

"The words NOTE or NOTES when used in any connection in this deed of trust; unless qualified in such connection by the words, principal or interest coupon; shall be construed to include both principal and interest coupon note or notes.

"That it is hereby agreed that the default in the payment of any of said notes when such note is due shall mature each and all of said notes, not then due, at the option of the holder or holders of any of said notes so as to render all of said notes immediately due and payable, without notice, and render this deed of trust subject to immediate foreclosure. * * *

"That the grantors herein bind themselves, their heirs, executors and administrators, and assigns, jointly and severally, to pay all of the taxes assessed against said property herein conveyed each year; and to pay all of the interest on the sum or sums owing the State of Texas, if any, as part purchase price for said property or any part thereof; and the failure to pay all of said taxes for any year and deliver the receipts for the payments to the payee of said notes, or the holder or holders of said notes, on or before the 1st day of February of the following year; or the failure to pay all of said interest to the State of Texas each year on said sum or sums owing it and deliver the receipts for the payments to the payee of said notes or the holder or holders of said notes on or before the 1st day of November on which such interest is due or the failure when requested to make report concerning administrations, marriages, deaths or any other change concerning the title to said property shall mature each and all of said notes, not then due, at the option of the holder or holders of any of said notes, so as to render all of said notes immediately due and payable, without notice, and render this deed of trust subject to immediate foreclosure.

"That in case said notes or any one or more thereof are matured by the exercise of any option herein provided for the unearned interest evidenced by said interest coupon notes shall be cancelled and credited on said interest coupon notes; and said principal and interest coupon notes shall be considered matured for all of the purposes therein and herein mentioned, and shall bear interest from the date of said maturity at the rate of ten per cent per annum.

"That in case the title to the property herein conveyed, or any part thereof fails or is attacked, the grantors herein hereby bind themselves, their heirs, executors, administrators and assigns, jointly and severally, to pay to the holder or holders of said notes such sum or sums of money as may become necessary to perfect as well as defend the title to said property, or any part thereof, including a reasonable attorney's fee and all costs incident thereto to all to be paid at Austin, Travis County, Texas, on demand therefor.

"That the failure to make any payment of taxes for any year on or before the 1st day of February of the following year, or the failure to make...