Oldham v. Briley

• Decision Date: 10 June 1938
• Docket Number: No. 1812.,1812.
• Citation: 118 S.W.2d 797
• Parties: OLDHAM v. BRILEY.
• Court: Texas Court of Appeals

118 S.W.2d 797

OLDHAM v. BRILEY.

No. 1812.

Court of Civil Appeals of Texas. Eastland.

June 10, 1938.

Rehearing Denied July 8, 1938.

Appeal from District Court, Dawson County; Chas. L. Klapproth, Judge.

Suit by G. D. Oldham against W. G. Briley for cancellation of notes and trust deeds, and for injunction against enforcement of notes and trust deeds, and for removal of cloud on title, wherein the defendant filed cross-action. Judgment for defendant, and plaintiff appeals.

Reversed and remanded.

Woodward & Coffee, of Big Spring, for appellant.

Wilson, Randal & Kilpatrick, of Lubbock, for appellee.

GRISSOM, Justice.

In October, 1933, the Citizens National Bank of Abilene entered into a contract with W. G. Briley and another whereby they became agents of said bank for the sale of 2,624 acres of land owned by the bank. The contract provided, in substance, that the bank was to receive $26,240 from the sale of the land, and that the agents were to receive all amounts collected from the purchasers above that sum. It provided that upon a sale of a portion of the land the purchaser would make application for a loan to the extent of, at least, $10 per acre. It provided in the event the total amount of loans procured by the purchasers and paid into the bank did not amount to as much as $26,240, then second lien notes would be held by the bank until such amount was collected by the bank, and when said amount was collected by the bank the remaining second lien notes would be transferred to said agents as their compensation. It provided further for crop mortgages to be executed by purchasers to secure payment of second lien notes.

In November, the bank entered into a contract to sell A. E. Cozart a section of land, out of the 2,624 acre tract. The purchase price was $9,600, $1,500 cash, the receipt of which was acknowledged, and the agreement of Cozart to execute ten vendor's lien notes for $710 each. Cozart agreed to secure a loan of $8,100 on the land purchased, or less, if approved by the bank, "the proceeds of said loan being to take up $8100 of the vendor's lien notes above described, the $8100 to be the last of the notes above described." (We call attention to the fact that the contract provided for notes aggregating only $7,100). It was agreed that a warranty deed from the bank to Cozart would be delivered to the party making the loan, for examination only, to be returned to the bank if the loan was not procured and if the loan was not procured the contract would be canceled. On the same day the bank executed a deed to Cozart for a recited consideration of $10,600. (The contract provided for $9,600 as the purchase price.) The deed recited payment of $2,500 cash. (The contract provided for and recited payment of $1,500 cash.) The deed recited the execution by Cozart to the bank of nine vendor's lien notes for $422.23 each, and one vendor's lien note for the sum of $4,500, aggregating $8,300.07. (The contract called for vendor's lien notes aggregating $7,100.) The deed recited that the $4,500 note was a first lien and the nine notes for $422.23 each were "second or junior liens to the last note." After the execution of the deed to Cozart he applied to the Federal Land Bank of Houston and the Land Bank Commissioner for loans aggregating $7,500. (This was the maximum amount authorized by law to be loaned to one farmer. 12 U.S. C.A. § 1016(b). On January 29, 1934, the Land Bank and Commissioner executed their joint approval notice for a loan on the land for $4,800, $3,200 by the Land Bank and $1,600 by the Commissioner. The approval notice contained the following conditions: (1) "Indebtedness against this property not to exceed $4800 to show required equity." (2) "When debts are required to be reduced or released, the amount reduced or released must be permanently canceled and not renewed after the loan is closed."

January 31, 1934, Cozart, in writing, accepted the proffered loan of $4,800 in accordance with the terms and conditions of the approval notice, which contained the conditions just quoted.

After Cozart had applied for the loan he decided he preferred purchasing a different section of land from the Abilene Bank and informed Briley of his desire to be released from his obligation to purchase the section in question, and to purchase another and different section. Briley agreed with Cozart if a buyer for the section Cozart had agreed to purchase "would agree to carry out the contract that Cozart had entered into with the Citizens National Bank for the purchase of section No. 3, to the full satisfaction of said bank, we would then sell him other lands which we were offering for sale. We did find a purchaser, G. D. Oldham, for the purchase of section No. 3 * * * then we sold the said Cozart other lands * * *." With reference thereto Briley further testified: "I explained fully to Mr. Oldham, all of the details in the sale of the herein discussed land to Mr. Cozart * * * Oldham knew all of the facts in relation to the sale to Cozart. Oldham even inspected the land, and later, he entered into a contract to purchase the said section * * *. After fully discussing all of the details of the Cozart contract, Oldham inspected the land and agreed to purchase same, and assume and carry out the provisions set out in the former contract of sale entered into by the said Cozart to the Citizens National Bank, on the sale of said section No. 3. * * * I told Mr. Oldham he would have to carry out the Cozart contract satisfactory to the bank, and he fully understood said contract existed and was shown a copy of the contract at the time Oldham was discussing the purchase of this land."

Briley further testified that Cozart conveyed by warranty deed to the Abilene Bank property of the value of approximately $1,500; that the deed thereto was not recorded but was returned to Cozart "when G. D. Oldham complied with his agreement to carry out the A. E. Cozart contract * *."

Oldham testified that Briley told him Cozart had made application for a loan on the land and that it would "save the expense of another application by letting it go on through in Cozart's name, and he could deed it to me when the loan was completed. * * rather than for him to deed it back to the bank and then the bank deed it to me. He said he would expect me to bear the expense of the application, which would be $33.00, and the two of them would be $66.00. Naturally, I wanted to save the money. * *

"Q. What was to be done with the Cozart notes, was anything said about it? A. I didn't know anything about the Cozart notes that he had made to them. He didn't tell me what kind of deal they had made. He just said they had sold the place to Cozart and he decided he didn't want it and wasn't able to go on with it and was out of it. As far as I knew, I was just buying the place directly from the bank. I didn't know Cozart at all. * * *

"Q. State whether or not you had any kind of a contract with Mr. Cozart? A. No sir.

"Q. I believe you stated a few minutes ago that you entered into a contract with the Citizens National Bank to purchase this land from them? A. Yes, that is right.

"Q. Did Mr. Briley bring out to your place here in Dawson County on or about May 12, 1934, a deed of trust and ten notes, and a deed from Cozart and wife to you, and present them to you? A. Yes.

"Q. I wish you would just tell the jury now what Mr. Briley told you at the time he brought those out there. A. Well, if I remember right he told me that they hadn't gotten as much money as they expected on the application, that the loan had come and been closed up and that he would bring — he had the deed with him then, I think I am right, but that he would bring it in and have it recorded, and that it would be sent back to me, and he said there was a balance of $3,900, or approximately that, that was still unpaid on this land and that he would expect me to make these notes for it, all of which I did do.

"Q. Did he tell you anything about the Federal Land Bank Commissioner having required in connection with the loan the balance of the indebtedness to be released or discharged? A. No.

"Q. Did he tell you anything of any character with reference to the loan being granted on condition that the total indebtedness did not exceed the amount of the loan? A. No sir, not a word.

"Q. Had you learned anything at that time about those requirements or about the notes having actually been marked `Paid' and sent in on May 10th when Mr. Briley was out there? A. No. * * * "Q. Did Mr. Briley at that time explain to you the items which went into making up the amount of $3,900 that these notes were drawn for? * * * A. He said it was some unpaid money on the purchase price of the land over and above the loan. * * *

"Q. Were you accepting those statements that represented the balance due and unpaid on the purchase price of this land for executing the ten notes and the deed of trust? A. I would not have had I known that the Federal Land Bank required them to be canceled before they would make that loan. No, sir.

"Q. If you had known that the Federal Land Bank and Land Bank Commissioner had required the notes to be marked `Paid in full' and surrendered, and the balance of the debt discharged, as a condition to the granting of the loan, would you have executed the deed of trust and the ten notes? A. No sir. * * *

"Q. Mr. Oldham, with reference to the Cozart deal tell the jury about it, just go a little more in detail and tell the jury what conversations you had with Mr. Briley with reference to letting the application stand in the name of Cozart. A. Well, after I had gone out and inspected the land and went back and told him that I would try to trade with him if I could, rather if he could use these lots, and we agreed on them and the price and payment and so on, and then he advised me that Cozart had made an application, and that they had accepted his application, but that he had decided that he didn't...