Park v. Kribs

• Decision Date: 15 December 1900
• Citation: 60 S.W. 905
• Parties: PARK et ux. v. KRIBS, Receiver.
• Court: Texas Court of Appeals

60 S.W. 905

PARK et ux. v. KRIBS, Receiver.

Court of Civil Appeals of Texas.

December 15, 1900.

Appeal from district court, Dallas county; W. J. J. Smith, Judge.

Action by Charles L. Kribs, as receiver of the Granite State Provident Association, against Milton Park and wife. From a judgment in favor of plaintiff, defendants appeal, and plaintiff assigns cross errors. Affirmed.

Kearby & Muse, for appellants. Hill & Dabney, for appellee.

BOOKHOUT, J.

This suit was instituted by the appellee, Charles L. Kribs, as receiver of the Granite State Provident Association, incorporated under the laws of the state of New Hampshire, against Milton Park and his wife, Alice Park, to recover judgment on a note for $1,500 executed by them, dated the 28th day of October, 1895, with interest and attorney's fees, and for a foreclosure of a lien on certain residence property belonging to defendant, located in the town of Oakcliff, Tex. The petition, among other things, alleged that on the 18th day of March, 1896, David Taggart was appointed receiver of said company by the supreme court of New Hampshire, and that thereafter, in the year 1896, the plaintiff, Charles L. Kribs, was appointed receiver for the said corporation for the state of Texas by the district court of Dallas county, Tex.; that, owing to the insolvency of said association, it has been enjoined from transacting further business, and a receiver appointed therefor; that no stock dues are now being collected, nor can be, and that the scheme of plaintiff and said association cannot now be carried out; that said shares can never mature, and the bond and obligation of borrowers can never become due and payable according to the tenor and effect thereof; that the affairs of said association are being wound up; that the district court of Dallas county, as well as the court of New Hampshire, has declared all obligations of borrowers and stockholders due and payable, and plaintiff has been ordered to collect the same by suit, if necessary. Plaintiff alleged that Milton Park made application for 15 shares of stock from the loan fund, of the par value of $200 each, agreeing to pay on account of such shares $1 per month until each share became worth par, in accordance with the rules of said association; that on the 15th day of August, 1895, in compliance with his application, certificate No. 31,984 was issued to him, representing 7½ shares of the stock applied for; and, in case he did not desire a loan, to pay him the sum of $1,500 upon the surrender of said certificate after maturity; that said Milton Park, joined by his wife, Alice Park, made, executed, and delivered to said association their written obligation, denominated "Installment Bond," whereby they acknowledged themselves to be bound unto the Granite State Provident Association in the sum of $1,500, conditioned that, if said Milton and Alice Park should pay the sum of $20 per month in advance on the 15th day of each month until 7½ shares of stock in the homestead fund should be of par value, then said obligation should be void, but that if default should be made, according to the rules and regulations of said company, then said bond should remain in full force and effect, and should, at the option of the association, or its assigns or successors, become due and payable, with all sums of money which at that time should be due to said association, and, if said obligation should be placed in the hands of an attorney for collection, defendants would pay the further sum of 10 per cent. upon the amount due as attorney's fees, and that, if proceedings should be commenced in any court to collect said amount, then they agreed to pay the additional sum of $200 as attorney's fees; that, in order to secure the payment of said bond, defendants did, on the 28th day of October, 1895, make and execute a deed of trust whereby they conveyed to L. M. Dabney, trustee, lot No. 7 in block 43 of Oakcliff, according to the map of said city, whereby plaintiff avers that a lien was created on the lot above described to secure the payment of said bond; that, in pursuance of the plan of said association, Milton Park did, on the 28th day of October, 1895, make, execute, and deliver to said association his obligation in writing whereby he promised five years after date to pay to the order of said association the sum of $1,200, with interest thereon at the rate of 6 per cent. per annum until maturity, payable semiannually on the 28th days of October and April in each year, and to secure said note said Milton Park, joined by his wife, executed a deed of trust upon the property hereinbefore described to L. M. Dabney, trustee, which is duly recorded, and was made the first mortgage upon said property for the purpose of being negotiated by said association, but was never carried into effect. Plaintiff further represents that on the 14th day of October, 1890, A. J. Holt and wife, Emma Holt, as owners of the premises hereinbefore described, executed and delivered two obligations in writing, one in the sum of $400, and the other for the sum of $2,000, the first due October 1, 1891, and the other due October 1, 1895, payable to the order of the Lombard Investment Company, each with interest at 6 per cent., and as security executed their deed of trust in the usual form upon said property, which, plaintiff avers, created a valid lien upon the premises hereinbefore described; that Milton Park and wife purchased the property from Holt and wife, and, as a part of the purchase money, assumed the payment of the notes above described, made by Holt and wife to the Lombard Investment Company; that, when the loan was made by the Granite State Provident Association to the defendants, it was with the express understanding that the amount so borrowed was to pay off the Lombard notes, on which there was due at the time by the defendants a balance of about the sum of $1,500, and that the plaintiff should have a first lien upon the premises to secure the same, and that said $1,500 was so applied by the association at the request of the defendants, and it was expressly agreed that said association was to be subrogated to the lien of the said deed of trust, all of which was recited in the deeds of trust made by said defendants, Park and wife, to the association; that defendants, though notified of the insolvency of said association, and the order of the court declaring said debt due, and though often requested, have failed and refused to pay the same or any part thereof, and plaintiff has been forced to place the claim in the hands of an attorney, and sue thereon, for collection. Plaintiff prays for judgment for the sum of $1,500, with interest thereon from the date of bond at the rate of 6 per cent. per annum, and attorney's fees and all costs of suit, and that a lien be declared upon the premises hereinabove described, and that plaintiff be subrogated to the lien of said deed of trust in favor of said Lombard Investment Company as the same existed on the 14th day of October, 1890, and to the lien of A. J. Holt and wife retained by them December 19, 1890, and that the lien be foreclosed on said premises; and, in the event that plaintiff should be mistaken in the nature of the relief he is entitled to receive, he prays that the several instruments be declared a part of one and the same transaction, and the lien established upon said premises by virtue of any or all of them to secure the debt therein, and that said lien be foreclosed as against both the defendants, and that such relief be granted as the plaintiff may be entitled to receive in the premises.

Defendants answered: (1) A general denial. (2) That defendants were husband and wife, and that the property upon which it is sought to have the lien foreclosed is, and was at the time of the execution of the deed of trust, the homestead of defendants, which was well known to the association and its agents at the time of making the loan. (3) They denied specifically that plaintiff was entitled to be subrogated to the lien on the property securing the Holt note. They allege that said note was fully paid by the National Exchange Bank before the loan was made to them by the association, and that by reason of such payment the lien to secure such note was released and discharged. Defendants further allege that said association undertook to transact its business in Texas about July, 1895, and represented to the said Milton Park and to the public that it was a solvent institution, paying dividends and profits to its shareholders, and that said association had $100,000 surplus funds then on hand with which to make loans in Texas; that said sum was on deposit for said purpose. Defendants show that said association fraudulently procured from one of the promoters said sum, with the design and purpose to mislead and deceive the public, and especially those whom it could induce to become shareholders, and for the purpose of giving said association color of solvency, when in fact said association had no intention or purpose of using said money in Texas or in making loans, and said sum did not belong to said association, and said sum was withdrawn from said association by said promoter so soon as it commenced business in Texas, in accordance with the original fraudulent purpose so to do between said association and said promoter; that said association was in fact insolvent long prior to its commencing business in Texas, all of which it well knew, and defendants were ignorant of its true condition or of its fraudulent designs and purposes aforesaid; that the system of issuance of stock of said association was in order to enable it to loan money at usurious rates of interest; that the subscription of stock by the said Milton Park, and the agreement to loan him money on the security alleged herein, was all one transaction, and the said Park was induced to subscribe for stock upon the agreement aforesaid to loan him said sum of...