Prince v. North State Bank of Amarillo

• Decision Date: 21 August 1972
• Docket Number: No. 8281,8281
• Citation: 484 S.W.2d 405
• Parties: George W. PRINCE et al., Appellants, v. NORTH STATE BANK OF AMARILLO, Appellee.
• Court: Texas Court of Appeals

Page 405

484 S.W.2d 405

George W. PRINCE et al., Appellants, v. NORTH STATE BANK OF AMARILLO, Appellee.

No. 8281.

Court of Civil Appeals of Texas,

Amarillo.

Aug. 21, 1972.

Rehearing Denied Sept. 18, 1972.

C. J. Humphrey, Amarillo, for appellants.

Sanders, Miller & Baker (James C. Sanders), Amarillo, for appellee.

ELLIS, Chief Justice.

This is an appeal from a judgment entered in a trespass to try title suit denying the claim of plaintiffs-appellants for recovery of title to certain tracts of land acquired by the defendant-appellee as purchaser at a foreclosure sale under a deed of trust. The validity of the foreclosure is challenged by the appellants who contend that the property was impressed with exempt homestead status at the time of the execution of the deed of trust. Affirmed.

Jessie Jean Prince and her children, appellants herein, are seeking to set aside a foreclosure sale and recover title to two tracts of land, hereinafter referred to as Tracts Nos. 4 and 5, aggregating approximately 27.95 acres, purchased by North State Bank of Amarillo, appellee herein, at a trustee's foreclosure sale under a deed of trust held by the bank to secure the payment of indebtedness evidenced by a note in the sum of $94,070.60. The note and deed of trust were executed on December 29, 1964, by George W. Prince, who, at that time, was the husband of appellant Jessie Jean Prince. Mrs. Prince did not join in the execution of the note and deed of trust.

The appellants have alleged that the property in question was a part of the rural homestead of appellant Jessie Jean Prince and her former husband. The original suit was filed by George W. Prince and wife, Jessie Jean Prince, to set aside the note and the deed of trust and to enjoin the trustee's sale of the tracts of land, designated as Tracts Nos. 4 and 5, containing 27.947 acres, and being two of five tracts, containing a total of 59.642 acres, claimed as the rural homestead of the husband, wife and children. The trial court denied the injunctive relief sought, and the Court of Civil Appeals dismissed the appeal as 'moot' and expressed no opinion upon the homestead question. Prince et al. v. North State Bank, et al., 425 S.W.2d 476 (Tex.Civ.App.--Amarillo 1968, no writ).

Before the trial of the case on its merits, the Princes were divorced and the children are the successors in interest of George W. Prince. The cause was tried to the court without a jury on the homestead question. From an adverse judgment, the appellants have brought this appeal on nineteen points of error, and the appellee has duly joined issue with its various reply points.

In order to delineate the salient points of the perspective in which this particular homestead problem is presented, we deem it appropriate to overview the evidentiary elements which we consider pertinent to a determination of the basic question submitted in this appeal. There are five tracts of land involved in this suit: Tract No. 1 containing 2 acres; Tract No. 2 containing 16.406 acres; Tract No. 3 containing 13.289 acres; Tract No. 4 containing 25.99 acres; and Tract No. 5 containing 1.95 acres. All of the tracts were acquired as community property during the marriage of appellant Jessie Jean Prince and George W. Prince. The land in dispute includes the above described Tracts Nos. 4 and 5, and Tracts Nos. 1, 2 and 3 are involved only to the extent that their use and occupancy may affect the status of Tracts Nos. 4 and 5.

George W. Prince and Jessie Jean Prince were husband and wife from February 2, 1946 to August 7, 1968. On April 18, 1962, George W. Prince entered into a contract for the purchase of Tracts Nos. 1, 2 and 3. Tract No. 1 was purchased outright from the seller, while it was contemplated that the purchase of Tracts Nos. 2 and 3 would be consummated under the Texas Veterans Land Program. The contract contained, however, special provisions regarding the right of Prince to purchase Tracts Nos. 2 and 3 directly from the seller in the event the transaction for the purchase of the two tracts could not be completed through the Veterans Land Board of Texas. The contract of sale covering the three tracts contained certain restrictive covenants as to the use of the property, indicating a use intended mainly for residential purposes and prohibited the keeping of certain livestock or conducting any commercial enterprise on the land, all of which restrictions did not appear to comport with an intent on the part of the contracting parties at that time that the property be devoted primarily to rural homestead usage.

Tract No. 1 was conveyed to the purchaser on April 18, 1962, and on October 6, 1962, Tracts Nos. 2 and 3 were acquired by the Princes from the Veterans Land Board of Texas under an installment sales contract. The instruments under which the purchaser acquired ownership of Tracts Nos. 1, 2 and 3 did not contain the restrictive covenants set out in the above mentioned contract of sale. Prior to the acquisition of Tracts Nos. 2 and 3 under the Texas Veterans Land Program, and while the original contract of sale containing the restrictions was still outstanding, a barn was constructed on Tract No. 2 in which nine horses and three colts were kept. The family home was built on Tract No. 1 and first occupied as such in October, 1962. Subsequently, Tracts Nos. 1, 2 and 3, being adjacent tracts, were enclosed by a fence, and a well was drilled and a pond constructed on Tract No. 3.

Tract No. 4, containing 25.99 acres, was subsequently acquired by Prince on March 5, 1963. This tract was separated from Tracts Nos. 1, 2 and 3 by a 60-foot strip of land which had been dedicated as a public roadway. This roadway strip was located immediately north of Tract No. 3 (the most northerly tract of Tracts Nos. 1, 2 and 3) and immediately south of Tract No. 4. The strip was entirely fenced on the south, and it was partly fenced on the north. Tract No. 5, being the 60-foot roadway strip, was subsequently acquired by the Princes on June 4, 1964, after the previously dedicated public roadway was abandoned by order of the Commissioners' Court of Randall County, Texas. An irrigation well was drilled on Tract No. 4, and this land was used to produce feed for their livestock.

During the entire time material to this suit, George W. Prince was a building contractor engaged primarily in the business of building homes, and Mrs. Prince performed interior decoration work in homes constructed by her husband. Also, they had mobile home parks in Amarillo and Oklahoma City.

The deed under which Tract No. 4 was acquired by the Princes contains a provision concerning prepayment privileges by which the vendor's lien and deed of trust lien securing the payment of the indebtedness thereon would be partially released as to 5-acre tracts upon the payment of $500 on each such tract. George W. Prince executed a deed of trust upon Tract No. 4 at the time of his acquisition thereof, and in such instrument disclaimed any intent to claim or use Tract No. 4 as a homestead. Mrs. Prince did not execute this deed of trust on Tract No. 4, but she was present when it was signed and knew the contents, including the representation of homestead disclaimer made therein.

Subsequently, the Princes became involved in financial problems. George W. Prince obtained a loan in the sum of $94,070.60 from the North State Bank evidenced by a note in such sum, dated December 29, 1964, and secured by a deed of trust upon Tracts Nos. 4 and 5. There is no claim that the funds were borrowed or the lien impressed upon the tracts for the purposes of purchase money, improvements or taxes upon the land. The deed of trust contained the following representation:

'I, George W. Prince, not joined by my wife for the reason that neither of the tracts hereinbelow specifically described, or any part thereof, has ever constituted any part of our homestead. . . .'

After default in the payment of the note secured by the deed of trust, the foreclosure sale was held on July 4, 1967, at which sale the appellee bank purchased the land and received a trustee's deed.

None of the five tracts of land had been rendered or carried on the tax rolls as homestead property of the Princes. On June 28, 1966, after the execution of the deed of trust in question and prior to the foreclosure, George W. Prince and wife, Jessie Jean Prince, executed a homestead designation of Tracts Nos. 1, 2 and 3 to 'straighten out' the tax rolls to show the portion of their land claimed as homestead for the years of 1963, 1964 and 1965. The instrument so designating the three tracts contains the following language:

'The hereinabove described land is and has been used by us as our homestead for several years, and we further declare that we have no intention of establishing our homestead elsewhere than upon the above described land.'

Tracts Nos. 4 and 5, the land involved in this suit, were not included, but were, in effect, excluded from this homestead designation relating to their land during the entire period of their ownership of the five tracts.

It is here noted that Mr. Prince was named as the only grantee or purchaser in each of the various instruments by which the community ownership of the five tracts was acquired. Also, Mrs. Prince did not join in the execution of the original contract under which the right to purchase Tracts Nos. 1, 2 and 3 was acquired. Further, she did not join in the original deed of trust on Tract No. 4 given at the time the property was acquired and which set out that the tract was no part of their homestead, but she was fully aware of such deed of trust and representations made therein. Also, she did not join in the deed of trust involved in this suit, but she knew of her husband's financial problems and, in any event, became aware of this deed of trust when the bank requested her to sign it. There is no evidence that she declined to sign the instrument because she was claiming the...