Ran v. City Nat. Bank

• Decision Date: 21 March 1925
• Docket Number: (No. 11091.)
• Citation: 272 S.W. 510
• Parties: RAN et al. v. CITY NAT. BANK OF DECATUR.
• Court: Texas Court of Appeals

272 S.W. 510

RAN et al. v. CITY NAT. BANK OF DECATUR.

(No. 11091.)

Court of Civil Appeals of Texas. Fort Worth.

March 21, 1925.

Rehearing Denied April 25, 1925.

Appeal from District Court, Wise County; F. O. McKinsey, Judge.

Action by the City National Bank of Decatur against G. C. Ran and others, in which the Decatur National Farm Loan Association intervened. From the judgment, defendants Ran appeal. Affirmed.

J. A. Templeton, of Fort Worth, and H. E. Lobdell, of Decatur, for appellants.

N. W. Burch, of Decatur, for appellee.

DUNKLIN, J.

G. C. Ran and wife, Bertha Ran, have appealed from a judgment in favor of the City National Bank of Decatur, foreclosing a mortgage lien on a tract of 258¼ acres of land situated in Wise county, about 8½ miles in a southeasterly direction from the town of Decatur.

The principal defense urged by the defendants, G. C. Ran and wife, was that 200 acres of the land was their homestead at the time the deed of trust was executed and was exempt from forced sale under the Constitution and statutes of the state. The questions presented on this appeal will involve that issue.

The note for which the mortgage was given was dated December 18, 1919, signed by the defendant G. C. Ran, made payable to the plaintiff, the City National Bank of Decatur, and was for the principal sum of $10,548.45, maturing October 18, 1920. The mortgage, dated December 19, 1919, was in the form of a deed of trust, and was executed and properly acknowledged by both defendants. By supplemental petition, plaintiff alleged that, prior to the date of the execution of the note and deed of trust, the defendants had abandoned the tract of land in controversy as their homestead, and that they, together with their children, had moved from the land into the town of Decatur with the intent not to return or again occupy the land as a homestead, and that it was not their homestead at the time the note and deed of trust were executed. The plaintiff further alleged in that connection that, after the defendants had abandoned the land and moved to Decatur, they acquired a new homestead in that town by purchase of 8 acres of land situated in the town of Decatur; that said purchase was by deed of conveyance, dated September 1, 1919; that at the time of the execution of the note and deed of trust, defendants were actually occupying, using, and claiming the 8-acre tract in the town of Decatur as their homestead, and had so claimed and occupied it ever since its purchase.

Plaintiff further alleged that defendants were estopped from claiming the land as their homestead by reason of representations made by them to the plaintiff, at the time the note and deed of trust were executed, that they had abandoned the land as a homestead with intention not to return, and had acquired a new home and residence in the town of Decatur, which residence they were then and there claiming as their homestead; which representations were relied on by plaintiff as true and induced plaintiff to extend the credit indicated by the note. In that connection plaintiff further alleged that, at the time defendants made those representations, they executed and delivered to plaintiff a written designation of the Decatur property as their homestead, which designation contained this stipulation:

"Said tract of land above described being land on which we have lived and occupied as our homestead hereby disclaiming any homestead interest in any other land."

Said written designation of homestead was dated December 19, 1919, signed by both defendants and duly acknowledged before a notary public in statutory form. It was alleged that plaintiff relied upon said written designation of the homestead as well as upon the oral declarations made by the defendants to the same effect.

The pleadings of the parties and the evidence introduced upon the trial all showed that in consideration of the execution of the note and mortgage sued on, the plaintiff advanced sums of money to be applied upon purchase-money notes held by other parties and secured by vendor's lien upon the land, and the sums so advanced were included in the principal notes sued on; the balance of said principal being for money theretofore loaned to G. C. Ran by the plaintiff and secured in part by chattel mortgage liens upon personal property, which plaintiff also sought to foreclose. The Federal Land Bank of Houston, who held a vendor's lien note against the land in controversy, was also made a party defendant for purposes of foreclosure of the lien claimed by the plaintiff.

The Decatur National Farm Loan Association filed a plea of intervention, in which it adopted a part of the answer of the Federal Land Bank of Houston, containing allegations that the defendant G. C. Ran owned 365 shares of stock in the Federal Land Bank of Houston, of the aggregate value of $365, in which the intervener has an interest, and which was given as additional security for the debt owing by the defendant G. C. Ran to the Federal Land Bank of Houston. The intervener prayed for a determination of its rights in said stock.

The judgment rendered contained specific provisions to the effect that the foreclosure of plaintiff's lien was subject to the prior and superior lien of the Federal Land Bank of Houston for the principal sum of $7,300, and that the intervener owned the 365 shares of stock, and the foreclosure of plaintiff's lien was without prejudice to the claim of intervener to that stock. There is a further statement in the judgment that neither the Federal Land Bank of Houston nor the Decatur National Farm Loan Association prayed for any judgment further than the one decreeing that their respective interests be protected. No complaint is made on this appeal of that portion of the judgment relating to the Federal Land Bank of Houston or the intervener, and, accordingly, those parties will not be further noticed.

Appellants admit that a portion of the debt, evidenced by the note sued on, was for money advanced to be applied on a prior debt secured by a vendor's lien, and that plaintiff would be entitled to a foreclosure of the lien to that extent, independently of the defense of homestead. But they strenuously resist the foreclosure of the lien for the balance of the debt.

The jury made the following findings in answer to special issues: (1) At the date of the execution of the deed of trust, the defendants' homestead was on the 8 acres of land in the town of Decatur. (2) The officers of the plaintiff bank, who acted for it at the time the deed of trust was executed, in good faith believed that the defendants had abandoned the land in controversy as their homestead, and that at that time the 8 acres of land in Decatur was then their homestead. (3) Such belief of said officers was induced in whole or in part by the written designation of homestead pleaded by the plaintiff and introduced in evidence. (4) They would not have advanced the money to take up the vendor's lien notes against the land held by other persons but for the execution and delivery of said designation of homestead. (5) Said officers believed the said designation of homestead had been made by the defendants in good faith. (6) They relied in whole or in part upon said designation of homestead. (7) At the time the defendant, Mrs. Ran, signed and acknowledged the designation of homestead, she understood that the execution of the same was to designate the 8 acres of land in Decatur as the homestead of the family, and to disclaim homestead rights in the land in controversy. (9) Warren Lillard, the cashier of plaintiff bank, who conducted the negotiations with the defendants, did not, as an inducement to G. C. Ran to procure from his wife, Bertha Ran, her signature to the deed of trust and designation of homestead, state and represent that the execution of the papers was to be a temporary affair under which the federal loan could be secured, and that he and his wife would not lose their homestead rights in the land in controversy by executing said papers.

The note sued on was a renewal in part of a prior indebtedness owing by G. C. Ran to the bank. Such prior indebtedness was originally secured by chattel mortgages on divers items of personal property, but that property had been disposed of and the proceeds of sale had been applied to those debts as shown by a written agreement between the parties which was introduced in evidence. Complaint is made of the admission in evidence, over defendants' objection, of former notes of G. C. Ran to the bank, and of the chattel mortgages given to secure the same, on the ground that the same was irrelevant, immaterial, and calculated to prejudice the jury against the defendants, since the property covered by the chattel mortgages had all been sold and the proceeds of the same had been received by the bank, and since all of those notes had been merged into the note sued on and defendants did not question the amount due. The evidence was properly admitted in order that plaintiff might show just what amount included in the note sued on was advanced to take up other indebtedness that was secured by a vendor's lien on the land, in other words, to separate the indebtedness so secured from that which was unsecured. Furthermore, we fail to see how such evidence could have been prejudicial to the defendants, in any event, since they did not deny the indebtedness.

On November 28, 1921, G. C. Ran submitted to the bank what is called a financial statement showing that he owned the land in controversy, the amount of indebtedness outstanding against it secured by mortgage, the value of the land, the amount of his equity therein, and included in the statement was the 8 acres of land in Decatur, its value being listed at $2,500, with indebtedness outstanding against it in the sum of $1,700. The document also contained the statement that G. C. Ran then regarded the 8 acres in Decatur as his homestead. That statement was admitted in...