Rice v. Ward

• Court: Texas Court of Appeals
• Writing for the Court: Fisher
• Citation: Rice v. Ward, 54 S.W. 318 (Tex. App. 1899)
• Decision Date: 20 December 1899
• Parties: RICE et al. v. WARD et al.

54 S.W. 318

RICE et al. v. WARD et al.

Court of Civil Appeals of Texas.

December 20, 1899.

Appeal from district court, Falls county; H. C. Lindsey, Special Judge.

Action by John Ward and others against William M. Rice and others. There was a judgment for plaintiffs, and defendants appeal. Affirmed.

Finks & Gordon and L. W. Goodrich, for appellants. Geo. Clark, Z. I. Harlan, Rice & Bartlett, and Sam R. Scott, for appellees.

FISHER, C. J.

This is an action by the appellees, as the heirs and devisees of S. S. Ward, deceased, against the appellants, for a decree declaring a deed absolute in form, executed March 19, 1868, by S. S. Ward to William Rice, to be in fact a mortgage, and to recover from appellants the land therein described. It is, in effect, alleged that the deed was intended as a mortgage to secure an indebtedness of $600, due by Ward to Wm. Rice & Co., and that Ward died in 1873, leaving the secured debt unpaid, and thereafter Rice & Co., with the intent and purpose to defraud the estate of Ward, caused to be proved up against the estate a large claim of several thousand dollars, which was allowed by the administrator of the estate, and approved by the probate court; that this claim was fictitious, in that all that was owing Rice & Co. was the $600 secured by the mortgage. It is also alleged that upon this fictitious and fraudulent claim Rice & Co. were paid the sum of $1,954, and that appellant William Rice is in possession of the land. It is also, in effect, pleaded that appellees had no notice that the instrument was in fact a mortgage until its true character was discovered in January, 1895, and that knowledge of its character could not have been sooner discovered. In addition to the relief asked, that the instrument be declared a mortgage, and that plaintiffs recover the land, judgment is also asked for the value of the rents of the land, and for the difference between the $600, due Rice & Co., and the amount of $1,954, fraudulently procured by Rice from the estate. Appellant William M. Rice appeared and answered, in which he interposed demurrers to the petition, in which it is claimed that it appears from the averments thereof that plaintiff's cause of action is barred by the statute of limitation of two, three, four, five, and ten years, and by laches and stale demand, and that the allowance and approval of the claim of Rice by the probate court was a valid and binding judgment, and was not subject to collateral attack. For answer to the merits he pleaded that the deed was not a mortgage, but was intended, as its terms imported, as an absolute conveyance, and pleaded the several statutes of limitation and stale demand, and also pleaded the judgment of the probate court approving and allowing the claim of Rice & Co. against the estate of Ward for several thousand dollars, and also pleaded this judgment, with other judgments, in which it is charged some of the plaintiffs were parties, as res adjudicata of the question as to the validity and amount of the debt due from Ward to Rice & Co.

The facts consistent with the verdict which are supported by the evidence we find as follows: Prior to the 19th of March, 1868, S. S. Ward was indebted to Wm. Rice & Co. in the sum of several thousand dollars, and upon the 19th of March, 1868, Ward and Rice & Co. had a settlement, and by agreement then entered into between them, after payment of certain amounts by Ward upon the indebtedness, the amount owing by Ward was compromised to the sum of $600, and on that day the deed in question, which is absolute in form, was executed by Ward to appellee William Rice for the purpose of securing the $600 remaining unpaid of the indebtedness. The deed, as between the parties, was intended as a mortgage to secure this debt. Ward died in May, 1873, and at the time of his death the debt secured by this instrument had not been paid off or discharged, and up to the time of his death there was no act or conduct upon the part of the appellants amounting to a repudiation of their trust relationship as mortgagees. In 1874, after Ward's death, Rice & Co. presented to the administrator of his estate a claim for several thousand dollars, which was allowed, and approved by the probate court. This claim was false and fictitious, all except the sum of $600 and interest. Certain credits are allowed on the claim, one of which is that the land in controversy was taken in part payment at a certain value. There is some evidence showing that, after the order of the probate court, William Rice claimed the land, and went into possession of it about 1887. We find that the fact of indorsing the credit upon the account presented to the administrator and the probate court of the claim due from the Ward estate, to the effect that the land in controversy had been taken as part payment, together with the conduct of William Rice thereafter, was of a nature calculated to lead the appellees to believe that the instrument was in reality an absolute deed and conveyance of the land. We find that this suit was instituted on the 19th of June, 1895, and that the appellees did not, before January of that year, become aware of the fact that the deed in question was a mortgage. They had no knowledge or information prior to that time that would put them upon inquiry that the deed was other than what its terms import. Ward, before his death, had not informed them that the deed was a mortgage, nor did the appellants furnish them any information upon that subject, and there was nothing occurring from the time of Ward's death to the time when actual information was obtained of a nature calculated to excite inquiry upon the part of appellees as to the true character of the instrument. The trial court, in its charge, submitted to the jury the issues whether the instrument was intended as a deed or mortgage, and, if the latter, the amount and date of the debt secured, and whether the plaintiffs had notice of the true character of the instrument, or could, by the exercise of reasonable diligence, have discovered its character at a time so far back as to bar their cause of action. The court also, at the request of appellants, submitted the question whether Ward, before his death, by reason of certain facts stated and grouped in the charge, abandoned or waived his equity of redemption, and thereby intended absolute title to vest in William Rice. The jury were also instructed that, if the instrument was a mortgage, Rice...