Smeltzer v. McCrory

• Decision Date: 18 January 1937
• Docket Number: No. 4685.,4685.
• Citation: 101 S.W.2d 850
• Parties: SMELTZER et ux. v. McCRORY et al.
• Court: Texas Court of Appeals

Page 850

101 S.W.2d 850

SMELTZER et ux. v. McCRORY et al.

No. 4685.

Court of Civil Appeals of Texas. Amarillo.

January 18, 1937.

Rehearing Denied February 8, 1937.

Error from District Court, Dallam County; Reese Tatum, Judge.

Suit by George E. Smeltzer and wife against Lon C. McCrory and others. To review a judgment entered upon the verdict in favor of the defendants, the plaintiffs bring error.

Reversed and rendered.

Art Schlofman, of Dalhart, and Taylor, Muse & Taylor, of Wichita Falls, for appellants.

B. N. Richards, of Dalhart, and Adkins, Pipkin, Madden & Keffer, of Amarillo, for appellees.

HALL, Chief Justice.

George E. Smeltzer and wife sued Lon C. McCrory and W. H. Latham to cancel two second lien notes, together with deeds of trust upon certain lands described in the petition.

In 1928 or 1929 the plaintiffs, Smeltzer and wife, purchased the lands involved in this suit, and as consideration therefor assumed an indebtedness of $10,000 then against the land in favor of the San Antonio Joint Stock Land Bank, and in addition thereto executed in favor of the defendants certain vendor's lien notes to represent the balance of the purchase price.

In 1934, and when the major portion of the indebtedness against the land was still outstanding, plaintiffs commenced negotiations for a loan from the Federal Land Bank of Houston, which was finally consummated in the sum of $15,500. In order to secure the loan it was necessary that certain judgment liens against plaintiffs' land be removed from the record, and defendants claimed that they paid out of their own money in removing said liens the sum of $714.

The defendants assert that prior to the time the Federal Land Bank loan was consummated, but at a time when the parties had reason to believe that said loan of $15,500 would be made, they, the defendants, estimated the amount of the proceeds of the loan which could be applied on the indebtedness due from plaintiffs to them, and discovered that there would be an insufficient balance to pay off the original vendor's lien notes which they held, together with the sums they had advanced to satisfy the judgment liens, and they made up new notes, representing this difference, after deducting all interest, one note being payable to each of the defendants, and each note bearing voluntary credits of several hundred dollars, which notes, together with deeds of trust upon the lands involved securing the same, were executed on April 24, 1934. That on the following day defendants assigned and delivered to the Federal Land Bank the original vendor's lien notes which they held, and the assignment contains this recital: "Any and all portions of said above described notes which is not hereby assigned has been fully paid and the lien securing the payment thereof is hereby released."

The notes executed by plaintiffs on April 24, 1934, as well as the deeds of trust securing the same, were subsequently renewed February 4, 1934, though there is some discrepancy in the date of the notes. They bear date of January 19, 1935. These renewed notes and the deeds of trust are the instruments which the plaintiffs attack by this suit and seek to cancel.

The foregoing facts are alleged by plaintiffs, who also allege the execution by them of notes aggregating the sum of $15,500 on February 26, 1934, secured by a first lien on the property by deed of trust of that date, and they further allege that prior to such date the defendants were the owners of original outstanding second lien notes against said property secured by liens which they transferred to the Federal Land Bank and Land Bank Commissioner by transfer and assignment dated February 27, 1934, which assignment contained the above quoted recital. That notwithstanding the execution and delivery of such assignment and release, the defendants represented to plaintiffs, on or about April 24, 1934, that the plaintiffs were still indebted to defendants, and induced the plaintiffs to execute and deliver to them second lien notes in the sum of $1,327.29 and $1,113.25 respectively, being credited with $431.12 and $361.42 respectively, and defendants further induced plaintiffs to execute and deliver to them deeds of trust on the property involved to secure the same, but did not place such deeds of trust of record. That at the time of the execution of said notes plaintiffs did not know that the indebtedness due the defendants, in addition to what had been transferred to the Federal Land Bank of Houston and Land Bank Commissioner, had beeen released by defendants.

Plaintiffs further allege that on or about February 4, 1935, they had an opportunity to sell a quarter section out of the above described land, and went to the office of the defendants to prepare a contract, and were informed that it would be necessary for plaintiffs to renew the notes and liens of April 24, 1934, before plaintiffs would be permitted to make such sale, and plaintiffs were induced thereby, on February 4, 1935, to execute and deliver renewal notes in favor of the defendants without the credits specified above, and to execute and deliver the deed of trust securing the same.

Plaintiffs further allege that there was no consideration for the execution and delivery of the original notes in favor of the defendants dated April 24, 1934, nor for the renewal notes dated February 4, 1935, and that the plaintiffs did not know that the indebtedness represented in said notes had been released when they executed the original and the renewal notes, and that the action of the defendants and representations made were fraudulent as against plaintiffs, the Federal Land Bank of Houston and the Land Bank Commissioner; that defendants represented that the notes must be executed or they would have to file suit to collect the indebtedness which existed, which representations were false and fraudulent and constituted duress. That said second notes and deed of trust cast a cloud upon the title of plaintiffs' property and prevented the sale of a quarter section of same, to plaintiffs' damage in the sum of $1,700.

The prayer is for cancellation of the notes and the deeds of trust securing the same, and for damages.

In addition to general demurrer and special exceptions and general denial, defendants pleaded estoppel, alleging that the plaintiffs requested them to execute the transfer and assignment to the Federal Land Bank of Houston, and to reduce their indebtedness. Defendants also pleaded that they aided the plaintiffs in securing the loan from the Federal Land Bank of Houston and the Land Bank Commissioner to retire the indebtedness due by plaintiffs, including the first lien due the Joint Stock Land Bank of San Antonio in the sum of $10,000, and a portion of the indebtedness due defendants, who paid certain judgments and expenses in order to aid plaintiffs in closing the loan with the Federal Land Bank of Houston and the Land Bank Commissioner.

Defendants admitted that they secured from the plaintiffs the renewal notes dated February 4, 1935, without charging interest on such notes, and did reincorporate in such notes the credits that had been placed on the original notes; that the prospective purchaser of a portion of said land had moved upon it, made valuable improvements thereon, and was willing to close the deal for the purchase thereof. They denied that there was any fraud or duress practiced on the plaintiffs.

At the conclusion of the testimony the court directed the jury to return a verdict in favor of the defendants. Judgment was entered upon said verdict.

Appellants' brief contains ten assignments of error, copied on the last four pages thereof. The brief contains no propositions, but the assignments are in the form of propositions. Following the statement of the nature and result of the suit, appellants failed to copy the assignments, but instead thereof we find "Statement, argument and authorities under Assignments of Error Nos. 1, 2, 3, 6 and 7."

This is a violation of the rules of briefing, but since the assignments referred to challenge upon several grounds the action of the court in directing a verdict, the assignments will be considered, notwithstanding the fact that appellees insist that the assignments are insufficient, to which we do not assent, and further insist that they do not present fundamental error.

The first assignment is: "The trial court erred in instructing the jury to return a verdict in favor of the defendants and against the plaintiffs on that part of the cause of action of the plaintiffs seeking to cancel the notes in question and the deed of trust securing the same, and in granting judgment in favor of the defendants on that part of the cause of action of the plaintiffs, for the reason that the undisputed evidence showed that there was no consideration for the execution and delivery of said notes and the deed of trust lien securing the same."

The next assignment insists that the court erred in instructing a verdict because the evidence showed the defendants had consented in writing to accept bonds and cash from the Federal Land Bank of Houston and the Land Bank Commissioner in full settlement of the debt due them by the plaintiffs.

As the third error committed by the court, the plaintiffs in error assert that the defendants had consented to accept the bonds and cash from the Federal Land Bank of Houston and the Land Bank Commissioner in full settlement of the debt due them by plaintiffs, and had transferred and assigned all of said debt, and the lien securing the same, to the Federal Land Bank of Houston and the Land Bank Commissioner, and had expressly released all of said indebtedness not so transferred and assigned, and had recited that the same had been fully paid, which constituted an accord and satisfaction of that part of such indebtedness not paid by the Federal Land Bank of Houston and the Land Bank Commissioner.

By the sixth assignment the plaintiffs in error assert that the...