Straus v. Brooks

• Court: Texas Court of Appeals
• Writing for the Court: George
• Citation: Straus v. Brooks, 126 S.W.2d 542 (Tex. App. 1939)
• Decision Date: 09 March 1939
• Docket Number: No. 2017.,2017.
• Parties: STRAUS v. BROOKS et al.

Page 542

126 S.W.2d 542

STRAUS v. BROOKS et al.

No. 2017.

Court of Civil Appeals of Texas. Waco.

March 9, 1939.

Rehearing Denied March 30, 1939.

Appeal from District Court, Dallas County; Sarah T. Hughes, Judge.

Action by Lelia Brooks and husband against Eugene Straus and another to set aside a deed of trust lien on certain realty on ground that the realty was homestead, wherein the United Construction Company intervened. From the judgment, Eugene Straus appeals.

Reversed and rendered.

Touchstone, Wight, Gormley, Strasburger & Price and Geo. T. Burgess, all of Dallas, for appellant.

Cedric G. Hamlin and George T. Lee, both of Dallas, for appellees.

GEORGE, Justice.

Lelia Brooks and husband, Ross Brooks, filed suit against Eugene Straus, trading as Eugene Straus & Company, and J. B. Quinn, trustee, to set aside deed of trust lien on Caddo Street property on the ground that same was homestead at the time of attempted creation of lien and at the time of each renewal thereof. United Construction Company intervened, asserting ownership of first lien by reason of certain paving ordinances and two mechanic's lien contracts. Straus answered, averring paramount lien, and that Lelia Brooks and Ross Brooks were estopped to assert an invalidity in his lien, and asked judgment on note and foreclosure of lien. The case was tried before the court and jury and judgment was rendered on the latter's answers to special issues, that Straus recover of Lelia and Ross Brooks $2,500.08, together with interest thereon, and foreclosure of his deed of trust lien only on the interest (one-half undivided interest) conveyed by Alex Rutlin to Lelia Brooks, less a life estate in Lelia Brooks; that United Construction Company recover its debt and attorney's fees of Lelia Brooks and have foreclosure of its lien against all of the property but only as a first lien against the interest owned by Lelia Brooks prior to the Alex Rutlin deed; hence this appeal by Straus.

The pertinent findings of the jury are: (1) that the property at 2400 Caddo Street was, on December 21, 1925, being used by Lelia Brooks and her then husband, Alex Rutlin, for the purposes of a home; (2) that Lelia and Alex Rutlin did not, at and just prior to December 21, 1925, represent to S. Topletz by conduct and statements that the Caddo Street property was not being used for the purposes of a home; (3) that Lelia and Alex Rutlin did not, at and just prior to December 31, 1928, represent to Eugene Straus, or his attorney, Fred Hancock, that the Caddo Street property was not being used for the purposes of a home on December 21, 1925; and (4) that the consideration for the transfer for Alex Rutlin's one-half interest of the Caddo Street property to Lelia Rutlin in the deed of January 1, 1930, did include the assumption of the Eugene Straus note of December 31, 1928.

The Caddo Street property was conveyed to Alex and Lelia Rutlin on December 4, 1914, by Gard, and the time payments were evidenced by their community obligations. S. J. Reynolds and Belle Reynolds, father and mother of Lelia Rutlin, purchased the Flora Street property in 1898, and S. J. Reynolds continued to occupy and claim the same as his home until after December 21, 1925. Belle Reynolds died on June 26, 1921, almost two years after the sale of her interest in the property for taxes to J. H. Luna. Lelia Rutlin and sister, Carrie Mae Latimer, on September 19, 1921, acquired by quit-claim deed the interest of their mother, Belle Reynolds, in the Flora Street property procured by J. H. Luna at the tax sale.

Lelia Rutlin and Alex Rutlin, on December 21, 1925, executed deed of trust on the Caddo Street property to secure payment of $1,500 note to H. S. Lawson, due three years after date, given in part in evidence and renewal of $95.35 taxes and $311 owed to Cowser Lumber Company. The deed of trust recited that the property was not homestead and that they disclaimed and renounced all such claims. Alex Rutlin, on December 18, 1925, made under oath designation of the Flora Street property as homestead; and Alex and Lelia Rutlin, on December 22nd, executed affidavit to the effect that the Caddo Street property was not then and had never been used or occupied by them as a homestead; that they had no present intention of using it for homestead purposes, and that the affidavit was made for the purpose of assuring against homestead claims and of inducing H. S. Lawson to make the loan. The note and lien were on the same day transferred to S. Topletz. Neither the homestead designation nor the affidavit was placed of record. The note and lien were transferred to Eugene Straus by instrument dated December 31, 1928, and Lelia Rutlin Brooks and her then husband, Alex Rutlin, on January 2, 1929, executed deed of trust in extension of all existing liens to secure payment of their note in the sum of $1,773, given in renewal of $1,500 note, accrued interest and $190.31 delinquent taxes on property paid by Straus at the time. That deed of trust contained a recital to the effect that Alex and Lelia Rutlin declared that the property formed no part of any property owned, used, or claimed by them as exempted from forced sale under the laws of Texas, and that they disclaimed and renounced all and every claim thereto under such law. Alex and Lelia Rutlin were divorced on August 17, 1929, and the Caddo Street property was decreed to be community and set aside to Lelia Rutlin and the minor child so long as it was used as a homestead by her. And thereafter, on January 2, 1930, Alex Rutlin by deed conveyed to Lelia Rutlin all of his undivided one-half interest in the Caddo Street property in consideration, among other things, of her assumption of the $1,773 Straus' indebtedness and reserved therein vendor's lien, which deed was filed for record March 4, 1930. Lelia Rutlin, widow, on February 20, 1930, executed the two paving contracts held by United Construction Company, which were filed for record on February 26, 1930. Lelia Brooks and husband, Ross Brooks, on January 19, 1932, executed deed of trust to J. B. Quinn, trustee, continuing all liens in force to secure payment of note in the sum of $1,900, given in renewal of the $1,773 note. The minor child of the Rutlins reached his majority prior to the trial. All of the parties admit that the payment of the items of $311, $95.35, and $190.31 was secured by valid first liens on the Caddo Street property, and according to the agreement of all parties, shown at page 234A in Statement of Facts, sums aggregating $510 were paid after last renewal, the last thereof in the sum of $85 being made on April 12, 1934.

Straus testified that he purchased the note and lien from M. Saffir; that he depended on Mr. Hancock, his attorney, in the matter; that he bought the note on Hancock's statement that the title was all right; that he had no knowledge of the transaction or of the parties except as was found out from the papers; that he did not know the Rutlins on December 21, 1925, nor did he know where they lived then; that his money did not pass until Hancock had approved everything. Straus admitted, through his counsel, that the aggregate amount of payments made him after the renewal of January 19, 1932, totalled $510, and that he applied $112.55 on principal and the balance on interest. Fred Hancock testified that he represented Eugene Straus in the purchase of the Alex and Lelia Rutlin note and lien; that the note and deed of trust, affidavit of Alex and Lelia Rutlin, and homestead designation of Alex Rutlin were handed to him prior to closing the matter; that he read them; that he had no independent knowledge or information apart from those papers that the representations and statements in them were not true; that he relied upon the representations and statements made in those written instruments and advised Straus to pay out his money and close the transaction; that Rutlin and wife appeared before him and executed and acknowledged the deed of trust; that on all these papers the matter was closed and Straus paid out his money and took up the note. Alex Rutlin testified that "he (Lawson) took me to S. Topletz and explained to him about the place and how it was; that we lived there and said, `He cannot move out,' and Topletz says, `We will fix that up all right.' Lawson wanted me to execute the affidavit saying we were living on Flora Street so he could get the money, and the other affidavit that we did not live on Caddo Street was signed in order to get the money, we had to say that we had moved out. We never moved out. Lawson and Topletz knew we never moved out. Mr. Straus took it over to me and I renewed the note." Lelia Brooks testified that she did not talk about the loan at the time she executed the renewal note for Mr. Straus; that she knew nothing about it not being all right; that she thought all the time it was all right; that she paid Topletz interest on the place for three years; that she paid the interest until the last time the note was renewed, and then that she made it in monthly payments so that she could pay it out by the month; that she paid on the 1929 note every six months.

Appellant contends that the trial court erred (1) in refusing to give his peremptory instruction and in overruling his motion to enter judgment non obstante veredicto, because (a) the deed from Alex Rutlin to Lelia Rutlin estopped Lelia Brooks and ...