Straus v. Brooks

• Decision Date: 26 February 1941
• Docket Number: No. 2346-7588.,2346-7588.
• Citation: 148 S.W.2d 393
• Parties: STRAUS v. BROOKS et al.
• Court: Texas Supreme Court

148 S.W.2d 393

STRAUS v. BROOKS et al.

No. 2346-7588.

Commission of Appeals of Texas, Section A.

February 26, 1941.

Error to Court of Civil Appeals of Tenth Supreme Judicial District.

Action by Lelia Brooks and husband against Eugene Straus to set aside a deed of trust lien, wherein the United Construction Company intervened, and the defendant by cross-action sought recovery of debt and foreclosure of the deed of trust lien. Judgment granting foreclosure on only an undivided one-half interest in the property was reformed by the Court of Civil Appeals, 126 S.W.2d 542, and the defendant brings error.

Judgments of the Court of Civil Appeals and of the district court reversed, and cause remanded, with instructions.

Touchstone, Wight, Gormley & Price, Allen Wight, and Geo. T. Burgess, all of Dallas, for plaintiff in error.

Cedric G. Hamlin and Geo. T. Lee, both of Dallas, for defendants in error.

GERMAN, Commissioner.

On December 21, 1925, Alex Rutlin and wife, Lelia Rutlin, executed deed of trust on a part of Lot No. 1 in Block 621-C in the City of Dallas, measuring 39 feet by 108 feet. On that date said lot was being used by them for the purpose of a home. Said deed of trust was executed to secure payment of one note for $1,500 payable to H. S. Lawson. Said note included renewal of the sum of $95.35 paid as taxes on the property and the sum of $318 due Cowser Lumber Company and secured by valid mechanic's lien. In said deed of trust there was a recital that said property did not constitute any part of the homestead of Alex Rutlin and Lelia Rutlin. On December 21, 1925, Alex Rutlin and Lelia Rutlin made affidavit that the property covered by said deed of trust had never been occupied by them for homestead purposes and was not at that date used by them as a homestead. On December 18, 1925, Alex Rutlin executed designation in which he declared that a part of Lot No. 7 in Block 569-C in the City of Dallas was the homestead of himself and family.

December 21, 1925, the note for $1,500, together with the deed of trust lien securing same, was assigned by Lawson to S. Topletz. May 5, 1926, S. Topletz assigned the note to M. Saffir, together with the lien securing same. On December 31, 1928, M. Saffir assigned the note and lien to Eugene Straus. On the same day Alex Rutlin and wife, Lelia Rutlin, executed a new note in the sum of $1,773, which included balance and interest due on the prior note and the additional sum of $213, which it is recited was advanced for taxes for the year 1928. A deed of trust was executed on the same date on the same property to secure such renewal note. In the deed of trust it is recited that the property described constituted no part of the homestead of Alex and Lelia Rutlin.

The testimony shows that when Straus took assignment of the note and lien there was delivered to his attorney for examination an abstract of title, together with the affidavit and designation of homestead hereinbefore mentioned. The attorney for Straus testified that he relied upon these instruments in advising Straus concerning the title to the property covered by the lien.

August 17, 1929, decree was entered in the District Court of Dallas County divorcing Alex Rutlin and wife, Lelia Rutlin. By this decree the property covered by the lien was declared to be community property and same was set apart to Lelia Rutlin and her minor child so long as same was used as a home by Lelia Rutlin. January 2, 1930, Alex Rutlin conveyed to Lelia Rutlin (recited to be a widow) his interest in said property describing same as follows: "My undivided one-half interest in and to a part of Lot No. One in Block No. 621-C of the City of Dallas, Dallas County, Texas, the same measuring 39 feet by 108 feet, as shown by the map or plat records of Dallas County, Texas."

After reciting the consideration of $500 paid and to be paid in a certain manner the deed contained this further recital of consideration: "And the further consideration of the said Lelia Rutlin assuming the payment of an indebtedness now owing to Eugene Straus, which indebtedness is secured by a first lien on said property."

The jury found that this assumption was a part of the consideration for the conveyance. This deed was filed for record March 4, 1930.

Thereafter Lelia Rutlin married Ross Brooks. On December 31, 1931, Lelia Brooks and her husband, Ross Brooks, executed a renewal note to Eugene Straus for $1,900 payable in monthly installments and bearing 10 per cent. interest. Contemporaneously therewith they executed a deed of trust to J. B. Quinn, trustee, to secure Straus in the payment of said renewal note, which deed of trust contained the following recital:

"It is expressly understood and agreed that the note herein and hereby secured is given in lieu of, substitution for and in renewal and extension of one certain note dated December 31, 1928, in the principal sum of $1,773.00, executed by Alex and Lelia Rutlin, payable to the order of Eugene Straus, described in deed of trust of even date to John C. Roberts, as Trustee, together with accrued interest thereon, and the holder of the note herein and hereby secured shall be entitled to all the rights, title, remedies and equities to which the holder of the note herein and hereby renewed was entitled.

"It is expressly understood and agreed that the note herein and hereby secured is a first and superior lien upon the hereinabove described property."

Prior to the institution of this suit certain payments were made by Lelia Brooks upon this indebtedness.

The City of Dallas, under proper ordinance, on the 13th day of August, 1930, levied paving assessment against the property in question, and issued certificate in the sum of $149.23 to H. L. Cannady Company of Texas. February 20, 1930, Lelia Rutlin as a feme sole entered into a contract with H. L. Cannady Company of Texas for the paving of the property and created a contract lien for that purpose.

On August 13, 1930, the City of Dallas assessed the property for street paving in the amount of $340.11 and issued certificate to H. L. Cannady Company of Texas. February 20, 1930, Lelia Rutlin, acting as a feme sole, entered into a contract with H. L. Cannady Company of Texas for this paving and created a contract lien to secure same. Thereafter H. L. Cannady Company of Texas changed its charter name to United Construction Company.

The present suit was instituted in the District Court of Dallas County by Lelia Brooks and husband, Ross Brooks, against Eugene Straus, holder of the note and deed of trust lien mentioned, and in this suit United Construction Company intervened, asserting its paving liens under the...