Temple Nat. Bank v. Warner

• Decision Date: 16 March 1898
• Citation: 44 S.W. 1025
• Parties: TEMPLE NAT. BANK et al. v. WARNER et al.
• Court: Texas Court of Appeals

44 S.W. 1025

TEMPLE NAT. BANK et al. v. WARNER et al.

Court of Civil Appeals of Texas.

March 16, 1898.

Error from district court, Bell county; W. A. Blackburn, Judge.

Suit by W. W. Warner against H. C. Merrick to vacate a certain deed, on the ground of fraud on the part of the grantee. The Temple National Bank and another, claiming under defendant, intervened. There were verdict and judgment in favor of plaintiff, and interveners bring error. Affirmed.

Harris & Saunders, for plaintiffs in error. A. M. Monteith, for defendant in error W. W. Warner.

FISHER, C. J.

This suit was brought by defendant in error Warner against H. C. Merrick, to recover two lots of land, situated in Temple, Bell county, Tex., and to cancel and rescind a certain deed executed by Warner to Merrick, conveying the lots to the latter, on account of certain fraudulent statements and representations made by Merrick, and also to have said deed, which was absolute in form, declared a mortgage. The petition in effect declares that the deed was executed to secure the payment of $1,700 due from Warner to Merrick, which arose from a transfer by Merrick to Warner of a one-half interest in saloon property and fixtures, then owned by Merrick, situated in Temple. It is stated that Merrick was then the owner of the property, and represented to Warner that the property was of the value of $3,400, and that there were no incumbrances or liens upon it, and that Merrick was not indebted. These representations and statements were made for the purpose of inducing Warner to purchase a half interest in the saloon property from Merrick. Warner, at the time, believed the representations and statements were true, and, acting upon that belief, purchased the half interest, and executed the deed in question, in order to secure the $1,700, the amount he agreed to pay Merrick for the half interest in the saloon; and it is alleged that these representations were false, and were made for the purpose of misleading and deceiving Warner; that part of the saloon property was incumbered; and that Merrick was much indebted; and that the property was not worth but about $500. Merrick filed an answer in the case, generally denying the averments of the petition, which was subsequently withdrawn by Merrick, he at the time in effect conceding that plaintiff, as against him, had a good cause of action. The plaintiffs in error, each by separate pleas, intervened in the case, and set up the fact that subsequent to the execution of the deed by Warner to Merrick, conveying the lots in question, the property in question had been incumbered by mortgages in favor of each to secure moneys due from Merrick to each, respectively; and that they had no notice, at the time, that the deed in question was intended as a mortgage, nor did they have any notice or knowledge of the fraud practiced by Merrick upon Warner. And it is further alleged that there was executed, simultaneously with the deed, another instrument, wherein it was agreed that Merrick should reconvey back to Warner, any time within two years, the property in question, if Warner should pay off and fully discharge the $1,700 due by him, as the purchase price of a half interest in the saloon; and they allege that this $1,700, no part of it, has ever been paid. To this intervention, plaintiff, in effect, replied by general denial, and charged the interveners with notice of the plaintiff's rights, as set up in his petition, and sought to recover against them the rental value of the lots in question, alleging that they had been in possession from the time that it was mortgaged to them by Merrick, collecting and receiving the rents therefor.

The case was tried before a jury, and verdict was rendered to the effect that the conveyance from Warner to Merrick was intended as a mortgage, and that Merrick made false and fraudulent representations to the plaintiff, in order to procure its execution, and found the reasonable rental value of the property during the time it was in possession of the Temple National Bank at $1,950 and judgment was rendered upon these findings. Verdict was also to the effect that the building and investment company recover nothing in the case. No verdict and judgment were rendered against it for any of the amount of rent recovered by plaintiff, but was for that amount rendered against the Temple National Bank. There is evidence in the record to support the allegations of plaintiff upon the ground of fraud, and also establishing that the deed in question was intended to be a mortgage; and there is evidence which also justifies the verdict of the jury as to the amount of rent recovered. The evidence shows that the deed in question, executed by Warner to Merrick, was absolute in form, and that, in connection therewith, there was executed another instrument, to the effect that Merrick would within two years, upon the payment to him of $1,700, reconvey back to Warner the lots in question. After these instruments were executed, Merrick executed to the Temple National Bank a deed of trust on the lots in question, to secure it in a prior indebtedness, due by Merrick; and there is some testimony that the cashier of the bank, who procured the execution of the deed of trust, had some knowledge of facts showing that the deed executed by Warner was intended as a mortgage. The Temple Building & Investment Company, after the deed from Warner to Merrick was executed, loaned to Merrick about $1,200, to secure which Merrick executed in their favor a deed of trust upon the lots...