W. C. Belcher Land Mortgage Co. v. Taylor

• Decision Date: 11 June 1919
• Docket Number: (No. 62-2801.)
• Parties: W. C. BELCHER LAND MORTGAGE CO. v. TAYLOR et al.
• Court: Texas Supreme Court

212 S.W. 647

W. C. BELCHER LAND MORTGAGE CO. v. TAYLOR et al.

(No. 62-2801.)

Commission of Appeals of Texas, Section A.

June 11, 1919.

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

Action by Mahala Taylor and others against the W. C. Belcher Land Mortgage Company. Judgment for plaintiffs was affirmed by Court of Civil Appeals (173 S. W. 278), and defendant brings error. Judgment of Court of Civil Appeals reversed, and judgment rendered for defendant.

Wm. J. Berne, of Ft. Worth, for plaintiff in error.

Fowler & Fowler, of Bastrop, for defendants in error.

SONFIELD, P. J.

In the year 1882 Charles H. Glover purchased certain land in Bastrop county from John Wilkes, executing for the purchase money several promissory notes, two of which were in the sum of $300 each, due respectively on or before October 15, 1887 and 1889, with interest at the rate of 10 per cent. after maturity, and providing that they might be liquidated in cotton at 10 cents per pound. Upon the purchase Glover and his wife moved upon the land, residing thereon and occupying it as their homestead until Glover's death; his wife continuing to so use the same as her homestead to the date of the trial. No lien was retained upon the land in either the deed to Glover or the notes. Glover died intestate in March, 1884, leaving surviving him his wife and six minor children, aged from one to eleven years. In November, 1886, the surviving wife married H. M. Taylor. Thereafter, on November 26, 1887, the first of the two notes hereinabove mentioned having become due, and payment being insisted upon, and neither the Taylors nor the minor children of Mahala Taylor, former wife of Glover, having the money with which to pay same, and having no property other than their homestead, they made application to the W. C. Belcher Land Mortgage Company to take up and extend said notes, which was granted. Wilkes transferred the notes to the Belcher Company. The transfer, as found by the Court of Civil Appeals, was not intended as a sale, but was for the purpose of subrogating the company to the rights of Wilkes under said notes. Taylor and wife wrote upon said notes their acknowledgment that they were just debts, promising to pay the same at the expiration of five years in accordance with their note of that day, and executed their note of even date in the sum of $600, payable to the Belcher Company, with interest at the rate of 7 per cent. per annum payable semiannually, reciting that it was given for the unpaid portions of a just and subsisting original purchase-money debt, and secures and perpetuates all of the original vendor's rights, remedies, and liens. At the same time the Taylors executed a deed in trust to said land to Horace H. Cobb, trustee, to secure the payment of said note, reciting therein that it was to secure plaintiff in error in the payment of a just and subsisting original purchase-money debt, subrogating the company to the vendor's lien and continuing same to secure said note. The deed provided that in case of default the land could be sold at the courthouse door in Travis county upon notice posted for ten days on the courthouse door of said county, and that, in the event of the failure or refusal of the trustee to act, such sale should be made by the acting sheriff of Travis county as substitute trustee.

The application of the Taylors to the Belcher Company for the loan was the result of the following negotiations: Wilkes, the payee, employed R. P. Jones to negotiate or sell the notes. Jones approached S. M. Smith, a broker, with request that he find a purchaser. Smith took up the matter with the Belcher Company. The company declined to purchase the notes, because they were payable in cotton and on or before a given date, but expressed a willingness to take up and extend the notes for a period of five years. Smith informed Jones that the notes could be thus extended, and Jones, who also represented the Taylors, agreed thereto. Thereupon the application was made, and Smith was employed by the Belcher Company to inspect and report upon the value of the land, which he did. Wilkes had stated to Taylor that he would take $500 for the notes. Upon the due execution of the instruments consummating the extension, the Belcher Company paid the sum of $585, of which sum Wilkes received $500, Smith, $60, and Jones, $25.

H. M. Taylor having died, Mahala Taylor, his widow, on September 22, 1893, obtained from the Belcher Company a five-year extension of the $600 note and like extensions on October 10, 1898, and October 1, 1903. The last extension having expired and the $600 note being due and unpaid, and the said Cobb having refused to act as trustee, the sheriff of Travis county, at the request of the Belcher Company, advertised and sold the land as provided in the deed in trust. The Belcher Company became the purchaser, paying therefor the sum of $875, and the sheriff executed and delivered to the company a deed thereto.

This action was in trespass to try title and for cancellation of the deed in trust and the deed executed by the sheriff. Trial was had by the court without a jury, and judgment rendered for defendants in error. On appeal the Court of Civil Appeals affirmed the judgment of the district court. 173 S. W. 278.

At the date of the execution of the note and deed in trust, the property in its entirety was subject to the vendor's lien. Mrs. Taylor, as tenant in common with her children, in order to protect her interest, as well as that of her children, and save the property from threatened foreclosure, had the right to extend the time of payment of the debt, and to this end was authorized to execute a deed in trust binding her interest, though homestead, and also the interest of her children. If, as held by the Court of Civil Appeals, the note to the Belcher Company was in an amount in excess of the indebtedness secured by the vendor's lien, this would not render the note and deed in trust void.

The rule is familiar and well settled that one paying on behalf of another the purchase price of land or part thereof, a lien thereon existing in favor of the vendor, is entitled to be subrogated thereto, where the payment is made under agreement with the vendee and upon an understanding, express or implied, that the lien shall be retained as security for the money advanced; and, where the amount advanced is in excess of that secured by the vendor's lien, the party is subrogated to the extent of the amount of the lien. This doctrine is as applicable to the homestead as to other property. Hicks v. Morris, 57 Tex. 658; Tex. Land & Loan Co. v. Blalock, 76 Tex. 85, 13 S. W. 12; Pridgen v. Warn. 79 Tex. 588, 15 S. W. 559; Hensel v. Building & Loan Ass'n, 85 Tex. 215, 20 S. W. 116; Flynt v. Taylor, 100 Tex. 60, 93 S. W. 423; Dixon v. National Loan & Investment Co., 40 S. W. 541.

A sale made under a deed in trust for a sum larger than the amount with which the property is properly chargeable is not void, and a power of sale in such deed can be exercised if any part of the debt is due and owing. Groesbeeck v. Crow, 85 Tex. 200, 20 S. W. 49; Hemphill v. Watson, 60 Tex. 679; Word v. Colley, 143 S. W. 257; Vaughn v. Mutual Building Ass'n, 36 S. W. 1013.

The amount of the indebtedness secured by the vendor's lien was included in the note secured by the deed in trust, and, the same being due and payable, and default made in...