Ward v. Scarborough

• Decision Date: 15 May 1920
• Docket Number: (No. 9388.)
• Citation: 223 S.W. 1107
• Parties: WARD v. SCARBOROUGH et al.
• Court: Texas Court of Appeals

Page 1107

223 S.W. 1107

WARD v. SCARBOROUGH et al.

(No. 9388.)

Court of Civil Appeals of Texas. Ft. Worth.

May 15, 1920.

Rehearing Denied June 19, 1920.

Error from District Court, Eastland County; Joe Burkett, Judge.

Suit by Mrs. W. L. Scarborough and others against E. J. Ward and others. To review judgment for plaintiffs, the named defendant brings error. Writ dismissed.

See, also, 219 S. W. 505; 220 S. W. 274.

Conner & McRae, of Eastland, for plaintiff in error.

F. G. Morris and Geo. E. Wallace, both of El Paso, and J. R. Stubblefield, of Eastland, for defendants in error.

DUNKLIN, J.

Mrs. Willie Scarborough, a feme sole, joined by her two sons, Jess and Chunk Scarborough, and her daughter, Moliero Scarborough, instituted this suit against E. J. Ward, Gus Ward, and John Ward in the district court of Eastland county. She alleged in her petition that she owned 2,840 acres of land in Eastland county during the month of May, 1916, which was incumbered by mortgage liens in the form of deeds of trust to secure an indebtedness of approximately $9,500, which she owed one Hillary Moseley; that the defendant John Ward, the father of the other two defendants, was the agent and representative of said Hillary Moseley and in the control of said loans, and was trustee in said deeds of trust; that at that time she was a widow, and for many years had been a customer of a bank which was being run and operated by the defendant Gus Ward; that an installment of interest on said indebtedness was about to fall due, the default in payment of which would entitle the holder to declare the principals of both notes due, and that John Ward, as agent for Moseley, the holder, had agreed to extend the time of payment of said interest for one year, but that for the purpose of liquidating the indebtedness in its entirety plaintiffs offered the land for sale, and thereafter obtained a proposed purchaser for it in T. J. Vines, residing in Greenville, Tex., who agreed to pay the plaintiffs therefor the sum of $6 per acre, and to allow them to reserve from such conveyance all the oil, gas, and mineral rights pertaining to the land; and at the suggestion of defendant Gus Ward plaintiffs borrowed from the bank, which was being operated by him, the sum of $1,500, and put it up as a forfeit in said bank to the credit of the proposed purchaser to insure said sale, and at the same time the purchaser put up the sum of $7,500 in cash as a forfeit to plaintiffs to bind him to carry out his contract of purchase. Plaintiff Mrs. Willie Scarborough was the owner of the legal title to the land, but the same was purchased after her husband's death with community funds. Her husband had devised his half of the community estate to her for life, but with power to sell it whenever she should see fit so to do.

The proposed purchaser was able, ready, and willing to carry out and consummate his agreement to purchase the land, and would have done so but for the conspiracy between the three defendants, formed for the purpose of acquiring title to the property for E. J. Ward for $4.50 per acre, and by means of which conspiracy said purpose was accomplished in the following manner: With full knowledge of the proposed purchaser's contract to buy the land, and of his ability and willingness to consummate the trade at the price stated, the defendant Gus Ward, in pursuance of said conspiracy and acting in behalf of the other two defendants as well as for himself, while acting as the agent of plaintiffs and in violation of the trust imposed in him by them, withdrew their forfeit of $1,500, and notified Vines of such withdrawal, and thereafter induced Vines also to withdraw his forfeit of $7,500, and to refuse to consummate the purchase by falsely and fraudulently representing to him that the land was not really worth as much as $3 per acre; all for the purpose of enabling E. J. Ward thereafter to acquire said land for a price below its market value.

According to further allegations in the petition, the land, without the mineral rights, was well worth the sum of $6 per acre, and as soon as the defendants succeeded in preventing plaintiffs from making said proposed sale John Ward, as agent for Moseley, declared all of the indebtedness owing by the plaintiff to him due in violation of the agreement of extension mentioned above, and notified the plaintiff that unless the same was paid at once the lien given to secure it would be foreclosed and the land would be sold to satisfy the indebtedness. Such action was for the purpose of taking advantage of plaintiffs' financial distress, they being unable to raise money from any other source, and to acquire plaintiffs' land for a grossly inadequate price. On account of the helpless condition in which plaintiffs had thus been placed by the fraudulent acts of the defendants in causing the proposed purchaser to refuse to carry out his contract of purchase, plaintiffs were forced to sell the land to defendant E. J. Ward for the price of $4.50 per acre, with no mineral reservation except a one-half of the royalties that might thereafter arise from an oil lease theretofore given by plaintiffs on said land, and later to sell the remaining half of said royalties to E. J. Ward for the sum of $500, by reason of his false and fraudulent representations that said lease was void and his threat to prevent any drilling thereunder. At the time of said sale the land was worth $6 per acre aside from the mineral rights therein, and the mineral rights in the land were worth $100,000.

According to further allegations in the petition, plaintiffs did not know of such fraudulent acts and conduct on the part of defendants at the time they executed the deed to E. J. Ward and the further deed to their remaining interest in the expected royalties. Plaintiffs further alleged, in substance, that by reason of the premises the defendant E. J. Ward held title to said land in trust for them, and they prayed for judgment against E. J. Ward, canceling the deed of conveyance, and fixing a lien against said land in Ward's favor for the amount of money he had paid to plaintiffs therefor, together with interest thereon. In the alternative, and in the event plaintiffs should be held not entitled to a decree canceling the conveyance, they prayed for damages against the defendants in the sum of $104,260, which they sustained by reason of their failure to sell the property to Vines, such damages being the sum of $4,260, which they would have received from Vines for title to the land without the mineral rights plus $100,000, the value of the mineral rights which they would have retained in the deed of conveyance to Vines.

By proper pleadings the truth of all of those allegations was put in issue by the defendants. Defendants' answer also contained numerous exceptions to the sufficiency of the petition to recover the land or the damages claimed in the alternative prayer, and by special exceptions the statute of limitation of two years was invoked. By way of special answer to the merits, defendants pleaded the statutes of two years' limitations, waiver, stale demand, the statute of frauds, failure of consideration for the alleged agreement of extension of the debts owing by plaintiffs to Hillary Moseley, and special denials of the alleged collusion and fraud charged by plaintiffs.

Upon the trial the plaintiffs dismissed their alternative prayer for damages as against defendant Gus Ward and John Ward.

The following were special issues submitted to the jury, with their findings thereon:

"(1) Did J. W. Ward agree with the plaintiff Mrs. Willie Scarborough that he would extend, or cause to be extended, the loan upon said land, together with the interest due thereon, for a term of one year from the spring of 1916? Answer: Yes.

"(2) If you answer question No. 1 in the affirmative, then answer, Did the plaintiff Mrs. Willie L. Scarborough rely upon such representations and thereby fail to make arrangements to take up the loan and interest when it became due? Answer: Yes.

"(3) Did J. W. Ward thereafter, on or about April, 1916, inform the plaintiffs Jess and Chunk Scarborough that he would wait no longer for payment of the accrued interest on said loan, but would foreclose the same, if the same were not paid immediately? Answer: Yes.

"(4) If you answer the above question in the affirmative, then answer, Did E. J. Ward have knowledge of such action on the part of J. W. Ward and thereby induce plaintiffs to accept the sum of $5.00 per acre for said land? Answer: Yes.

"(5) Was the sum of money paid by E. J. Ward to plaintiffs for said land a fair, reasonable market value for said land at that time? Answer: No.

"(6) Did the defendant Gus Ward represent to one Vines, or his agent, S. A. Moore, that the land in controversy was not worth $3.00 per acre? Answer: Yes.

"(7) If you answer the above question in the affirmative, was such representations on the part of Gus Ward his true opinion as to the reasonable market value of said land at the time, or was it made for the purpose of misleading said Vines, and to cause him to refuse to carry out his agreement to purchase said land from the Scarboroughs? Answer: No, it was made to mislead Vines.

"(8) What was the reasonable market value of said land per acre in April, 1916, including all mineral rights, except one-half of the royalty, under the lease then in force? Answer: Eight dollars per acre.

"(9) If you have answered question No. 7, that Gus Ward made representations to said Vines or his agent that said land was not forth $3.00 per acre, was such representations, if any, made for the purpose of preventing said Vines from consummating the deal for said land with the opportunity to buy same? Answer: Yes.

"(10) Did E. J. Ward have knowledge of such representations, if any, on the part of Gus Ward, to Vines or his agent, with reference to said land? Answer: Yes.

"Special issue No. 9 (requested by plaintiffs): Did the...