West End Town Co. v. Grigg

The West End Town Company sued Grigg and wife on a number of notes alleged to be for the purchase money of two lots described in the petition. Defendants set up that the two lots constituted their homestead, and that they conveyed them to plaintiff to secure the payment of the debt represented by the notes sued upon, which was contracted for the construction of a residence upon the lots. The pleadings raised the issues presented by the following conclusions of fact, filed by the judge of the District Court, before whom the case was tried without a jury:

"From the evidence introduced upon the trial of this cause, I find as follows:

"1. That on June 16, 1890, F.B. Grigg and Hattie M. Grigg, his wife, owned lots 28 and 29 in block 7 of the West End Town Company's first addition to the city of San Antonio, Texas, and they had no other real estate. These lots were purchased for the purpose of a home for Grigg and wife.

"2. At that time, said lots were vacant and unimproved lots.

"3. F.B. Grigg and his wife desired to erect for themselves a dwelling upon said lots, and to this end they made application to the West End Town Company for a loan of sufficient money to erect said dwelling, and were informed by the company that it could not make a loan to them.

"4. Afterwards, upon their request, the company agreed that if Grigg and his wife would transfer the property to the West End Town Company, it would have the dwelling erected upon the lots, and then reconvey the lots with the dwelling thereon to F.B. Grigg and wife for the costs of said dwelling, and would retain a vendor's lien upon the property to secure the repayment to it of the cost of building said house.

"5. I find that in pursuance of said agreement, on the 16th day of June, 1890, by a deed duly acknowledged by F.B. Grigg and Hattie M. Grigg (the acknowledgment being taken in the manner required by the statutes and Constitution when the wife joins in the conveyance of her homestead), conveyed the above described property to the West End Town Company in consideration of the agreement on the part of the West End Town Company to erect said dwelling.

"6. I find that at the same time, June 16, 1890, the deed was made, a contract was made with the consent of the West End Town Company by said F.B. Grigg with W.S. Hardy and others for the construction of said dwelling at the stipulated price of $3600, the money to be paid Hardy for constructing said house by the West End Town Company.

"7. I find that at the same time and as part of the same transaction, the West End Town Company reconveyed the said lots to F.B. Grigg and his wife, Hattie M. Grigg, the consideration being the notes herein sued upon, which notes were executed and signed as stated in the petition, the principal of which was made up of said contract price and the interest on each note from its date to its maturity; the deed and the notes retaining a vendor's lien to secure said notes.

"8. I find that the execution of said deeds and the contract with Hardy constituted one transaction, and that thereafter and in accordance with his contract, W.S. Hardy did construct the dwelling upon said property.

"9. I find that for the work done by him and the material furnished by him in constructing said dwelling, the West End Town Company paid to the said W.S. Hardy the contract price in installments, said installments being determined by the voucher of J. Riely Gordon, the architect, which vouchers, when presented to the treasurer of the West End Town Company, were paid direct to Hardy.

"10. I find that no part of said money was paid to F.B. Grigg or to his wife, Hattie M. Grigg, but that the same, under the arrangement above set forth, all went into the work and labor and material used and incident to the construction of said dwelling house.

"11. I find that the labor and material which went into the construction of said house were furnished upon the said obligation of the West End Town Company to pay for the same and not upon the credit of Grigg and his wife.

"12. I find that F.B. Grigg is now indebted upon said vendor's lien notes to the West End Town Company in the sum of _____ dollars.

"Conclusions of Law. — From the foregoing facts, I conclude as follows:

"1. That the plaintiff is entitled to recover of the defendant, F.B. Grigg, the principal, interest and attorneys' fees due upon the note sued upon in this case, amounting to eight thousand six hundred eighty-eight and 79-100 dollars ($8688.79).

"2. I conclude that said two lots were the homestead of the said Grigg, and that the plaintiff is not entitled to a foreclosure of its lien upon the property described in its petition."

The court refused to foreclose plaintiff's lien upon the ground that the property sought to be subjected was the homestead of the defendants in error and not subject to sale for the debt sued upon, which ruling plaintiff in error attacks, because the facts found by the court show that no homestead right existed at the time the lien was created upon the property. The trial judge did not express a conclusion of fact as to the existence of the homestead right; but, as a conclusion of law, he decided that the property was the homestead of Grigg and wife at the time of the transaction and not subject to the lien. If the trial court had found, as a conclusion of fact from the evidence, that the homestead right existed at the time Grigg and wife entered into the contract which is evidenced by the several instruments made by the parties, then we would have been confined to the question, — is there any evidence upon which that conclusion could be based? But the conclusion of law expressed by the court will not be considered as a conclusion of fact, and we will proceed to determine whether the facts found made the property the homestead of Grigg and wife before and at the time of the transaction involved in this litigation. Edwards v. Chisholm, 6 S.W. Rep., 558.

The purpose of Grigg and wife to establish their homestead upon the lots at some future time, if able to erect a residence upon it, did not make it a homestead, but the making of the contract under which that residence was built, concurring with the intent to occupy it, fixed the homestead right from that time. Cameron v. Gebhard, 85 Tex. 610; Swope v. Stantzenberger, 59 Tex. 389. In the case of Swope v. Stantzenberger, in which the facts were very similar to this case, it was claimed that the contract was void because the homestead right attached after the building contract was made but before it was filed for record; because, in the meantime, preparation had been made for other improvement on the property, in anticipation of using it as a homestead. This court said: "Whatever may be the rule, as between the mechanic and creditors of the owner, as to the time when the lien commences, as between the owner and the mechanic, in the determination of the question whether the land was or not the homestead so as to exempt it from the operation of the lien unless the wife should join in the execution of the written contract, it would seem that the time of the making of the contract is the true criterion. If, at that time, it was not the homestead of the owner, then no subsequent act of his could have the effect of abrogating and destroying his contracts."

The agreement between Grigg and the builder for the erection of a residence upon the lots in question, with the notes of Grigg and wife to the West End Town Company for the price of the work, formed a contract for the improvement, and the conveyance of the lots by Grigg and wife to the plaintiff in error and the reconveyance to them constituted a mortgage to secure the notes. The instruments were all executed at the same time, and, when the contract for the building became binding, the lien of the mortgage to secure the notes became effective and attached to the lots in question. No homestead exemption existed prior to the last act by which the transaction was completed, but the intention to occupy continuing with Grigg and wife, the constitutional immunity from debts then arose in their favor as to future transactions, but did not invalidate the lien which had attached to the lots. Swope v. Stantzenberger, cited above. The effect of the judgment in this case is to hold that when the contract and mortgage took effect, therefrom arose a right in Grigg and wife which destroyed the lien that secured the notes. In other words, the negotiation was self-destructive, for, by its completion, it destroyed the lien upon which it rested. Such a proposition can not be sustained consistently with the uniform holding of this court, that a pre-existing lien is not affected by the subsequent acquisition of a homestead right in the property.

The facts found by the trial court clearly show that there was no homestead exemption in favor of Grigg and wife at the time this contract was made, and the trial court erred in refusing to enter judgment foreclosing the lien created by the mortgage. It is therefore ordered that the judgments of the District Court and of the Court of Civil Appeals be reversed and that judgment be here entered in favor of the plaintiff in error for its debt, with interest and costs, and also foreclosing its lien upon the property described.

Reversed and rendered.

ON MOTION FOR REHEARING.