Cage & Crow v. Perry

Appellants insist that the judgment is erroneous in so far as it cancels the deed of Frank and his wife to them, and decrees the title to the land described in it to be in Mrs. Frank, "because the proof showed," quoting from the assignment, "that Cage Crow purchased said land for a valuable consideration without any fraud or duress on the part of Cage Crow, and without any knowledge or notice of any fraud or duress or undue influence practiced upon the said Kate Frank to secure the execution thereof by the said Kate Frank." The jury found that Mrs. Frank did not willingly execute the deed, that she was coerced by her husband into executing it; but they also found that appellants at the time they concluded the transaction with her husband were ignorant of the fact that she had been coerced into executing the deed. So it did not appear that Mrs. Frank, as against appellants, was entitled to have the deed canceled because of the coercion practiced upon her. But it was shown that the consideration for the conveyance agreed upon between appellants and Frank was to be $8,250 in money, debts of said Frank due to appellants, land and a diamond ring. It was further shown that, to induce her to execute the deed, Frank represented to his wife that appellants were to pay them for the land $6,000 in cash, less certain debts he owed them, amounting, it appears from the record, to the sum of $1,767, and convey to them two tracts of land — one in Angelina and the other in Anderson county — guaranteed by appellants to be worth $2,000, and a diamond ring worth $250; and it was further shown that the deed presented to Mrs. Frank was signed by her, and on its face recited the consideration to be paid by appellants to be the sum of $8,250. The jury found that the real consideration for the conveyance was the cancellation by appellants of debts due them by Frank, aggregating the sum of $1,767, the payment to him of $3,226.25 in cash, the delivery to him of a diamond ring, deeds conveying to Mrs. Frank a tract of land in Angelina county worth $400, a tract in Anderson county worth $400, and an undivided interest in a rock house in Stephenville, and the crediting on their books of the sum of $250 in favor of Mrs. Frank. The jury did not find the value of the interest in the rock house, nor the value of the diamond ring, but there is evidence in the record which would have supported a finding that the diamond ring was worth $150 or $250 and the interest in the rock house $400. Including the $250 passed by appellants to Mrs. Frank's credit on their books, about which the record shows nothing further, the total consideration paid by them for the land was about $6,593.25, or $1,656.75 less than the amount of the consideration recited in the deed and $1,656.75 less than the amount thereof as represented to Mrs. Frank by her husband to induce her to execute the deed. The testimony shows, and the jury found, that the notary who took Mrs. Frank's acknowledgment to the deed did not read same to her, nor explain to her in any way anything about the transaction, or that the real consideration to be paid by appellants was other than the consideration recited in the deed, and, further, that she had no information as to the consideration and the nature thereof other than that furnished to her by her husband as recited above. It appearing, as it did from the findings and testimony referred to, that the land conveyed was the separate property of Mrs. Frank, and that she was induced by false representations made to her by her husband to execute the deed conveying same to appellants, if they participated in or were chargeable with notice of the fraud perpetrated, they have no right to complain of the cancellation of the deed. The jury did not find that they were parties to the fraud of Frank, and it is not necessary to look to the record to determine whether testimony in it warranted such a finding, because, under repeated holdings of the courts, it must be said they were chargeable with notice of the fraud. Cole v. Balnlnel,62 Tex. 112; Stallings v. Hullum, 79 Tex. 421, 15 S.W. 677; Stallings v. Hullum, 89 Tex. 431, 35 S.W. 2; Johnson v. Callaway, 87 S.W. 178. In the case last mentioned Judge Gill, referring to the others, said: "By these decisions it is settled that where a vendee accepts a deed from a husband and wife in conveyance of either her separate property or her homestead, and the recited consideration is greater than that agreed to be paid and actually paid, the vendee is thereby put upon inquiry, and is guilty of constructive fraud, rendering the deed a nullity, unless it be shown that the wife knew of and assented to the lesser sum as the consideration for the conveyance." The testimony of appellant Bruce Cage was that appellants agreed to pay Frank $8,250 in money, property, and debts. The consideration recited in the deed they accepted was $8,250. As shown above, they actually paid Frank, the court had a right to say from the findings and testimony, $1,656.75 less than that sum.

Appellants further insist that, if Mrs. Frank ever had a right to avoid her deed, she waived it by ratifying her execution of it after she had obtained full knowledge of the true consideration paid by them. This contention finds its answer in the unchallenged finding of the jury that Mrs. Frank first learned of the true consideration paid her husband for the land about the time she filed her intervention in the suit There was no evidence tending to show that thereafterwards she did any act indicating an assent to or waiver of the fraud practiced upon her. Speer's Law of Married Women, §§ 152, 131.

Finally, appellants insist that, after canceling the deed, the court erred in failing to compel Mrs. Frank to do equity by restoring to them the consideration they paid her husband for the land described in the deed. In so far as it applies to the part of the consideration which was actually received by her and the part thereof which operated to relieve her separate estate of the liens she had created thereon by the mortgages mentioned above, we think the contention should be sustained; but we do not think she should be required to restore the part of the consideration paid by appellants to her husband which she did not receive and which did not operate in any way to benefit her separate estate. Chargeable, as they were, with notice of the fraud practiced upon her by her husband, appellants in effect became parties thereto when they accepted Mrs. Frank's deed, and without her consent paid to her husband another and different consideration therefor than the consideration she had a right to expect and demand of them. Therefore, we think, they should not be heard to say that the relief she sought should be granted only on condition that she return to them something she had never received, nor obtained benefit from, and which, as they had a right under the circumstances to expect it would be, had been wrongfully used by Frank for his own purposes. As between themselves and Mrs. Frank, we think equity will be done when she shall have restored to them what, or its value, she actually received of the consideration they paid. From the record it seems she received of said consideration a diamond ring. $140 in money, the tract of land in Anderson county, and a release of debts secured by liens on her separate property aggregating $1,767. [5] Appellees J. N. Groesbeeck, Sr., and Mrs. Frank, with reference to the liens referred to as securing debts, insist that the mortgages evidencing them were void because made by Mrs. Frank during the life of the trust created by the deed to J. N. Groesbeeck, Sr., when, they insist, Mrs. Frank, because of the conveyance to J. N. Groesbeeck, Sr., was without power to incumber her interest in the property. For reasons hereinafter stated, we think she could not during the life of the trust by a mortgage on her interest in the property deprive the trustee of the power conferred upon him or interfere with his exercise of same, but we see no reason why a mortgage made by her, if otherwise valid, should not have operated to pass to her mortgagee the interest she owned in the property, subject to the trust she had joined other parties in creating. Monday v. Vance, 92 Tex. 428, 49 S.W. 516. The cancellation of the deed she made to appellants should, we think, be on the condition that she pay to them the value of the part of the consideration paid by appellants which she actually received, including the amount of said debts secured by her mortgages. The testimony as to the value of the diamond ring she received as a part of the consideration was conflicting, and the conflict was not determined by a finding of either the jury or the court. As this court cannot say that it was worth $150 as testified to by R. T. Frank, or $250 as testified to by B. C. Cage, the judgment disposing of this part of the litigation cannot be so reformed here as to avoid the necessity of remanding the case otherwise than for the purposes of the partition to be made.

By cross-assignments, appellees J. N. Groesbeeck, Sr., and Mrs. Frank attack the judgment as erroneous, in so far as it is in favor of Mrs. Perry for a partition, and in so far as it adjudged a recovery in favor of appellants against Mrs. Frank of the sum of $400 on account of the Anderson county land, and in so far as it undertook to revive as against Mrs. Frank the debts and mortgages made to secure same representing the $1,767 indebtedness canceled by appellants as a part of the consideration for the conveyance to them of the lands described in Mrs. Frank's said deed to them of April 26, 1909, canceled and annulled by the decree.

The contention as to the part of the judgment which provides a recovery by appellants against Mrs. Frank of $400 on account of the Anderson county land should not, we think, be sustained. By her conveyance of that land she, in effect, appropriated its value to her own use, and equity, we think, therefore would require her to restore to appellants its value, as found by the jury. The contention that the judgment is erroneous in so far as it attempted to revive the debts and mortgages referred to has in effect been disposed of by the ruling made that her deed to appellants should be canceled only on the condition that she pay to appellants a sum equal to the aggregate of those debts as found by the jury. Of course, appellants are not entitled to have such a payment made to them, and also to have the debts and mortgages revived.

It appears that a partition was sought by Mrs. Perry, not only of the lands conveyed in trust to J. N. Groesbeeck, Sr., but also of certain other lands. As to such other lands, the record discloses no reason why she was not entitled to have a partition made as prayed for. Whether she was entitled to a partition of the lands conveyed by her and the other parties to the trust deed to J. N. Groesbeeck, Sr., depends upon the effect which should be given that deed when considered in connection with the trust agreement in accordance with which it was made. If the effect of that deed was to pass to said J. N. Groesbeeck, Sr., during the time specified in it an exclusive right to manage, sell, or otherwise dispose of it for the purpose of the trust the interest of Mrs. Perry and Mrs. Frank in the property it conveyed, and to deprive them during that time of a right to exercise any power over or with reference to it inconsistent with such a right in said J. N. Groesbeeck, Sr., then it should be held that Mrs. Perry was not entitled to a partition of that property during the life of the trust. Monday v. Vance, 92 Tex. 428,49 S.W. 516. No reason why she did not have the power to create such a trust and deprive herself of such a right has been suggested. If she might have done so, and we think she might, then clearly she did do so; for a right on her part to have a partition as sought during the life of the trust is not only inconsistent with the power conferred upon the trustee by the deed, but also is inconsistent with the intention of the parties to it as declared in the trust agreement when they stipulated that the interests of Mrs. Perry and Mrs. Frank in the property described in the deed should be conveyed "at once and continue in trust to J. N. Groesbeeck, Sr., as trustee, * * * for a term of six years after Henry S. Groesbeeck shall reach his majority," and, as further shown by the provision so carefully made for a successor in the trust, in the event of the death of said J. N. Groesbeeck, Sr., during the time it was to continue. The trust was an active one, and was based upon a consideration inuring to each of the parties to it. Each of them had a right, we think, to insist that it should be carried out according to its terms, free of a right on the part of either of the other parties to it during its life, to exercise or have a court to exercise any power over the property inconsistent with the powers conferred upon the trustee. To permit any one of the parties against the wish of any other one of them to have a partition of the property during the life of the trust we think clearly would be inconsistent with their intention as evidenced by their agreement, and would operate to interfere with an exercise by the trustee of the powers conferred upon him. Therefore we are of the opinion that the judgment is erroneous in so far as it decreed a partition of the lands conveyed to J. N. Groesbeeck, Sr., as trustee.

The judgment will be reversed, and the cause will be remanded for a new trial in accordance with the rulings we have made.