Graves v. Kinney , 95 Tex. 210 ( 1902 )

As appears from the conclusions of the trial judge, the place in controversy was the homestead of I.B. and Elizabeth J. Graves and they were in possession of it as such throughout the transactions in question. I.B. Graves and M.H. McLaurin, in order to raise money for purposes of their own upon the security of the homestead, agreed upon a plan by which Graves and wife were to make a deed to McLaurin for the place and the latter was to execute his note to Graves, pretendedly for part of the purchase money. A deed was prepared for signature by Graves and wife, reciting, as its consideration, a cash payment of $1700 and a note for $1100, and purporting to convey the property to McLaurin. This was presented to Mrs. Graves for execution and she was induced to believe that it was intended, according to its purport, to effect a real sale of the property. She at first objected, but upon the promise of her husband that the proceeds should be invested in another home, finally assented and executed and acknowledged the deed, still believing that the transaction was a real sale for the recited consideration. No money was paid McLaurin nor was there any purpose on his and Graves' part to make a real sale and purchase, their scheme being to raise money upon the note. The deed, properly executed and acknowledged, was delivered to McLaurin and placed of record, and the note recited in it was executed to Graves. Graves assigned the note to J.P. Richardson for full value before its maturity, Richardson having no notice of the true nature of the transaction between Graves and wife and McLaurin, or that it was not truly represented by the papers executed. Defendant in error, Kinney, acquired the note after maturity from Richardson and brought this suit against McLaurin, Graves and wife, and Richardson to recover the amount due upon it and to foreclose the lien upon the property. Mrs. Graves set up the facts of the transaction as stated to defeat the lien asserted. Kinney and Richardson pleaded that the latter acquired the note and lien under the deed to McLaurin before maturity of the note for a valuable consideration without notice. The plaintiff recovered under this plea in the District Court and the judgment was affirmed by the Court of Civil Appeals.

The transaction, being in the form of a sale but in reality an attempt on the part of Graves to incumber the homestead to secure the payment of money, was a "pretended sale." It involved a "condition of defeasance;" for, under the arrangement between Graves and McLaurin, payment of the note would have put an end to the pretended conveyance. It therefore comes within the provision of section 50, article 16, of the Constitution, that "all pretended sales of the homestead involving any condition of defeasance shall be void."

The understanding of the wife that she was making a sale could not give such effect to the transaction really consummated between Graves and McLaurin, because (1) her husband never joined in a sale, and (2) the sale to which she assented was never consummated. Cole v. Bammel, 62 Tex. 108.

It is plain, therefore, that no right to the property ever vested in McLaurin, and no lien upon it, good against Mrs. Graves, as between the parties, ever arose.

But to the purchaser of the note, the papers executed by all the parties presented a transaction in which there was a regular and lawful sale of the homestead, in which the cash installment of the purchase money had been paid, and the remainder was secured by the note with a valid lien on the property; and the question is, whether the court, in ascertaining his rights, should look behind the evidence of their rights which the other parties had thus created and upon which he acted, or should, in his favor, hold them to the transaction as they had made it appear to be. The decisions of this court have, it seems to us, settled the question in favor of the purchaser. Hurt v. Cooper,63 Tex. 362; Heidenheimer v. Stewart, 65 Tex. 321 [65 Tex. 321]; Love v. Breedlove, 75 Tex. 649 [75 Tex. 649]; Eylar v. Eylar, 60 Tex. 315.

In these cases, transactions which fell as completely within the constitutional provisions as that involved in this case were passed upon and it was held that a purchaser of a note given for purchase money in an apparent sale of the homestead, or a purchaser or subsequent mortgagee of the property itself, was entitled to protection against the claim of the wife that the transaction was really an attempt to mortgage the property under the form of a sale. It seems from the reports that in all of the cases cited the wife knew the true nature of the transactions when she executed the deeds upon which the purchaser relied; and it is argued, and we were at first somewhat impressed with the view, that this fact, in principle, distinguished this case from those. If the former decisions rested upon the doctrine of estoppel of the married women by their fraudulent conduct, the question might be open whether or not an estoppel could arise from such an act on Mrs. Graves' part as this case discloses. But the opinions, except one, proceed exclusively upon the principles of law existing in favor of bona fide purchasers; and in the excepted case (Heidenheimer v. Stewart), both that doctrine and that of estoppel are stated in the opinion. The original record in that case shows, however, that the sole ground relied on to defeat the claim of homestead was that of bona fide purchase, no estoppel being pleaded or claimed in the briefs. The transactions in those cases were, upon the real facts, as completely without effect between the parties as the one under review, but the rights of the purchaser were held to depend upon the facts as the parties had made them appear to him. Obviously, the state of the wife's knowledge when she executed the deed can not affect the question of the good faith vel non of the purchaser, when he knew nothing of it beyond the evidence afforded by the deed; and, accordingly, we find no allusion to such an element in any of the opinions. The doctrine of these cases is that purchasers have the right to rely upon evidences, created by the owners of homesteads, of lawful and regular sales thereof, and that evidence that the parties did not intend what their acts represented is ineffectual against such purchasers.

The judgments of the courts below were in accordance with this rule and must be affirmed.

Affirmed.