Hall v. Hix

CONNER, C. J. This suit was filed by ap-pellee, Mrs. Eloise Hix, on January 22, 1926. She alleged that she was the widow of Roscoe Hix, deceased. That her husband died on November 23, 1925. That on November 1, 1895, her husband, Roscoe Hix, purchased from Mrs. Loretta J. MeColgan and husband a tract of 34 acres-of land, situated about 2% miles northeast of Cleburne. That the consideration in said deed was the sum of $100 cash paid by said Roscoe Hix and the further consideration of the execution and delivery by said Roscoe Hix of his four promissory vendor’s lien notes of even date of said deed for the principal sum of $200 each, said notes bearing interest from date at the rate of 8 per cent, per annum, the first of said notes being due on November 1, 1896, and one each of said notes maturing on each succeeding November, the last note being due on November 1, 1899. Appellee further alleged that immediately after the purchase of said land by her husband they moved on the same and continued to occupy it as their homestead up to the time of his death on November 23, 1925. That she and her husband had only one child born to them, and that said child died in December, 1917, never having been married and without issue, and that at the time of the death of said Roscoe Hix, her husband, he left no children or descendants of children, and that he died intestate, and that all title in and interest to said 34 acres of land vested in ap-pellee at the death of her, husband. Appellee further alleged that on January 10, 1922, her husband, Roscoe Hix, executed a renewal note in the sum of $1,238.62, dated January 16, 1922, payable to the order of appellant Rosa M. Hall, and at the same time the said Roscoe Hix executed a deed of trust on said 34 acres of land securing payment of said renewal note, which renewal note was in [492] renewal and extension of the amount due on the last two of the four original vendor’s lien notes dated November 1, 1895, and due November 1, 1898 and 1899, respectively. That at the same time the said Roseoe Hix executed an extension agreement to the said Rosa M. Hall purporting to renew and extend the said vendor’s lien notes above mentioned, and alleged that said deed of trust and extension agreement were duly recorded in the records of Johnson county. That in said deed of trust O. L. Bishop was appointed trustee, but that prior to December 22, 1925, the said 0. L. Bishop had died and appellant M. N. Baldwin had been appointed substitute trustee by appellant Rosa M. Hall, the beneficiary In said deed of trust, and that the said M. N. Baldwin as such substitute trustee had advertised to sell said 34 acres of land under the said deed of trust, default having been made in the payment of said renewal note in the sum of $1,238.62. Appellee further alleged that at the time of the renewal of the said two vendor’s lien notes and the execution of the extension agreement and deed of trust aforesaid, by the said Roseoe Hix, on January 16, 1922, the said two original notes and the lien retained to secure their payment had become barred by the provisions of articles 5693, 5694, and 5695, of the Civil Statutes of Texas, as contained in the Texas Complete Statutes of 1920, and that said renewal note, extension agreement, and deed of trust, nót having been executed within one year from and after the 18th day of November, 1913, were void under and by reason of the above-mentioned articles; that the extension agreement was illegal and void and was contrary to the provisions of the articles of the statutes above mentioned. Appellee further alleged that said land wa£ the community homestead of herself and husband, Roseoe Hix, at the time of the execution of the renewal note for $1,238.62 and of the extension agreement, and that the right to renew said indebtedness had been extinguished by the statutes of this state and especially article 5695, and that such attempted reriewal was void. It was further alleged that the renewal note and the extension agreement and deed of trust lien executed by Roseoe Hix on January 16, 1922, were not only void, but each and all of them created and cast a cloud upon her alleged title to said 34 acres of land such as to hinder and prevent the sale of said land by her, and she prayed that an injunction be issued restraining the said M. N. Baldwin, substitute trustee,-from further advertisement and sale of the land, and that she have judgment declaring said renewal note, deed of trust lien, and extension agreement of no effect and void, and for cancellation of the same and for general and special relief. The petition having been presented to the judge in chambers on January 22, 1926, an order was made granting temporary injunction. On March 6, 1926, the defendants Mrs. Rosa M. Hall, joined by her husband, W. C. Hall, and M. N. Baldwin, substitute trustee, filed their original answer and cross-action in .said cause. The defendants excepted to the plea of limitation set out by appellee and to the plea of homestead as a bar to the validity of the liens of the defendant Rosa M. Hall against said land, and further pleaded that plaintiff, Eloise Hix, was estopped to deny the validity of the renewal of the said liens and notes made by her husband on January 16, 1922, and prayed judgment on their said exceptions and pleas. By way of further answer and cross-action, the defendants set forth the facts relating to the sale of the land, the execution of ttie original notes, the renewal thereof, and the execution of the trust deed to secure the renewal, substantially as set forth in the plaintiffs’ petition, and further alleged that the original notes of $200 each, given for the land referred to, were payable to Loretta J. McCol-gan, as alleged by the plaintiff; that the defendant Rosa M. Hall was a daughter of said Loretta J. McOolgan and H. T. McColgan, and that long prior to January, 1922, the said Rosa M. Hall became and wa's the legal owner and holder of the last two of said series of four notes, together with all the liens, rights, equities, titles, and interest in said lands securing said notes. That the said renewal note of January 16, 1922, executed by Roseoe Hix in the sum of $1,238.62, was payable to the order of Rosa M. Hall, and due on or before one year after date, and was secured by a deed of trust of date January 16,1922, duly executed and acknowledged by said Roseoe Hix covering and conveying the said 34 acres of land, and which deed of trust had been filed for record on January 17, 1922, and duly recorded in the deed records of Johnsoff county. That on the same date, to wit, January 16, 1922, and contemporaneously with the execution of said renewal note and deed of trust, the said Roseoe Hix executed1 a written extension agreement duly signed and acknowledged by the said Rosa M. Hall, by which extension agreement Roseoe Hix renewed and extended the vendor’s lien on said 34 acres of land to secure payment of said renewal note for $1,238.62, which extension agreement was duly filed for record on January 17, 1922, and recorded in the deed records of Johnson county. The defendant Rosa M. Hall further alleged that Roseoe Hix died intestate and without heirs other than the plaintiff, Mrs.. Eloise I-Iix, substantially as set forth in plaintiff’s petition, and alleged that the land was charged with the payment and satisfaction of said vendor’s lien renewal note and liens securing the same; that said note was past due and unpaid and prayed for a judgment for the anmunt due with a foreclosure of a [493] vendor’s lien and deed of trust lien and for general relief. Other pleadings were filed by the parties, but we think it sufficient to say that the foregoing substantially outlines the allegations of the parties except that it should be further stated that plaintiff in reply to the cross-action of the defendants specially alleged that the renewal note, extension agreement and deed of trust lien had all been executed “without the knowledge or consent of the plaintiff, were in fraud of the rights of this plaintiff,” and prayed as in her original petition. The cause came on for trial on the 6th day of May, 1926, and was heard by the court without the intervention of a jury. The court overruled the defendant’s exceptions and demurrers, and at the conclusion of the evidence rendered judgment that plaintiff, Eloise 1-Iix, recover on her plea for cancellation of the note and deed of trust liens and extension agreement, and that the defendant Rosa M. Hall take nothing by her suit and cross-action or upon said lien and extension note, and further rendered judgment perpetuating the temporary injunction that had been issued upon the prayer of plaintiff’s original petition enjoining the defendants from in any manner attempting to enforce said note or liens. From the judgment so rendered the defendants have appealed to this court. The evidence fully supports the material allegations of fact stated in appellants’ answer and cross-action, and they contend that Eoscoe Hix, having purchased the land in controversy on November 1, 1895, and having given his vendor’s lien notes in payment therefor, with lien reserved in deed, and having on January 16, 1922, executed his renewal note, and also his vendor’s lien extension agreement duly signed and acknowledged by him in the manner provided by law, and having at the same time executed his deed of trust lien duly signed and acknowledged by him in the manner provided by law, and having at the same time executed his deed of trust lien duly signed, acknowledged, and recorded, and the renewal note, extension agreement, and deed of trust lien not being barred at the time this suit was filed thereon, such note, extension agreement, and deed of trust lien were and are effective to revive said original debt and vendor’s lien regardless of the provisions of articles 5693, 5694, and 5695 of ' Vernon’s Sayles’ Statutes of 1914, since there were no intervening equities, or subsequent purchasers, or lienholders, and the trial court erred in not so holding and in canceling and decreeing as void the said liens of the appellant Rosa M. Hall. Appellee’s counter proposition, is to the effect that the original vendor’s lien notes, exe'cuted by Roscoe Hix, having been executed prior to July 14, 1905, to wit, on November 1, 1895, and being more than four years past ‘due at the time of the taking effect of said article 5695, and not having been extended nor suit brought thereon within one year from the taking effect of said article 5695, which took effect on the 18th day of November, 1913, said renewal note, extension agreement, and deed of trust, executed on January 16, 1922, were ineffectual to revive said lien and debt against the whole or any part of said land, and was void as such attempted renewal and revival, and would have been void as such attempted renewal and revival, even if the wife of Roscoe Hix, the appellee herein, had joined in the execution of said instruments, but she not having joined in said execution of said instruments, the execution of the same by her husband was a fraud upon the rights of appellee in said land, and was a fraud upon her homestead right therein, and did not and could not renew the debt and lien against either the community interest of the said Roscoe Hix in said land or against the entire tract of land, and the court did not err in refusing to foreclose appellants’ note and lien on said land. It is thus seen that there is little or no dispute in the facts in this case, and that its determination rests upon the proper construction of the articles of the statutes referred to in the contention of appellants and in the counter contention of appellee. The articles of the statutes referred to, in so far as necessary to notice, provide that (article 5693) no power of sale conferred by any deed of trust or any mortgage on real estate theretofore executed, or that might thereafter be executed, shall be in force after the expiration of the four years from the maturity of the indebtedness secured thereby, and any sale un-' der such power after the expiration of such debt shall be void, and such sale may be enjoined and the lien created thereby shall cease to exist four years after the maturity of the debt secured thereby. Article 5694 provides that the right to convey any real estate by virtue of a superior title retained in any deed of conveyance theretofore or thereafter executed, or in any vendor’s lien note or notes theretofore or thereafter executed, given for. the purchase money of such real estate, shall be barred after the expiration of four years from the maturity of such indebtedness, and that if suit be not brought for recovery of such real estate, or for the foreclosure of the lien to secure such, note or notes within four years from the date of the maturity of such indebtedness, or if suit is not brought within such time for the recovery of the land by. the original vendor, or his transferee, or for the foreclosure of the lien given to secure such notes, the purchase money therefor shall be conclusively presumed to have been paid m any suit tp recover such land or to enforce a lien thereon, and the lien reserved in any such notes and deeds conveying the land shall cease to exist, four years after fhe note or [494] notes have matured, provided the lien reserved in such note or notes may be extended as provided- in section 5695 of the chapter. Article 5695 provides that when the date of maturity of either debt referred to in either of the foregoing articles is extended, if the contract of extension is signed and acknowledged as provided for in the law relating to the execution of deeds of conveyance by the party or parties obligated to pay such indebtedness as extended and filed for record in the county clerk’s office in the county in which the land is situated, the lién shall continue and be in force until four years after maturity of the notes as provided in such extension, the same as in the original contract, and the lien shall so continue for any succeeding or additional extension so made and recorded, provided that the owners of all notes secured by deeds of trust or other liens and the owners of all vendor’s lien notes reserved in deeds of conveyance which were executed prior to July 14, 1905, and which are more than four Shears past due at the time this act takes effect as shown by the original mortgage, deed of trust, or conveyance, or last record extension, shall have twelve months after the act takes effect within which they may obtain such record extension as hereinbefore provided for, or bring suit to enforce the liens securing them if same are valid obligations when this act takes effect, and if such debt is not so extended of record, or suit is not brought within such time, the right to extend such debt of record or bring suit to enforce such liens shall be forever barred. Article 5522 of the Statutes of 1925 provides that if the contract of extension is signed and acknowledged as provided for in the law relating to the execution of deeds of conveyance by the party or parties obligated to pay such indebtedness as extended and filed for record in the county clerk’s office in the county in .which the land is situated, the lien shall continue and be in force until four years after maturity of the notes as provided in such extension, the same as in the original contract and lien shall so continue for any succeeding or additional extension so made and recorded, provided the owner of the land and holder of the note or notes may at any time enter into a valid agreement renewing and extending the debt and lien, so long as it does not prejudice the rights of lienholders or purchasers subsequent to the date such liens became barred of record under laws existing prior to the taking effect of or under this act; as to all such lienholders or purchasers any renewal or extension executed or filed for record after the note or notes and lien or liens were, or are, barred of record and before the filing for record of such renewal or extension, such renewal or extension shall be void. An interesting history of the several articles of the statutes referred to and of amendments relating thereto, which need not be here repeated, may be found in the opinion of Chief Justice Cureton in the case of Cathey v. Weaver, 111 Tex. 515, 242 S. W. 447. The concluding proviso in article 5522 of the. codified laws of 1925 indicates that articles 5693, 5694, and 5695 of Vernon’s Say les’ Statutes, above referred to, were intended for the protection of subsequent purchasers and lienholders. To repeat, the language of the proviso referred to is to the effect that the holder of the note or notes may at any time enter into a valid agreement renewing and extending the debt and lien, so long as it does not prejudice the rights of lienholders or purchasers subsequent to the date such liens became barred of record under laws existing prior to the taking effect of the act. And such construction was applied in the case of Amonette v. Taylor (Tex. Civ. App.) 244 S. W. 238. From the opinion in that case, written by Chief Justice Pleasants, we quote the following : “The majority of this court cannot agree with the appellants in the contention that article 5695 of the statute is applicable to renewals of liens -as between the parties. There is nothing in the caption of the original act, nor in its language as now embraced in the cited articles of the statute, which would require the construction that it was the intention of the Legislature in the enactment of the law to declare void as between the parties any renewal of a lien on land which is not recorded in accordance with the provisions of the act. No public benefit could be subserved by such a law. If parties can create a valid lien on land without putting it of record, no possible reason suggests itself to our minds for denying them the right to extend or renew a lien in the same way. We think the obvious purpose and intent of the statute was to protect subsequent purchasers of the land from unrecorded renewals or extension of liens, and not to unnecessarily hinder parties in their right to make contracts.” The above quotation was quoted with, express approval in the opinion of Powell, presiding judge of section B of our Commission of Appeals, in the case of Watson v. First Nat. Bank of Coleman, 285 S. W. 1050, in which Judge Powell further noted that: “The codifiers in 1925 gave statutory effect to the right of the parties themselves to renew a debt or lien, already barred. The courts had always done so.” The opinion of Judge Powell in the case of Watson , v. Bank reviews a number of decisions cited in behalf of appellee in the present case, and, as it seems to us, is conclusive in the present proceeding. As said in 12 Corpus Juris, p. 949, § 460: “All persons who are sui juris (subject to exceptions not applicable in the present case) are free to make whatever contracts they please as .long as no fraud or deception is practiced and the contracts are legal in all respects.” [495] The text is supported by citation of numerous authorities, and we think is in harmony with constitutional provisions, for, as said by the same -authority — 12 C. J. 1200, § 966: “The right to make contracts is both a liberty and a property right, and is within the protection of the guaranties against the taking of liberty or property without due process of law. Neither the state nor federal governments therefore may impose any arbitrary or unreasonable restraint on the freedom of contract.” In the case before us there is no evidence that even tends to show any fraud or duress on the part of either Roscoe Hix, appellee’s husband, or appellant Rosa M. Hall in the execution of the renewal note and extension agreement executed by those parties. The attorneys who prepared and supervised the execution of those instruments testified that the appellee, Eloise Hix, was present during the discussion which led up to the execution of these instruments, and that, while she did not join in the execution, she made no protest against it. Appellee did not deny her presence at the time of the execution of the instruments and during the discussions thereof, but merely testified that she thought they related to a mortgage or other instrument of the kind. While at the time of the execution of these instruments the original notes and liens were barred, as asserted by appellee, yet the purchase-money debt for the land now claimed by appellee still existed as a moral obligation, which affords a sufficient consideration for the act of Roscoe Hix in executing the instruments. It is true that he might have refused to execute them, but he had the power to waive the statute of limitation — that being a personal privilege. See 29 Cyc. 1107, and numerous other authorities that might be cited. Nor do we think that it can be said that the free and untainted acts on the part of Roscoe Hix in renewing the vendor’s lien notes and in executing the extension agreements and trust deed were in fraud of the homestead right of appellee. In the case of Jackson v. Bradshaw, 24 Tex. Civ. App. 30, 57 S. W. 878, writ refused, it was said, quoting from the headnotes: “A purchaser of land may waive the plea of limitations as to the original purchase-money note by renewing the same.” And “in the absence of fraud on the rights of his wife, a purchaser of land may renew the original purchase-money note after it is barred by limitations, and thereby bar the wife’s rights in the premises, though the land is his homestead.” For the reasons stated and upon the authority of the case of Watson v. Bank, 285 S. W. 1050, which was approved by- the Supreme Court, we conclude that the judgment below should be reversed and here rendered in favor of appellants, dissolving the writ of injunction, and for the recovery of principal, interest, and attorney’s fees provided for in the renewal note and the establishment and foreclosure of the vendor’s and trust deed liens upon the land in -controversy to secure the payment of said note, interest, attorney’s fees, and costs, and the judgment will be accordingly so entered.