Burnett v. Continental State Bank of Alto

The appellee sued the appellants, J. M. Burnett and wife, for the title and possession of a house and lot situated in the town of Alto, Tex. It claimed title by virtue of two conveyances, one executed by the appellants in May, 1914, and the other in February, 1915. The appellants resisted the suit upon the ground that the land was their homestead, and that the conveyances relied on were intended as mortgages. They also alleged that the second deed referred to above was, after its execution by them, placed in escrow, with the understanding that it was not to be delivered until Burnett received his discharge in bankruptcy, and upon the further condition that he had no further trouble with any of his creditors. In addition to the above, it was also alleged that Mrs. Burnett executed the second deed under duress. It appears from the evidence that the property in controversy had been purchased by Burnett for a homestead, and was being so used at the time the above conveyances were executed. In January, 1915, Burnett, on account of financial embarrassment, had filed a petition in bankruptcy, and the appellee was one of his creditors. The appellee also held as a claim against Burnett a balance of approximately $550 due upon the purchase price of the homestead, which had previously been acquired from the holder of the original purchase-money note. The court submitted special issues, and the jury returned the following findings of fact: That the first conveyance, that made on May 8, 1914, was a mortgage. That the second conveyance, the one dated February 3, 1915, was delivered to Perkins Perkins, attorneys, in escrow, to be delivered to the appellee upon Burnett's discharge in bankruptcy. That Burnett was notified by Perkins Perkins previous to the delivery of the deed to the appellee. That the property in controversy was worth, on the 8th day of May, 1914, $1250. That the conveyance of February 3, 1915, was properly acknowledged by Mrs. Burnett, and was not signed by her under duress. That there was at the date of the trial due upon a vendor's lien note previously executed by Burnett, including interest and attorney's fees, $549.46. Upon these findings the court rendered a judgment in favor of the appellee. The first error assigned assails the finding of the jury upon the issue of duress, as without sufficient evidence to support it. *Page 173 There was no motion to set aside this finding in the court below, nor was there any objection to the action of the court in submitting that issue. The objection here urged therefore comes too late. Blackwell v. Vaughn,176 S.W. 912. But even if objection had been seasonably made, the state of the evidence is not such as to require a contrary finding as a matter of law. Appellants, having pleaded duress, assumed the burden of proving it. Burnett testified that prior to the execution of the deed he informed his wife that the attorney and the cashier of the appellee had told him that unless he and his wife gave the bank a good deed to the property, they would give him trouble in the federal court. He construed the intimation as meaning some form of criminal prosecution. Mrs. Burnett corroborated her husband as to what he told her prior to the execution of the deed concerning those threats. Burnett's testimony was contradicted by the cashier and appellee's attorney, both denying that any threats were made. If Burnett falsely represented to his wife that such threats had been made, and she was thereby induced to sign the deed, she was the victim of a fraud upon his part, and not of duress. Moreover, the jury was not bound to accept as true the statements of Burnett and his wife, both of whom are parties interested in the result of the suit. The next assigned error complains of the refusal of the court to submit the following special issue: "Did the defendant J. M. Burnett have any further trouble with any of his creditors after the execution of the deed by himself and wife dated February 3, 1915? Answer this `Yes' or `No.' " The relevancy of that issue must depend upon the following written agreement, which was entered into at the time of the conveyance of February 3, 1915: "I sign this deed with the understanding that it is not to be turned over to the Continental State Bank until I am notified, and not then only on condition that we get a discharge and have no further trouble with any of the creditors. Perkins Perkins agree to keep this deed in their possession until this contract is carried out, and also to notify me or my husband before turning over the deed." This agreement was signed by Perkins Perkins and by both Burnett and his wife. At the time it was executed and the deed there referred to was signed Burnett had not received his discharge in bankruptcy, but did receive it some time before the deed was finally delivered to the appellee. The "further trouble" with his creditors, which is relied on to defeat the right to the delivery of the deed, grew out of a contract between Burnett and Sanger Bros., of Dallas, after the discharge in bankruptcy. The evidence shows that Burnett had previously transferred some of his accounts to the appellee and Sanger Bros. jointly, in settlement of a part of his indebtedness due them; that after the discharge in the bankruptcy court Burnett, at the suggestion of appellee's cashier, purchased from Sanger Bros. their interest in those accounts, giving his note with personal security in payment. A dispute afterwards arose between the appellee and Burnett as to the extent of the interest in those accounts which had been owned by Sanger Bros.; and for some reason, not clearly explained, Burnett refused to pay the Sanger note when it became due. Sanger Bros. thereupon filed suit against Burnett to recover upon the note, and this suit was pending at the time of this controversy. This is the trouble which appellants rely upon to defeat their deed. It is evident from an inspection of this collateral written agreement, in the light of the circumstances then surrounding the parties, that the "further trouble" with creditors, mentioned as a condition, referred to the creditors of Burnett then existing and whose claims were then being settled. To hold otherwise, and say that it referred to all persons who might thereafter become creditors by reason of any future business transactions with Burnett, would keep the deed in abeyance indefinitely, and practically defeat it entirely. The facts show that the "trouble" or suit by Sanger Bros., grew out of a contract made after the termination of the bankruptcy proceedings, and clearly not that species of trouble, or trouble with that particular character of creditors, which the parties had in contemplation. We, therefore, conclude that the court correctly refused to submit the issue. The remaining assignment is based upon the admission of testimony objected to upon the ground that it disclosed confidential communications between Burnett and his attorneys. The bill of exceptions does not point out any specific testimony to which a definite objection was applied, and for that reason we are unable to say that any error was committed in the admission of the evidence. This judgment of the district court is affirmed. On Motion for Rehearing. The appellants contend that the evidence conclusively shows that Mrs. Burnett acted under duress when she executed the last deed to the appellee. While, as stated in the original opinion, there was a conflict in the evidence as to whether any threats were ever in fact made to Burnett, it is doubtful if his own testimony raises that issue. In describing the conditions under which Mrs. Burnett signed the deed, Burnett stated that she was sick at the time, and for an hour or more declined to sign the deed. He said: "She refused to sign it (the deed) until this other contract was made (referring to the contract placing the deed in escrow, which was set out at length in the original opinion). * * * I wrote up the agreement for the purpose of *Page 174 getting my wife to sign the deed, for she would not sign it until then. But the agreement was between us all." This testimony tends strongly to indicate that Mrs. Burnett was not acting under duress at that time; that she undertook to carefully guard her rights in the property and convey it only upon the conditions stated in the written agreement. To constitute the duress here relied on the agents of the appellee must have made the threats of a criminal prosecution to which Burnett testified. The denial by those agents of having made them presented an issue for the jury, which was determined against the appellants. A deception resulting from any false statements by Burnett to his wife that such threats had been made would not affect the validity of the deed, without showing notice of the deception to the appellee. Davis v. Kennedy, 58 Tex. 516; Stringfellow v. Brazelton,142 S.W. 937; Veeder v. Gilmer, 103 Tex. 458, 129 S.W. 595. The second assignment of error referred to in this motion was not discussed in the original opinion. Under this assignment it is contended that, inasmuch as the property in controversy was the homestead, it could not be conveyed by a deed in escrow, as was done in this instance. The proposition is thus stated in tile appellants' brief: "A pretended sale of the homestead involving any condition of defeasance is void." In support of that proposition the case of Jones v. Goff, 33 Tex. 254, is cited, along with some other authorities. In Jones v. Goff an effort was made to enforce specific performance of an executory contract entered into by a married woman to convey the homestead, and it was held that such a contract was not binding upon the wife. In Warren v. Jones, 69 Tex. 465,8 S.W. 775, and Jones v. Robbins, 74 Tex. 617, 12 S.W. 826, our Supreme Court had under consideration the validity of a deed conveying the homestead, which had been executed by an agent under power of attorney signed and acknowledged by the husband and wife. In the first case the court said: "The power of attorney when followed by the deed of her agent is treated as the conveyance itself. In a bond for title she has to execute another instrument before the legal title passes from her. The conveyance is not fully made until she acknowledges the deed she has bound herself to execute, and this must be done in accordance with the statute. She must be allowed the privilege of retracting before the deed is made, or the statute is not fulfilled. In case of a power of attorney she has that privilege, and may withdraw her consent at any time before the deed is made by her attorney." The case of Jones v. Goff was referred to and distinguished, the difference being that in making a bond or contract to convey title something remained to be done in the future — execution of the conveyance. To bind a married woman in advance to make a deed would deprive her of her right to retract. In this case there was no mere contract to convey the title, but the conveyance itself was executed, and nothing remained except to deliver the instrument upon the happening of the contingency the parties had in mind. It the wife executes a deed to be delivered immediately or in future, she may exercise her right of retraction until the deed is placed beyond her power to recall. But if we concede that she may retract and recall at any time before actual delivery to the grantee she is bound by her acknowledgment unless she does retract within that time. There is no evidence in this case that Mrs. Burnett attempted to exercise any such right, or that she desired to recall the deed before its delivery to the appellee. On the contrary, there was testimony tending to show that both Burnett and his wife were notified that the deed was about to be delivered, and that they consented. It is again urged that the court should have submitted the issue as to whether or not Burnett had any further trouble with his creditors. Counsel for appellants agree that the construction placed upon the collateral agreement signed at the time the deed was executed is correct, but contends that we erred in our conclusions from the facts. A more careful examination of the record shows, according to Burnett's own testimony, that on January 9, 1916, he filed a voluntary petition in bankruptcy, and received his discharge before the deed was delivered to the appellee. He testified that during the year 1914 he had assigned some notes and accounts to the appellee bank and to Sanger Bros. These accounts were bought from him, not from the trustee in bankruptcy. They were owned by Sanger Bros. and the bank jointly. He had been paid for them in a settlement had in 1914, before he went into bankruptcy. After he received his discharge in bankruptcy he purchased Sanger Bros.' interest in the notes and accounts, and had a controversy with the appellee bank regarding the delivery of the half which it claimed. In his cross-examination, when questioned about what trouble with his creditors he referred to in the written agreement, he said: "I don't know just what trouble you might say that refers to, but I meant any trouble in the settling of my bankrupt estate with my creditors." It is evident from Burnett's own testimony just referred to that he had no trouble in securing his discharge, and that the property about which the trouble arose was not part of his bankrupt estate. There is another reason why we think the court might properly have refused to submit that issue. B. B. Perkins, who held the deed in escrow, testified, in effect, that Burnett and his wife were notified and made no objection to the delivery of the deed. The court, having the right to find all facts not submitted to the jury, might have concluded that, notwithstanding there was trouble *Page 175 with the creditors, that condition had been waived. We adhere to the original disposition of this case, and the motion for a rehearing is overruled.