First State Bank of Wortham v. Bland

* Writ or error dismissed for want of jurisdiction April 20, 1927. *Page 651 This suit was instituted by plaintiff in error First State Bank of Wortham, hereinafter designated as the bank, against defendants in error J. C. Bland and wife, in trespass to try title to certain lots on which a hotel is located in the town of Wortham. The bank, by amended and supplemental pleadings, alleged that the common source of title was W. L. Tate, that W. L. Tate had conveyed the property to S. V. Tate, and that S. V. Tate had conveyed the same to the bank. Defendants in error answered, in effect, that they had made a contract for the purchase of the property with W. L. Tate, under the terms of which they were to and did pay $3,000 in cash, and placed $10,000 worth of improvements on the property in the way of additions to the hotel, and were to pay to W. L. Tate an additional $7,000; that they purchased the property and paid therefor to W. L. Tate on the representations that had been made to them by W. L. Tate and S. V. Tate that the property belonged to W. L. Tate. They alleged that, at the time the bank received the deed from S. V. Tate, its officers were charged with knowledge of said facts. They alleged further that the deed from W. L. Tate to S. V. Tate was without consideration, and was made for the purpose of defrauding the creditors of W. L. Tate and putting his property beyond their reach, and further alleged that no title passed to S. V. Tate, because the deed was never delivered to him by W. L. Tate, and therefore no title ever passed to the bank. They alleged by way of cross-action that P. J. Small, as administrator of the W. L. Tate estate, and S. V. Tate were claiming some interest in the property, and asked that they be made parties to the litigation and that their title be quieted as to the Tates and the bank. They alleged that they had paid the remaining $7,000 to W. L. Tate by his having agreed to take $7,000 worth of the mineral leases which were held in his name, but which were owned jointly by him and W. L. Tate. P. J. Small, administrator of the W. L. Tate estate, answered, alleging that W. L. Tate had executed and delivered a deed to the property to S. V. Tate, and that S. V. Tate had executed and delivered a deed to the bank; that by reason thereof the bank was entitled to all of the equity of the W. L. Tate estate in and to the property, and prayed that the bank recover and thereby relieve the W. L. Tate estate from any liability on its warranty. The bank, by a supplemental petition, admitted the execution of the contract of sale between W. L. Tate and Bland, and ratified same, but specifically denied that the $7,000 had been paid, and asked for a judgment against Bland for said amount, together with 6 per cent. interest from the date same was to be paid under the terms of the contract. The cause was submitted to a jury, and, based on its answers and additional findings by the court, judgment was rendered denying the bank any recovery, and quieting the title of Bland and wife to the property, and canceling the debt of $7,000, and in effect holding that Bland had completely paid for the property. The undisputed facts in the record show that W. L. Tate owned the property in controversy, and on November 15, 1918, he and his wife executed a general warranty deed to S. V. Tate, reciting $1,000 paid and subject to a lien of $800. This deed was by W. L. Tate filed for record and duly recorded January 5, 1920, and, after being recorded, was returned to and kept by him until his death in March, 1922. On November 18, 1921, W. L. Tate and J. C. Bland entered into a written contract, under the terms of which Tate agreed to convey the land to Bland in consideration of $10,000, $3,000 to be paid in cash, $5,000 on or before December 15, 1921, $1,000 by February 1, 1922, and $1,000 by March 1, 1922. Upon the payment of said sums W. L. Tate agreed to execute to Bland a warranty deed to the property, and in addition Bland agreed to make improvements on the property by building a 22-room addition to the hotel. The contract provided that, if Bland failed to carry out its terms, he would forfeit all money paid by him. The record further shows that, beginning with September, 1919, J. C. Bland rented the property from W. L. Tate and continued to occupy same as a tenant until the time of his purchase in November, 1921. The record further shows that Bland did build the addition to the hotel and make permanent improvements on the property at a cost of $10,000. The record further shows that, at the time Bland rented the property from W. L. *Page 652 Tate, as well as at the time when he made the contract of purchase, S. V. Tate told him that he (S. V. Tate) had no interest in the property, but that it belonged entirely to his brother, W. L. Tate. On January 3, 1925, S. V. Tate conveyed the land to the bank for a recited consideration of $2,000 paid. In addition to the above facts, the jury found, in response to special issues, that the bank officials, at the time S. V. Tate made his deed to it, knew he had told Bland he had no interest therein, and that Bland had bought on the strength thereof, and found that W. L. Tate did not make a selection of any specified leases that were owned jointly by him and J. C. Bland in full settlement and satisfaction of the $7,000 deferred payments, and found that, after W. L. Tate died, J. C. Bland claimed to own a full one-half interest in the oil and gas leases which were standing in the name of W. L. Tate, and found that W. L. Tate did cancel the indebtedness of $7,000 against the property involved in the suit. The bank and Bland each filed a motion asking the court to render judgment in their favor, based on the answers of the jury. The bank contends that the jury's finding that W. L. Tate canceled the indebtedness of $7,000 against the property is wholly without support in the evidence, and further contends that, if there is any support in the evidence sustaining said issue, that the answer thereto is in direct conflict with, and contradictory to, the finding of the jury that W. L. Tate did not make a selection of any specified oil leases owned jointly by himself and Bland in full settlement and satisfaction of the $7,000 deferred payments. The only testimony offered by Bland as to how he paid the $7,000 deferred payments was on the theory that Tate had agreed to accept $7,000 worth of the oil leases and cancel the indebtedness. The testimony with reference to the transaction between W. L. Tate and Bland was by J. C. Levens. Under the most favorable construction to be placed on his testimony, it appears that there were about 10.000 acres of land on which J. C. Bland and W. L. Tate held mineral leases, all of them standing in the name of W. L. Tate, but owned jointly by himself and Bland; that Bland desired to sell a portion thereof in order to obtain money with which to pay W. L. Tate the remaining $7,000; that Tate agreed to accept part of Bland's leases in full satisfaction thereof, and in consideration therefor agreed to cancel the indebtedness and execute to Bland a clear deed to the hotel property; that in pursuance thereof W. L. Tate was to get the lot and block number of the hotel property, and Levens, an attorney, was to prepare a deed from Tate to Bland. The lot and block number were never furnished Levens, and shortly thereafter Tate was taken suddenly ill and died. No deed was executed by Bland to Tate for the mineral leases, and no release or deed was executed by Tate to Bland for the hotel property, and, as above stated, the jury found that Tate never selected any specific leases owned jointly by himself and Bland in full settlement and satisfaction of the $7,000. Under the most favorable aspect of the testimony, the contract between Bland and W. L. Tate was executory, and it does not appear that Bland executed any deed to Tate or that Tate selected any acreage, or that there was any agreement with reference to the amount of acreage that Bland was to convey to Tate in satisfaction of the $7,000 note. The record shows that Tate never executed a deed to Bland, and it appears from the evidence that neither of the parties did any act with reference to the carrying out of the executory contract. We do not think the evidence is sufficient to sustain the jury's finding that W. L. Tate canceled the indebtedness of $7,000 which Bland owed him on the property. It is a well-recognized principle of law that the owner of mineral rights has an interest in the land, and that to convey same it must be by an instrument in writing, properly executed and delivered. Gardner v. Sittig (Tex.Com.App.) 222 S.W. 1090; Green v. Priddy, 112 Tex. 567, 250 S.W. 656; Schmidt v. Baar (Tex.Civ.App.)283 S.W. 1115 (error dismissed); Pantaze v. McDill (Tex.Civ.App.)228 S.W. 962; Texas Co. v. Tankersley (Tex.Civ.App.) 229 S.W. 672. Under the established facts in this case, there was no legal transfer of the interest which J. C. Bland owned in the mineral leases to W. L. Tate, and there was not, therefore, any payment of the $7,000 made by virtue thereof, and, since there was no legal payment of said $7,000 deferred payment, the trial court was in error in rendering judgment for the defendants in error, canceling same and removing the cloud from their title by reason thereof. The evidence further shows beyond dispute that J. C. Bland, after the death of W. L. Tate, had the agreement which had been made between him and W. L. Tate reciting that the mineral leases were owned jointly by him and W. L. Tate, recorded, and on several different occasions thereafter he claimed to be the owner of an undivided one-half interest in said mineral leases, and demanded that the administrator of W. L. Tate's estate make to him a conveyance thereof. Defendant in error Bland in his answer offered to pay any portion of the unpaid purchase money on the property which the court might find was still unpaid. The trial court apparently rendered judgment in favor of defendants in error on the theory that Bland had paid to W. L. Tate the entire indebtedness. Under our holding above, the court was in error in rendering judgment on this theory. Defendants in error contend that, if the court was in error in rendering a judgment on the theory of payment, nevertheless the judgment should be affirmed because the record shows that the deed from W. L. Tate to S. V. Tate was never delivered, and that therefore S. V. Tate had no title to convey to the bank, and that, since the bank had *Page 653 knowledge thereof, it cannot complain because it has no interest in or to the property in controversy. The question as to what constitutes delivery of a deed is a question of law, but as to whether there is in fact a delivery is a question usually for the jury to determine. Henry v. Phillips, 105 Tex. 459, 151 S.W. 533; Taylor v. Sanford, 108 Tex. 340,193 S.W. 661, 5 A.L.R. 1660; Williams v. Moore, 24 Tex. Civ. App. 402,58 S.W. 953. Where a deed is executed and placed of record by the grantor, it makes a prima facie case of delivery. Belgarde v. Carter (Tex.Civ.App.) 146 S.W. 964; Newton v. Emerson, 66 Tex. 142, 18 S.W. 348. The execution and recording of a deed by a grantor, however, is not conclusive of its delivery. Heintz v. O'Donnell, 17 Tex. Civ. App. 21,42 S.W. 797. It has also been held that, where a party conveys property for the purpose of defrauding his creditors, title absolutely vests in the vendee, subject alone to be divested by the creditors. Maples v. Maples (Tex.Civ.App.) 275 S.W. 1091; Stevens v. Cobern, 109 Tex. 574,213 S.W. 925; Dittman v. Weiss, 87 Tex. 614, 30 S.W. 863. There is evidence tending to show that S. V. Tate never heard of the deed which W. L. Tate had executed and had recorded, conveying the property to him until after W. L. Tate died, and that, immediately upon discovering the deed, S. V. Tate claimed the property as his own. The question as to whether there was an actual delivery of the deed from W. L. Tate to his brother, S. V. Tate, is one of intention, to be determined from all of the facts and circumstances surrounding the transaction. It is the well-settled rule of law that a trial court cannot submit a case to the jury on one theory and then completely ignore same and render a judgment on an entirely different theory. National Union Fire Ins. Co. v. Richards (Tex.Civ.App.) 278 S.W. 488, and authorities there cited. We cannot agree with the contention of defendants in error that under the facts in this case the trial court should have rendered judgment for them because there was no delivery of the deed. We do not think the evidence shows conclusively that there was or was not a delivery of the deed by W. L. Tate to his brother, S. V. Tate, and this issue was not submitted to the jury. The fact that he executed the deed in December, 1918, and, after holding it for 14 months had same recorded, at least makes, under the authorities above cited, prima facie evidence that he intended it as a delivery. If there was in fact no delivery of the deed from W. L. Tate to S. V. Tate, the property still belongs to W. L. Tate's estate, and said estate or his heirs are entitled to recover the $7,000, if same has not been paid. Koppelmann v. Koppelmann, 94 Tex. 40, 57 S.W. 570; Kellogg v. Chapman (Tex.Civ.App.) 201 S.W. 1096. Because we do not think the evidence justified the findings of the jury that the debt has been canceled, and because we think the court was not justified in rendering a judgment quieting defendants in error's title as against said $7,000 unpaid purchase money, the judgment of the trial court is reversed, and the cause remanded.