J. P. Wooten Motor Co. v. First Bank of Swenson

Statement of tbe Oase. HARPER, O. J. Matt Osborn and wife, being tbe owners of lots 14 and 15 in block No. 28, Aspermont, Tex., on April 10, 1918, executed a deed of trust in favor of J. P. Wooten Motor Company, to secure tbe payment of a note executed at same time between same parties. On March 26, 1921, Osborn and wife conveyed tbe property by warranty deed and for valuable consideration to tbe First Bank of Swenson. Tbe latter, after filing tbis suit, sold it to J. H. Robertson. Tbe trial court found, and wbieb findings we approve: That at tbe time of tbe execution of tbe deed of trust Matt Osborn and Hettie Osborn were husband and wife with a family of children. That at tbe time and prior to the date of execution of said deed of trust, Matt Osborn was conducting the City Garage in tbe building situated on tbe lots and carrying on there a general garage business, selling cars, gasoline, oil, etc., and continued to so occupy the property until sold to tbe bank. That the bank at all times knew of the note and deed of trust to Wooten Motor Company, but did not acknowledge its validity, but declared it to be void, and that it would force its cancellation after tbe title passed. That tbe bank never at any time agreed orally or otherwise as a part of the consideration for the deed to it, to assume tbe payment of said note. Opinion. Tbis suit was filed by the bank and Robertson against the J. P. Wooten Motor Company to cancel said deed of trust and to remove cloud, upon tbe ground that same was void because tbe property was tbe business homestead of Osborn and wife at tbe time it was executed. Tbe defendant answered: (a) That tbe plea of homestead should be stricken out because it could be pleaded only by tbe parties thereto; (b) that the note for $550 due and unpaid; (e) that- tbe deed of trust to secure it is valid and subsisting; (d) that the property was not homestead at tbe time of executing the deed of trust, and, by cross-action, mailing Osborn and wife parties, asked for judgment for their note and for foreclosure of lien. Tried without jury and judgment entered for plaintiffs bank and Robertson, declaring the deed of trust to be void and removal of cloud, etc. Denied the motor company judgment against bank and Robertson and granted judgment on tbe note against Matt Osborn. The motor company appealed. Tbe substance of tbe propositions is that the bank is a stranger or third party and cannot claim tbe homestead exemption, and that, since tbe bank had both constructive and actual notice of tbe existence of tbe lien and debt, it is estopped to assert tbe invalidity of tbe lien. Tbe appellant relies on the case of Rice-Stix Dry Goods Company v. First National Bank (Tex. Com. App.) 231 S. W. 386, and other cases which bold that where a purchaser buys subject to tbe Ken or assumes the debt secured by tbe lien as part of the consideration for tbe land he cannot then take advantage of tbe homestead exemption. Tbe bank is not a stranger but by its purchase without assuming tbe debt stands in tbe same position as Osborn and wife. Palm v. Chernowsky, 28 Tex. Civ. App. 405, 67 S. W. 165; Batts v. Middlesex Bank, 26 Tex. Civ. App. 515, 63 S. W. 1046; Mayers v. Paxton, 78 Tex. 196, 14 S. W. 568, Tbe lien being void as to Osborn and wife it could not affect any title wbieb they might convey to another who is a bona fide purchaser. Affirmed.