Merchants' & Planters' State Bank of Winnsboro v. Nichols

LEVY, J. (after stating the facts as above). The appellant’s requested peremptory instruction to the jury was refused, and is here made the basis of complaint. The proposition, in effect, presents the point in view that both W. A. Nichols and his wife are estopped from asserting their claim to an exemption in the farm land by creating a lien upon the farm land by a trust deed, and by having designated and claimed a homestead in the lot in the town of Winnsboro upon which they were actually residing, inducting the belief in the bank that all claim to a homestead in the farm land had been abandoned. The proposition must be considered in the light of the special circumstances of the ease. It is admittedly shown that, at the date of the trust deed creating a mortgage lien on the farm land, Mr. Nichols, with his .wife and family, were actually residing on the lot owned by him in the town of Winnsboro, and that they had been residing there for some time. It can be conceded as a fact warranted by the evidence that previous to the date of the trust deed Mr. Nichols and his wife had.not abandoned the farm as their homestead, but intended to ultimately use and occupy it as their homestead as in previous time done, although actually residing upon the town lot at the time in question. Further, too, it can be conceded as a fact warranted by the evidence that, previous to the date of the execution of the trust deed, the bank officials knew that Mr. Nichols and, his wife had used and occupied the farm as their homestead, and that they intended to claim it as their homestead, although they were presently residing upon their town lot. But the acts of Mr. ¿nd Mrs. Nichols, coupled with their written declaration at the time of the execution of the trust deed, present special circumstances to which legal effect must be given. W. A. Nichols, in a grocery business, and owing the bank a valid and subsisting indebtedness past due and unsecured, executed a trust deed creating a lien on his farm land. The trust deed was given as security for the indebtedness upon the condition of a renewal and extended due date, and for no other purpose. At the same time of the execution of the trust deed Mr. Nichols and his wife executed and placed of record a formal written designation of the lot in the town of Winnsboro upon which they were actually residing as their homestead. The bank, then, two days after the execution of the trust deed and the homestead designation, accepted the proffered renewal note in lieu of the past-due and unsecured note, relying upon the claim to a homestead in the town lot. Mr. Nichols, owning two places, had the legal right to designate which place should constitute the family homestead, and to incumber the land not so designated with a valid lien. Acting in good faith and not in fraud of his wife, Mr. Nichols could at any period of time select and designate which place should constitute the family homestead. And although he may have intended to claim the farm as his homestead previous to the time of the trust deed, yet he had the legal right, on the very day the trust deed and the designation were signed, to choose and designate as the family homestead the town lot on which he *87 and. his wife were then residing. As a consequence of that legal right that designation would be binding on both Mr. Nichols and his wife, if in the final selection and designation of the town lot as the family homestead Mr. Nichols acted freely, in good faith, and not fraudulently. And therefore if he so acted it is immaterial what his previous intention was, and what had been previously said by him to the bank cashier regarding the farm as his homestead. In this respect Mr. Nichols admits that he freely and of his own volition made the homestead designation upon the town lot. No other conclusion can be reasonably reached upon his testimony. He plainly and frankly stated: “I made a designation of my homestead. I don’t know how come me to do it. Nobody asked me to do it; there wasn’t anything said to me about it, only some papers brought up there to sign. There never was a word said to me about designating anything as a homestead.” And Mrs. Nichols, too, stated: “Nobody ever asked me to sign a designation of my homestead.” There is no semblance of proof that the bank officials even suggested to Mr. Nichols the execution of the designation, and there is no pretense of any evidence of fraud, coercion, or undue advantage or influence directed towards Mr. or Mrs. Nichols bringing about the selection and designation. There is no claim even in their pleadings that the designation was a sham or induced by fraud or undue advantage. The only claim in their pleading is the mere fact that the farm was homestead and legally exempt from a mortgage lien. It is difficult to hold a designation of homestead ineffective, for fraud, undue advantage or as a sham, when the husband and wife aré in accord in the intention of selection of a given place as their family homestead, acting freely, voluntarily, and influenced by “nobody.” What would relieve the effect of the designation? The appellees insist “that the undisputed evidence shows ■that the deed of trust, as well as the homestead designation, was not executed in good faith, but merely so as to enable the bank to satisfy the state . banking department.” Necessarily, if the deed of trust and the designation were executed in pursuance of a mutual understanding of a wrongdoing or in the nature of a sham transaction, then the bank could not predicate estoppel. But the appellees do not plead such a state of facts in defense to the bank’s plea of estop-pel. And looking to the entire evidence, it is concluded that an issuable fact is not presented of a sham transaction or of deception practiced by the cashier of the bank on appellees or either one of them inducing the execution of the deed of trust or the homestead designation. The force and effect of the evidence is that the bank, acting through the cashier and the president, was undertaking to comply with the direction of the bank examiner to insist upon all past-due indebtedness being paid, or upon renewals being made with security for payment, and that Mr. Nichols, at first objecting to give security for his past-due note by trust deed upon his farm, finally, upon his own free will, proffered, a renewal note, secured by a trust deed upon the farm, and accompanied by a formal designation of homestead in the town lot upon which he and his family were residing. The bank then, in good faith, accepted the renewal note, relying upon the designation freely and voluntarily made by Mr. Nichols and his wife. No other conclusion can be reasonably reached. The case is clearly within the case of Dodson v. Dickey (Tex. Civ. App.) 264 S. W. 586. Therefore the judgment is reversed, and judgment is here rendered in favor of the bank, foreclosing the lien upon the land in suit to the extent of the amount of the note, .interest, and attorney’s fees; no personal judgment to be entered against W. A. Nichols, in virtue of his discharge in bankruptcy. The cost of the trial court and of appeal to be taxed against W. A. Nichols.