Opinion
Writ of error granted January 16, 1924.
November 7, 1923. Rehearing Denied November 28, 1923.
Appeal from District Court, Dallam County; Reese Tatum, Judge.
Trespass to try title by W. W. Floyd against H. J. Hammond. Judgment for plaintiff, and defendant appeals. Reversed and rendered.
R. E. Stalcup, of Dalhart, and O. P. Easterwood, of Clayton, N.M., for appellant.
Tatum Strong, of Dalhart, and Underwood Jackson, of Amarillo, for appellee.
Appellee as plaintiff filed suit in the district court of Dallam county against appellant in trespass to try title and to recover possession of certain named town lots in the town of Texline, Tex. Trial was had before a jury and upon hearing the evidence the trial court instructed a verdict in favor of plaintiff. From a judgment rendered on the instructed verdict the defendant has perfected his appeal to this court.
Plaintiff filed suit in the district court of Dallam county, as stated, and in his petition prayed for an injunction to restrain the defendant, appellant, and one E. L. McCullough, trustee, from making sale under a deed of trust of the property in controversy. Failing to give the bond required by the court, no writ of injunction was issued, and the sale of the property under the deed of trust was consummated. By amendment the plaintiff changed his action into one of trespass to try title, and in addition to the formal action pleaded that he was a married man, the head of a family; that he acquired title to the property purchased, and paid for it with the intention of making it his business home; that after his purchase of the lots he erected thereon a building which he was using as a public garage, repair shop, and in the general automobile business; that same was his business homestead; that the defendant, Hammond, is setting up some kind of claim to the property by reason of a deed of trust dated December 12, 1917, and several other deeds of trust given in renewal thereof; and that all of said deeds of trust were void and without force and effect and gave to the trustee no authority to make sale of the property described therein, and that the safe made thereunder was null and void.
Defendant, after a general exception and general denial, specially pleaded the transactions between plaintiff and himself, and seeks thereby to avoid plaintiff's claim of homestead in the property.
The evidence establishes: That being without funds the plaintiff approached the defendant, who was a banker in Clayton, N.M., during the summer of 1917, for the purpose of securing money to purchase lots in the town of Texline, Tex., and to erect a building upon same in which to conduct the above-named business. Defendant agreed to furnish the money, and placed $4,000 to the credit of plaintiff upon the plaintiff's agreement to give him a first lien on the property to secure the money to be advanced by him for this purpose. The plaintiff thereupon purchased the lots in controversy, and they were paid for by the defendant, who advanced the money — $750. The plaintiff then proceeded to make a contract for the erection of the building on the lots in controversy with the Clayton Construction Company, the work and material therefor being paid for by defendant under the agreement. Before the plaintiff moved in said building to occupy same as his place of business, he and his wife executed the deed of trust here in controversy. The evidence shows that the defendant advanced approximately $4,800 to the plaintiff. Upon the failure of the plaintiff to pay the note he had given the bank for such money advanced, the lots were sold under the deed of trust. There was no question raised as to the regularity of the sale except its invalidity by reason of the property being the business homestead of plaintiff.
It further appears from the evidence that there were certain small sums, out of this larger amount, that were checked out by plaintiff for other purposes than the paying for the lots and erection of the building, and that a builder's and materialman's lien was attempted to be given to the Clayton Construction Company, which lien was assigned to defendant, but in our view of the case it is not necessary to consider any of the questions arising by reason of contentions made upon the misuse of a part of the funds by plaintiff, and whether or not such builder's lien and the assignment thereof without record preserved to plaintiff or defendant any rights to be adjudicated, for the reasons now set forth.
The defendant having advanced the money to purchase the lots on the agreement that he should have a prior lien to secure the payment of same, plaintiff's homestead claim is postponed to defendant's lien as to such purchase money advanced to buy the lots.
The advancement of purchase money by one party to another, with the express understanding that the first party is to have a lien upon the property purchased to secure his advancement, gives the first party an equitable and enforceable lien superior to a subsequent claim of homestead, notwithstanding no written lien was executed to fulfill the agreement at the very time the purchase money was advanced. It is sufficient that this equitable lien be recognized by the subsequent execution of the written lien.
In Benavides v. Houston Ice Brewing Association (Tex.Civ.App.) 224 S.W. 388 (writ denied) it is held:
"Having agreed at the time all the money * * * was advanced for him to give the lien to assure its repayment, and then formally by written instrument, in conjunction with his wife, so acknowledged before he moved in and while yet living with his family in a house he owned elsewhere, no homestead claim of Benavides himself nor of his wife could defeat such lien, so long as the indebtedness it secured remained enforceable against either of them."
See, also, the authorities cited in said last named case.
The appellant having under the evidence established an equitable lien, the question remaining to be discussed is: Did the sale under the deed of trust convey title to the property?
The fact that the sale was made to satisfy the total amount of the indebtedness, of which the improvements on the lots constituted a large part, does not render the sale void. The appellant's claim for money advanced to plaintiff for plaintiff to purchase the lots in controversy was a valid claim, and the equitable lien to secure the same gave authority for the sale. If the foreclosure was not valid as to the improvements erected on the lots, it was the duty of appellee to tender the amount he actually owed as purchase money to the appellant, and not having done this, and the deed of trust having been properly foreclosed, the sale was valid and conveyed the legal and equitable title to appellant. Ives v. Culton (Tex.Civ.App.) 197 S.W. 620 (affirmed by Commission of Appeals 229 S.W. 321).
The appellant, having shown the legal and equitable title in himself, was entitled to recover, and we therefore reverse the judgment of the district court and here render judgment for appellant.
On Rehearing.
In the original opinion it is stated, "the work and material therefor being paid for by the defendant under the agreement," and this statement is vigorously assailed by the appellee. We are of the opinion that the record of the facts, as a whole, bears out this conclusion, but we deem this immaterial as no judgment is rendered for the money furnished for the building and material. The case is decided upon the furnishing of the $750 purchase money of the lots. It is clear that appellant paid this purchase money and that he had an equitable lien, which was later merged into and evidenced by the deed of trust given by appellee and wife to appellant as beneficiary. It is immaterial whether this deed of trust was executed before or after appellee moved to the premises.
We are of the opinion that the appellee's motion for rehearing should be and it is in all things overruled.