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deed and title from Lard to the Pampa lots, would then convey the land to the bank in sitisfaction of the balance of the debt, such an agreement would be enforceable, though verbal. Hence, when Pipkin orally agreed to execute a mortgage upon land to be acquired in the future, for the purpose of securing the balance of the debt, what difference can there be in the cases and the application of the principle? It is clear that if the mortgage, as to future acquired real estate, attaches a trust to the land for the benefit of the bank, the subsequent designation and vesting of the homestead interest is subordinate. McCarty v. Breckenridge, 1 Tex. Civ. App. 180, 20 S. W. 997 (writ of error denied).

On Motion for Rehearing.

prescribed in the English statute. Same case, I lease of the Roberts county land, in considsupra. On account of the omission in our eration that Pipkin, when he received the statute of frauds of the language, "any interest in or concerning land," found in the English statute (which statute is adopted by many other states without change), there is a marked difference in the application of our statute and the application in other states of the English statute, when considering oral contracts. We have contracts affecting interests in or concerning lands in Texas, enforceable though resting in parol, but inhibited where the statute is as broad as the omitted language. James v. Fulcrod supra; Long v. Gray, 13 Tex. Civ. App. 172, 35 S. W. 35; Miller v. Thatcher, 9 Tex. 483, 60 Am. Dec. 172; Houser v. Jordan, 26 Tex. Civ. App. 398, 63 S. W. 1050; Bailey v. Harris, 19 Tex. 110. We know that an agreement in parol to locate a land certificate for The order of the district judge, refusing a part of the land is not in the statute; the the preliminary injunction is affirined. future acquisition of the title and interest which does not exist at the time the agreement was made inures to the benefit of the The reasons for the affirmance of this party contracting for the location. Watkins cause, given in the original opinion, upon v. Gilkerson, 10 Tex. 340; Ikard v. Thomp-reconsideration, are not satisfactory, and are, son, 81 Tex. 290, 16 S. W. 1019; Gibbons v. to some extent, subject to the criticisms in Bell, 45 Tex. 423. We also know that where two persons orally contract to purchase a piece of land, one of the parties to take the title in his own name, the other may enforce the contract, though verbal. Gardner v. Randell, 70 Tex. 453, 7 S. W. 781; Reed v. Howard, 71 Tex. 205, 9 S. W. 109; Masterson v. Little, 75 Tex. 697, 13 S. W. 154. The statute does not apply where a party who borrowed money to pay for the land permitted the creditor to take the title in his own name and the borrower tendered the money and sues for the land. Long v. Gray, 13 Tex. Civ. App. 172, 35 S. W. 35. Associate Justice Gaines said, in the case of Sprague v. Haines, 68 Tex. 217, 4 S. W. 371, that the words, "any contract for the sale of real estate," as used in the statute

"include every agreement by which one promises to alienate an existing interest in land upon a consideration, either good or valuable."

The case of Anderson v. Powers, 59 Tex. 213, was under consideration by Justice Gaines, and overruled. He held that the court had misapplied the authorities to the real status of case in the Anderson-Powers record, saying that:

"In none of the cases cited did the parties who subsequently acquired the legal title by patent from the state have any interest in the land at the time of the contract."

In the instant case, Pipkin, not having any real interest in the land at the time the oral agreement was made with the bank for the substitute deed of trust, and said agreement being made to operate upon land to be acquired in the future, we think the case comes within the principle of the authorities cited, and numerous others which could be cited. It is clear, under our authorities, that

appellants' argument on the motion. A portion of this criticism is due to a lack of perspicuity on our part, referring especially to appellants' argument that a mortgage is not a trust. We said:

"It is clear that if the mortgage, as to future acquired real estate, attaches a trust to the land for the benefit of the bank, the subsequent designation of the homestead is subordinate."

And appellant makes an extended argument that a mortgage is not a trust. We, of course, meant that if the contract for the mortgage as to future acquired real estate attached a trust to the land for the benefit of the bank, the supervening designation of the homestead would be subordinate to the

bank's interest.

We admit, since equity has developed the subject, that a mortgagee's interest is hard to define, and very few law-writers have attempted its definition. Lord Denman said:

"It is very dangerous to attempt to define the precise relation in which mortgagor and mortgagee stand to each other in any other terms than those very words"

-that is mortgagor and mortgagee. Jones on Mortgages, vol. 1, § 16. A mortgage, we all know, was originally a conveyance of land, subject to defeasance, under which, if not complied with, the mortgagee acquired the whole estate, including the title; but under the conception and development of equity the land is merely impounded or charged in a contractual sense as a fund as security, and this development, which, in working out the relations and rights between mortgagor and mortgagee of third parties, has developed seeming incongruities, probably is not yet ended. In this state the only view by which the statute operates

A

rather notable case in this state-and one cited by appellant, to sustain the position that an equitable mortgage cannot be created by an oral agreement-is Johnson v. Portwood, 89 Tex. 248, 34 S. W. 596, 787. The facts are somewhat complicated, but, stripping it of details unnecessary here, and reproducing the essentials for the purpose of exhibiting the analogy, it presents the following condition: Land was sold and vendor

when affecting lands, is to view it as a con- by one, and the refusal of performance by veyance of lands. The assignment of one, another, with additional circumstances inas to innocent third parties, is covered by our herent in the transaction operating as a registration statutes, but the assignment of serious injury to the party partially performthe debt, as between the parties, has always ing as to constitute a fraud, creates an equity carried the mortgage. Outside this state, in favor of the losing party, and the statute where the distinctions have been maintained, does not apply, on the theory that the statute a mortgage goes to the personal representa- is to prevent, not to advance, fraud. tive as personal property, and not to the heir as real estate, the law of the place where the land is situated controls its construction, as to the rights of the parties in the land, and an after-acquired title inures to the benefit of the mortgagee. In some states the mortgagee can predicate ejectment against the mortgagor, but in this state it is unavailing unless the mortgagor has placed the mortgagee in possession under the mortgage. The different conceptions of a mort- lien notes were executed. The vendee and gage under the law, as affecting real estate, and in equity, treating the land merely as an auxiliary for the payment of the debt, could be extended unnecessarily, viewing the numerous incidents as cited by the courts in the development of the rights of the mortgagor, the mortgagee, and third persons. But we are convinced that this right inuring to a mortgagee, whether you would regard it as some estate in the land, or a mere right to a beneficial use of it upon condition broken, as a fund to pay the mortgagor's obligation, is nevertheless the subject of a trust, which we presume, under appropriate conditions, appellants would not deny.

the vendors made an independent agreement that if the former would pay a certain sum cash and another sum certain at a future time, and would reconvey one-third of the land to the vendors, the latter would release the lien and cancel all the notes on the remaining two-thirds of the land to the vendee. A third party, Long, furnished the first cash payment to the vendee, which was paid to the vendors, and, as pleaded by him, with an understanding with the vendee that when the contract was completed that the latter was to secure the advancement of this money with the released land as security, and that it was so understood by the vendors. An exception to the vendee's pleading, setting up an oral agreement, was sustained. We infer that the mere breach of the contract by the vendors, with a part payment upon the same by the vendees, was insufficient to take the case out of the statute; but as to the intervener Long, who advanced the money, the case was different. He could not claim under the contract Johnson, the vendee, et al., 8 Allen (Mass.) 539, citing several old had with his vendors for the release of the English authorities, inaccessible to us. Wash-land, but he could claim under his own oral burn on Real Property, vol. 2, c. 16 (Mortgages) contract, and Justice Gaines said: § 7, and cases cited, to which we add the case of Bridgeport Electric & Ice Co. v. Meader, 72 Fed. 119, 18 C. C. A. 451.

"The rule is perfectly well settled that a party may, by express agreement, create a charge or claim in the nature of a lien on real estate of which he is the owner, or possessor, and that equity will establish and enforce such charge or claim, not only against the party who stipulated to give it, but also against third persons, who are either volunteers or who take the estate on which the lien is agreed to be given, with notice of the stipulation. Such an agreement raises a trust which binds the estate to which it relates. * * Pinch v. Anthony

We also assume that in that in considering a contract to execute a mortgage, if in writing, where the remedy sought is for the specific performance of the same, or a mere establishment of the lien, equity, in either event, recognizes the trust feature in connection with the contract. The fact that a contract, obligating one to execute a mortgage, is not in writing would not lessen the trust if from the nature of the transaction a trust existed, though the language of the statute of conveyance is rather stringent. This statute, and the other now designated as the statute of frauds, is, after all, a regulation of a rule of evidence affording a successful means of resistance to the claim of estate. Bringhurst v. Texas Co., 39 Tex. Civ. App. 500, 87 S. W. 896, and authorities cited.

"It is settled law in this court that, in case of oral contracts for the sale of land, the payment performance as will take the case out of the of the purchase money alone is not such part statute. The ground upon which a specific performance is enforced in such cases when there has been a part performance is that the refusal of the defendant to perform would operate a fraud upon the plaintiff. When there has been nothing more done than the payment of the purchase money, the courts say that the vendee in this case, unless the intervener be allowed has a remedy by suit to recover it back. his lien, he is without remedy for the recovery of his money. It was lent to the defendant, who is alleged to be insolvent. It has been paid to the plaintiffs upon a debt of defendant that was due, and they cannot be compelled to pay it back. It would be a fraud for them not to carry out their contract, at least in so far as it is necessary for the intervener's protection."

But

Justice Gaines said that the intervener would be subrogated to the lien of the plaintiffs as to the two-thirds interest in the land

Apparently this might weaken the decision upon the equitable question with reference to the statute of frauds. However, Long advanced the money to Johnson for its payment to the vendors upon an independent agreement for the conveyance of land. This money was not paid under the original obligation of the vendee Johnson to pay his own debt, in which latter event, of course, subrogation always applies under any kind of a contract. The question might be asked how subrogation could apply if Johnson's contract was unenWe assume that the Supreme forceable. Court merely meant that Long's contract with the vendees for the conveyance of the two-thirds interest to Johnson, was enforceable only in so far as to preserve Long's rights, under his own contract, which the vendors breached; and, being confronted with the anomalous condition of not being able to compel a conveyance of the land to Johnson, on account of the unenforceability of the contract with him, it raised the doctrine of subrogation for Long's benefit.

The real gist of the opinion is that it was an enforceable contract with Long on account of the partial performance and the raising of the equity. The line is often tenuous between a case of a mere violation of agreement with injury to the other party, and a case of a violation with such injury as constitutes a fraud and creates the equity. Lord Chancellor Selborne said, in the case of Maddison v. Alderson, 8 App. Cas. 478, before the House of Lords, in which Brown says the matter received very thorough consideration:

"That it is not arbitrary or unreasonable to hold that when the statute says that no action is to be brought to charge any person upon a contract concerning land, it has in view the simple case in which he is charged upon the contract only, and not that in which there are equities resulting from res gestæ subsequent to and arising out of the contract. So long as the connection of those res gesta with the alleged contract does not depend upon mere parol testimony, but is reasonable to be inferred from the res gestæ themselves, justice seems to require some limitation of the scope of the statute. Browne, on the Statute of Frauds,

*

*

§ 455a.

The case of Dean v. Anderson, 34 N. J. Eq. 496, by the New Jersey Court of Chancery, is rather an applicable and instructive case upon this subject. Dean agreed to sell and convey to Anderson a certain estate, for the sum of £1,500, £375 at a certain date, and the balance of the purchase money to be secured by mortgage. Anderson, after having paid a part only of the £375, exchanged his interest in the Dean property to one Jackson, for other real estate. It was afterwards agreed between all parties that Dean should convey direct to Jackson, and that Jackson should convey to Anderson, and that Anderson should execute a bond with a mortgage on the Jackson property to Dean, which he refused to do. The Maryland court of chan

"Where an agreement has been executed or in part performed by complainant, and the acts done place him in a situation which is a fraud upon him, unless the agreement is executed, equity will not permit the defendant from executing his part of the agreement_by_pleading that it was not in writing. *** The court will interpose and grant relief, notwithstanding the statute, when the complaint shows a performance on his side, by which he would suffer an injury, amounting to fraud, by the refusal fendant" (citing numerous English authorities). to execute the agreement on the part of the deThe chancellor further said:

* * *

*

relief, on the ground of part performance than "I cannot well imagine a stronger case for the present. The agreement having been made, Dean, in pursuance thereof, conveyed his estate to Jackson, and Jackson conveyed the ferry property to Anderson, after which Anderson, in fraud of his agreement, refused to execute the mortgage, and held the property which he had thus obtained. This refusal was, in my opinion, a gross and palpable fraud on Dean, and the case comes clearly and fully within the principle upon which the court relieves in cases of part performance. The complainant, relying on the agreement, parted with his estate * * [to Jackson] and waived the security by mortgage which he was to have had on that property [in the original trade with Anderson]. He has therefore done an act in execution of the agreement by which he is greatly prejudiced, and is entitled to say that the nonexecution of the agreement by Anderson is a fraud on him. This case is strongly analogous to the one in the books, where there was a parol executed and a defeasance, and, after executing agreement for a mortgage, and a deed was to be the deed, the grantor refused to execute the defeasance, and, on a bill filed, relied on the statute of frauds, which was held to be no bar. Eq. Cas. Ab., 20 Par. 5; S. C. Prec. in Cha. 526. This was a decree of Lord Nottingham, and is said to have been the first case, after the statute, in which relief was granted upon the ground of part performance." Dean v. Anderson, 34 N. J. Eq. 496.

He

The case of Plumer & Crary v. Reed, 2 Wright (38 Pa.) 46, will afford some analogy to the case here: One of the parties held an agreement for 116 acres of land, upon which he had only paid the sum of $5, and his contract was liable to forfeiture. surrendered his title to others, who brought in the whole title under a parol contract that 10 acres of the land should be conveyed to him as soon as the outstanding title was acquired. Also see Beegle v. Wentz, 55 Pa. St. 374, 93 Am. Dec. 762.

The case of King v. Williams, 66 Ark. 333, 50 S. W. 695, by the Supreme Court of Arkansas, was one to compel the performance of an oral contract to execute a mortgage in consideration of a release by the mortgagee upon other land. After the release was made the mortgagor sold the land, refused to execute the mortgage upon the other property, and moved upon such other property, occupying the same as a homestead. The court said the mortgagee was remediless if the mortgagor failed to execute.

The old English case referred to by the Maryland court, in the Dean-Anderson Case, supra, as having been decided by Lord Nottingham, where the mortgagor refused to

observed, in our investigation, cited in mat- curity, produced by the relinquishment of ters of specific performance. It is to be a similar right in other land for the same noted that this decision was made at a time purpose, and that a trust growing out of before the doctrine had developed in England in equity that a formal deed on its face being a conveyance of property, could be proven as a mortgage.

The record shows that the appellant Pipkin, at the time he traded with Lard, had a homestead in Roberts county upon land different from the two sections upon which the bank had the lien; that he thereafter also sold his Roberts county homestead and moved to Pampa, occupying the latter property as a homestead as soon as he could get possession. The testimony of the cashier of the bank is that he requested Pipkin, over the telephone, to execute the lien in accordance with his promise; that when the deed of trust was executed by Pipkin the bank had no knowledge that the homestead character had attached to the Pampa lots. The record also indicates that for the balance of the debt owing to the bank by Pipkin, the latter is remediless; and it is our conclusion that the fastening of the homestead character upon the Pampa lots, after the promise made to execute the mortgage, with a partial performance upon the part of the bank of this oral contract in releasing the vendors' lien, with the consequences to the bank, creates the equity in favor of the bank; and to use the statute of frauds in a case of this character is to use it as an instrument advancing instead of preventing fraud.

With reference to the ground upon which the original opinion was based, and the analogies attempted to be drawn from other cases cited in said opinion, upon additional consideration, we withdraw as the basis of the decision. It is inferable, however, from Lard's testimony that he understood, in consideration of the cancellation of the lien upon the property which he was to receive in the trade, Pipkin was to execute the mortgage on the l'ampa property, to be conveyed by him in exchange; hence all parties understood the conditions of this trade. The

Pampa property, which Pipkin agreed to give the lien upon, was produced in a sense

by the cancellation of the mortgage lien

the contract, under such conditions, could not be evolved for the purpose of effectuating this right. We prefer, however, to rest the affirmance of the case upon the ground adduced in this opinion.

The motion for rehearing is overruled.

McGOUGH v. FINLEY. (No. 8217.)

(Court of Civil Appeals of Texas. Ft. Worth. June 19, 1915. Rehearing Denied Oct. 16, 1915.)

1. HOMESTEAD 117 - CONVEYANCE-CONSENT OF WIFE-STATUTE.

Under Rev. St. 1911, art. 1115, providing that the homestead of the family shall not be sold and conveyed by the owner, if a married man, without the consent of his wife, where two lots were the business homestead of one of the incorporators of a corporation, he agreeing to transfer them to the company in return for a portion of its stock, which was issued to him, neither the application for the charter nor the affidavit thereto being executed by the incorporator's wife, title to such lots did not pass from the incorporator to the company.

[Ed. Note. For other cases, see Homestead,

Cent. Dig. §§ 191-202; Dec. Dig. 117.] 2. FRAUDS, STATUTE OF 69 - CONVEYANCE OF LAND-NECESSITY FOR WRITING.

Under Rev. St. 1911, art. 1103, providing that no estate in land shall be conveyed unless the conveyance be declared by instrument in transfer two lots to the company in return for writing, where an incorporator orally agreed to a portion of its stock, which was issued to him, the lots not being designated either on the company's charter or the affidavit thereto, title to such lots did not pass from the incorporator to the company.

[Ed. Note.-For other cases, see Frauds, Statute of, Cent. Dig. § 83, 111; Dec. Dig. 69.] 3. FRAUDULENT CONVEYANCES 295-CHARACTER AS SUCH-SUFFICIENCY OF EVIDENCE.

In trespass to try title, evidence held sufficient to justify jury's finding that the conveyance of the premises to defendant was fraudulent as to the grantor's creditors.

[Ed. Note.-For other cases, see Fraudulent Conveyances, Cent. Dig. §§ 867-875; Dec. Dig. 295.]

Appeal from District Court, Stonewall County; John B. Thomas, Judge.

McGough. Judgment for plaintiff, and deSuit by George P. Finley against J. M.

fendant appeals. Affirmed.

C. P. Chastain, of Hamlin, and Jas. P. Kinnard and H. G. McConnell, both of Haskell, for appellant. W. R. Sawyer, J. M. Carter, of Aspermont, and Chapman & Coombes, of Anson, for appellee.

upon the Roberts county property, which thereby, on account of it being unincumbered, gave it a value in the trade which it could not have possessed without the bank's relinquishment. While technically it may be said that Pipkin did not hold the mere title to the land in trust for the bank, still the bank in a sense agreed to exchange its lien for another lien upon the Pampa property, DUNKLIN, J. Geo. P. Finley instituted partially produced by the cancellation of this suit in the form of trespass to try title the former lien. We are not sure that these against J. M. McGough, J. W. McGough, A. two rights are not reciprocal, nor that the F. McGough, and Sam Rash, to recover a secright to the lien on the Pampa property is tion of 640 acres of land situated in Stonenot the representative of the former, and wall county. All the defendants except J. which latter is a right in the land, as se- M. McGough filed disclaimers, and from a For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

judgment in favor of the plaintiff for the 1 and 10, block 55, in the town of Hamlin, with land, that defendant has appealed.

"One thousand ($1,000.00) dollars, paid by J. M. McGough, receipt whereof is hereby acknowledged and fully confessed."

barns, stall, sheds, and carriage houses, all Plaintiff and J. M. McGough each claimed valued at $5,000; that the subscription of J. title through J. W. McGough as the common M. McGough was paid by lot 8, block 55, in source; the plaintiff claiming under an ex- the town of Hamlin, valued at $1,700; and ecution sale against J. W. McGough, and J. the subscriptions of J. W. Reese and A. F. M. McGough claiming title under a deed of McGough were paid with eight head of horsconveyance from J. W. McGough antedating es, valued at $1,200, and three transfer busses the execution sale. The sale to plaintiff was and one transfer wagon and harness, all valunder and by virtue of an execution levied ued at $2,100. At the time the parties applied upon the property under a judgment in favor for the charter of the Hamlin Transfer Comof August A. Busch & Co., dated June 23, pany they were jointly engaged as partners in 1909, rendered by the district court of Tar- the transfer business in the town of Hamlin, rant county, Tex., against J. W. McGough and after the incorporation continued in the and others for the sum of $575.91, with 6 same business in the corporate name. The per cent. interest and costs of suit. That sale evidence shows that J. W. McGough was at was made February 4, 1913, the execution that time a married man, the head of a famhaving been levied upon the property Decem-ily, residing in the town of Hamlin, and that ber 27, 1912. The deed from J. W. McGough lots 4 and 5 in the town of Hamlin constito J. M. McGough, under which J. M. Mc- tuted his business homestead; and according Gough claimed title, was dated December 2, to the testimony of J. W. McGough those lots 1910, and duly recorded in the deed records were the lots which J. W. McGough intended of Stonewall county on December 5, 1910. to convey to the corporation, instead of lots The consideration recited in that deed was 9 and 10 in block 55, as described in the affias follows: davit attached to the charter. Those lots and lot 8 in the same block, which according to the affidavit attached to the charter was conveyed to the corporation in payment of J. M. McGough's stock, were used by the incorporators in connection with the transfer business at the time they decided to incorporate the business. The horses, vehicles, and harness, referred to in the affidavit as transferred to the corporation in payment of the stock subscribed by J. W. Reese and A. F. McGough, had likewise been in use in the same business previously transacted by the partnership firm. After the incorporation, the Hamlin Transfer Company used the three lots and the other property mentioned in the affidavit in conducting its business. The only instrument of writing signed by J. W. McGough relating to or evidencing the supposed rights of the corporation in and to lots 9 and 10 was the application for the charter and the affidavit attached thereto. J. W. McGough testified that after the incorporation he worked for the company on a salary as its president, and was not engaged in any transfer or livery business upon his own individual account, and never intended to so engage in business after the incorporation of said company. The evidence further shows that J. W. McGough never at any time executed any deed of conveyance to the corporation transferring said lots 4 and 5, but, on the contrary, on December 2, 1910, the same day he conveyed the land in controversy to J. M. McGough, by warranty deed he conveyed those lots to his son, J. M. McGough, in which a consideration of $1,000 was acknowledged; $5,000 the deed being filed for record in Jones coun1,700 ty on December 3, 1910, after being duly ac1,700 knowledged. Those two deeds, if effective, 1,600 operated to strip J. W. McGough of all his property subject to execution, except the stock he held in the Hamlin Transfer Com

The conveyance to J. M. McGough by J. W. McGough was attacked by the plaintiff upon the ground that it was made for the purpose of defrauding the creditors of J. W. McGough, and therefore void, and that was the principal issue upon the trial. On January 22, 1910, J. W. McGough, J. M. McGough, A. F. McGough, and J. W. Reese applied for and obtained a charter for a private corporation under the name of the Hamlin Transfer Company. The business for which the corporation was formed was the establishment and maintenance of a line of stages, and its place of business was in Hamlin, Jones county, Tex. J. M. McGough and A. F. McGough were sons of J. W. McGough, and J. W. Reese his son-in-law, all of whom resided in Hamlin. The directors named in the charter were J. W. McGough, J. W. Reese, and J. M. McGough, and J. W. McGough was thereafter made president of the company. The charter of the corporation contains the following:

"The amount of capital stock is ten thousand ($10,000) dollars, divided into one hundred (100) shares of one hundred ($100.00) dollars each, all of which capital has been subscribed and 100 per cent. paid in, as per affidavit attached hereto."

The affidavit of J. W. McGough, J. M. McGough, A. F. McGough, and J. W. Reese, attached to the charter, contained the statement that the parties had subscribed for stock in the following amounts, to-wit: J. W. McGough ... J. W. Reese

J. M. McGough

A. F. McGough

-and that all of said stock had been fully paid in property; the subscription of J. W.

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