Opinion
No. 3874.
June 26, 1930. Rehearing Denied July 3, 1930.
Appeal from District Court, Red River County; R. J. Williams, Judge.
Suit by J. H. Summers, trustee, against the Red River National Bank and others. From a judgment on an instructed verdict for plaintiff, defendant named appeals.
Affirmed.
Claiming to be the legal owner and entitled to the possession of certain money, the appellee brought the suit against the appellant bank as holder of the money as depository of the parties, and against the First National Bank of Clarksville and J. F. Kunkel as adverse claimants of the money. After hearing the evidence the court instructed a verdict in favor of the plaintiff, and judgment was accordingly entered that he as trustee recover the money in suit. The Red River National Bank has appealed from the judgment.
It appeared that J. F. Kunkel, joined by his wife, on February 20, 1926, executed a deed of trust on certain real estate to John M. Butcher as trustee to secure the payment of a note signed by J. F. Kunkel and his wife dated February 20, 1926, in the sum of $15,000, with 8 per cent. interest from date, payable January 1, 1927, to the order of A. M. Graves, cashier of the Red River National Bank of Clarksville. The deed of trust covered the undivided interest of J. F. Kunkel in some nineteen different tracts of land in Red River county, Tex. The deed of trust by its terms conveyed the land to the trustee merely and only a lien or security for the payment of the indebtedness due by Mr. Kunkel to the bank. This deed of trust was duly and timely, registered in the county clerk's office. Thereafter, on July 2, 1928, J. F. Kunkel executed a deed of trust or mortgage to J. H. Summers as trustee on "all cotton, cottonseed, corn, oats and all other kinds of agricultural products planted or to be here after planted during the year 1928 on any and all lands owned or claimed by me in Red River County, Texas, together with all rents that may be due me for the year 1928 on any and all lands owned by me in Red River County, Texas, and rented for the year 1928," etc. By the terms of the instrument J. H. Summers as trustee was to take over all the property and rents, and with the proceeds of the sale thereof was to pay the indebtedness owing certain named creditors of J. F. Kunkel. The declared purpose of the conveyance was to secure the specially named creditors in the payment of their notes. This mortgage was duly registered on "July 3, A.D. 1928, at 9 A. M." It was proven that all of the lands were rented by J. F. Kunkel during the year 1928 to tenants who contracted and were to pay him as rent for the land one-third of all the corn and grain and one-fourth of all the cotton seed and cotton raised during the year. The tenants had planted and had standing and growing upon the land crops of cotton and grain at the date of the instrument, July 2, 1928. The products that were payable as rents were later duly turned over to J. H. Summers as trustee by the tenants, and such products were "by agreement" of the appellant bank and J. H. Summers, trustee, sold and "the proceeds deposited in the First National Bank of Clarksville, Texas, to be held by it until the ownership of the rents should be settled." It was further agreed that $2,498.42 was the amount derived from the sale of such rental products and placed on deposit in the bank. The following agreement appears: "It is agreed between the plaintiff and the defendant that John M. Butcher under the deed of trust above set out sold the property described on July 3, 1928, at ten minutes after 10 o'clock, and it was purchased by the Red River National Bank; and that it is the same property that the rents which are in dispute as to ownership were produced upon." All of the above were uncontroverted facts in the case. The testimony further showed without dispute that Mr. Kunkel was indebted to Mrs. Bledsoe in the sum of $1,350 and to Mrs. Keller in the sum of $1,000, each holding his note for such respective sums with interest. The mortgage was executed by Mr. Kunkel pursuant to an agreement made between him and Mrs. Keller and one made between him and Mrs. Bledsoe, both of such agreements having been made before the execution of the mortgage or deed of trust. Mr. Kunkel desired further time for the payment of these two notes; and each holder, in consideration of his agreement to give her a mortgage on his rents, agreed to extend the time for the payment of his note to her. Mr. Kunkel had no agreement with the other beneficiaries named in the mortgage or deed of trust. As to the acceptance of the deed of trust, Mr. J. H. Summers testified: "The first notice I had about this deed of trust in which I am named as the trustee was when Mr. Kunkel notified me that they had made me trustee in it. I was at the First National Bank when he told me of it. He said he made me trustee in the matter, and I told him it would be all right. I told him I would accept it. * * * He had the instrument in his hand when he told me. I did not go over the instrument. Before that time I did not know that I had been made trustee or was going to be made the trustee."
Mrs. Bledsoe, as to acceptance, testified: "I remember having a conversation with Mr. Kunkel about June 2, 1928, in regard to security on this note. I wanted security, as I did not have any security except just the names on the note; and he said he would give me a mortgage on his rents or his crop. I had been restless about this time that he told me he would give me a mortgage. He told me he would give me a mortgage and renew the note. The note was extended. I agreed to accept a mortgage if he would give it as security for his debt. It was not long after he told me that he would give the deed of trust that I saw a copy of it. When I saw it I agreed to accept it. It was agreeable to me. * * * As soon as I learned of the deed of trust I agreed to accept under it and was willing to take under it, and am willing to-day to take under. * * * When this note was renewed was the first time I knew of the deed of trust."
Mrs. Keller, as to acceptance, testified: "On June 22, 1928, Mr. Kunkel promised me that he would secure me. He owed me, and I had asked him for the money. He made me a payment and then renewed the note and said to me he would secure me. In a few days he showed me a copy of this mortgage. It was agreeable to me when I saw what he had done, and I was willing to accept under it."
Mr. Kunkel testified that: "I agreed to give Mrs. Bledsoe a mortgage on my rents to secure her note. She said she would extend it if I would secure it with the rents. I agreed to do that. * * * I had the same arrangement with Mrs. Keller that I had with Mrs. Bledsoe, that I would give her a mortgage on the rents to secure her note. * * * I executed the original of that instrument, and I filed it for record in the office of the County Clerk of Red River County at 9 o'clock, July 3, 1928."
A. L. Robbins, of Clarksville, for appellant.
C. D. Lennox, Jr., of Clarksville, and King, Mahaffey Wheeler, of Texarkana, for appellee.
Under the errors as assigned, it is urged by the appellant, in effect, that there had not been such a delivery and acceptance of the deed of trust by the trustee and the beneficiary as to legally pass to J. H. Summers as trustee the rents in suit in superior right thereto of the Red River National Bank which it had acquired upon the foreclosure sale. It is believed there was a sufficient delivery of the deed of trust or mortgage. The deed of trust or mortgage was executed by Mr. Kunkel pursuant to agreement made between him and Mrs. Bledsoe and Mrs. Keller before its execution. Mr. Kunkel was indebted to both of them, and he desired further time for the payment of the indebtedness, and each agreed to extend the time for the payment in consideration of his agreement to give a mortgage on the rents. The deed of trust or mortgage was executed and placed of record before the hour of sale of the real estate by Mr. Kunkel pursuant to this agreement. Mr. Summers was apprised of his appointment and agreed to accept it. There is no question made of fraud in the execution of the instrument, and no claim that what was actually done by Mr. Kunkel about the execution and delivery of the deed of trust was not in keeping with an agreement previously made between him and Mrs. Keller and Mrs. Bledsoe. They had agreed in advance to accept the mortgage on his rents as security for the debts, and he had promised to execute the same.
The rule is stated in 41 C.J. p. 427, namely: "If the mortgage is made in pursuance of a previous engagement of the parties to place a mortgage on the specific property which the mortgagee has agreed to accept, then the act of the mortgagor in filing it for record in the proper office is a sufficient delivery of it." Wallis, Landes Co. v. Taylor, 67 Tex. 431, 3 S.W. 321, 322; Ford v. Boone, 32 Tex. Civ. App. 550, 75 S.W. 353; Taylor v. Sanford, 108 Tex. 340, 193 S.W. 661, 5 A.L.R. 1660; Russell v. Beckert (Tex.Civ.App.) 195 S.W. 607. Quoting from the case of Wallis, Landes Co., supra: "Had there been an understanding between Taylor and his creditors that a mortgage on the merchandise should be executed for their security, the delivery of the instrument to the clerk, under the great weight of authority, would have been a sufficient delivery," etc.
It is believed that the trial court correctly held that there had been a constructive severance of the rent cotton growing on the land, operating to prevent the same from passing to the appellant bank as purchaser at the foreclosure sale. The deed of trust to the bank did not convey the rents on the lands, or any rights to crops. The effect of the deed of trust was merely to create a lien upon the lands as security for the payment of the indebtedness to the bank due it by Mr. Kunkel. Mr. Kunkel had the right to sever the rents before his title was divested by foreclosure, and he had the right to make the severance either actually or constructively. Bowyer v. Bearden, 116 Tex. 337, 291 S.W. 219; Bowers v. Bryant-Link Co. (Tex.Com.App.) 15 S.W.2d 598.
The judgment is affirmed.