Court Opinion

ID: 9833020
Source: CourtListenerOpinion
Date Created: 2023-09-01 22:22:32.288256+00
Date Added: 2024-06-11T07:43:57.747802
License: Public Domain

On Appellee’s Motion for Rehearing.
With something of reluctance — as that opinion discloses — this court on appellants’ motion for rehearing so applied the holding in Little v. Shields (Tex. Com. App.) 63 S.W.(2d) 363, as to conclude that appellants had been entitled upon the trial hereof to a finding upon whether or not they had actual knowledge when they bought the $1,250 Bell note that Toas had originally purchased the land in question for and with the money of Bell; on a more careful re-examination of the Shields Case, however, it is now concluded that, upon the materially differing facts here obtaining, it does not support the conclusion so before reached, but that, instead, the more recent holding of the Beaumont Court of Civil Appeals in Smith v. New Waverly State Bank, 76 S.W.(2d) 201, 204, which in effect was upheld by the Supreme Court in its dismissal thereof for lack of jurisdiction on February 6th of 1935, is directly in point here on the legal equivalent of the same state of facts, and should therefore be followed; indeed, the case at bar is a stronger one on the facts for the application of the principles of law declared in the Smith Case than it is; the Beaumont court on rehearing in the Smith Case thus in brief differentiates it, and perforce the cause here at bar also, from the Shields Case in this statement:
“The fact that appellants did nothing to induce appellee to purchase the Dr. Spiller notes clearly distinguishes this ease from Little v. Shields (Tex. Com. App.) 63 S.W.(2d) 363, and Bernstein v. Hibbs (Tex. Civ. App.) 284 S. W. 234, with which appellee, in its motion for rehearing, insists we are in con-*734flick Had appellants induced appellee to purchase the Dr. Spiller notes on a representation that the notes were valid, then appellee could have invoked against appellants the principle of equitable estoppel, recognized and enforced in the cases cited supra. The principle of equitable estoppel was recognized by this court in Judge v. Shaboub, 57 S.W.(2d) 613, 616, where we said: ‘We think these facts support the conclusion of the trial court that' appellants were estopped to assert their claim of homestead against the deed of trust lien. In Burnett v. Atteberry, 105 Tex. 119, 145 S. W. 582, 587, our Supreme Court quoted With approval the rule that “he who has been silent as to his alleged rights when he ought in good .faith to have spoken, shall not be heard * * * when he ought to be silent.” In Garrett v. Katz, 23 S.W.(2d) 436, 438, Judge Looney, speaking for the Dallas Court of Civil Appeals, said: ‘The doctrine is also well settled that, where a void lien emerges from an illegal transaction, such as the one involved in this controversy, the maker will be estopped to set up its invalidity where he has induced a stranger to become its purchaser on representations that asserted its validity.’ * * *
“As appellants did not induce appellee to purchase the notes, the case of Harrington v. H. B. Claflin & Co. [91 Tex. 294, 42 S. W. 1055], cited in our original opinion, is absolutely on all fours with the facts of this case supporting our conclusion that appellee ‘was not a holder in good faith.’ ”
A recurrence to the facts recited in our original opinion will show, not only, as therein stated, that there were no secret equities between the original parties in this transaction that appellants were not at least charged with knowledge of, but further that this Bell note, as well as all renewals thereof, had been past due at the time appellants purchased it, and that neither Bell nor his wife had ever. done another thing touching it— that is, had never had any transaction whatever concerning it with appellants, hence had never induced them to purchase it, nor done anything else toward estopping either of themselves from asserting the defense of the homestead character of the land the note was given as a lien upon; appellants here, therefore, like the New Waverly Bank in the Smith Case, were not holders of this Bell note in good faith, and that being alone the transaction and the situation as affected them, they were charged as a matter of law with notice that this Bell note had not been given for a part of the purchase money of the land described therein, but that it had been part and parcel of an unlawful transaction in which the original parties to it (that is, the Bells, Yoas, and appellants’ predecessor bank) had attempted to mortgage the known homestead of the Bells for a debt for which it could not be incumbered. Harrington v. H. B. Claflin & Co., 91 Tex. 294, top page 300, 42 S. W. 1055; Little v. Shields, supra, 63 S.W.(2d) 363, page 366 (3, 4), (5), and cited authorities; Smith v. New Waverly State Bank, supra, 76 S.W.(2d) 201, pages 202 to 205, and cited authorities.
Wherefore, under the undisputed facts thus otherwise shown to have existed, appellants’ special issue No. 3, for the refusal of which a reversal was heretofore ordered on their motion, was an immaterial one, hence that reversal order was erroneous, and since the Supreme Court, as noted supra, has already dismissed the New Waverly Bank’s application for writ of error in the Smith Case for want of jurisdiction, it may not be properly further argued that either the holding in the Smith Case, or ours now made herein, is in conflict with the Shields Case, or any of the long line of others it so carefully reviews and distinguishes.
from these conclusions it follows that our reversal of this cause upon appellants’ motion for rehearing must be set aside, and that our original judgment herein should be reinstated, with reaffirmation of the opinion thereupon rendered, and it is so ordered.
Appellee’s motion for rehearing granted, preceding judgment of reversal- set aside, and original judgment of affirmation reinstated.