Payne v. Miller

GRAVES, Justice

(dissenting).

This dissent stems from what are regarded as the controlling facts developed at the trial, which may be thus, in material substance, stated:

The note sued upon here is dated November 14, 1934; more than three months after this date, the appellee, by instrument dated February 25, 1935, assigned to the Federal Land Bank the unpaid balance of $1,926.54, on an original mechanic’s lien recorded November 26, 1934. This assignment is partly typed and partly printed, and contains the following provisions:

“* * * does bargain, sell ⅜ * * and assign * * * the unpaid balance of $1926.54 principal and interest owing on that certain mechanic’s and materialman’s lien * * *.
“And the grantor hereby bargains * * * unto the said * * * Commissioner all of the right, title and interest now owned and held by Grantor in and to said land by virtue of said note or notes and the lien securing same, in so far only as said lien rests upon and against the lands * *

The testimony of the appellee is, in part:

“Q. Now, prior to the time that they got this money from the Federal Land Bank, prior to receiving the money, had you any other agreements with the Paynes relative to any payments, any interest, or back payments on the note that had accrued? A. Yes, I had.
“Q. About how long before was it that you had taken this $671.46 promissory note in payment of the interest and back payments on the note which was secured by the lien ? A. It was several months.
“Q. Did that $1926.54 pay any part of this $671.46 note here? A. No, it didn’t.
“Q. This $671.46 note transaction was three months prior to selling the remaining part of the lien note to the bank? A. Yes.
“Q. So that the amount shown on this photostatic copy which Mr. Kimbrough has shown you is the amount that was due after you had given Mr. Payne credit for this $671.46 note on that loan secured by the mechanic’s lien? A. Yes.
“Q. Now, the payments you received from the Federal Land Bank covered no part of this $671.46 note you had previously taken from Mr. Payne? A. No.”
The appellant testified: “I thereupon suggested that, if she would sell and transfer her note and lien (to the Federal Land Bank) I would undertake * * * to pay her, as I could, the difference between the $1926.54 it would loan and the total amount due on her note. This she declined to do * * * but suggested that she would take a secured note for the difference. I told her that I could not give security or a lien on the property for the note because the Land Bank Commissioner making the loan would not permit me.to do so. And it was finally agreed that I would give an unsecured note * * *. ”

Mr. W. E. Daly, attorney for the Federal Land Bank, testified in response to questions from the court:

“Q. There was four or five months time elapsed from the time the application (from appellant Payne to that Bank for this loan) came in until the loan was made ? A. That is correct.
“Q. Just before you closed the loan, did you make any inquiry as to his (appellant Payne’s) liabilities? A. No, sir, we approved it on the previous application.
“Q. Did you have any statement whatsoever from Mrs. Miller, saying he was not indebted to her in any sum on any other obligation? A. The only statement we have from Mrs. Miller is in this file, her agreement to accept payments, which is already in evidence.
“Q. You never made any inquiry of Mrs. Miller whether or not he might have *517owed her other money which was unsecured? A. No, we don’t deal direct with the lien-holder at all.
“Q. Doesn’t the assignment show only a balance of $1900.00 due on this account? A. $1926.54.
“Q. It says on its face that there is only Nineteen Hundred and some-odd dollars due on the old lien? A. That is correct.
“Q. So far as you know it may have been reduced by a payment in cash? A. That is correct.
“Q. So far as the assignment is concerned, there was only a balance due on the lien of $1900.00? A. Yes.”

This record is totally void of any evidence that the Federal Land Bank was actuated in making the loan by any representations of the appellee; rather it was action of the appellant himself. Whatever he did was at his own suggestion and of his volition, and whatever appellee did was at the suggestion of the appellant, as reflected by the appellant’s own testimony.

There is, in the record, evidence that the Land Bank would loan only 75% of the appraised value of any property, and that the borrower should have a 25% equity in the land and in his assets, but nowhere in the record is there any evidence that, after giving the note of $671.46 to Mrs. Miller, the appellant would have had less than this required equity in either the property or his assets.

There was no requirement in this record that any debts of appellant would have to be “scaled down” to bring him within the qualifications for a Land Bank loan. They required no further statement from the appellant as to any change in the status of any of his debts from October 1, 1934, when the original application of appellant was made, until the time of making the loan in February, 1935.

No findings of fact or law were filed, the trial having been before the court itself; wherefore, there being a statement of facts in the record, the court will be presumed to have made the findings set out above, as in support of its judgment. Maryland Casualty Co. v. Walsh & Burney Co., Tex.Civ.App., 119 S.W.2d 94; Kinney v. Johnson, Tex.Civ.App., 135 S.W.2d 773; Massachusetts Bonding & Ins. Co. v. Pittsburg Pipe & Supply Co., Tex.Civ.App., 135 S.W.2d 818; Miller v. Texas General Agency Co., Tex.Civ.App., 141 S.W.2d 441.

Under them, it seems plain — even from the terms of the quoted assignment from the appellee to the Federal Land Bank Commissioner — that the note appellee recovered upon herein represented no renewal, extension, or continuation, of any part of the debt so transferred and assigned to the Commissioner, on February 25 of 1935; but that, under the express recitations of that instrument, it was wholly different and disassociated from other debts, being specifically limited to the $1926.54 the parties had agreed upon to be “the unpaid balance” then due upon the lien-note for $2,300, of August 27, 1931, and that appellant, appellee, and the Federal Commissioner, all understood that the appellee was only transferring that amount of her debt against the appellant as “the unpaid portion”, “in so far as said lien rests upon and against the land.”

Indeed, the concluding paragraph of such transfer, which the appellant underscores, and upon which mainly, if not exclusively, he appears to have based his claim of fraud and estoppel against the appellee to enforce the note sued upon, itself expressly provides that the appellee “will not require or accept directly or indirectly any payment, renewal, extension, or any other evidence of indebtedness, for ‘the unpaid portion of said debt’ ” — that is, the $1,926.-54 agreed upon (on February 25 of 1935) as the unpaid portion of the debt, in so far as it carried the lien against the land.

So that, with the issuable facts all deemed to have been found'in the appellee’s favor, there thus appears no evidence whatever of any fraud by the appellee either against the appellant or against the Land Commissioner, nor of any estoppel in favor of appellant against her as to this wholly different note here involved; in fact, it undisputedly appears that appellant and appellee, full three months prior to the execution by her of such assignment to the Commissioner, at his own suggestion, had in good faith agreed to reduce the lien-indebtedness to the “unpaid balance of $1926.54”, and for that to stand as the sole debt against the land, he to give her the unsecured note here involved for what he otherwise admittedly owed her, that is, $671.46.

In the next place, the appellee had no dealings with the Land Bank direct at all, *518its own attorney, who handled all of the negotiations culminating in its taking over this lien on the “unpaid balance of $1,926.-54, having testified that all transactions had been between appellant and it, there being no negotiations between it and the ap-pellee, and the bank having made its subsequent loan solely upon the act of this appellant; therefore, there can be no estop-pel nor fraud upon her part in his favor, the fraud apparently having been on his side, if any was committed by either.

Wherefore, upon the cause as a whole, it is not thought there was any fraud upon the appellee’s part, within the holding in McCrory v. Smeltzer, 132 Tex. 383, 124 S.W.2d 336, and Smeltzer v. McCrory, Tex.Civ.App., 101 S.W.2d 850, in that, as appears supra, the facts are entirely dissimilar to those ruling that cause; without undertaking a restatement, nor even a resume of the apparently controlling facts in that cause, it is enough — to structurally distinguish it from this one — to say that all the parties there, both the lien-holder and the maker of the note, just a day or two before the loan was made, deliberately gave false information as to the credits that had been made upon the note — in order to bring the total indebtedness of the maker within the limits set by the bank; whereas here, to the direct contrary, as appears from the above summary, this appellee was shown not to have done any fraudulent act or made any false representations to anybody — let alone this Land Commissioner; the Federal Land Bank’s attorney, Mr. Daly, who handled the entire transaction for it, so in purport testified, saying that they had approved the loan application upon dealings between the Bank and this appellant alone, and that they had no dealings whatever with Mrs. Miller.

Not only so, but in the Smeltzer case the lien-holder, while assigning to the Land Bank all the recorded liens upon the land there involved, held on the side an unrecorded lien, which he subsequently recorded, and which included the credits he had represented to the Federal Land Bank as having been paid off prior to the time of the transfer to it; whereas here, in contrast, this appellee never took or had any other lien of any kind or nature against this land, having in good faith transferred all her lien upon it to the Bank three months after she had settled with appellant, by taking his unsecured note for the $671.46 — excess over the $1926.54 — • amount left as a lien against this land; having thus openly given appellant credit for that difference, and then transferred, just as openly, only the remaining $1926.54 balance due on the lien, to which sum and its supporting lien the assignment, as twice thereby specified therein, was limited.

Another distinguishing feature from the Smeltzer case is that in that instance the Federal Land Bank was lending the maximum value under the Federal statute, and, in consequence, required that no other debt be made; whereas, in this case, no such maximum was shown to be involved, and Mr. Daly, the Land Bank’s attorney, in his testimony, appeared to imply that it was a different type of case. Therefore, there seems nothing here to show that this ap-pellee was guilty of any crime under 12 U.S.C.A. § 1019, as claimed by the appellant, nor is such a recovery, upon such a note as this one, shown to be in violation of any known public policy of this State.

Finally, the recitations of the assignment to the Bank the appellant so depends upon, to the effect that “of the indebtedness above described, all had been transferred to the Commissioner, and that Mrs. Miller would not accept renewal, extension, etc., of said indebtedness”, when given the same construction our Supreme Court gave analogous provisions in Continental State Bank v. Pepper, 130 Tex. 71, 106 S.W.2d 654, are clearly referable only to the assigned portion of the lien debt here involved, “the unpaid balance of $1926.54”. In consequence, the transfer by the appellee is thereby limited and referable only to the lien on the land upon which the Land Bank took its new deed of trust.

Under these conclusions, the trial court’s judgment should be affirmed.