Stewart v. Friona State Bank

MARTIN, Justice.

This opinion, originally conceived as a dissenting -opinion, has been adopted by Associate Justice, E. O. Northcutt, and is rendered as the majority opinion of this Court. Appellant, Ralph L. Stewart, sought to recover funds of his deceased wife on deposit in the Friona State, Bank. She had died intestate leaving appellant as her .sole surviving .heir. Appellees, Aubrey Carlton, Robert Carlton and Wilburn Carlton, are the brothers of appellant’s deceased wife and sought to recover such funds from their deceased sister’s estate solely by reason of the written contract here in issue and copied in full in this opinion. The sole issue in this cause of action is whether the contract is supported by any consideration. The cause was submitted to the court, and this issue was immediately recognized by the trial court upon his hearing a brief recitation of the facts by the -attorneys- as evidenced by the court’s statement as follows:

"The question, then, in my mind, is what would be the consideration for the contract ?”

The issue as to whether the contract is supported ’by any consideration is wholly -dependent upon whether there existed a bona fide dispute between appellant and ap-pellees . as to the facts governing descent and distribution as to the estate of appellant’s deceased wife. Since there is a wide divergence of opinion in the Court as to both the law and the facts in the cause, the controlling issue will be discussed in detail as to both the facts and law. The amount of money involved is not large as the trial court awarded each of the appellees the sum of only $461.56. The case is rather a test of 'the rights of the parties and of the soundness of judicial procedure than of the value of the recovery.

Appellant, Ralph L. Stewart,, was married to Johnnie Opal Carlton Stewart for approximately nine years. During this time she had suffered from spells of mental illness1 and appellant had placed her in a hospital for .treatment — about T2 or 15 weeks on one occasion. Appellant was a railroad telegrapher and he and his wife had accumulated a small estate consisting principally of money in the bank. Appel-lee, Aubrey Carlton, is a brother of Johnnie Opal Carlton Stewart and testified that his sister had written to - another brother asking such brother to come for her at Jayton. Appellee, Aubrey Carlton,- testified he moved his sister to Friona and that he did not advise appellant of the impending trip prior to arriving in Jayton where his sister and appellant resided. Appellant testified that Aubrey Carlton requested a division of the community property owned by appellant and his wife at the time of this separation. Appellant, in a settlement with his wife of their community property interests, delivered to her the sum of approximately $3,000. Aubrey Carlton then accompanied his sister to Friona where the money was deposited in the Friona State Bank. Appellant’s deceased wife lived with her brother, Aubrey Carlton, approximately 27 days following this separation from her husband and before taking her life. She and her husband were never divorced and neither party had filed suit for divorce.

Following the death of appellant’s wife, appellant and his deceased wife’s three brothers, appellees herein, under the cir*427cumstances hereinafter detailed, executed the following written contract:

The State of Texas)

County of Parmer)

Whereas Johnnie Opal Carlton Stewart, of Friona, Texas, departed this life April 30, 1953, intestate, and left surviving her no child either adopted or otherwise, and left' no mother and father surviving, but-left an estranged husband, Ralph L. Stewart, of Channing, Texas, and Aubrey Carlton, a brother, and Wilburn Carlton, a brother, both of Parmer County, Texas, and Robert Carlton, a brother, of Hedley, Texas, and her entire estate consisted of cash in Friona State Bank, Friona, Texas, of not more than $3,000.00; consequently, no inheritance tax could be owed to the State of Texas and no estate tax could be owed to the United States Government.

Whereas, a bona fide dispute exists as to the facts governing the descent and distribution of this property and the parties being desirous of settling such estate amicably, and as inexpensively as possible, agree that the only debts owed by the said Johnnie Opal Carlton Stewart are as follows:

Wolf-Roberts Funeral Home, Clovis, New Mexico $ 942.00

Parmer County Community Hospital, Friona, Texas $ 7.00

Dr. Paul L. Spring, Friona, Texas $ 3.00

and each party signing this contract guarantees and warrants to said bank that such indebtedness is all the indebtedness owed by the estate of the deceased.

Therefore, the Parties hereto bind and obligate themselves to said bank that they are the sole and only heirs-at-law o'f the deceased and agree to hold said bank harmless for any distribution made of said fund in keeping with this agreement and, as stated above in compromise, satisfaction and accord, and for the purpose of settling a dispute which is agreed to be bona fide the undersigned parties instruct Friona State Bank to pay the indebtedness above described out of the bank account of the deceased including a fee to the attorney for drafting this instrument and counseling them in regard to the settlement and the remainder to be paid as follows:

¼ to Ralph L. Stewart, surviving, husband ;

¼ to Aubrey Carlton, surviving brother;

¼ to Wilburn Carlton, surviving brother;

¼ to Robert Carlton, surviving brother.

Witness Our Hands this 4th day of May, A. D., 1953.

(signed and acknowledged by appellant and appellees)

A short time after the execution of this contract, appellant contacted an attorney and directed the Friona State Bank not to pay out any funds thereunder. Appellant, as the sole surviving heir of his deceased wife, then filed suit. ■ for the funds in the bank. As the sole surviving heir of his deceased wife, his claim to such fund was a liquidated demand. Appellees' answered claiming ¾ of the fund by reason of the above-written contract. The Friona State Bank filed an answer stating that the bank held the funds and would pay the same over to the party .entitled thereto.

As indicated at the inception of this opinion, the written contract detailed in the. above paragraph must he supported by a valid consideration. The only consideration upon which the contract can rest was recognized by the appellees’ ' attorney in preparing the contract, “Whereas, a; bona fide dispute exists as to the facts governing the descent and distribution of this property, * * * There is no need to go beyond the written contract' itsel'f to ascertain that the same is wholly without any consideration. The opening paragraph of the contract in reciting the undisputed facts of heirship reveals beyond controversy that there was, and could be, no bona fide dispute as to the facts governing descent and distribution. Further, the contract in the first paragraph' thereof does- not allege that the facts as to descent and distribution as recited therein were agreed upon as a result of a bona fide dispute as to the facts surrounding the same. The contract merely recites the existing facts governing the issue of heirship under the statutes of descent and distribution. • When the' statutes *428of descent and distribution are applied to the undisputed facts recited in the contract, appellant must be recognized as the sole heir to his wife’s estate and as the sole person entitled to the funds in the Friona State Bank. Therefore, the contract itself fully determines the facts as to the issue of consideration and reveals that the contract under which appellees must recover is wholly without any consideration and is unenforceable.

The trial court, by detailed findings of fact in his júdgftient, enumerated several issues which were incorporated in the judgment for the evident purpose of showing a bona fide dispute existed between the parties and that thereby the contract was founded upon a consideration. The record will be examined in detail — first on the issue as'to whether "there was a-bona fide dispute as to the facts of descent and distribution and second as to whether there is any evidence supporting the' findings in the trial court’s judgment. Appellant’s second and third points of error allege that the testimony is undisputed as to the lack of' consideration and thereby raise the issue that there was no evidence of the existence of a bona fide dispute between the parties as found by the coui;t as the basis for his judgment.

The record will be examined first on the issue of whether there existed a bona fide dispute between the parties as to the facts governing descent and distribution of. the fund -in. issue — the consideration appellees sought to establish as to the contract. The good faith and soundness of appellees’ contention may be ascertained from an examination of the conduct of Aubrey Carlton .in procuring appellant’s signature on the contract as revealed by the following-excerpts from his. testimony. Aubrey Carlton’s testimony will be principally discussed -herein as he was the -agent of his brothers in drawing the contract and was the sole actor in procuring appellant to execute the same. , The testimony of Aubrey Carlton, although cut off by proper ■objection at its inception, finally revealed tnat his brother Robert told him, following their sister’s funeral at Turkey, that appellant was willing to pay the debts and divide the money in issue four ways. The record does not reveal whether Aubrey Carlton was present at the time this alleged statement was made by appellant to his brother Robert. Appellant denied making the statement , as to offering to divide the money four ways and is fully corroborated in this by the testimony of appellee, Robert Carlton, as pointed out hereinafter. As to any conversations between appellant and Aubrey Carlton, Aubrey Carlton’s testimony reveals only one conversation between appellant and Aubrey Carlton and such conversation was at the Friona State Bank just before the contract was signed. It is undisputed that Aubrey Carlton only saw appellant twice before the contract was signed — at the funeral and in Friona when the contract was executed. In the light of this undisputed fact, there are some unusual elements as to Aubrey Carlton’s testimony concerning his conversation with appellant in Friona when examined in the light of whether the record reveals any evidence óf a bona fide dispute.

Aubrey Carlton, according to his own. testimony, following his learning of the alleged statement made by appellee to Robert Carlton as to what disposition appellant wanted to make of the money in the bank, engaged the services of an attorney in Farwell, Texas. His testimony reveals that he gave such attorney all the facts as recited in the first paragraph of the contract herein quoted and had him prepare such contract. Page 39 of the statement of-facts reveals that Aubrey Carlton admitted on cross-examination that he had already employed this attorney to prepare the agreement in issue and the same had been written before he made a long-distance call to appellant, Ralph L. Stewart, asking him to come to Friona. Aubrey Carlton- further admitted that Ralph Stewart had never seen the agreement or knew of it being prepared until he saw it at the bank in Friona when it was signed by appellant. The following testimony clearly reveals this issue,

“Q, Well, — and as far as you know, Ralph Stewart knew nothing about the agreement you had written up until *429you showed it to him there at the bank in Friona, that is correct, isn’t it? You can answer that yes or no. A. Yes.”

This clear cut admission by Aubrey Carlton reveals that he had already drawn the agreement in issue, without any authority from or- knowledge of the appellant, and had deposited the same in the bank ■ at Friona ready to be signed. In the light of this proven fact, pages 23 and 24 of the statement of facts reveal the following statement of appellee, Aubrey Carlton, as made to the appellant in Friona just prior to the signing of the written contract:

“Q. What four ways was the money 'to be divided? A. Between Ralph Stewart, myself, my brother Robert Carlton any my brother Wilburn.
“Q. What did you tell him about that? A. Well; I told him that it was all new to me, I hadn’t had time to study it and' hadn’t thought about that part, but if it was agreeable with the other three, well, it would sure be with me, and I would go along with whatever the others decided.” (underscoring added.)

Aubrey Carlton further testified they signed the contract following this conversation. As to the controlling issue of whether there existed between the parties any bona fide dispute as to the facts, or any dispute at all, appellee, Aubrey Carlton, further testified:

“Q. Did Ralph Stewart make any objection to that kind of an agreement? A. He didn’t.”

The above undisputed testimony and admissions of Aubrey Carlton should be all the evidence needed by a court to take the true measure of this cause of action and to ascertain that there existed no bona fied dispute as to the facts of descent and distribution — the stated consideration upon which the contract is based. Aubrey Carlton testified under oath that appellant made no objection to that kind of an agreement. He further testified under oath in answer to direct examination by his own attorney as to his reason for executing the contract:

“I just wanted to cooperate.”

Therefore, the court is left with only two elements of testimony to establish the alleged bona fide dispute, if Aubrey Carlton’s testimony is accepted as correct, to-wit:

“(1) that appellant, immediately following his wife’s funeral, stated he was willing to pay the expenses and settle four ways and made no objection to the agreement as signed, and
(2) Aubrey Carlton was willing to settle because he wanted to co-operate.”

This, and the preceding paragraph, constitute a brief survey of the controlling evidence as to the conduct of the parties just prior to the execution of the contract with reference to the issue of a bona fide dispute — the appellant had no objection to the contract and Aubrey Carlton, represent-, ing appellees, wanted to co-operate. This' testimony reveals no evidence of any bona fide dispute as to either the facts or the law.

The findings of fact in the judgment will next be examined on this issue. The judgment in the cause recites numerous fifldings of fact as a basis for sustaining the contract in issue. These findings of fact seek to establish the existence of a bona fide dispute between the parties and thereby constitute a finding that the contract in issue is supported by consideration. Appellant’s, points two and three assert, in essence, that “the undisputed testimony showed such agreement without any consideration and utterly void.” Therefore, the findings of fact in the judgment seeking to establish the existence of bona fide disputes as forming the consideration for the contract in issue must be examined in the light of appellant’s points of error. The respective findings of the trial court and the evidence thereunder will' be briefly discussed in separate paragraphs.

The trial court first found that “there was a bona fide dispute between *430Aubrey Carlton and Ralph Stewart as to whether or not Aubrey Carlton should be reimbursed for the care and expenditures which he ’ had rendered to and made in behalf of the deceased, Johnnie Opal Carlton, and also for moneys he had expended in connection with her burial out of the estate of the said Johnnie Opal 'Carlton Stewart.” There is not a scintilla of testimony that Aubrey Carlton ever made any claim for such expenditures. His testimony is to the effect that on the day of the funeral appellant was willing to pay the expenses and divide the money four ways. Aubrey Carlton, as pointed out here-inabove, 'had his attorney prepare the contract in issue without appellant’s authority or even knowledge of the act but it is noteworthy that Aubrey Carlton did not place in the contract any debt due him but recited only the funeral expenses and one or two minor debts which were to be paid out of the funds in his deceased sister’s estate. In the preparation of this contract, he had a free hand, according to his own testimony, but he did not assert any claim against his deceased sister’s estate what-, soever. It is wholly contrary to human experience to even presume that Aubrey Carlton had a financial claim against his deceased sister for the 27 days she was in his home under the circumstances revealed by this record.

The court next found “That the said Aubrey Carlton, Wilburn Carlton and Robert Carlton had a doubtful claim against the estate of Johnnie Opal Carlton Stewart. That there was a doubt both as to the facts and as to the law.” It is true that Aubrey Carlton went to Jay ton, Texas and brought his sister to his home but he only kept her there approximately 27 days before she took her life. He never at any time asserted any claim due him for going to Jay ton for his sister and moving her to his home. He voluntarily paid the funeral expenses but there were ample funds in the bank to the credit of the deceased to pay such expenses and final payment of all expenses was made from the deceased’s estate without any controversy as to the same. As to the other two brothers, their sister had not been in the home of one of them and had only paid a short visit to the other. It cannot be reasonably assumed that she owed the one brother anything by reason of this short visit — at least no claim was made for the same. All three brothers signed the agreement here in issue as dictated by their agent without ever asserting they had a doubtful claim or otherwise. A recitation of the debts as prepared by Aubrey Carlton’s attorney upon the advice of Aubrey Carlton acting for himself and as agent for his brothers did not reveal any debt owing any of the appellees. As to the doubt as to both the facts and law, both Aubrey Carlton and Robert Carlton testified, without any dispute, as to the family history as detailed by Aubrey Carlton and as incorporated in the written agreement. There is not a scintilla of testimony in the record that any doubt existed in the mind of any party to the contract as to the facts recited in the contract. As to the court’s allegation of “doubt as to the law,” the attorney for appellees completely foreclosed this issue as a basis for any dispute as consideration for the contract by the following question:

“The only thing you mean to tell the court was that you didn’t know the law, also, that’s right, isn’t it? A. Yes, sir.
“Q. But in this agreement, you didn’t say anything about a dispute as to the law, you said there was a dispute as to the facts, didn’t you, isn’t that right? Right here, ‘whereas a bona fide dispute exists as to the facts governing the descent and distribution of this property,’ isn’t that right, you didn’t say there was a dispute as to the law, did youf A. No.” (Underscoring added.) ■

The court also found, "That at the time of the settlement hereinafter referred to was entered into, it was not known whether Johnnie Opal Carlton Stewart died testate or intestate and it was not kn’own by any of the parties hereto what the terms of her will, if any, were.” There is not a scintilla of evidence to support this finding. Further, to arrive at such finding, the final *431positive testimony of appellees, Aubrey Carlton and Robert Carlton, that there was no will must be cast out and ¡ discarded. Further, reference is again made to the fact that Aubrey Carlton had his attorney prepare the contract without any authority from appellant and without appellant’s knowledge of such preparation. Aubrey Carlton, prior to the drawing of the. contract and to its execution, advised his own attorney that his deceased sister had no will. This phase of the testimony was fully developed by appellant’s attorney and need not be further discussed as Aubrey Carlton, acting for himself and as agent for his brothers, was certainly bound by his statement to his attorney that their sister died intestate. The court’s finding is directly contrary to the statement of facts as to heirship as included in the contract as well as to the testimony and statements of both Aubrey Carlton and Robert Carlton. Further, as pointed out at the time of submission on oral argument, the appellees cannot legally draw the presumption, without ány evidence as a basis therefor, that appellant presumed there was a will. They certainly cannot then further presume thereon that appellant further presumed that the will, if existing, eliminated him as an heir and thereupon further presumed from such presumption that he had better settle as to his deceased wife’s estate. This finding of the court also wholly disregards the fact of the deceased’s mental condition and as to her capacity to execute a will. Such involved and theoretical speculation and presumption based upon presumption cannot support a judgment or finding of fact which is directly contrary to the testimony of the deceased’s own brothers that she had no will and that they were unable to find a will.

The trial court further stated in his judgment, “That there was a disputed claim and a doubt among the parties as to what the law applicable in such cases would be * * * ” Such disputed claim and a doubt as to what the law applicable in such cases would be was foreclosed not only by the statement which Aubrey Carlton had .his attorney place in the contract as to the nature of the alleged bona fide dispute but by the specific examination of Aubrey Carlton by his attorney on this issue as disclosed hereinabove wherein any issue as to a dispute on the law was eliminated by the direct testimony of Aubrey Carlton.

In' examining the record in the light of the above 'findings of the court, it is recognized that Aubrey Carlton, on being first examined by his attorney, attempted to testify that he did not know whether or not his sister had a will but this testimony is directly contra to the prior information given in private by appellee to his attorney as a basis for preparation, of the contract. But, “the facts governing the descent and distribution” were established beyond controversy by the testimony of both Aubrey Carlton and Robert Carlton in the trial of the case — which testimony established, without dispute, the facts as recited in the first paragraph of the contract here in issue. This issue was fully clarified by the testimony of Aubrey Carlton:

“Q. Now, Mr. Aldridge asked you a question as to a dispute to the laws of descent and distribution. Now, this contract doesn’t say anything about a dispute as to the law of descent and distribution, it says that there is a dispute as to the facts, didn’t I read that correctly? A. That’s right.
“Q. Now, there wasn’t any dispute about the facts of descent and distribution, you knew, as a matter of fact, that the Plaintiff, Ralph L.. Stewart, was the husband of your sister when she died, you knew that, didn't you? A. Yes.
“Q. You knew they weren’t divorced? A. That’s right.
“Q. You knew there was no children, either natural or adopted? A. Yes.
“Q. And you knew or stated in here that she died without any will? A. Yes, to my knowledge.
“Q. Then you stated that then and you state today that she died without *432any will, as far as- you know? A. . That’s right.
“Q. Then there couldn’t be any dispute as to that fact. You knew who her husband was, and who her brothers were, and that she had no father or mother and she had no. will, you knew all those things, didn’t you ? A. Yes.”

Aubrey Carlton, on re-direct examination by his own attorney testified to the same facts and specifically as to the issue of the non-existence of a will,

“Q. And you knew she had no will, so you did know the facts then as well as you know the facts now, didn’t you ? A. Yes, sir.”

The above-admitted facts, under the statutes of descent and distribution, foreclosed any issue as to the legal ownership of the fund in the bank in Friona and established the appellant as the owner thereof. They likewise revealed the total absence of a bona fide dispute of any nature as to the fund in issue and established that the contract in issue was wholly without any consideration. .

As stated hereinabove, Aubrey Carlton attempted to testify that the appellant had told his brother, Robert Carlton, immediately following the burial of appellant’s wife, that he wanted to settle “this case”? Immediately following the burial of appellant’s wife, there was no “case” filed and none to be settled just as there was no “case” filed or to be settled at any time prior to the signing of the contract. On this issue as to what appellant told Robert Carlton following the burial of his wife, appellant testified that he had told Robert Carlton that he wanted to pay the funeral expenses. Appellant denied that he propositioned Robert Carlton to divide this money four ways. On this issue and conversation, ap-pellee, Robert Carlton, testified on direct examination by his own attorney as follows:

“Q. The day of the funeral. All right, now, tell the court just exactly what ,he said to you; A. lie said he wanted to settle it and get it over with ■ and pay the bills, and I agreed . to settle it four ways.
“Q. All right, what did he say? A. He just said he would like to settle it and get it over with.
“Q. How did he want to settle it? A. Divide it four ways after the expenses.
“Q. All right, tell us what he said. A. He just said he would like to get the thing settled.
“Q. That was the day they buried your sister. A. ■ That’s right, after the funeral.
“Q. All right, what did he say— how did he say he wanted to settle it? A. Settle it four ways after the expenses were paid.”

It is noteworthy that Robert Carlton never' testified as to what the appellant said in this conversation had with Robert Carlton within an hour or two after they had buried appellant’s wife — the sister of the appellees. Robert Carlton’s testimony, in the absence of repeated leading, questions, fully corroborated appellant as to his testimony as to what he said on the day of the funeral. It would not be material in the cause as to the issue of consideration had appellant stated that he was willing to divide the money four ways but this issue is clarified as it reveals appellant said nothing to induce Aubrey Carlton to prepare the written contract. On such issue, Aubrey Carlton testified he told the appellant, “that he (appellant) was the one that wanted it that way.” This was nothing more than a self serving declaration made by Aubrey Carlton and no basis for it is found in the testimony of his brother Robert Carlton as revealed hereinabove.

There is no evidence in this record of a bona fide dispute of any nature. After the appellant repudiated the contract and came to Farwell with his attorney and paid the funeral expenses, no bona fide controversy' arose even at that late date. The undisputed testimony reveals that Wilburn *433and Aubrey Carlton threatened the appellant with personal violence and cursed him at that time but there is no evidence in this record that appellent either said anything or did anything that would transpose ap-pellee’s cursing and threats into a bona fide controversy. This occurrence took place following the appellant’s repudiation of the contract in issue.

Since there is no evidence in the record to support the consideration on which the written contract is founded in that there is no evidence in this record that “a bona fide dispute exists as to the facts governing the descent and distribution of this property”, the contract is unenforceable and void and appellees were not entitled thereunder to recover three-fourths of the estate of appellant’s deceased wife. Appellant’s right to the money on deposit was a liquidated demand therefor. “We do not understand that an insurance com-' pany, by inserting in the settlement agreement a statement that there is a dispute between the parties when there is in fact none, thereby forecloses the issues and puts the matter beyond investigation. 10 Tex. Jur. 119”, National Mut. Ben. Ass’n v. Butler, Tex.Civ.App., 72 S.W.2d 659, 661 [4]; “ ‘It is well settled, elementary in fact, that an agreement, not supported by a consideration, for a creditor to receive a less sum than the whole, will not discharge the debt.’ ” McCarty v. Humphrey, Tex.Com.App., 261 S.W. 1015, 1016[1]; “The de-' mand * * * can be calculated upon undisputed factors and is a liquidated demand. * * * ‘Sufficient consideration for accord may inhere in or arise out of a dispute as to liability upon a liquidated claim. This presupposes that denial of liability, in whole or in part, is not merely . factitious or mala fides.’ ” Ortiz Oil Co. v. Geyer, 138 Tex. 373, 159 S.W.2d 494, 497[4-6]; The Eastland Court of Civil Appeals speaking through Judge Hickman ruled as follows: “There being no such contract, certainly appellant could not in good faith dispute a claim based thereon. A bona fide claim cannot be based upon a contract which had no existence.” Silvers Box Corporation v. Boynton Lumber Co., 297 S.W. 1059, 1061, writ refused. In the cause here in issue, a bona fide dispute cannot’ be based upon conversations or disputes which had no existence ifi fact. “If,' when the compromise was made, the facts really existed which rendered the. lien void under the Constitution, the parties could not make the lien valid by agreeing that such-facts did not exist.” In the cause here in issue the appellees cannot supply the consideration for the alleged compromise agreement by agreeing that a bona fide dispute and controversy existed when in ■ fact none existed under the evidence and none could have existed as revealed by. the recitation of the facts in the very agreement itself. Rich v. Walker-Smith Co., Tex.Com.App., 57 S.W.2d 1098, 1099; “* * * such dispute must be an honest one and based on some reasonably tenable grounds, though it need not be in fact well founded.” Detroit Belt Lacer Co. v. Fowler, Tex.Civ.App., 4 S.W.2d 651, 653; “The compromise of a disputed claim may uphold a promise, although the demand was unfounded.' * * * However, if the party knows or ought to know that the claim has no foundation, it is not a consideration”. 17 C.J.S., Contracts, § 105, p. 462.

The appellant’s three points i of error are sustained. The judgment of the trial court is reversed and judgment is rendered for, the appellant for the funds in issue.