Rayner Cattle Co. v. Bedford , 91 Tex. 642 ( 1898 )

This suit was filed by appellant against appellee on October 16, 1893, to recover on three certain promissory notes executed by appellee to it on July 24, 1890, for section No. 90, block 45, H. T. C. R. R. Co., containing 640 acres, and to foreclose the vendor's lien on said land. The defense was failure of consideration, in that the title was not in appellant at the date of the sale, and that it had no valid claim thereto, but was in the State of Texas, it being public school lands of the State; and also a plea in reconvention, praying judgment for $138.20, paid to appellant on said land July 24, 1890, and $193.80 paid on said land July 24, 1891, and for the cancellation of the notes sued on. This answer was filed October 31, 1893. Appellant replied that it only quit-claimed its interest and claim to the land, and that by contract it was only bound to show a title from Martin Casey, who had located the H. T. C. R. R. Co. certificate on the land, and that it had fully performed its contract; and also pleaded the statutes of limitation of two and four years against appellee's cross action to recover back the sums of money paid to it on the purchase price as aforesaid. The case was tried by the court without a jury April 27, 1897, and judgment was rendered against appellant and in favor of appellee, Bedford, cancelling the notes sued on, and for the two sums of money, with interest at 6 per cent per annum. from the respective dates they were paid to appellant; and to reverse this judgment this appeal is prosecuted to this court on the conclusions of fact and law only as found by the District Court.

These conclusions of fact are not objected to and we adopt them. They are as follows:

"(1) I find that the defendant, Ed. W. Bedford, executed and delivered to the plaintiff, the Rayner Cattle Company, the notes sued on in this cause, the originals of which are attached to the plaintiff's original petition as exhibits; and that said notes, after maturity, were placed by the plaintiff in the hands of Holman Montgomery, attorneys at law, for collection.

"(2) That said notes were given in consideration of a conveyance executed by the Rayner Cattle Company, and duly acknowledged, of which the following is a true copy: 'Rayner Cattle Co. to Ed. W. Bedford. The State of Missouri, City of St. Louis. Quit-claim deed. Know all men by these presents, that the Rayner Cattle Company, duly incorporated under the laws of the State of Missouri, of the city of St. Louis, and State of Missouri, for and in consideration of the sum of one hundred and thirty-eight and 20/100 dollars to them in hand paid by Ed. W. Bedford, of the County of Knox, and State of Texas, and the further consideration of five hundred and fifty-two 80/100 dollars secured to be paid by his promissory note of even date herewith, bearing ten per cent interest per annum from date, due by the 24th day of July, 1894, and payable in four installments of $138.20 of the principal and all interest to those dates on the 24th day of July, 1891, 1892, 1893, and 1894, respectively, said payments being contained in four coupon notes attached thereto, and numbered from 1 to 4, inclusive, the receipt of which is hereby acknowledged, do by these presents, bargain, sell, release, and forever quit-claim unto the said Ed. W. Bedford, his heirs and assigns, all their right, title, and interest in and unto that certain tract or parcel of land lying in the County of Knox, and State of Texas, described as follows, to-wit: "One Section, known as Section No. 90, Block 45, H. T. C. R. R. Co., Martin Casey, original grantee, certificate No. 28/1851." But it is expressly stipulated and agreed that a vendor's lien is retained against the above-described property, premises, and improvements until the above-described note and all interest thereon is fully paid, when this deed shall become absolute. To have and to hold the said premises, together with all and singular the rights, privileges, and appurtenances to the same in any manner belonging, unto the said Ed. W. Bedford, his heirs and assigns, so that neither they, the said Rayner Cattle Company, nor any person or persons claiming under them, shall at any time hereafter have, claim, or demand any right or title to the aforesaid premises or appurtenances or any part thereof.'

"(3) I find: That about a month prior to the execution of the abovementioned deed, the defendant saw W.E. Rayner, agent of the Rayner Cattle Company and said to him that he (Bedford) wanted to buy from said company the land described in said deed. That Rayner stated to him that he (Bedford) knew as much about the land as we (the Rayner Cattle Company). 'That you think you have the title, and we think we have.' That defendant replied, 'I know that I have no title, but I have possession, and want to buy the land.' That said Rayner replied that he would consider no verbal proposition for the purchase of the land; for defendant to go home, and make a proposition in writing, and he would submit it to the company. That this defendant, a short time after, submitted a proposition in writing, and soon thereafter received in reply thereto the following letter, dated June 30, 1890: 'Ed. W. Bedford — Dear Sir: Yours of May 27th duly reached me yesterday. I will give you quit-claim deed for $691.20; one-fifth cash, balance 1, 2, 3, and 4 years, 10 per cent interest on deferred payments; we retaining lien to secure same; you to assume all amounts due the State. Yours truly, W.E. Rayner.' That defendant, in reply, wrote and mailed to said Rayner the following letter, of date July 11, 1890. 'W E. Rayner, Esq., Rayner, Texas — Dear Sir: Yours of June 30, to hand, and in reply will say that your proposition is fair, and I will accept same, provided this quit-claim deed you offer shows a chain of title from Martin Casey to Rayner Cattle Company. I would like for you to send deed properly signed up, and the notes for me to sign to some one here at Benjamin, if you are not expecting to be here soon yourself. Respectfully yours, Ed. W. Bedford.' That a few days thereafter Rayner wrote defendant that the deed and notes had been sent to bank at Haskell and for him to go there, and sign notes, and make first payment, and get the deed. This the defendant did and got deed above referred to, and signed the notes sued on, and paid to said bank in cash $138.20.

"(4) I find: That the section of land above described was State school land, and was on the 8th day of August, 1881, duly and legally classified and appraised by the surveyor of Baylor land district, together with 359 other school surveys in said county, the appraisement being made under the laws then in force. That the appraisement was duly presented to and approved by the Commissioners Court of Baylor County. That they certified to the same, and a copy was duly forwarded to the land office, and a copy filed with the surveyor, which copy filed with the surveyer under the head of 'Remarks,' in that part referring to D. W. block No. 2, recited that it was in conflict with block 45, H. T. C. R. R. Co. survey. That the commissioner of the general land office, on August 18, 1881, made on said appraisement and classification the following endorsement: 'Received, examined, and approved for 180 sections (one-half), the other (one-half) 180 sections being in conflict, and withheld from sale until the conflict is removed.' That on August 30, 1881, by due course of mail, said commissioner notified the surveyor of Baylor land district by letter of his action in reference thereto, which was duly received by said surveyor. That by said letter the said commissioner told the surveyor that block 2, D. W. Ry. Co., and block 45, H. T. C. Ry. Co., are reported as being in conflict, and, this being the case, all the surveys in said block must be withheld from sale, and that he must so mark them on his record, and that they could not be sold until the conflict was removed; and that no other appraisement of said block 45, H. T. C. Ry. Co. survey was ever made.

"(5) That on December 26, 1882, one Martin Casey made his application in due form of law to purchase said section of land to the district surveyor of Baylor land district; that it was duly filed and recorded on said date by said surveyor; and that on March 13, 1883, said Casey tendered to the State treasurer, the sum of $32, being 1/20 of the appraised value of said land, as the first payment therefor; that the State treasurer refused to receive same; that on January 7, 1887, said money was paid, and receipted for by said treasurer, as the first payment on said land; that the Commissioner of the General Land Office, with the consent of said Casey, endorsed on the receipt given by him that it was 'given subject to the decision of the court in the case now pending;' that no other fact with reference to a tender or payment of said money is shown by the land office records.

"(6) That prior to the execution and delivery of the deed by plaintiff to defendant Martin Casey, by quit-claim deed, duly executed and delivered, conveyed to plaintiff all his right and interest in said section of land.

"(7) That the survey herein referred to was in conflict with certain surveys in said block 2 of the D. W. Ry. Co. surveys, at the time of the appraisement above referred to, and the conflict still exists.

"(8) That at the time of the delivery of the deed from plaintiff to defendant the defendant paid plaintiff in cash $138.20, and on September 16, 1891, paid plaintiff $193.48, being the coupon note due July 24, 1891, and has never paid any other sum.

"(9) That in the year 1887, the land herein referred to being unoccupied, one A.M. Horner moved on the land, and erected improvements thereon, and applied to purchase the same as school land under the law then in force; that the land was duly awarded to him, and his first payment received; that thereafter the treasurer refused to receive any further payments; that in 1888, by quit-claim deed, he conveyed to J. Rawdon said land; that in February, 1890, said Rawdon, by quit-claim deed, in consideration of $1,000, conveyed said land to defendant; that prior to the conveyance by Rawdon, to defendant the file of A.M. Horner, upon application of said Rawdon, was canceled, and the said money paid by said Horner was refunded to said Rawdon; that at the time of the conveyance by Rawdon to Bedford the improvements on the land were worth $1,000; that at the time of the purchase by defendant from plaintiff, defendant claimed no title to the said land.

"(10) That the plaintiff has never at any time been in possession of the said land, or any part thereof.

"(11) That in the fall of 1892 the State school sections in said block 2, D. W. Ry. surveys, were duly classified and appraised, and placed upon the market for sale; that thereafter, in February of 1893, defendant purchased from the State section 16, block 2, D. W. Ry. surveys, and has made all payments thereon required by law since said last-mentioned date, and that about one-half of section 90, block 45, H. T. C. Ry. survey, is in conflict with said section 16, block 2, D. W. Ry. surveys, and the balance of said section 90, H. T. C. Ry. survey, is in conflict with other surveys in said block 2, D. W. Ry. surveys.

"(12) I find that on July 24, 1883, a suit was filed in Baylor County District Court by Adams Leonard v. H. T. C. Ry. Co. for all railroad surveys in said block 2, D. W. Ry. Co. surveys, plaintiff claiming that they were in conflict with railroad surveys in block 45, H. T. C. R. R. surveys, and that the D. W. surveys had the superior title; that no one was a party to said suit except said Adams Leonard and the H. T. C. Ry. Co.; that said suit was pending until 1892, when judgment was rendered in favor of Adams Leonard against said H. T. C. Ry. Co. for all railroad sections in said block 2, D. W. Ry. Co. surveys, which judgment is a subsisting and valid judgment between the parties thereto.

"(13) That the reasonable market value of the land in controversy was, on July 24, 1890, $2.25, without the improvements, and that the improvements thereon were of the value of $1000, said improvements being on section 16, block 2, D. W. Ry. Co. block.

"(14) I find that on July 1, 1892, defendant, Bedford, became convinced that he had acquired no title to said section of land described in the conveyance set forth in conclusion of fact No. 2 herein by virtue of said conveyance, and that defendant, Bedford, believed until said time — July 1, 1892 — that he had acquired a good and valid title to said land by virtue of said conveyance, subject to the incumbrance thereon mentioned, and also subject to the supposed amount due the State upon the said Martin Casey file.

"(15) I find that defendant, by his original answer, filed October 31, 1893, pleaded in reconvention, and sued for the sums of money paid by him to plaintiff, as hereinbefore found."

The learned District Judge, following the suggestions of our brothers of the Third District on a former appeal of this case (13 Texas Civ. App. 618[13 Tex. Civ. App. 618]), found as matter of law that the deed from appellant to appellee was not a quit-claim deed, but also found that the notes were without consideration, because the purchase by Martin Casey was void, and that neither he nor appellant acquired any title under that purchase; that limitation had not run against appellee's claim for the money paid to appellant, and gave judgment in favor of appellee for the sum so paid. We find it unnecessary to decide whether the deed was a quit-claim deed or not, but it seems to be in almost exactly the same language as the deed passed on by our Supreme Court in the case of Threadgill v. Bickerstaff, 87 Tex. 522, and held to be a quit-claim. See, also Richardson v. Levi, 67 Tex. 364 [67 Tex. 364]; Lumber Co. v. Hancock, 70 Tex. 312 [70 Tex. 312]; Shepard v. Hunsacker, 1 Posey. Unrep. Cas., 585; Smith v. Pollard, 19 Vt. 272.

But, whether it is a quit-claim deed or not, we are constrained to hold under the rule laid down in Lamb v. James,87 Tex. 490, that both the deed and the notes executed in consideration thereof are void, as being in contravention of the public policy of the State concerning its unappropriated public domain; for in the case cited a general warranty deed even was condemned. The land embraced within the lines of section 90, block 45, H. T. C. R. R. Co., the claim and title to which were attempted to be conveyed, or quit-claimed and released, according as the deed would be construed, had been, at least as to one-half, prior to the location and survey of said No. 90, legally appropriated, by a valid certificate issued to the Dallas Wichita Railroad Company, and designated as "Survey No. 16, block 2, D. W. R. R. Co.," and, being an even number, the law set it apart to the State for public school purposes, while, perhaps, the other half of survey 90 was embraced in an odd-numbered survey, and belonged to Adams Leonard, assignees of the D W. R. R. Co. We think our Supreme Court, in the Lamb case, supra, settled the question that contracts of private persons concerning the unappropriated public school lands, while the title remains in the State, and when the grantor had not acquired a valid claim thereto in conformity with the law governing sales of such lands, are void, and that no rights in law or equity can be based thereon; and that, consequently, as the party assuming to sell or quit-claim any private title or interest therein could have had nothing to sell, and could have had no valid claim to release, the attempted conveyance, of whatever character, would be void, as against the public policy of the State, and therefore the notes executed for such a deed would be void also, for the want of a valid consideration.

In this case, however, we must assume that one-half of section 90, block 45, H. T. C. R. R. Co., was not public domain, but had been segregated by a valid certificate of the D. W. R. R. Co., and belonged to Adams Leonard at the time survey No. 90 was made, because the record only shows that half of section 90 was embraced in section 16 of the D. . W. R. R. Co. surveys, and the burden was on appellee, Bedford, to prove his plea of no consideration. If the deed to Bedford were purely a quit-claim, and all the land described therein belonged to a private individual, then the notes sued on might be valid and binding, for there is no public policy to prevent one person from releasing and quit-claiming all his interest, claims, and demands in and to the property of another private individual. But, where half the section is public domain and the other half not, what, then, is the rule? The deed executed by appellant shows that the section of land No. 90 was considered and contracted about as an entirety, and so was the consideration to be paid, to-wit, $691, although a part was paid in cash, and the balance divided into annual installments. It does not appear that the contract was based upon the number of acres contained in the section, nor was the sum to be paid based upon the value of the land by the acre. So that we conclude that the consideration for the notes was an entirety, and that the section was contracted about as an entirety. The contract as made by the parties being an entirety, we have no power to make it severable. If, therefore, it is void as to one-half the section, because it is contrary to and in violation of the State policy, which is but another name for law it is void as to the whole. 1 Pars. Cont. (8th ed.), *455, *456. We therefore conclude that the appellant could not recover on the notes sued on, or, in other words, that the appellee's plea of failure of consideration was fully sustained by the evidence; and also that the appellee had the right to recover back the sums of money paid on the illegal and void contract, unless he was barred by the statute of limitation of two years, which is the statute applicable in this case, if any is.

On the question of limitation, we are of opinion that the appellee's demand and cause of action to recover back the money paid was fully barred at the time he filed his plea in reconvention. His legal right to recover back his money existed from the moment he paid it, and his ignorance of his legal right to do so will not excuse him from filing his suit within the two years within which suits must be brought on open accounts for money had and received. There was no fraud or concealment of facts on the part of appellant pleaded or proved. The fact that appellee believed until July 1, 1892, that he had acquired a good and valid title from appellant, did not prevent the statute from running against him. He was simply mistaken as to the law governing such cases, and no man can be heard to plead his ignorance of the law. Our opinion is that so much of the judgment in this case as awards a recovery in favor of appellee for the money paid to appellant should be reversed, and rendered so as to decree that appellee take nothing on his plea in reconvention for the sums paid to appellant, but that in all other respects the judgment ought to be affirmed, the costs of this appeal to be paid by appellee; and it is ordered accordingly.