Barker v. Temple Lumber Co. , 120 Tex. 244 ( 1931 )

On December 23, 1889, C. M. Bennett, who claimed a limitation title to 1,111 acres of land in Sabine county, as surveyed and patented to John W. Gibbons in 1893, conveyed the same by general warranty deed to H. G. Damon in consideration of the payment of one-third of the purchase money in cash and the balance in notes executed by Damon, the vendor's lien being expressly retained to secure the payment thereof.

On September 3, 1890, the heirs of John W. Gibbons, the original patentee, sued Damon in trespass to try title to recover this land. Two days thereafter, and before citation was served upon Damon, he conveyed the land by general warranty deed to his brother-in-law, Rogers, the deed being made to the latter "as trustee". The instrument did not state the purpose of the trust, the beneficiaries thereof, nor set forth the powers of the trustee.

Damon answered in the suit on September 6, 1891, and on January 16, 1892, Bennett and wife were made parties and answered at the February term, 1893.

On February 10, 1894, judgment was entered based upon a written agreement of the parties to the suit, said agreement being signed by the attorneys for the various parties. This agreement, which was made the judgment of the court, awarded all of the land in controversy to the Gibbons heirs except 320 acres, the title to which was vested in Bennett, and Damon was by said judgment divested of any title to the land.

The notes executed by Damon to Bennett were due December 23, 1890, and 1891, respectively, and were never paid. After the rendition of the judgment above referred to, the notes were mailed to Damon's representative in Corsicana; for some reason they were not delivered, but returned to the sender, who produced them upon the trial of this case.

On September 11, 1894, Bennett conveyed one-third of the 320 acres awarded him in said suit to Blount and Goodrich, and one-third to Gellatly on March 29, 1895. After his death his heirs conveyed the remaining one-third to Vickers on July 5, 1902. These tracts through mesne conveyances vested in defendants in error.

It is not shown that either Damon or Rogers, or anyone claiming under them, ever rendered the land for taxes or did anything indicating acts of ownership until 1911, when the heirs of Rogers gave a power of attorney, under which plaintiffs in error claim an interest in the land in controversy. The power of attorney did not specifically describe this land. It merely covered any land the grantors might then own in Sabine County. The first conveyance asserting any interest in this specific land through Damon or Rogers was a quit claim deed executed by the Rogers heirs to J. W. Minton in 1921, more than a quarter of a century after the rendition of the judgment hereinabove referred to and the conveyance of the land by the original vendor to other parties.

Defendants in error, and their vendors, have during the period of years since the rendition of the judgment aforesaid actively asserted claim to the land by payment of taxes, filing numerous transfers, recording mortgages, and paying large sums as a consideration for the transfer of the land from one to another.

Plaintiffs in error contend that in as much as Damon had not been served with citation in the suit by the Gibbons heirs at the time he conveyed the land to Rogers, the latter was not a purchaser pendente lite. That Rogers, not being a party to the suit, was not bound by the agreed judgment subsequently entered therein, and therefore the power of attorney executed by the Rogers heirs vested a present interest in the land in controversy to Arthur and Barker, under whom plaintiffs in error claim.

It is a correct proposition of law that Rogers was not affected with notice as a purchaser pendente lite; as when he bought, his grantor Damon had not been served with process in the suit filed by the Gibbons heirs. Hanrick v. Gurley,93 Tex. 469, 54 S.W. 347, 55 S.W. 119, 56 S.W. 330; Sparks v. Taylor, 99 Tex. 411, 90 S.W. 485, 6 L. R. A. (N. S.) 381.

The conveyance from Bennett to Damon was executory. Damon could only perfect his title to the land by paying the purchase money notes in accordance with the terms of his agreement. Upon his failure to do so Bennett had the right to rescind the sale and convey the property to others. Likewise Rogers held no title to this property except one conditioned upon the discharge of the obligation for the purchase money notes. Farmers Loan Co. v. Beckley, 93 Tex. 267, 54 S.W. 1027; Hale v. Baker, 60 Tex. 217.

The undisputed evidence shows that the purchase money notes executed by Damon were never paid, and that Bennett exercised his right of rescission by conveying the lands to other parties. It is our conclusion that this rescission was binding both upon Damon and his vendee, Rogers, to the extent that neither vendee could successfully maintain an action of trespass to try title against those claiming under the original vendor. Kennedy v. Embry, 72 Tex. 387, 10 S.W. 88; Crafts v. Daugherty, 69 Tex. 477, 6 S.W. 850; Masterson v. Cohen,46 Tex. 520; Bunn v. Laredo (Texas Com. App.), 245 S.W. 426, Id. (Texas Civ. App.), 208 S.W. 675.

But, it is asserted that those claiming by deeds executed by Bennett after his conveyance to Damon were required to prove notice to Rogers of Bennett's intention to rescind such contract. Defendants in error's answer to this proposition is that they should not be required to assume the burden of proving notice to Rogers of Bennett's intention to rescind his executory contract with Damon because Rogers and his heirs acquiesced in such rescission by failing to assert any character of ownership in the property for more than seventeen years and until all the parties connected with the transaction, or who were likely to know anything about it, were dead.

We do not deem it necessary to decide whether Bennett's rescission of the executory contract Was binding upon Rogers, in the absence of any proof that he received notice of Bennett's intention to rescind, to the extent of depriving him of any rights in the property, but prefer to rest our decision upon the proposition that plaintiffs in error, who were not in possession of the land, will not be permitted to recover the same in an action of trespass to try title against the original vendor, or any one holding under him, so long as a portion of the purchase money remains unpaid. McPherson v. Johnson,69 Tex. 484, 6 S.W. 798; Harris v. Catlin, 53 Tex. 8; Jackson v. Palmer, 52 Tex. 427.

But it is argued that Bennett's title had failed to all of the land except the 320 acres awarded him in the suit of the Gibbons heirs and that it would therefore be inequitable to require those holding under Rogers to pay the unpaid purchase money notes when title to such a large portion of the land had failed. Such position might be consistently maintained if this action had been an equitable one in which plaintiffs in error set up the failure of title to a portion of the land conveyed to Rogers and asked for an adjustment of the purchase money with an expressed willingness to pay such sum as might be determined by the court to be fair and just under the circumstances. Plaintiffs in error have not proceeded in this manner, but have obtained a recovery of the land in a straight action of trespass to try title, ignoring the outstanding unpaid purchase money notes and all equities arising in connection therewith. They have merely assumed that the value of the portion of the land to which title has failed would exceed or exactly offset the amount due the original vendor upon the unpaid purchase money notes, together with the interest thereon over a long period of years. Those claiming title under Bennett who have paid a valuable consideration for this property are entitled to a judicial adjustment of the equities existing between Bennett and Rogers. Those claiming under the latter would only be entitled to recover the land upon paying whatever sum might be judicially determined to be due on the unpaid purchase money notes, taking into consideration the failure of the title to a portion of the land conveyed.

To hold otherwise would be to determine that an attempted rescission of a vendor, where a portion of the purchase money remains unpaid, without notice of the vendee, would give the vendee a greater right than that possessed by him if such rescission had not been attempted. If Bennett had not rescinded the executory contract with Damon by conveying the land to others, those claiming under Rogers could not have recovered it from him in an action of trespass to try title brought by them. They might, in an equitable proceeding, have perfected their title to the land without paying any sum on the unpaid purchase money, but this would only be true because of a judicial ascertainment that the value of the land to which title was defective equaled or exceeded the amount of principal and interest due the original vendor on the unpaid purchase money notes. They could not, however, ignore this question and recover the land in action of trespass to try title in complete disregard of the equities existing between them and the original vendor. McPherson v. Johnson, supra.

Since plaintiffs in error were not entitled, in this character of action, to recover any of the land in controversy, the judgment of the Court of Civil Appeals reversing the judgment of the trial court and rendering judgment in favor of defendants in error is a correct one, and should be affirmed.

The foregoing opinion is adopted as the opinion of the Supreme Court, and judgment will be entered in accordance therewith.

C. M. CURETON, Chief Justice.